GST Sops for Digital Payment Push

GST Sops for Digital Payment Push

GST Council may discuss proposal tomorrow, has option of incentivising merchants & customers

A year after demonetisation, India is getting ready to give digital payments yet another push. It could consider providing incentives in the goods and services tax (GST) regime for payments that are settled electronically. The GST Council meeting on Friday is likely to consider a proposal in this regard, a senior government official told ET.

“There is a thinking that digital transactions need to be incentivised .The council will look at what could be done,” the person said.The council could take up the proposal along with steps to cut GST on some items from the top 28% rate besides easing the compliance burden for businesses.

As far as digital payments are concerned, the council has the option of incentivising merchants and customers. Under the proposal, benefits in terms of credit or exemption could be provided within central and state GST to encourage such transactions.

A merchant could, for instance, get credit for digital payments that can be adjusted against GST liabilities. Consumers, on the other hand, could be incentivised through lower tax when payments are made digitally.

It contributed 12.5 billion to its total sales in 2016 when refreshments accounted for 10 billion. Together, these would have a 43% share in total sales. Unilever is merging the two businesses in a bid to unlock expansion opportunities and grow margins faster.

Paranjpe is currently Unilever’s president for the homecare business, which reported 10 billion of revenue last year. The new appointment is effective January 1, 2018, a Unilever spokesperson said.

At Reckitt Benckiser, Kapoor will move to the US and report to its India-born chief executive Rakesh Kapoor.The elevation of Indian executives reflects the increasing importance of the country and other emerging markets for multinationals as markets in the West have stopped growing. India particularly is an important destination for these companies, given its prime demographics and faster population growth.

The number of Indian leaders at global consumer goods companies has been increasing steadily. Unilever has more than 200 Indian managers at global level as the company tries to win consumers in emerging markets.

Paranjpe, who joined Unilever’s Indian unit Hindustan Lever (now Hindustan Unilever) in 1987 as a management trainee, has risen rapidly through the ranks. He was the youngest CEO at the Indian unit of the consumer giant and had a highly successful five-year tenure at the helm of HUL before he moved to his current role as president of the homecare business in 2013.

Under his watch, HUL’s share price rose from Rs230 to a peak of Rs  725. Its annual revenue grew to Rs  26,000 crore from Rs 16,000 crore during the same period.

Packaged foods business for Unilever has been slowing for the past few years and was the worst performer with sales declining 3.1% last fiscal year and volume growth slowing to 2.1%. In comparison, Paranjpe’s current portfolio of homecare products had the fastest volume growth at 4.9%. In April, Unilever said it plans to combine its refreshment business, which includes ice-cream and tea, with the rest of its foods business by year-end. As part of the operations review, it also announced exiting the spreads business of butter and margarine, increasing its margin targets and reviewing the dual structure of the Anglo-Dutch company which exists as two separate entities in the UK and the Netherlands.

Similarly, Reckitt Benckiser announced its decision to split its businesses globally last year to sharpen its focus and fuel growth in a challenging market. Under Nitish Kapoor — who led Reckitt Benckiser India for four years — the local business had posted sales of Rs 5,606 crore in fiscal 2016, an expansion of 14% over the previous financial year. Growth was fuelled by increased direct distribution in rural markets, introduction of packs at entry-level price points in brands such as Dettol and Harpic, and the ‘Banega Swachh’ campaign to leverage the sanitation brands. Experts welcomed the developments at Reckitt. “Reckitt Benckiser is embracing bold changes

when needed, to continue to create disproportionate shareholder value. The new structure reinforces the prowess that RB has when it comes to growing diverse talent and building a culture of merit,” said Vibhav Dhawan, managing partner of executive search and consulting firm Positive Moves Consulting.

The Business Standard, New Delhi, 22th November 2017