Top 10 biz headlines: Auto sales down 23.5%, direct tax code delay & more

Cars are seen parked in a dock at the Chennai Port Trust | Photo: PTI
1) Slowdown blues: Auto sales down 23.5%, worst slump in two decades

Passenger vehicle sales in the country declined for the 10th straight month as carmakers resisted increasing inventories at dealerships, signalling that it would be a muted festive season this year.

Domestic sales of passenger vehicles fell 31.6 per cent year-on-year to 196,524 units in August, according to the data released by the Society of Indian Automobile Manufacturers (Siam). That’s the steepest decline since 1997-98 when Siam started recording data. (Read more here)

2) Govt to tweak Income Tax Act, won’t replace it with direct tax code  

In order to avoid creating more uncertainty for businesses amid an economic slowdown, the government is unlikely to replace the Income Tax Act with the direct tax code, and will incorporate only select suggestions from the draft law, LiveMint reported on Tuesday. 

3) SAT quashes Sebi's order against Price Waterhouse in Satyam scandal

In a major relief to Price Waterhouse (PW), the Securities Appellate Tribunal (SAT) on Monday quashed the order passed by the Securities and Exchange Board of India (Sebi) against the global audit firm for its role in the decade-old Satyam scandal.

In January 2018, Sebi had issued an order banning PW, an affiliate of PwC, and two of its auditors from providing audit services to listed companies and market intermediaries for two years for their involvement in the multi-crore accounting scam at the Ramalinga Raju-promoted company. The scandal involving overstatement of bank and cash balances had come to light in January 2009. PW had moved the SAT against the Sebi order in January last year and, after a series of hearings, the tribunal passed the final order in the matter on Monday. (Read more here)  

4) Bumpy ride ahead: Tax department in rush to fight faceless regime hurdles

The ambitious faceless tax administration project, set to start on October 8, will initially take up the limited scrutiny cases across the country. Within a year, the new tax regime is expected to cover the complete scrutiny cases as well.

However, the pilots have not shown encouraging results, indicating that the new system seeking to redefine the assessment process is not fully prepared for the shift. Sources in the tax department attributed this to lack of appropriate supporting infrastructure and ground-level teething problems. (Read more here

5) From cigarette butts to straws, govt considers ban on 12 plastic products

Cigarette butts, one of the biggest plastic pollutants in the world, are among a list of items the Centre will crack down on soon to stop the circulation of single-use plastic in the country.

Straws, small cutlery, plastic sticks used for ear buds, balloons, flags and candies, thin carry bags (less than 50 microns), and non-woven carry bags are on the list of 12 plastic pollutants that the Central Pollution Control Board (CPCB) has proposed be banned. (Read more here

6) Banks may miss September 25 deadline to approve DHFL resolution plan

As finer details of the resolution plan presented by beleaguered Dewan Housing Finance Corporation (DHFL) are being deliberated on by the consortium of banks, lenders might take more time to approve it, said sources. “There are various aspects to the resolution plan, starting from the price at which debt can be converted into equity, to what should be the additional loan facility that banks can extend to DHFL and the period of moratorium. These are currently being discussed,” said a person aware of the development. (Read more here)   

7) NBFCs with exposure to realty developers stare at fresh trouble

Wholesale non-banking financial companies (NBFCs), which have huge exposure to real estate developers, could see their asset quality slide as early as the second half of FY20 if refinancing pressure continues, said rating agency India Ratings & Research (Ind-Ra) in its NBFC sector outlook for FY20. Most of these NBFCs have given a moratorium of 18-24 months on the principal amount lent in the last two years.

This will end towards the second half of FY20 and the first half of FY21. NBFCs account for about 16 per cent of the total loan outstandings to real estate developers. (Read more here

8) NHAI pause on contracts likely to hurt construction firms' revenue

The Union government’s focus on the build-own-operate model of road construction may “adversely” impact the revenue visibility of construction players operating in the road segment in the medium term, India Ratings and Research (Ind-Ra) has said.

According to Ind-Ra, revenue visibility of players operating in the roads segment would be impacted negatively in the medium term on account of any slowdown in fresh awards by the NHAI. (Read more here

9) Govt lists essential hygiene products, gives industry price control scare

The government's move to draw up a list of essential hygiene products, on the lines of an existing national list for drugs, could put it at loggerheads with industry. For one, say sources in the know, it signals the Centre’s intent to widen its control beyond pharmaceuticals into over-the-counter (OTC) products.

OTC products in India are typically sold like fast moving consumer goods (FMCG), backed by huge marketing budgets and an aggressive distribution push. It is not heavily regulated, say industry experts, the way the pharmaceutical industry is in the country. (Read more here

10) Paytm owner One97 in talks to pick up stake in YES Bank   

One97 Communications, owner of mobile payments major Paytm, is in preliminary talks for a deal to pick up a stake in YES Bank, the Times of India reported on Tuesday. Two sources familiar with the development told the national daily that this was part of the Mumbai-based private lender's broader plans to raise fresh capital. The sources added that the structure of the deal was still being discussed and much would depend on the approval from the Reserve Bank of India, since One97 and Paytm founder Vijay Shekhar Sharma already owns Paytm Payments Bank.  

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