Latest news with #Section80-IAC
Mint
19-05-2025
- Business
- Mint
Swipe card, scan QR? Buying on UPI may be about to get cheaper
Scanning that UPI code to make a purchase may become cheaper than swiping your credit card, if a consumer affairs ministry effort on payment transaction fees bears fruit. The government is working on a plan that will pass on the cost benefits of its popular unified payments interface (UPI) to consumers and incentivize its use in one go, three people familiar with the discussions said. Ministry officials will soon meet industry stakeholders to take the plan forward, one of the three people said on the condition of anonymity. Every time a credit card is swiped, the merchant pays a fee of 2-3% to the bank and a payment gateway such as Visa or MasterCard, called the merchant discount rate (MDR). Most merchants do not pass on the fee to the customer, but absorb it themselves. To illustrate, in a ₹100 credit card payment, the merchant keeps ₹98, and passes on ₹2 as MDR. In UPI, the merchant retains the entire ₹100, since UPI has no MDR. The disparity is stark in e-commerce platforms, which charge the same amount regardless of payment mode. At retail outlets, while most merchants absorb MDR, some pass it on to customers. Also read: Govt approves 187 startups for tax exemption under revamped Section 80-IAC framework If the plans go through, the UPI user will pay ₹98, while the credit card user pays ₹100, implying a ₹2 discount for the former. The ministry will consult e-commerce leaders, banking service providers, National Payments Corp. of India (NPCI), Department of Financial Services (DFS), consumer groups and others before finalizing the way forward, the third person added. Plans are still early and more details are expected after the stakeholders' meeting likely in June, this person said. Queries emailed to the consumer affairs ministry remained unanswered. The radical plan comes at a time UPI has eclipsed all other payment modes, growing 42% by volume to 185.85 billion transactions in FY25, and 30% by value to ₹260.56 trillion. Between FY20 and FY25, UPI transaction volumes expanded at a compound annual growth rate (CAGR) of 72%. Between FY22 and FY25, about 260 million new users and 55 million new merchants joined UPI platform. Around 450 million used UPI in 2024. Industry experts said the move opens space for more nuanced pricing. Vivek Iyer, partner and financial services risk leader at Grant Thornton Bharat, said, 'Market infrastructure initiatives like UPI have democratized payments because of zero MDR. But other channels that incur costs and offer better customer experience can still justify MDRs. Differential pricing should be possible, especially when better service or personalization is part of the offer." Also read: India could use Apple's exit to spur hi-tech manufacturing push: GTRI Iyer added that e-commerce platforms can adopt a layered strategy. 'For luxury purchases, the choice of payment channel may not affect buyer behaviour, but for regular purchases, price sensitivity is much higher. So, there's scope to design differentiated offerings around that." He emphasized that zero MDR on UPI should continue, given its broader economic impact. 'UPI enables the inclusion of many commercial activities in the formal economy. It serves a national interest and should remain focused on that goal for a few more years." With countries like Singapore, the UAE and France showing interest in adopting UPI, those involved believe that aligning domestic policy to reflect its cost advantages for consumers could strengthen India's digital public infrastructure and cement its leadership in inclusive fintech innovation. 'Consumers currently pay the same whether they use a card or UPI, despite the cost structure being different," said the second person, who is involved in the discussions. 'If UPI is cheaper and simpler, we are looking at ways to make that benefit visible to users." Business owners typically negotiate MDR charges before signing up for card swipe machines, based on the transaction value they expect from customers. High MDR is one of the primary reasons merchants prefer UPI to card-based payments. 'The move will definitely benefit consumers greatly. They would be rewarded for using UPI as their mode of payment," said Ashim Sanyal, chief executive officer of Consumer Voice, a consumer rights organization. Finance minister Nirmala Sitharaman recently underscored the need to target one billion UPI transactions per day within the next 2-3 years and stressed on accelerating the internationalization of UPI through interoperable frameworks and expanding global payment acceptance. Also read: Goods trade deficit widens to a five-month high of $26.42 billion in April The Reserve Bank of India wants credit and debit card issuer banks to provide customers with options to choose from multiple payment networks—such as Visa, MasterCard and RuPay—at the time of issue. The popularity of UPI has pushed banks to issue RuPay cards that facilitate UPI transactions. RuPay credit cards attract MDR of 1-2%. According to experts, merchants set product prices which remain the same for all payment modes. The only benefit passed to consumers in the form of lower prices is when a merchant accepts only UPI payments. Meanwhile, the Payments Council of India, representing various non-banking payment players, has unsuccessfully lobbied the government to introduce MDR on UPI and RuPay debit cards, pointing out the cost of operating back-end systems. It has proposed MDR for RuPay debit cards for all merchants and an MDR of 0.3% for UPI, applicable only to large merchants with annual sales above ₹20 lakh. The council says this is necessary for the long-term viability of the system, as zero charges prevent payments firms, banks and fintech companies from investing in critical areas such as cybersecurity, innovation and infrastructure upgrades.
Mint
16-05-2025
- Business
- Mint
India's liquor makers are having a party. And it's not going to end soon
NEW DELHI : India's liquor industry is expected to record a fourth straight year of strong growth, according to a study, as more people take to drinking and consumption shifts towards costlier, premium whiskies and gin to beer. Alcohol sales are likely to rise 8-10% to ₹5.3 lakh crore in fiscal 2025-26, according to Crisil Ratings. The makers of alcoholic beverages—like whisky, rum, vodka, beer, and wine—are also expected to earn better profits this year, it said. The overall volume of liquor sold is likely to grow 5-6% in FY26, according to the study based on 25 major liquor companies that make up about 12% of the organized market in India. Spirits such as whisky and rum bring in nearly 70% of the industry's revenue, while the rest comes from beer, wine, and country liquor, according to Crisil. A young drinking-age population, more people living in cities and rising incomes are driving consumption, especially towards premium brands. Also Read: Govt approves 187 startups for tax exemption under revamped Section 80-IAC framework Crisil estimates the blended operating margins to rise by 0.6 to 0.8 percentage points, marking the second straight year of rising profitability for the sector. It's driven by customers choosing higher-end products and companies able to manage their costs better. 'Even without big price hikes, better sales and more people buying premium brands will keep the industry growing," said Jayashree Nandakumar, director at Crisil Ratings. Premium and luxury liquor (priced above ₹1,000 for 750 ml) will grow about 15% this year and make up around 40% of total spirits sales, up from about 33% two years ago, she said. Rising costs Costs may go up slightly. The price of alcohol used in spirits (called extra neutral alcohol or ENA) may rise 2-3%, and barley used for beer could get 3-4% more expensive, said the report. Glass bottle prices will also remain steady due to strong demand. But thanks to higher sales and better prices from premium brands, companies should be able to handle the cost pressure. Also Read: Indian single malts keep up spirits despite Trump's tariff heat Profits will likely rise by 0.8 to 1 percentage points for spirits and 0.5 to 0.7 points for beer makers this year, said Sajesh KV, associate director at Crisil Ratings. Demand steady The steady rise in liquor demand has prompted manufacturers to ramp up their production capacity by 15-20% over the past two years. With current capacity utilisation at around 70-75%, companies have sufficient room to cater to growing demand without needing to invest heavily in new infrastructure. As a result, no major debt-funded capital expenditure is expected in the current fiscal, Crisil said. According to the report, the financial health of these companies looks strong. Their ability to repay interest remains high, and they are not borrowing much, keeping their debt levels low. 'There is positive sentiment among liquor makers as they see trade opportunities opening up with India signing a free-trade agreement (FTA) with the UK," said Abhash Kumar, a trade expert and assistant professor of economics at Delhi University. 'Talks are also moving in the right direction for FTAs with the European Union and the United States, which could further support exports and premiumisation in the sector." Also Read: India to revamp rice cultivation technique to save water, cut labour costs, reduce methane emissions The Agricultural & Processed Food Products Export Development Authority (APEDA) aims to boost India's alcoholic beverage exports to $1 billion in the coming years. This target aligns with the global trend of premiumization and the growing appreciation for Indian spirits. India's presence in the global spirits market remains modest, but the country has made notable strides in recent years, particularly with the growing international recognition of its single malt whisky brands. According to data from APEDA, India's exports of alcoholic beverages rose to $375.09 million in FY24, up from around $325 million in FY23, riding on steady demand growth in markets such as the UAE, Singapore, the Netherlands, and parts of Africa.
India Gazette
15-05-2025
- Business
- India Gazette
DPIIT approves 187 startups for tax relief under revised section 80-IAC framework
New Delhi [India], May 15 (ANI): The Department for Promotion of Industry and Internal Trade (DPIIT) has approved 187 startups for income tax exemption under the revamped Section 80-IAC of the Income Tax Act. The decision came during the 80th meeting of the Inter-Ministerial Board (IMB), held on 30th April 2025, Ministry of Commerce & Industry said in a statement. According to a spokesperson of DPIIT, the tax benefit allows eligible startups a 100 per cent income tax deduction on profits for any three consecutive years within a ten-year window from the date of incorporation. The scheme is designed to support emerging businesses in their formative years, encouraging innovation, job creation, and wealth generation. Of the total approvals, 75 startups were cleared during the 79th IMB meeting and 112 during 80th such meeting . With this, over 3,700 startups have now been granted exemptions since the scheme's inception. In a key announcement during the Union Budget 2025-26, the government extended the eligibility window for startups to claim benefits under Section 80-IAC. Startups incorporated before 1st April 2030 are now eligible to apply, giving more time and opportunity to new ventures to benefit from this financial relief. Pertinently, the revised evaluation framework introduced by DPIIT has made the application process more structured and transparent. Complete applications are now reviewed within 120 days, ensuring faster decision-making and reducing procedural delays. Startups that were not approved in the latest round have been encouraged to reassess and refine their applications. The DPIIT has advised applicants to focus on demonstrating technological innovation, market potential, scalability, and a clear contribution to employment and economic growth. The government's continued support underlines its commitment to fostering a robust, future-ready startup environment aligned with the vision of a self-reliant and innovation-led New India, the spokesperson said. Further information on the tax exemption process, eligibility criteria, and application details is available on the official Startup India portal, the spokesperson added. (ANI)
Hans India
15-05-2025
- Business
- Hans India
Govt approves 187 startups for tax exemption to boost growth
New Delhi: In a significant boost to India's startup ecosystem, the Department for Promotion of Industry and Internal Trade (DPIIT) has approved 187 startups for income tax exemption under the revamped Section 80-IAC of the Income Tax Act, according to an official statement issued on Thursday. According to a DPIIT spokesperson, the tax benefit allows eligible startups a 100 per cent income tax deduction on profits for any three consecutive years within a 10-year window from the date of incorporation. The scheme is designed to support emerging businesses in their formative years, encouraging innovation, job creation, and wealth generation. Of the total approvals, 75 startups were cleared during the 79th Inter-Ministerial Board (IMB) meeting and another 112 during the 80th such meeting held on April 30. With this, over 3,700 startups have now been granted exemptions since the scheme's inception. In a key announcement during the Union Budget 2025–26, the government extended the eligibility window for startups to claim benefits under Section 80-IAC. Startups incorporated before 1st April 2030 are now eligible to apply for the exemption, giving more time and opportunity to new ventures to benefit from this financial relief. Pertinently, the revised evaluation framework introduced by DPIIT has made the application process more structured and transparent. Complete applications are now reviewed within 120 days, ensuring faster decision-making and reducing procedural delays. Startups that were not approved in the latest round have been encouraged to reassess and refine their applications. The DPIIT has advised applicants to focus on demonstrating technological innovation, market potential, scalability, and a clear contribution to employment and economic growth. 'The government's continued support underlines its commitment to fostering a robust, future-ready startup environment aligned with the vision of a self-reliant and innovation-led New India,' the spokesperson said. Further information on the tax exemption process, eligibility criteria, and application details is available on the official Startup India portal, the spokesperson added.
Time of India
15-05-2025
- Business
- Time of India
DPIIT nod to 187 startups for income tax exemption under revamped Section 80-IAC: Govt
In a significant boost to India's startup ecosystem , the Department for Promotion of Industry and Internal Trade ( DPIIT ) has approved 187 startups for income tax exemption under the revamped Section 80-IAC of the Income Tax Act, the government said Thursday. The tax benefit allows eligible startups a 100% income tax deduction on profits for any three consecutive years within a ten-year window from the date of incorporation. The scheme is designed to support emerging businesses in their formative years, encouraging innovation , job creation , and wealth generation. 'The decision came during the 80th meeting of the Inter-Ministerial Board (IMB), held on April 30, 2025,' the commerce and industry ministry said in a statement. Of the total approvals, 75 startups were cleared during the 79th IMB meeting and 112 during 80th such meeting . With this, over 3,700 startups have now been granted exemptions since the scheme's inception. In Budget 2025–26, the government extended the eligibility window for startups to claim benefits under Section 80-IAC. Startups incorporated before April 1, 2030 are now eligible to apply, giving more time and opportunity to new ventures to benefit from this financial relief . 'The revised evaluation framework introduced by DPIIT has made the application process more structured and transparent. Complete applications are now reviewed within 120 days, ensuring faster decision-making and reducing procedural delays,' the ministry said. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Startups that were not approved in the latest round have been encouraged to reassess and refine their applications. The DPIIT has advised applicants to focus on demonstrating technological innovation, market potential, scalability, and a clear contribution to employment and economic growth , according to the statement.
