E-commerce logistics and shipping software firm Shiprocket has unveiled Shiprocket Capital, a novel financing platform set to disburse up to Rs 100 crore to small and medium businesses (SMBs) operating online. The platform aims to provide revenue-based financing, offering collateral-free funds without equity dilution. This initiative is designed to assist SMBs in ramping up inventory, boosting marketing efforts, enhancing production, and expanding into new markets.
Key Features of Shiprocket Capital:
Shiprocket Capital plans to facilitate Rs 10 crore in revenue-based financing to SMBs within the next 12 months, starting December 2024. The repayment structure involves a one-time fee and a percentage of revenue generated by the SMB.
Diverse Support for E-commerce Businesses:
Shiprocket Capital is tailored to cater to e-commerce businesses spanning various categories, including fashion, consumer electronics, beauty and personal care, home and kitchen, and jewelry and accessories. The initiative acknowledges the challenges faced by e-commerce entrepreneurs in accessing traditional financing methods and seeks to streamline the process.
Efficient Disbursement Through NBFC Partners:
Capital disbursement will be carried out through partner non-banking financial companies (NBFCs) such as InCred, Indifi, Klub, Stride, Vedfin, Velocity, and GetVantage. Shiprocket aims to ensure a swift turnaround, disbursing funds within two days of document submission by the SMB.
Saahil Goel, Co-founder and CEO of Shiprocket, emphasizes the platform’s commitment to building a thriving ecosystem of one million e-commerce businesses in India by 2025. Shiprocket Capital stands as a strategic move to empower these businesses and be a growth partner through flexible capital solutions.
In a proactive move to bolster cybersecurity measures, the Goods and Services Tax Network (GSTN) has initiated the implementation of Two-Factor Authentication (2FA) for taxpayers accessing the GST portal. The successful pilot rollout in Haryana has paved the way for the first phase, encompassing Punjab, Chandigarh, Uttarakhand, Rajasthan, and Delhi.
Key Features of 2FA Implementation:
To access the GST portal, taxpayers will now be required to undergo a two-step verification process. After entering their user ID and password, a one-time password (OTP) will be dispatched to the registered Mobile Number and Email ID of the Primary Authorized Signatory.
Ensuring Smooth User Experience:
To facilitate a seamless experience, taxpayers are urged to maintain up-to-date contact information for their Authorized Signatory on the GST Portal. The OTP will only be solicited when there is a change in the taxpayer’s system (desktop or laptop) or location.
Phased Rollout Across India:
The rollout of 2FA commences on December 1, 2023, beginning with the aforementioned states in the first phase. Subsequently, the second phase will witness the extension of 2FA to all states across the country, solidifying the GSTN’s commitment to nationwide cybersecurity.
This strategic move aligns with the evolving landscape of online security, safeguarding taxpayer information and fortifying the integrity of the GST portal.
When setting up a small manufacturing plant, determining the appropriate license is crucial. The Shop and Establishment Act and the Factories Act govern distinct aspects of business operations. The Shop and Establishment registration, mandated by state-specific laws, is essential for commercial spaces, including shops, offices, and entertainment venues. This license is obligatory within 30 days of starting operations and plays a pivotal role in business documentation.
Shop and Establishment License: A Business Necessity
Applicable to a range of businesses, including home-based and e-commerce enterprises, the Shop and Establishment license is a fundamental requirement. It establishes the legitimacy of your business, facilitating processes such as securing loans and opening bank accounts. Compliance with this Act ensures adherence to working condition regulations.
Factory License: Safeguarding Workers’ Well-being
For small manufacturing plants, the Factories Act, 1948 stipulates the need for a factory license. Mandatory for factories with specified worker counts, this license ensures the welfare of workers and adherence to safety measures. Renewal options are available, making owners eligible for government benefits and safeguarding against penalties.
Navigating the Licensing Landscape
While the Shop and Establishment license focuses on working conditions in commercial spaces, the Factory license is tailored for manufacturing units. Careful consideration of the nature of your business and workforce size will guide you in choosing the appropriate license, ensuring legal compliance and the well-being of your employees.
The Income Tax (IT) Department is considering filing an appeal in the Supreme Court against a Delhi High Court ruling that rendered any IT assessment order without a Document Identification Number (DIN) legally invalid. The Delhi HC, in April, upheld the 2019 Central Board of Direct Taxes (CBDT) circular, mandating DIN for issued documents. The circular stated that any communication lacking DIN would be considered invalid. The IT Department argued that the absence of DIN is a technical glitch, not an oversight affecting the validity of assessment proceedings. However, the HC deemed this argument “untenable,” citing the CBDT circular’s explicit language.
Legal Implications and Potential Appeal
The Delhi HC ruling has legal implications, rendering numerous previously issued orders legally invalid due to the absence of DIN. The IT Department is in the process of finalizing its appeal to the Supreme Court, seeking expert opinions before proceeding.
CBDT Circular Binding and Jurisdictional Error
Legal experts note that the Delhi HC ruling establishes two key positions: CBDT circulars are binding and mandatory, and non-compliance with CBDT circulars constitutes a jurisdictional error. The court rejected the notion that such errors could be rectified under Section 292B of the IT Act.
Potential Ramifications on Time-Bound Notices
The ruling has led to an influx of writs from taxpayers challenging assessments where DIN was missing. The IT Department may contest the High Court’s decision, particularly concerning time-barred notices/orders, where applying DIN retroactively could pose challenges.
The Finance Ministry aims to introduce pre-filled goods and services tax (GST) return forms before the upcoming fiscal year, addressing the challenge of significant data mismatches leading to unwarranted tax notices. The move is expected to enhance the ease of doing business and curb discrepancies in the GST system. The ministry is currently assessing the additional costs associated with reinforcing digital infrastructure to prevent system slowdowns or crashes when consolidating data from various databases.
Addressing Data Mismatches for Business Ease
A senior government official highlighted that the pre-filled consolidated GST return form is in progress and could be implemented before the next fiscal year. The initiative aims to combat the rising issue of data mismatches, which often results in unnecessary demand notices. Multiple templates are being employed in the development process.
Automated Scrutiny and Technological Analysis
The automated scrutiny module for GST returns presently sends notices to assesses when data mismatches exceed 20%, utilizing data analytics and system-identified risks. The Central Board of Indirect Taxes and Customs (CBIC) is currently evaluating the necessary technological upgrades, weighing the potential additional costs against the impact on system speed and response time.
Pilot Testing and Approval Process
Before full implementation, a pilot program will assess the functionality and time efficiency of the pre-filled GST return form. Notably, the initiative, focused on taxpayers’ convenience, doesn’t require GST Council approval to proceed, according to the official. The commercial question of acceptable additional costs versus benefits is under debate, emphasizing the need for a balanced approach to technological enhancements in tax processes.
Anicut Capital, through its third private credit fund Grand Anicut Fund (GAF) 4, has injected INR 133 crore into IT services firm TAO Digital Solutions. The funds are earmarked for TAO’s strategic acquisition of data intelligence services company TriGeo Technologies, aimed at bolstering its digitization services. TAO Digital Solutions, a global player in technology services encompassing product engineering, managed services, cybersecurity, and payment solutions, operates with a team of over 2,400 professionals worldwide.
Expanding Capabilities for Customer-Centric Growth
Rajkumar Velagapudi, CEO of TAO Digital Solutions, emphasized the pivotal role this investment will play in elevating their service offerings. With the TriGeo acquisition, TAO plans to integrate digitization services, annotation & labelling, 3D modeling, and digital twinning capabilities to enhance customer satisfaction and position itself as a market leader.
Anicut Capital’s Strategic Deployments
Anicut Capital’s GAF-4, a Rs 1,000 crore fund launched in Q1 FY24, has strategically deployed over Rs 220 crores in sectors like technology, ITeS, electronics manufacturing, and engineering services within the past seven months. A. Jayaseelan, Partner and Chief Credit Officer at Anicut Capital, expressed confidence in TAO’s trajectory, stating that the acquisition of TriGeo is TAO’s initial stride towards market leadership.
Driving Digital Transformation in a Growing Market
The investment aligns with the booming global digital transformation market, projected to surge from $695.5 billion in 2023 to $3,144.9 billion by 2030, with a compound annual growth rate of 24.1%. Anicut Capital, managing assets worth Rs 3,000 crore, has a diverse portfolio, including investments in notable enterprises like Wow! Momo, Bira, Sugar Cosmetics, Lendingkart, and others.
Fintech SaaS platform Clear, backed by Peak XV Partners, achieved a significant milestone in the financial year ending March 31, 2023, with its consolidated operating revenue soaring by over 85% to INR 108.8 Cr. Although this propelled Clear past the coveted INR 100 Cr mark, the company experienced a nearly 5% increase in net loss, reaching INR 233.5 Cr, compared to INR 222.7 Cr in the preceding fiscal year.
Revenue Streams and Geographic Breakdown
Clear’s primary revenue streams, stemming from services such as tax preparation, e-filing, accounting, and investment planning solutions, accounted for over INR 104 Cr in FY23. The domestic market in India remained Clear’s stronghold, contributing over INR 103 Cr, while international revenue amounted to INR 5.4 Cr. Additionally, Clear’s acquisition of CimplyFive Corporate Secretarial Services in July the previous year contributed INR 2.1 Cr, but also incurred an impairment loss of INR 8.13 Cr.
Path to Profitability
Despite the surge in operating revenue, Clear emphasized in its FY23 financial filings that the positive trajectory has brought the company closer to its profitability goal. The increase in revenue, driven by services like taxation and software subscriptions, reflects Clear’s commitment to financial growth and market leadership.
Expenditure Dynamics
Clear’s total expenditure rose by over 21% to INR 343.7 Cr in FY23, growing at a slower pace than its operating revenue. This strategic balance suggests a focused approach to sustainable growth, as Clear navigates the dynamic landscape of financial technology.
The Small Industries Development Bank of India (SIDBI) has entered into a memorandum of understanding (MoU) with the Technology Development Board (TDB) under the Department of Science and Technology. The MoU aims to facilitate enhanced credit access for Micro, Small, and Medium Enterprises (MSMEs) engaged in developing and applying indigenous or imported technology for broader domestic applications. SIDBI and TDB will collaborate to refer additional funding requirements of previously funded companies to each other. Dedicated contacts within both organizations will streamline coordination, ensuring a seamless exchange of referrals. Additionally, financial support will be extended to eligible MSMEs in alignment with respective policy guidelines. The collaboration seeks to foster innovation, job creation, and overall economic development in the MSME sector. Rajesh Kumar Pathak, Secretary of TDB, expressed the significance of the collaboration in promoting technology development and creating an environment conducive to the growth of innovative MSMEs.
Comprehensive Support Beyond Financial Assistance
In addition to financial support, SIDBI and TDB will engage in outreach and marketing activities to promote the initiative, reaching a wider audience of MSMEs. The collaboration builds on SIDBI’s recent initiatives, including the launch of the MSME Economic Activity Index – Sumpoorn in partnership with Jocata. The index leverages anonymized monthly sales data from over 50,000 MSMEs, aiming to bridge the knowledge gap and support stakeholders in strategizing credit flow and formulating policies for sustainable MSME growth.
The finance ministry aims to introduce pre-filled Goods and Services Tax (GST) return forms before the upcoming fiscal year to address the challenge of significant data mismatches resulting in tax notices. This initiative seeks to enhance the ease of doing business and prevent unnecessary demand notices. The pre-filled consolidated GST return form is currently under development, utilizing multiple templates. The automated scrutiny module, which triggers notices for data mismatches exceeding 20 percent, will benefit from this enhancement.
Technological Analysis for Seamless Implementation
The Central Board of Indirect Taxes and Customs (CBIC) is assessing the technological requirements and potential upgrades, considering the additional costs and system impact. The analysis aims to determine the balance between implementing the pre-filled form without compromising system efficiency and response time. The discussion involves defining the technological asks for digital infrastructure and evaluating the acceptable additional cost compared to the benefits.
Pilot Testing and Council Approval
The plan involves conducting a pilot to test the functionality and efficiency of the pre-filled GST return form. While seeking to enhance taxpayer convenience, the initiative does not require GST Council approval to proceed. The move aims to streamline the GST return process, reduce mismatches, and contribute to a more efficient and business-friendly tax environment.
Anicut Capital, through its third private credit fund Grand Anicut Fund (GAF) 4, has invested Rs 133 crore in IT services firm TAO Digital Solutions. The funds will be utilized by TAO Digital Solutions to acquire data intelligence services company TriGeo Technologies, further expanding its digitization services. TAO Digital Solutions specializes in technology services, including product engineering, managed services, cybersecurity, digitization, and payment solutions. With a global presence and a team of over 2,400 professionals, the company aims to enhance its offerings through the acquisition of TriGeo.
Strategic Expansion and Digital Transformation
Rajkumar Velagapudi, CEO of TAO Digital Solutions, expressed that the investment will play a pivotal role in elevating their services and taking a significant leap in their journey. The acquisition of TriGeo will enable TAO to incorporate digitization services, annotation & labeling, 3D modeling, and digital twinning capabilities to better serve customers.
Anicut Capital’s Strategic Investments
Anicut Capital’s Grand Anicut Fund-4 (GAF-4), launched in Q1 FY24, has deployed over Rs 220 crore in sectors such as technology, ITeS, electronics manufacturing, and engineering services over the past seven months. Anicut Capital believes that TAO is well-positioned to become a market leader with its technological advancements, and the acquisition of TriGeo marks a significant step in that direction.
