Volvo’s Managing Director Says GST Is Good for Business

In an interview with the Economic Times, Tom Von Bonsdorff managing director of Volvo Auto India said that the recently introduced Goods and Services Tax (GST) is a business enabler. “The ease of doing business in India will grow. Now we have just transitioned to GST, give it a few months, it will settle down and will be good for business.”

Bonsdorff told the publication that the company will continue to bring hybrid cars into India despite the higher GST levies on this category of vehicles. Hybrid cars are the crucial first step in helping India achieve its 2030 goal of switching to electric cars for personal transport, he added. In 2019, Volvo will launch its fully electric car globally.

Volvo Logo

“We launched our first plug-in-hybrid last fall. We will continue to launch plug-in-hybrids in all the cars that we bring in. We are committed to that,” Bonsdorff said. He also noted that the company had a good start this year and will go forward in its plan to bring in new cars. He was confident of achieving a target of selling 2000 cars and having 25 new showrooms by the end of this year.

July 20, 2017   No Comments

M&A Deals Surge in India

According to assurance, tax, and advisory firm Grant Thornton, during January-May 2017, there were 170 mergers and acquisition deals worth $35.45 billion in India, registering a significant jump over last year deals worth $13.37 billion.

“All eyes seem to be now on the Goods and Services Tax implementation and its impact on not only trade and economy, but more importantly on investor interest,” Grant Thornton India partner Prashant Mehra said. He added that since there is a clear visibility on this, one should see good traction in both M&A and PE.

A handshake

In May, the e-commerce sector led the deal activity by contributing over 53 percent of the total transaction value. The month also witnessed deals worth over $100 million in the banking and financial services, hospitality and leisure, and real estate sectors, Grant Thornton’s report added.

“Increasing consolidation is driving deal volumes in the start-up sector, capturing 25 percent of volumes with highest activity witnessed in the on-demand services space,” quotes BusinessLine from the report.

June 21, 2017   No Comments

GST May Spur Over 1,000 companies to seek public listing

Ashishkumar Chauhan, CEO of Bombay Stock Exchange says that once India’s federal government implements the Goods and Services Tax (GST) regimen, smaller firms will become tax-compliant and will float IPOs to sell their shares to the public.

Chauhan estimates that around 1,000 companies will list on his bourse over the next four years. “We have only scratched the surface,” he told Bloomberg, adding that about 74 companies raised $4.3 billion through first-time share sales on the BSE in the last fiscal year, the highest since  2010.

Raamdeo Agrawal, joint managing director at Motilal Oswal Financial Services Ltd., said that the GST was “a huge positive development. It will have short-term hiccups for six months or so. But once it is done and people have accepted it, then the control of the economy will become far better,” reports the Business Insider.

Taxes

June 11, 2017   No Comments

Mercedes-Benz Reduces Prices in India

German luxury car maker Mercedes-Benz is reducing the price of its cars for the whole month of June in India. The price reduction will range from $2,170  on the CLA sedan to $10,850  on its Maybach S 500.

The company seeks to pass on the benefits of the new tax rate under GST due to be implemented on July 1, to its customers. However, in case GST is deferred, the company said it would hold the current  prices reports Firstpost.

Mercedes-Benz-New-E-Class--2

Mercedes-Benz India managing director and CEO Roland Folger said, “We now know more in details what taxes are going to be in various states. So we have decided to compensate the difference between the current and post GST prices for our entire Made in India range. Our decision to go ahead and reduce the price is also a reflection of our confidence in this government.”

Per GST rates, large luxury cars and SUVs with engine capacity of over 1.5 liters attract a 15 percent “cess” over and above peak rate of 28 percent, bringing down the overall tax incidence compared to the present of about 50 percent.

June 10, 2017   No Comments

Warehousing Sector Surges in India

In anticipation of the national Goods and Services Tax roll-out in July, warehousing facilities will increase by 18 percent to 132.5 million sq ft, and this sector is likely to see investments of about $700 million, according to industry experts

Delhi-NCR had the maximum warehousing stock in 2016 at 29.3 million sq ft, followed by the Mumbai Metropolitan Region, Bangalore, Pune, Chennai  Kolkata, Hyderabad, and Ahmedabad.

A warehouse

Ramesh Nair, CEO, JLL India, told BusinessLine that in 2016, the Grade A and B warehousing stock touched 111.9 million sq ft from 96.8 million sq ft in 2015, and that the GST roll out will “up-grade warehousing infrastructure.”

According to Nair, Pune and Chennai lead the way in Grade A and B warehouse rentals due to their proximity to manufacturing hubs, and local market dynamics.

 

May 30, 2017   No Comments