Daily Archives: January 7, 2018
NEW DELHI: Demand for athletic gear in India has always surged during December due to millions of people making a New Year resolution to head to the gym. But this time, sportswear firms saw up to 100% growth in sales in December, thanks to early end-ofseason sale across the country.
“We did twice of what we usually do in other months,” said Rajat Khurana, MD of Japanese footwear maker Asics India. “While New Year resolutions have always helped us get good results in December, we could rake in better numbers in 2017 due to end-of-season sale and marathons.”
End-of-season sale for the last quarter of the calendar year traditionally used to take place in January but in 2017, it was brought forward to December.
Similarly, Puma India MD Abhishek Ganguly said December was a high-traction month for the German sportswear firm. “Sports and fitness are clearly getting more prioritised and are topping New Year resolutions,” he said. “We have seen a substantial uplift in consumer demand during December this year. Across channels, our sales is 30% more than the average monthly sales for the year.”
Categories such as running, training and fitness usually do well for sportswear companies during the end of the year, while at other times, companies bank on athleisure (active wear that people can wear outside a gym) for a bulk of their volumes.
Several industry experts that TOI spoke to said e-commerce companies are disrupting traditional shopping patterns in the country due which end-of-season sales, even for sportswear makers, are being rescheduled.
BENGALURU: About 196 IT deals worth more than $100 million each, and adding up to $51 billion, are coming up for renewal in 2018. Of these, some 12 are multi-billion-dollar deals, the largest of which is Siemens’ $7.2-billion contract with French IT giant Atos, according to research firm Everest Group.
As in previous years, this is an opportunity for Indian IT firms that have been steadily increasing their share of global outsourcing contracts. Of the 196 deals, only four are currently led by Indian IT firms, though these firms may be present as secondary partners in some of the other deals.
Also, the opportunity for Indian IT sector is rising because many of the large deals today are being broken up into smaller contracts. Barring TCS, the others are typically not considered for billion-dollar deals, but if these same deals are broken up, the others get to pitch.
IT research firm ISG did a study in 2016 that analysed 180 deals to see what happened to incumbent vendors when a contract came up for renewal. It found that where clients choose to do competitive re-negotiations (and that’s 66% of all contracts), the incumbents lost the entire contract in 47% of the cases. And in 32% of the cases, the incumbents witnessed a drop in scope with clients moving some part of the contract to new service providers.
ISG found that Indian service providers are also gaining through consortia deals that are led by large MNCs. “We found that large Indian providers managed to get around 30-35% of the share that the incumbents lost,” said Rajesh Gupta, partner in ISG’s India operations.
Jimit Arora, IT analyst in Everest Group, said the billion-dollar deals coming up for renewal have the following characteristics: Infrastructure transformation to cloud, government and defence contracts, integrated contracts (that combine application development & maintenance, analytics, etc), large, multiyear BPO or BPaaS (business process as a service) deals in relatively mature areas, and deals with asset/people transfer (such as the takeover of a global in-house centre of an MNC). “The vendors that will tend to continue to win will be the traditional global majors that can structure asset-intensive infrastructure deals (IBM, Atos, DXC, NTT Data). In the government and defence sector, you would not expect the Indian service providers to be as relevant. But you will likely see them succeed in categories like integrated deals, BPO/BPaas contracts or deals with huge asset or people transfer (think of TCS-Nielsen, Wipro-Atco),” Arora said.
However, the challenge for Indian IT service providers is the changing character of contracts, as clients move towards newer digital offerings where there are a number of newer players, and where some big players like Accenture are seen to have built greater expertise than the Indian providers.
London-based research firm Ovum’s estimates for Indian IT’s share of the global services market in 2017 suggests that there was at best a marginal growth from 2016. “A lot of the workload is being moved to cloud and that market is in the hands of vendors like AWS, Microsoft Azure, etc. The Indian providers and other systems integrators are doing the integration work and building things like analytics on top of these cloud-enabled workloads but the decline in traditional lines is eating up the double-digit growth rates they enjoyed during the last decade,” said Hansa Iyengar, IT analyst with Ovum.
MUMBAI: An employer can set off loss declared by an employee under the head ‘income from house property‘ only up to Rs 2 lakh against such employee’s salary to arrive at the amount of tax to be deducted at source (TDS).
The amendment to section 71 of the Income-Tax (I-T) Act applies for the first time from 2017-18. If an employee has declared a loss higher than Rs 2 lakh, the excess is to be ignored for calculating the amount of TDS, which is deducted monthly from salary income, the Central Board of Direct Taxes (CBDT) has said.
In a circular issued last month, the CBDT has pointed out key amendments to the I-T Act, which employers who are responsible for TDS against salary income should consider. Issue of such a circular is an annual feature.
An employee is permitted to provide details of other income (say, bank interest) that he or she has earned during a year, together with the tax that has already been deducted (say, TDS deducted by the bank). Similarly, losses can also be declared by the employee. However, only loss from house property can be considered by the employer, as this is allowed to be set off against salary income. The employer has to take into consideration the details of income and loss from house property declared by the employee for the purpose of computing TDS which is deducted from the employee’s salary each month.
Making such a declaration is not mandatory. However, if an employee does so, he or she may not have to separately compute and pay advance taxes, as the employer will be deducting tax at source on the employee’s taxable income based on the details given (and not just salary income).
If an employee had let out his or her house (which typically was the case when a second house was owned), the corresponding interest on home loan is fully allowed as a deduction. This, in many cases, led to a significant loss under the head ‘income from house property’ (which is mainly the difference between the rental income and the interest on the home loan). Earlier, there was no cap prescribed for set-off of such loss, which could be kept against salary income. Such set-off reduced the taxable income for that particular financial year. Now, the Finance Act, 2017, has capped the limit for the purpose of set-off to Rs 2 lakh. The balance loss, if any, can be carried forward, but it can only be set-off only against income from house property of the subsequent eight years.
In the light of this amendment, employees having a loss of more than Rs 2 lakh will have a higher tax outgo for the financial year 2017-18. Employers now need to be careful to ensure that the set-off, if any, is adjusted against salary income, only to the extent of Rs 2 lakh, the CBDT said. Any excess or deficit in TDS made in the earlier months, can be adjusted by the employer, by increasing or decreasing the amount of subsequent deductions during the same financial year. Thus, 2017-18, any rectification in TDS can be done in respect of salary for the coming three months.
MUMBAI: Around 14% of the bad loans in public sector banks (PSBs) are due to wilful defaulters. The total gross non-performing assets (NPAs) of 21 PSBs stood at Rs 7.33 lakh crore as on September 30, 2017. Of this, Rs 1.01 lakh crore of loans were termed as those in wilful default.
Wilful defaults have an element of malfeasance as it broadly means that the borrower has reneged on the agreement on usage of funds or has not paid despite having resources.
Recovery from such accounts are difficult because in many cases the money is siphoned off from the books of the defaulting company and most of them are being fought in courts. Some of the largest cases of wilful default are Kingfisher Airlines, Zoom Developers, Winsome Diamonds and Varun Industries.
Of the 9,025 cases of wilful defaults in PSU banks, lenders have filed cases against 8,423 for recovery of Rs 95,384 crore of NPAs. They have also filed 1,968 police complaints in cases of loan amounts totalling 31,807 crore. In 6,937 accounts, representing an outstanding of Rs 87,458 crore, banks have also initiated proceedings to attach and sell assets under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.
Data released by the RBI in response to a Parliament query shows that Vijaya Bank has the highest share of wilful defaulters in its books. The Bengaluru-based banks had NPAs worth Rs 6,649 crore as on September 30, 2017. Of this loans amounting to Rs 3,537 crore were on account of wilful defaults. Punjab National Bank has the highest share of wilful defaults in its books among the larger banks. Of its bad loans worth Rs 57,630 crore, 25% are on account of borrowers who have deliberately defaulted.
The implication for a business or promoter being declared a wilful defaulter is that they will never be able to get bank loans as long as they have the tag. For a lender, declaring a borrower as a wilful defaulter is a complicated process with senior bankers having to give a hearing to the borrower. In several cases, courts have ruled against the labelling of the borrower due to shortcomings in the process.
Among banks with small percentage of wilful defaulters among NPA accounts are Punjab & Sind Bank (4%), Bank of Maharashtra (5%) and Syndicate Bank (5.4%).
As on September 30, 2017, leading corporate houses accounted for approximately 77% of the total gross NPA from domestic operations for banks in India.
The US has suspended about $2 billion in security aid to Pakistan for failing to clamp down on the Afghan Taliban and the Haqqani Network terror groups and dismantle their safe havens.
The freezing of all security assistance to Pakistan comes after President Donald Trump in a New Year’s Day tweet accused the country of giving nothing to the US but “lies and deceit” and providing “safe haven” to terrorists in return for $33 billion aid over the last 15 years.
“We see the Pakistanis continuing to provide safe harbour for terrorists who present risks to the United States of America,” Pompeo was quoted as saying by the CBS.
“We are doing our best to inform the Pakistanis that this is no longer going to be acceptable. So this conditioned aid, we have given them a chance. If they fix this problem, we are happy to continue to engage with them and be their partner. But if they don’t, we’re going to protect America,” Pompeo said.
He was responding to questions on the recent decision of the Trump administration to suspend approximately $2 billion in security assistance to Pakistan.
“The president has made very clear that he needs Pakistan to cease being a safe haven for terrorists that threaten the United States of America, end, period, full stop,” Pompeo said, reflecting the stand taken by Trump.
The security assistance can be restored if Pakistan takes decisive actions against terrorists, he said.
Heavy showers of rain in Cape Town on the Day three of the first match of test series between India-South Africa spoiled the mood of Indian cricket fans in the South Africa’s capital on Sunday. India struggled in the first inning of by scoring 201 runs with the help of fighting knock of 93 runs by all-rounder Hardik Pandya. India took two wickets in quick succession in the South Africa’s second inning. South Africa was 65/2 when rain stopped the play in Cape Town stadium.
CHENNAI: Saina Nehwal proved no match for Olympic gold medallist Carolina Marin as the Spaniard blew the Indian away in straight games and helped Hyderabad Hunters win all their matches of the Premier Badminton League on Sunday.
Harry Kane took his goal tally for the season in all competitions to 27 with a quickfire double in Tottenham Hotspur’s 3-0 victory over third-tier AFC Wimbledon in the FA Cup third round at Wembley Stadium on Sunday.