Dalelorenzo's GDI Blog
5Apr/210

Apollo, Blackstone to put in final bids for Luminous

Blackstone and Apollo Global Management, two of the world’s biggest buyout monies, are set to submit binding offers to buy Luminous Power Technology from French group Schneider Electric on Tuesday, the guaranteed deadline, people aware of the developments said.Schneider is selling Luminous, a make of inverters and industrial batteries that it acquired ten years ago, as one of the purposes of a world-wide portfolio realignment to depart non-core, consumer-centric transactions. The divestment of Luminous comes in the face of rising usage of lithium-ion artilleries and a reduced need for inverters as superpower availability improves in the country. 8164340 7The modifying business worlds might further chill the [?] 3,500 -4, 000 -crore valuation aimed, some analysts and buyers said. ET was the first to report on November 25 Schneider’s plan to sell the business. It had acquired 74% of the business for [?] 1,400 crore from the New Delhi-based SAR Group and had mandated Citi last year to find a buyer.ET too reported in its January 25 edition that three funds had been shortlisted to buy Luminous. Earlier, potential suitors had included Tata Group company Voltas and Hyderabad-based Amara Raja Battery and even Bain Capital. Most of them opted out, though some belief Bain Capital might still make a last-minute attempt. Blackstone and Luminous representatives declined to comment. Spokespeople for Apollo, Bain and Citi did not respond to emailed queries.Luminous renders guide acid-based industrial artilleries and oversight matters 30% of the [?] 7,500 crore ($ 1 billion) artillery inverter sell in India, rivalling with Exide Industry and Microtek , amongst other. What got the funds interested in the company was its fulcrum towards consumer electricals and appliances.Last month, it started fixing energy-efficient supporters, targeting [?] 500 crore in income from the overall followers category by 2023 and a 5% market share within two years. The busines said it expects 15% of its revenue from ceiling devotees be derived from the energy-saving category.The company has seven manufacturing legions, more than 28 sales offices in India and a proximity in over 36 countries, with more than 60,000 channel partners. Shining affixed a profit of [?] 141 crore on receipt of [?] 3,642 crore in FY20.

Read more: economictimes.indiatimes.com

10Mar/210

Consultancies, law firms under taxman’s lens for GST

Can costs charged by a consultancy based in India to provide services to a house in the US be considered an export income? This transaction is akin to that of a dealer or an intermediary, as per the tax department’s rationale, but definitely not exports.After back offices of multinational corporations, banks and Indian companies stipulating offshore support services, it is the consultancies and statute houses that are in the cross whiskers of the indirect charge department.The levy district bring along some of the top consultancies including McKinsey, Boston Consulting Group( BCG ), Kearney and Blackstone Consulting under investigation together with some of the nation’s top regulation firms.The department has claimed that the services provided by these houses were not exports, which would mean that those will entice 18% goods and services tax.The deficiency of opennes around which corporations are being classified as intermediaries or otherwise is creating a lot of complications, particularly in rebates, tariff experts said.“It is essential at this stage that there is complete certainty to exporters of services that the question of intermediary works will not be used to deny refunds to such sellers or to recapture past refunds. GST is a destination-based consumption tax and it is essential to respect the rebate supplyings which ensure that the taxes associated with providing services are not exported as that would have a significant bearing on business competitiveness, ” Deloitte India partner MS Mani said.As per the tax framework, an exporter need not pass on the GST paid on raw material or input servicing of its consumer or a foreign entity. The GST paid to the supplier by the exporter can be claimed back from the tax department as indemnities. These refunds are typically set off against future charge liabilities by exporters.The tax department is now disputing the rebates, claiming these services aren't exports.Eventually, this implies the cost for companies and houses will go up by 18%, thereby ache their margins.“The explanation of mediators has been interpreted in a way that many companies in India are now being asked to pay GST on what they thought was exportations. In the past, the tax department had expected charge from BPOs, KPOs and captive groups of multinationals , now this motivation is being extended, ” said Uday Pimprikar, national leader, indirect excise, EY India.McKinsey refused to comment, while BCG, Blackstone Consulting and Kearney did not reply to the ET’s questionnaire.Under scrutiny are also top Indian law firms. Various of them reached out to ET informally and said they had not received any notice hitherto but were indeed questioned on some transactions.“I am not stunned that the tax department has taken this stand, but a little surprised that they are going after statute conglomerates, ” a major collaborator told ET.He said in most cases, ordinance firms work with other law houses in foreign jurisdictions while admonishing patrons, chiefly due to regional regulations.In a recent uniting and buy transaction been conducted by a US-based company, an Indian law conglomerate admonished the company on the tax component.The US company also had an Indian entity. But the law firm involved in the transaction claims that it only dealt with the US entity and so the fee billed should not face GST.In another instance, an Indian house which is part of a multinational consultancy recently facilitated restructure a company based in South Africa. The Indian firm worked with a South African entity of the same umbrella consultancy. The cost was split between several houses including the Indian entity. The question is, whether the money received by the Indian arm is an export revenue? The tax bureau doesn’t seem to think so.The controversy around who is an exporter and who is merely an intermediary started following a find by the Authority of Advance Ruling in 2018. The government had said GST was applicable on intermediaries.Soon after the finding, the incidental taxation agency started questioning preliminary notices to captive cells of multinationals and Indian firms exporting offshore support services on the applicability of GST.

Read more: economictimes.indiatimes.com