The Standing Committee on Finance (2019-20) has recommended to the Centre to abolish tax on Long Term Capital Gains for all investments in startups which are made through collective investment vehicles (CIVs) such as angel funds, alternate investment funds (AIF), and investment LLPs.
The committee in its report on “Financing The Startup Ecosystem” said the tax should be removed at least for the next two years to encourage investments amid the pandemic.
“The Committee would like to strongly recommend that tax on Long Term Capital Gains be abolished for all investments in startup companies (as designated by DPIIT) which are made through collective investment vehicles (CIVs) such as angel funds, AIFs, and investment LLPs,” it said.
It suggested that after this 2 year period, the Securities Transaction Tax (STT) may be applied to collective investment vehicles (CIV) so that revenue neutrality is maintained.
Investments by CIVs are transparently done and have to be done at fair market value, the Standing Committee said, adding that it is easy to calculate the STT associated with these investments.
“This can be done in lieu of imposing LTCG on these CIVs and to make the taxation system fairer, less cumbersome, and transparent. This will also ensure that investments in unlisted securities are on par with investments in listed securities,” it said.
It has also recommended that there should be no punishing of domestic risk capital at any level, as the current tax disparity is proving advantageous to foreign capital through low tax jurisdictions and low taxes for fund management services.
As per the panel, such a move will establish a level playing field for domestic investments in comparison to foreign investments and domestic listed in comparison to unlisted securities.
The committee recommended that to encourage domestic investments in unlisted debt and equity securities, once the pandemic period concessions are lifted, CIV capital gains should always be taxed at the same rate as listed securities.
Flipkart Wholesale expands footprint to 12 new cities
Digital business-to-business marketplace Flipkart Wholesale on Thursday said it has expanded its operations to 12 new cities ahead of the festive season.
Flipkart Wholesale will now be operational in Ghaziabad, Faridabad, Mysuru, Chandigarh Tricity, Meerut, Agra, Jaipur, Thane-Bhiwandi-Ulhasnagar, Greater Mumbai, Vasai-Virar-Mira-Bhayanadar, Thane (Kalyan-Dombivli) and Thane (Navi Mumbai).
Expanding with the fashion category in these cities, Flipkart Wholesale said it is looking to digitally transform kiranas and micro, small and medium-sized enterprises (MSMEs) to help them grow faster, retain their customers, and improve their profitability.
“As we enter the festive season, we are excited to be scaling up our offerings across 12 cities, aiming to create more opportunities for MSMEs and Kiranas,” Adarsh Menon, Senior Vice President and Head – Flipkart Wholesale, said in a statement.
“From trendy Jaipuri Kurtis to evergreen Mysuru silk saris, we aim to help small businesses embrace the digital transformation and emerge as more robust businesses,” Menon added.
By this year-end, Flipkart Wholesale also plans to expand into categories such as home and kitchen, and grocery.
Flipkart Wholesale said its customers will have access to easy credit facilities in partnership with leading banks and non-banking financial companies to manage cash flow.
E-commerce platform Flipkart first announced the launch of Flipkart Wholesale’s operations earlier this month.
At the time of the launch, the platform was available for fashion retailers, especially footwear and apparel, in Gurugram, Delhi and Bengaluru.
Nepal-China border point reopens after 3-week closure
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The Rasuwagadhi-Kerung border point between Nepal and China reopened on Thursday after it remained closed for around three weeks due to the Covid-19 pandemic, a senior customs official said here.
The border point, which is one of the key trade routes between the two country, was closed after a Nepali worker tested positive for the novel coronavirus, reports Xinhua news agency.
Earlier, it reopened in early July after it was closed for nearly six months firstly due to snowfall in the bordering Chinese region and later because of the Covid-19 outbreak.
“Two containers of medical goods entered into Nepal after the reopening of border point on Wednesday,” senior customs officer at Rasuwagadhi, Punya Bikram Khadka told Xinhua.
“Now, we hope the movement of goods will take place normally.”
According to the officer, there has been a restricted flow of goods through this border as both countries have adopted zero human-to-human contact policy between the two sides until the pandemic is over.
The Tatopani-Zhangmu, another border point, which reopened in late March after closing in January, has also remained shut for the last few months.
Imports fall leads to New Zealand’s largest trade surplus in 6 yrs
New Zealand imports fell nearly NZ$1 billion ($650 million) in August, leading to the country’s largest annual trade surplus since 2014, the Stats NZ said on Thursday.
The NZ$1.3 billion annual goods trade surplus reflected a rise in exports and a fall in imports over the past months, Xinhua news agency quoted Stats NZ as saying.
“The recent falls in imports and growth in exports resulted in an annual trade surplus not seen since the strong 2013-2014 dairy export season, when product prices were high,” senior analyst Nicholas Cox said in a statement.
Imports of crude oil, cars, and other vehicles were much lower than usual in recent months after the Covid-19 pandemic, Cox said.
New Zealand’s demand for fuel dropped due to the international and domestic travel restrictions, which were put in place to slow the spread of the novel coronavirus.
During the lockdown in April, imports of vehicles were particularly affected by international trade restrictions and the closure of vehicle dealerships as non-essential businesses, he added.
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