Mahindra buys troubled Rivigo’s B2B express business; Gameskraft gets Rs 21,000-crore GST notice

Credit: Tenor

Also in this letter:
■ Gameskraft gets Rs 21,000-crore tax notice for alleged GST evasion
■ India’s push for home-grown navigation system rattles smartphone giants
■ Flipkart faces users’ wrath over cancelled iPhone 13 orders

Mahindra Logistics buys Rivigo’s B2B express business for Rs 225 crore

Mahindra Logistics (MLL) has acquired the B2B express business of logistics startup Rivigo, the two entities said on Monday.

Details: Mahindra Logistics will acquire the business through a business transfer agreement (BTA), including its customers, team, assets, technology platform, and brand.

Rivigo will continue to own its truck fleet and the rights to the full truckload (FTL) operations.

The acquisition is expected to augment Mahindra Logistics’ existing B2B express business through the use of Rivigo’s network, technology and process capabilities.

Unicorn in trouble: We reported in August that Rivigo – which became a unicorn in 2019 – had held talks with ecommerce marketplace Flipkart and omnichannel baby products retailer FirstCry for a potential sale. The logistics tech unicorn was struggling to raise fresh funds as investors turned skittish amid the ongoing economic slowdown.

“The company is not in great health. It has tweaked its business model in the past from being an aggregator to being asset-heavy and owning trucks to now again being asset light… its fleet size reduced significantly from 3,000,” sources told us at the time.

“Rivigo has its foundation in the relay full truckload business. Over the years, we have built a strong brand in the PTL/express services with a pan-India network and high-quality technology and service backbone. We believe the customers, and employees of our PTL business will benefit greatly from being part of a high-quality, end-to-end supply chain services company like Mahindra Logistics,” said Deepak Garg, CEO of Rivigo Services Private Limited.

Consolidation: In February, Mahindra Logistics said it had acquired 60% of ZipZap Logistics, a last-mile logistics service provider that operates under the brand Whizzard, for Rs 71.73 crore. It also said it would buy out the remaining stake later and make it a fully-owned subsidiary.

Gameskraft gets Rs 21,000-crore tax notice for alleged GST evasion

The Directorate General of GST Intelligence has served a show-cause notice to Gameskraft Technology, a Bengaluru-based online gaming company, demanding Rs 21,000 crore in taxes, interest and penalties, the company said in a submission to the Karnataka High Court.

The court has stayed the notice and will hear the matter after the Dussehra holidays.

Catch up quick: Last December, GST authorities conducted a search of the company’s premises and attached its property and bank accounts, alleging it evaded Rs 460 crore in taxes. The company filed an appeal against the demand and attachment of its property and bank accounts.

The authorities have now issued a fresh show-cause notice, the company said, seeking the court’s intervention.

The GST was calculated at a rate of 28%.

Response: “We are confident that we will be able to respond to this notice to the full satisfaction of the authorities since they have sought to apply 28% tax applicable to games of chance and lottery, instead of the 18% applicable to online platforms of games of skill,” a Gameskraft spokesperson said, adding the company paid its GST and income tax dues as per standard industry practice.

The company has also told the court that the notice has been issued by an officer who didn’t have jurisdiction.

Online gaming rules: On September 21 we reported, citing sources, that e-gaming startup WinZo was against the idea of joining a self-regulatory organisation (SRO) for e-gaming firms. The development came amid efforts by the government to draft rules for online gaming companies.

WinZo had written to Minister of State for Electronics and IT Rajeev Chandrashekhar in June, expressing its views on the self-regulatory structure, the sources said. Other gaming firms have also had internal differences on the matter and there was consensus that one SRO might not be enough for the sector, the company added.

India’s push for home-grown navigation system rattles smartphone giants

India is pushing tech giants to make smartphones compatible with its home-grown navigation system within months, worrying the likes of Samsung, Xiaomi and Apple, who fear elevated costs and disruptions as the move requires hardware changes, Reuters reported, citing two industry sources and government documents.

Catch up quick: In line with Prime Minister Narendra Modi’s drive for self-reliance, India has over the years expanded the use of its regional navigation satellite system called NavIC (Navigation with Indian Constellation).

The Indian government wants to reduce dependence on foreign systems, including the widely used US Global Positioning System (GPS). It says NavIC provides more accurate domestic navigation and that its use would benefit the economy.

China, the European Union, Japan and Russia have their own global or regional navigation systems to rival GPS.

Driving the news: Operational since 2018, NavIC’s uptake is minimal. It is mandated in public vehicle location trackers, for example.

But the government and space officials want to broaden its use, and have this year pushed smartphone giants to make hardware changes to support NavIC, in addition to GPS, in new phones they will sell from January 2023.

Pushback: In private meetings in August and September, representatives of Apple, Xiaomi, Samsung and others pushed back, citing worries that making phones NavIC-compliant would mean higher research and production costs.

The changes would also require more testing clearances, which – with a January 1 deadline – would disrupt businesses and planned launches, the Reuters report said.

Also Read | Explainer: NavIC, India’s home-grown alternative to GPS

Flipkart faces customers’ wrath over cancelled iPhone 13 orders

Flipkart, which has been selling the iPhone 13 for around Rs 58,000 in its ongoing Big Billion Days sale, is facing a deluge of criticism on social media from users who claim their iPhone 13 orders were abruptly cancelled, and that their refunds were taking unusually long.

Several social media users speculated that the cancellations were due to a shortage of units amid heavy demand for the year-old iPhone.

Anger: “Booked iPhone 13 during the Big Billion Day Sale & was eagerly waiting for the delivery. The product was cancelled by the seller/ Flipkart without any explanation. Pathetic experience,” Twitter user Pulkit Jain posted.

Another Twitter user, Sneha Chakraborty, claimed she received a defective iPhone 13 and when she tried to return it, her request was rejected.

One user said his iPhone 13 order was cancelled 20 hours after he placed it, while another said hers was cancelled after the app told her it was out for delivery.

Festive sales off to a flyer: We reported on Monday morning that ecommerce festive season sales, which kicked off on Friday, have seen an overall volume growth of 28% – excluding smartphones – in the first two days compared to last year, according to data from ecommerce enablement firm Unicommerce.

Apple starts making the iPhone 14 in India

Apple has started manufacturing the iPhone 14 in India at Foxconn’s facility in Sriperumbudur on the outskirts of Chennai.

Customers will be able to buy the made-in-India iPhone 14 – launched earlier this month – in the next few days as the company plans to ramp up production gradually, sources told us.

The company has seen huge demand for the latest iPhones, with a waiting period of four to five weeks.

Progress: Apple started making iPhones in India in 2017 with the iPhone SE. and has since been manufacturing the iPhone 12 and iPhone 13 locally. However, it continues to import all the Pro models.

China’s loss: According to a JP Morgan report, Apple is likely to shift about 5% of iPhone 14 production to India from late 2022 and hit 25% by 2025. It is also forecast that nearly 25% of all Apple products will be manufactured outside China by 2025, from just 5% at present.

Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant in Mumbai and Gaurab Dasgupta in New Delhi. Graphics and illustrations by Rahul Awasthi.