Corporate Snippets on May 13
Ø Modi unveils Rs 20L cr package to boost economy
Ø DoT to defer 5G sale, auction only 4G in 2020
Ø U.S. posts record $738 billion budget deficit in April
Ø Job-seekers leverage lockdown to learn skills: Survey
Ø 'Auto component industry may double-digit degrowth'
Ø Banking lobby group proposes bad bank
Ø PSBs sanction loans worth 6 lakh cr in two months
Ø SEBI trains guns on Greater China, wants beneficial owners of FPIs named
Ø Anil Agarwal announces plans to delist Vedanta, to offer Rs 87.5 per share
Ø Industrial production declines 16.7% in March amid Covid-19 pandemic
Ø Iron ore prices likely to bounce back in H2FY21, expected to gain 15%
Ø India suspends 30 licences to import 452,303 tonnes of refined palm oil
Ø ‘Economic activities to gather steam in coming days’
Ø Maruti resumes operations at Manesar plant on single shift basis
Ø Tata Motors’ India biz holds no equity value, JLR the only driver: CLSA
Ø Rights Issue: MCA’s relief on postal delivery of notices to shareholders
Ø JK Paper consolidated net down 18% in Q4
Ø PFRDA’s cautious approach has prevented credit risk from hurting NPS funds
Ø Time to strengthen poor, labourers and farmers, says PM Modi
Ø US to give $3.6 million aid to India for Covid-19 battle
Ø Nestle India's March quarter net profit up 13.5% at ₹ 525 crore
Ø Havells Q4 net profit down 10.7% to ₹177.7 crore
Ø China announces new list of US imports eligible for trade war tariff waivers
Ø Blue Star Q4 net profit down 89 pc to Rs 8.9 cr, sales decline 18.5 pc
Ø Yes Bank case of ED: Bombay HC refuses pre-arrest bail to Wadhawans
Ø GE Power resumes production at Noida plant
Ø India's automakers warn of up to 45% sales drop as economy slumps amid pandemic
Ø PNB scam: Nirav Modi's extradition trial to begin in UK over money laundering case
Ø Indian nationals stuck in US after H-1B visa cards suspended
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Prime Minister Narendra Modi addresses public of India as on May 12, 2020
- 5 pillars:
1. Economy, that will bring quantum Jun
2. Infrastructure, that will be the face of modern India
3. System, that will be technology driven
4. Demography, vibrant demography of India is the the best option we have
5. Demand, the supply chain of demand and supply will be driven smoothly bit for that, every stakeholder has to act responsibly
- Atma Nirbhar Bharat Abhiyaan: A package of Rs. 20,00,000 crores will be given to the economy that will cover the land, labor, liquidity, laws, MSMEs, small businesses, farmer, middle class people, etc.
- Finance Minister will explain every details of Atma Nirbhar Bharat Abhiyaan (explained below)
- Tax system of the country will be eased and will be made simpler
- We as Indians, should buy local products and promote them with proud
- PM Modi announces Lockdown 4.0 and all the details will be shared before May 18, 2020
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Hon'ble Finance Minister Speech Highlights on 13th May, 2020 Fiscal Monetary Package
General introduction
- Focus on Aatmnirbhar India as suggested by PM yesterday
- 5 Important Pillars : Economy, Infrastructure, Tech driven system, Incremental Demand and Vibrant Demography
- New Factors of production can be as follows : land, labor, liquidity and law (Capital and enterprise)
- Intention to build local brands and showcase the same on global level by integrating supply chain globally
- DBT (Direct benefit transfer), Micro insurance schemes, PM aawas yojna, PM kisaan Yojana Scheme etc. helped money and other benefits reach directly to poor
- Mass production of PPE kits and other medical equipments in India and supplied globally
- Foundation for aatmnirbhar bhaarat led due to Public sector banks cleanup, recapitalization, ease of doing business, IBC reforms, GST reforms, Power sector reforms, Cleanup Coal Mines and other similar reforms
- RBI already infused liquidity in system
- 2019 budget met demand of SMEs
- 18,000 crores worth refund given under income tax along with duty drawbacks, to increase liquidity : Benefitted 14 lakh taxpayers
- Due Dates and deadlines postponed to ease compliances
- Different sectoral reforms (Bifurcation of 20 Lakh crore benefit) to be announced regularly by Hon'ble FM
Details of Specific Reforms introduced in todays Press Conference
- 15 different measures, 6 of which are for MSME
6 Major Benefit of MSME
1. Collateral free automatic loan to MSME (Standard MSME)
- Benefit Worth 3 Lakh crores
- 4 year tenure with moratorium for 12 months
- Available till 31 oct. 2020
- No fresh collateral required
- Firms with upto 100 Crore Turnover to benefit
- Done to ensure revival of business, operations, pay salaries etc.
- 45 Lakhs MSMe expected to benefit
2. Debt Benefit for stressed and NPA MSME (Stressed MSME)
- 20,000 crore benefit for stressed and NPA MSME
- Employee provident fund
- NBFC
- 2,00,000 stressed MsMe to benefit
3. Funds of funds created for infusing 50,000 crore equity in MSME (Good and growing MSME)
- 50,000 crores allocated through mother fund and daughter fund framework to growing MSME
- 10,0000
4. Change in Definition of MSME
- Removing difference b/w manufacturing and service based MSME
- investment limits increased and turnover based criteria introduced
- Micro unit - 25 Lakhs (M/f) and 10 lakhs (service) increased to 1
Crore for manufacturingThis 1 crore is for service entity as well which was earlier 10 Lakhs)
- Turnover criteria introduced for defining MSME (Upto 5 Crore eligible to be called Micro enterprise)
5. Global tender disallowed in garment procurement for tender upto 200 crores
- This will make MSME do business with confident and will promote make in India
6. E-Market and ecommece linkage
- As trade fair etc will be difficult, thus e commerce integration will be done
- All receivables Cpcs and Govt of india will clear all govt receivables in next 45 days
EPF 1st Benefit
1,70,000 Crore Pradhan Mantri Gareeb Kalyan Package was earlier announced for March, April, May, EPF contribution to be paid by Government of India for next 3 months too i.e. Jun, July, August (2500 crores liquidity) 72,22,000 employees to get the benefit of this Provident fund exemption
EPF 2nd benefit
Statutory PF contributions reduced from 12% to 10% for next 3 months - this will benefit employer, however central and state PSU it will still be 12% but in these central and state PSU too, employees will be eligible to pay 10%
NBFC 1st benefit
30,000 crore special liquidity scheme for NBFC, Housing Finance Companies, Micro Financial Institutions for their buying debt papers of NBFC, fully guaranteed by Government of India
NBFC 2nd benefit
In addition to above 30,000 scheme, this scheme will be 45,000 crore worth scheme where unrated paper, other rated papers, debt risk will be borne by GOI
Liquidity injection for Discoms
They are facing cash problems, and in serious crisis, liquidity injection worth 90,000 Crores (One time provisions for PFC, RIC, etc this shall be for receivebles and guarantee shall be given by government)
- Discoms will inturn pay gencos, and in turn cycle shall continue
- Central public sector power generating companies should allow Rebates to discoms who shall pass on benefit to customers
Contractors
- Upto 6 month extension without any cost to contractors to comply with contract conditions
- This shall cover construction works, goods and services contract, PPP schemes, CPWD, railways or any sort of government contracts
- Concessional periods covered under contract shall also be extended
- Govt agencies will partially release bank guarantees against partially completed contracts to improve cash flow
Real Estate
- Urban Development ministry shall issue advisory to state and union territories, to invoke Force Majeue (Act of God) provision can be invoked during Covid-19
- Using this clause, project registration dates, completion dates, etc. can be suo-motu increased for projects entered into after 25th March, 2020
- This matters will destress developers and real estate industries and help them attain benefit of new timelines
Direct Taxation related relief
1. TDS & TCS Rates
- Reduce TDS rate and TCS rates to reduce by 25% (This shall be for everything be it professional, interest, rent or anythhing)
- Applicable from 14th May, 2020 to 31st March, 2021
- INR 50,000 Crores liquidity injection
2. Pending Refunds to be issued immediately
- All the pending refunds of charitable trust, non cooporate business, Partnerships or any other kind of refunds to be immediately sanctioned
3. Extension in Due Dates of income tax from 31st July, 2020 and 30th Septmeber to 31st October, 2020
4. Date of assessments getting barred on 30th Septemeber 2020 extended for 3 months, to 31st December, 2020 and those getting barred on 31st March 2021 to 3th September 2021
5. Vivaad se vishwas scheme is extended upto 31st December, 2020 and no additional payment required for this
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GST Anti-Profiteering has issued that Builder denied benefit of ITC from flats and shops buyers in case of Smt. Shubhra Vipin Gajbhiye (Applicant) Vs. Pyramid Arcades Pvt. Ltd (Respondent).
GST on Directors Salary has been put to rest by a recent decision of the Authority for Advance Rulings (AAR), Karnataka bench. AAR bench has clarified that if the director is an employee of the company, there will be no incidence of GST. However, if the director is a non-executive director (that is, a nominated director), and provides his or her services to the company, then the remuneration paid is subject to GST. In such cases, the ‘reverse-charge’ mechanism will apply and it is the company (recipient of the services) who will pay the GST.
Union Cabinet has decided to put the Insolvency and Bankruptcy Code, 2016 (IBC) in abeyance by suspending the admission of new cases into insolvency for the next six months to address the hardship of businesses which risk being dragged into bankruptcy due to pandemic-fuelled distress.
Audit companies are exploring all options available to audit financial statements of their clients during the COVID-19-induced lockdown. There has been an exponential increase in the use of technology to validate financial numbers, with a greater reliance on electronic evidence, use of live videos where possible, data analytics, and project management software to overcome the physical limitations in verifying transactions and accounts.
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👉 Stressed-asset companies, banks and other creditors, and insolvency, as well as resolution professionals, are in a quandary in the absence of any clarity about the fate of applications filed under the Insolvency & Bankruptcy Code (IBC) before the Covid-19 outbreak in India.
The government on March 24 raised the threshold for invoking IBC proceedings to Rs 1 crore from Rs 1 lakh, to prevent triggering of insolvency cases against small and medium enterprises facing the brunt of the pandemic. On March 29, the Insolvency & Bankruptcy Board of India decided to not include the lockdown period in any ongoing corporate insolvency resolution process.
Lawyers, resolution professionals and stakeholders ET spoke to said the announcements were silent on the already-filed applications where the disputed amount was less than Rs 1 crore and which were yet to be admitted by the National Company Law Tribunal (NCLT).
“The notification does not clearly specify the date on which the higher threshold becomes effective,” said Sudip Mahapatra, a partner at law firm S&R Associates. “The general presumption under the law would be that the change is prospective. Therefore, it would not apply to existing proceedings.”
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