Also in this letter:
■ Rajasthan HC tells DGGI to halt coercive action against MyTeam11
■ Seven countries to sign up for India Stack’s digital public goods
■ Zomato Gold returns with discounts on delivery and dining out
Budget 2023: Fintechs expect sops, new funding avenues and more
As the countdown for the Union budget 2023-24 begins, Indian fintechs are batting for incentives to help widen their participation in the formal financial economy, industry organisations and fintech founders told us.
Wishlist: In their expectations from finance minister Nirmala Sitharaman, the fintech industry – which has seen several regulatory reforms over the last year – is seeking ‘priority sector’ status for driving financial inclusion, along with sops to cover the cost incurred for growing digital payment net in the country.
Lending fintechs are also asking for new avenues of financing, whether from public sector banks (PSBs) or inclusion in government infrastructure schemes.
More payment sops: One of the main issues for Indian fintech has been the zero merchant discount rate (MDR) for unified payments interface (UPI) and RuPay debit card transactions.
This has proved a major hurdle for payment fintechs such as Google Pay and PhonePe.
To make up for their losses, the government announced a Rs 1,500-crore scheme to promote digital transactions in the 2021 budget. And earlier this month, the Union cabinet approved an incentive scheme for RuPay debit card and low-value UPI transactions, and announced incentives worth Rs 2,600 crore for FY23. But the industry is demanding more.
Better access to capital: With the increase in repo rates and cost of borrowing up for new-age fintech non-bank finance companies (NBFCs), industry bodies are seeking government intervention on reducing cost of funds and creation of dedicated debt financing facilities for new-age lenders.
Simpler rules for insurtech: Last year, the Insurance Regulatory and Development Authority (IRDAI) and the government had implemented several reforms to make the sector more conducive for insurance providers and policyholders. Now, insurance providers are looking for eased norms to promote participation in the sector.
Rajasthan HC tells DGGI to halt coercive action against MyTeam11
The Rajasthan High Court has asked the Directorate General of GST Intelligence (DGGI) to refrain from taking coercive action against Jaipur-based gaming company MyTeam11.
This followed a petition by the company after DGGI issued a show-cause notice alleging that it was “misclassifying” the sale of ‘actionable claims’ as services and thereby avoiding tax.
Driving the news: A division bench of the court, in an order dated January 18, asked DGGI to file its reply to MyTeam’s petition within a month, following which a final order would be issued. ET has reviewed a copy of the order.
Issue in a nutshell: According to the DGGI notice, MyTeam11 offers games of chance – or betting – and not games of skill. Actionable claims are claims of any debt and are exempted from GST. But actionable claims on lotteries, betting and gambling are subject to GST.
‘Abuse of process’: The bench, comprising Chief Justice Pankaj Mithal and Justice Shubha Mehta, held that some of the games offered by the petitioners “have already been held to be games of skill rather than that of chance or that of betting/gambling”.
Further, the bench observed that since the matter on games of skill and chance has been settled by courts, “the impugned show cause notice is nothing but an abuse of the process of law”.
Why it matters: The order is significant as the DGGI had also issued a Rs 21,000 crore tax notice last year to Bengaluru-based gaming company Gameskraft, which has challenged the tax demand before the Karnataka High Court. The HC reserved its judgement in the case last November.
Executives at online gaming companies said the Rajasthan HC ruling may encourage more companies to challenge tax notices in court.
Seven countries to sign up for India Stack’s digital public goods
As many as seven countries will sign up to use India Stack’s digital public goods, Rajeev Chandrasekhar, union minister of state for electronics and information technology, told us.
These agreements will be signed at the World Government Summit that will be held from February 13 to 15 in Dubai where more than 140 countries are expected to participate.
DigiLocker tops wishlist: Sources said these countries are mainly interested in DigiLocker, a secure cloud-based platform for storing, sharing and verifying documents. About 14.4 crore Indians have used the platform so far.
Other platforms on offer are foundational identity programmes like the Modular Open Source Identity Platform (MOSIP), instant real time payments system Unified Payments Interface (UPI), Covid vaccination platform CoWIN and Health Stack.
Nadella praise: India’s digital initiatives and the country’s progress on building digital public goods have been extraordinary, Microsoft chairman and CEO Satya Nadella said during his keynote address at the Microsoft Future Ready Leadership Summit in Mumbai on January 3.
Zomato Gold returns with discounts on delivery and dining out
Zomato has brought back its Gold subscription programme two-and-a-half years after it was replaced by Zomato Pro. The Pro membership programme was shut down last year. Last month, CEO Deepinder Goyal had tweeted a teaser on the return of Zomato Gold.
Details: According to company sources, the Gold membership is currently being offered on an invite-only basis. However, users with existing Pro memberships are being offered Gold subscriptions for three months.
The new Zomato Gold membership costs Rs 999 for three months but is currently being offered at Rs 149 for three months.
Subscribers will get free deliveries at restaurants less than 10 km away on orders above Rs 199, and discounts on food deliveries and dining out.
Many avatars: In June 2020, Zomato shelved its Gold programme for Zomato Pro. That version of Zomato Gold offered several benefits, including a 1+1 offer on food and drinks at restaurants.
The company discontinued Zomato Pro in August 2022, months after it shut down its premium loyalty programme Zomato Pro Plus, which it launched in 2021.
Also Read: Zomato is winding up its 10-minute food delivery business
ETtech Done Deals
- Rigi has raised Rs 100 crore ($12.3 million) in a funding round led by Elevation Capital. Accel India, Stellaris Venture Partners and Sequoia Capital has also participated in the latest funding round of the online content broadcasting and mentoring platform provider. Rigi has also added new angel investors to its cap table.
- Ecozen, a maker of solar-powered cold-storage rooms among other products, on Tuesday said it has closed a Series C funding round of $25 million led by Nuveen and Dare Ventures in equity and debt. The Pune-headquartered company had kicked off the planned funding round with a first tranche of about $6.5 million last June.
- Proptech startup Landeed said on Tuesday it has raised $8.3 million in a round led by Draper Associates, Y Combinator and Bayhouse Capital. Landeed said it aims to build India’s fastest and most comprehensive property title search engine.
- Digital entertainment and technology company JetSynthesys said it has acquired a majority stake in Fanory, a monetisation platform for content creators. Former Twitter India head and Fanory cofounder Manish Maheshwari will join Jetsynthesys as president following this transaction.
Other Top Stories By Our Reporters
Ola to sell 5,000 used cars to Dbest Cars for Rs 125 crore: Ride-hailing company Ola said it would sell 5,000 cars owned by its subsidiary Ola Fleet Technology to used car-selling dealer Dbest Cars for Rs 125 crore. The company said it would replace the old vehicles with new ones, which, according to sources, will be EVs.
BharatPe makes three new hires: Embattled fintech startup BharatPe has announced three key appointments, including a chief information security officer, head of internal audit, and head of compliance. The company announced the appointment of Ambuj Bhalla as its chief information security officer (CISO), who will be responsible for the implementation of robust IT security and cybersecurity frameworks for the BharatPe Group. The firm has also appointed Rahul Bhatia as head of internal audit, and Ravinder Oberoi as head of compliance.
Global Picks We Are Reading
China is the world’s biggest face recognition dealer (Wired)
Elizabeth Holmes tried to flee US after conviction, prosecutors allege (The Washington Post)
Tech layoffs shock young workers. The older people? Not so much. (NYT)
