OPINION, P8 COMPANIES, P6 FLEET EXPANSION Forcing LIC to buy IDBI akin to cheating its policy-holders Taxman investigation of politicians’ assets should be shared with public under RTI ESCALATING TRADE WAR Goyal-led Jet Airways inks deal to buy additional 75 Boeing 737 Max jets EDITORIAL INTERNATIONAL, P20 US plans limits on Chinese investment in US technology firms MUMBAI, TUESDAY, JUNE 26, 2018 VOL. 58 NO. 150, 20 PAGES, `7.00 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD 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 SENSEX: 35,470.35 ▼ 219.25 NIFTY: 10,762.45 ▼ 59.40 NIKKEI 225: 22,338.15 ▼ 178.68 HANG SENG: 28,961.39 ▼ 377.31 `/$: 68.13 ▼ 0.30 `/€: 79.59 ▼ 0.64 BRENT: $74.29 ▼ $1.26 GOLD: `30,540.00 ▲ `56.00 60 50 40 March 23, 2018 June 25, 2018 QuickPicks PolicyBazaar raises over $200 m ETECHACES-RUN insurtech brand PolicyBazaar has raised over $200 million in Series F investment led by venture capital fund giant SoftBank Vision Fund, with participation from existing investors including InfoEdge, reports fe Bureau in New Delhi. PolicyBazaar.com says it hosts over 100 million visitors yearly and records sales of nearly 300,000 transactions a month. PAGE 5 1,50,000 SPOT AIRFARES IN May and June are up by about 10-12% over the same period last year, causing a slight slowdown in traffic growth. Data from the Directorate General of Civil Aviation (DGCA) showed passenger traffic growth slowed to 17% year-on -year in May, the slowest annual increase reported in May in the last four years. Airlines are understandably looking to pass on the higher cost of fuel; the price of ATF(aviation turbine fuel) was up by 38% year-on-year in May. In April, fuel prices were Air traffic volume growth slows down in May '18 Govt to food retailers on FDI biz Continued on Page 2 Passengers (million) Growth (%, y-o-y) 12 32 16.4 11 24 10 THE GOVERNMENT on Monday said food retailers having foreign investments will have to keep accounts and invoices separate from those of their other businesses, reports fe Bureau in New Delhi. However, such retailers can still use the warehousing facility meant for other businesses to store food products if they are stored separately, DIPP said. PAGE 2 9 8 Source: DGCA 16 16.5 Sept 2017 Nov Jan 2018 Mar 11.8 56.20 11.5 80 30 up a more modest 19% yearon-year. An estimated 11.85 million people flew in May on domestic carriers;inagrowing economy the number should have been higher, analysts point out. They point out the continuous pressure on yields — as airlines are unable to pass on the entire jump in fuel costs — could impact margins of carriers.“Slower traffic growth in May 2018 — a seasonally strong month — is concerning in the backdrop of declining passenger yields and higher ATF prices,” analysts at Axis Securities observed. 11.5 77.65 70 Fares rise, traffic growth slows ARUN NAYAL New Delhi, June 25 Idea Cellular (share price on BSE, `) 90 AIR POCKET 10.7 Idea fell 7.68% on the BSE on Monday on reports of a delay of its merger with Vodafone India as DoT plans to raise a demand of `4,700 crore on Vodafone India. ■ P11 Continued on Page 2 11.4 Idea dips on merger delay March under I-GST, these three states argue the difference is likely to be the evasion that still takes place under the GST regime. Tax experts,however,argue that since VAT rates used to varya lot across states,oneway to bypass it was to disguise intrastate sales as interstate 11.2 FE BUREAU Source: GST Council 10.4 Call drop (Amount claimed, July 2017 to March 2018) ` crore Maharashtra AN ANALYSIS CONDUCTED by three states — West Bengal, Madhya Pradesh and Maharashtra — suggests that taxpayers may have underreported value of goods entering these states bynearly `2.6 lakh crore during July 2017 to March 2018. Government officials and tax experts,however,point out that a large part of this is likely tobetheamountoftaxevasion — in the pre-goods and services tax (GST) or VAT era — that has, in fact, been stopped bythe implementation of GST. The analysis, discussed in the last GST Council meeting, was based on a comparison between declarations in the‘C’ from in 2016-17 with those underIntegrated GST(I-GSTis applicable on interstate sales). With the C-form sales of goods between states much higher— `2.6 lakh crore across these three states — compared to what was declared in July- 10.4 RELIANCE JIO on Monday said it has secured a term loan of $1 billion from a group of banks led by Australia and New Zealand Banking Group and Hongkong and Shanghai Banking Corporation, reports fe Bureau in New Delhi. The long-term facility has been covered by Korea Trade Insurance Corp. SUMIT JHA New Delhi, June 25 9.5 Reliance Jio secures $1-bn term loan sales.While VAT rates could be ashighas12.5%,thoseagainst the‘C’form were as low as 2%. As Rajat Mohan, partner, AMRG & Associates, puts it, “Many businesses based in Delhi would supply items to their branch in neighbouring states, say, Haryana or Rajasthan, and then sell these items to a Delhi-based buyer, making it an interstate sale.” Under the VAT regime, stock transfers to a branch outside the state was not subject to eitherVAT or central sales tax. Inwhich case,these experts argue,the C-form exaggerated genuineinterstatesales.Under the GST regime, when taxes across all states are the same, there is no tax arbitrage to be made from recording transactions in this manner.“It is possible that such transactions have now stopped and this is reflecting in the lowervalue of goods entering states,” a central tax official said. Indeed,inhisreportonGST in 2015, chief economic adviser Arvind Subramanian had also alluded to this possibility. Though he never referred to disguising of intrastate sales as interstate sales, Subramanian said at least half the interstate trade was accounted for by stocktransfers between branches of a company. Under-reporting of interstate sales in GST? 60,000 THE SECOND tranche of Bharat-22 Exchange-traded Fund (ETF) saw bids worth `15,436 crore from investors, which is more than twice the amount sought to be raised, reports PTI. Through Bharat22 ETF, comprising shares of 22 companies, the government had targeted to mopup `6,000 crore with a greenshoe option of another `2,400 crore. What Maharashtra, Madhya Pradesh & West Bengal claim is huge GST theft may be elimination of VAT-era tax evasion Madhya Pradesh Bharat-22 ETF receives bids worth `15,436 cr ● ICICI BANK CASE Dramatic decline in VAT-era tax evasion 50,000 THE MONSOON session of Parliament will commence on July 18 and end on August 10, reports fe Bureau in New Delhi. The session, which will have 18 sittings, will also consider the triple talaq Bill and Constitutional status for the National Commission for OBCs, parliamentary affairs minister Ananth Kumar said. GST West Bengal IN THE NEWS Monsoon session of Parliament from July 18 May 8 0 Sebi for adjudication against bank, Kochhar PRESS TRUST OF INDIA New Delhi, June 25 Raining troubles Cars are seen buried under debris after the wall of a residential building collapsed owing to heavy showers in Mumbai on Sunday. At least three people were killed in the city and adjoining Thane in rain-related incidents EXPRESS PHOTO:GANESH SHIRSEKAR MINISTERSPEAK Following stake sale fiasco, Air India set for a revamp FE BUREAU Mumbai, June 25 AFTER A FAILED attempt at selling loss-making Air India to private players,the government is now attempting a turnaround of sorts for the airline by getting in a new thrust on improving efficiencies and strengthening management practices at the airline over the next 18 months, interim finance minister Piyush Goyal said on Monday. The government had earlier said that while the divestment efforts ofAirIndia is over for the time being, it is on its radar in the long run and in the meantime its efficiency and opera- ● ENERGY SECURITY India deepens ties with UAE, Saudi FE BUREAU New Delhi, June 25 IN A SIGN of deepening energy ties, India, one of the fastest growing consumers of petroleum products in theworld,has attracted the interest of oil-rich countriesUAEandSaudiArabia. While the UAE’s Abu Dhabi NationalOilCompany(ADNOC) onMondaysignedamemorandum of understanding with Saudi Arabian Oil Company (Saudi Aramco) to acquire a stakeinIndia's$44-billionWest Coast refinery,both companies are also looking to invest in the entire value chain, including fuel retailing,here.At the same time,Indian oil companies as a consortium will be bidding for hydrocarbon fields in UAE. Continued on Page 2 HOG WILD Harley to shift production out of US to avoid EU’s tariffs BLOOMBERG New York, June 25 US PRESIDENT Donald Trump’s trade war with the European Union is going to cost Harley-Davidson as much as $100 million a year and spur the manufacturer he embraced soon after taking office to shift production out of the US. The EU’s tariffs retaliating againstTrump’s steel and aluminium levieswill cost Harley about $2,200 per motorcycle shipped to Europe, according to a Monday filing. Passing that on to dealers or customers would cause an Cruising in Europe Percent of motorcycle net sales from EMEA “immediate and lasting detrimental impact” on the company’s business in its secondlargest market,so it’ll bear the brunt of the expense. While Trump has repeatedly claimed that the US can easily win trade wars, victims Harley's share of total sales to Europe last year was the highest since 2011 18 16 14 12 10 8 6 4 2 0 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Source: Company filings, Bloomberg data are starting to pile up at home and abroad. Daimler warned last week that escalating tension between the US and China will impair earnings its Alabama SUV plant and lower profit this year. Harley tied its higher costs to a sequence started by Trump,who praised the company as a model American manufacturerduring a February 2017 meeting at the White House. Continued on Page 2 In the next 18 months, you will see a visible change — PIYUSH GOYAL INTERIM FINANCE MINISTER tional parameters would be improved. Commentingonzerointerest shown byprivate players in buying a 76% stake in Air India, Goyal said,“Due to high oil prices the last three months was not the most conducive for investors but this phase will pass.” Indicating a revamp of operational aspects of the airline and also bringing about financial efficiencies, Goyal said that there is a new thrust on improving the efficiency and strengthen management practices, and visible changes will be seen over the next 18 months. Continued on Page 2 A PRELIMINARY EXAMINATION by the Securities and Exchange Board of India (Sebi) hasfavouredadjudicationproceedings against ICICI Bank and its CEO Chanda Kochhar for alleged violation of listing disclosure norms regarding “conflict of interest” in business dealings of her husband with the Videocon Group. ICICI Bank may face a penalty of up to `25 crore undertherelevantSebiregulations for such lapses,while the fine for Kochhar may go up to `1 crore, besides other penal actions,a senior official said. Continued on Page 2 SPECIAL FEATURE ? G-Secs ` 30 years Fixed income investment for very long term ■ Personal Finance, P13
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