Skip to main content

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

Comments

Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Firms with sales below Rs.50 crore out of ambit

The tax department has reiterated that the PoEM rules, which require foreign firms to pay taxes in India if the effective control is here, will not apply to companies withaturnover of Rs.50 crore or less inafinancial year. Last month, the tax department had come out with the longawaited Place of Effective Management (PoEM) rules, which require foreign companies in India and Indian firms with overseas subsidiaries to pay local taxes if their businesses are effectively controlled by Indians. Then the rules did not setathreshold above which they were to apply. However, the accompanying press release states that the rules will not apply to companies withaturnover of up to Rs.50 crore inayear. That created confusion whether the threshold will be adhered to. Inacircular to clarify things, the Central Board of Direct Taxes (CBDT) said the provision "shall not apply toacompany havingaturnover or gross receipts of ~50 crore or less inafinancial year".

PoEM rules essentially target shell …