OPINION, P8 COMPANIES, P6 SUNIL JAIN Junking past govts’ bad policies hard, but Modi must keep trying INTERNATIONAL, P16 SURJIT S BHALLA DEAL SEALED ROCK-STAR SCIENTIST Going by publicly available LTCG data, mop-up may be under `10K cr in future years Neemuchwala-led Wipro sells data centre biz for $405 m Stephen Hawking, whose mind roamed the cosmos, dies at 76 NEW DELHI, THURSDAY, MARCH 15, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM VOL.XLIV NO. 11, 28 PAGES, `5.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E READ TO LEAD SENSEX: 33,835.74 ▼ 21.04 NIFTY: 10,410.90 ▼ 15.95 NIKKEI 225: 21,777.29 ▼ 190.81 HANG SENG: 31,435.01 ▼ 166.44 `/$: 64.84 ▲ 0.06 `/€: 80.25 ▼ 0.20 BRENT: $64.98 ▲ $0.34 GOLD: `30,375.00 ▲ `137.00 IN THE NEWS Bypolls: BJP loses all 3 Lok Sabha seats in UP, Bihar IN A STUNNING blow to the BJP ahead of the 2019 general elections, the party on Wednesday lost bypolls to all the three Lok Sabha seats it contested, including its bastion Gorakhpur, and Phulpur in Uttar Pradesh, besides Araria in Bihar, reports PTI. WPI inflation at seven-month low in February INFLATION based on wholesale prices eased to a seven-month low of 2.48% in February on cheaper food articles, including vegetables, reports PTI. On the basis of Wholesale Price Index (WPI), inflation was 2.84% in January and 5.51% in February 2017. UltraTech boosts Binani bid to `6,600 crore ULTRATECH CEMENT has raised its bid for Binani Cement to `6,600 crore from about `6,200 crore, in an email to the resolution professional overseeing the company’s bankruptcy proceedings, its chief financial officer Atul Daga told Bloomberg on Wednesday. LS PASSES FINANCE BILL Little relief on LTCG, digital tax net widens Indexation benefit for shares to be listed on April 1 or later; Bill passed sans debate FE BUREAU New Delhi, March 14 AS THE LOK SABHA passed the Finance Bill, 2018, amid dinandwithoutanydiscussion on Wednesday, the government dashed whatever faint hope investors in listed equity had nurtured of their investments being adjusted to inflation for the purpose of the newlyimposed long-term capital gains (LTCG) tax. An amendment to the Bill also widenedthescopeofIndiataxing the so-called digital income that some multinationals earn in the country without a permanent establishment here, by buttressing the “significant economic presence”clause introduced in the Budget. However, in the case of shares that were unlisted as on January 31,2018,and may get listed on April 1 this year or ■ Whether or not a foreign company has PE in India or has entered into an agreement to transact with Indian consumers, its income from India could be taxable here; amendments to Finance Bill reinforce a clause brought by Budget later, the cost of acquisition willincludewhatthecostinflation index for 2017-18 allows. A commensurate relief will be extended to mergers of listed andunlistedentities.Barringin a deflationary scenario, a cost inflation index could inflate theacquisitioncostand,hence, deflatethevalueofthegainsto be taxed and reduce the tax liability. For other asset classes like immovable property, the LTCG tax applies on (lower) gains computed after the indexation but in case of listed Patel for more powers over PSBs REUTERS Mumbai, March 14 equity, this facility has now been expresslydenied. The government has clarified that if a non-resident undertakes transactions or has activities that constitute significant economic presence (SEP) in India, the income it earns from the country(practicallyvia digital means) will be taxable here, whether or not it has entered into an agreement for such transactions in the country. RESERVE BANK OFIndia(RBI) governor Urjit Patel said on Wednesday that the central bank had“verylimited authority” over state-run banks and called for reforms in the wake of a $2-billion fraud to give the regulator the same powers to police state-run banks as it has over private lenders. Patel defended the central bank’s role in the aftermath of the Punjab National Bank (PNB) fraud case and launched an indirect broadside against the government, which has been critical of the role of the regulator and auditors in failing to spot the huge alleged scam. In a speech at a law university in Gujarat,Patel said there were numerous limitations in theRBI’spowersoverstate-run lenders, such as its inability to removedirectors,replacemanagement, push through a merger or initiate liquidation. While the RBI regulates all banksinIndia,state-runbanks are also regulated by the government,whichownsmajority stakes in them. Continued on Page 2 Continued on Page 2 ■ No inflating the acquisition value of listed equity for LTCG computation; for shares that were unlisted as on Jan 31, cost inflation index for 2017-18 allowed ● POST-PNB ■ In any year other than those when revenue breaches `25 crore, start-ups can get benefit of full deduction available for 3 years in 20152021 period LoUs DISCONTINUED Industry upset, sees cost rising Says ‘detrimental’ move will hike borrowing costs for genuine players in overseas trade FE BUREAU Mumbai, March 14 ACROSS-SECTIONofindustry on Wednesday expressed concerns over the Reserve Bank of India’s (RBI) move to discontinue the usage of letters of understanding (LoUs) and letters of comfort (LoCs) instruments, which they expect will leadtoanincreaseinborrowing costs for genuine players engaged in overseas trade. ■ Diamond traders say LoUs not widely used, gold traders borrowing cost could get impacted ■ RBI on Tuesday disallowed banks from issuing LoUs following the `14,000-crore LoU-linked PNB fraud Terming the sudden move “highly detrimental” to trade, Nikunj Turakhia, president of Steel Users Federation of India ● TRADING CHARGES Trump mulls tariffs on $60-bn Chinese goods REUTERS Washington/Beijing, Mar 14 US PRESIDENT DONALD TRUMPisseekingtoimposetariffs on up to $60 billion of Chinese imports, two people who haddiscussedtheissuewiththe Trump administration said on Tuesday.Whilethetariffswould be chiefly targeted at informationtechnology,consumerelec- tronicsandtelecoms,theycould be much broader and the list could eventually run to 100 products, this person said. In Beijing, Chinese foreign ministry spokesman Lu Kang said, “We have said many times that China resolutely opposes any kind of unilateral protectionist trade measures.” Details on Page 16 (SUFI) said,“There will be sudden funds crisis and companies who avail bank credit for ‘at sight’ import documents will face the music.” Turakhia said that the move will impact companies with longer trade cycles, as they will face issues regarding funding of transactions. “The cost of funds are going to go up substantially. This seems a knee-jerk reaction to the NiMo (Nirav Modi) fraud, but it will have highly negative impact on trade and industry,”he said. Meanwhile, in light of the Modifraud,theIndiandiamond industry has stated that the usage of LoUs is not a common practice in the diamond trade. Continued on Page 2 eFE P15 Samsung Galaxy S9+ is a top-notch Android
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