One quick thing: Standalone Instamart app from Swiggy goes live

In today’s newsletter:

• Infosys files counterclaim, levels charges against Cognizant CEO
• Supreme Court relief for real-money gaming cos
• Budget 2025: Fintechs pin hopes on cheaper credit

Was this newsletter forwarded to you? You can sign up for Tech3 here

Where there's smoke, there's fire – a US courtroom has become the battleground for a blazing rivalry between two IT giants.

Infosys filed a counterclaim against Cognizant, accusing the company and its CEO, Ravi Kumar S, of using anti-competitive tactics and misappropriating sensitive information to impede the growth of its healthcare platform, we exclusively reported.

• This legal filing follows a lawsuit from Cognizant in August of last year, which had accused Infosys of stealing trade secrets related to healthcare software

Infosys is seeking a jury trial, asking the court to declare Cognizant’s Non-Disclosure and Access Agreements (NDAAs) invalid, and to award triple damages as well as attorneys' fees.

Infosys claims that Cognizant’s actions have stifled competition, limited consumer choice, and ballooned prices in the US healthcare sector.

• Moreover, Infosys alleges that Cognizant blocked its access to training programmes and imposed one-sided contracts on clients

It further accuses Cognizant of interfering with Infosys Helix’s development by luring away key executives and creating barriers to entry.

This suit signals the deepening rivalry between two major IT players in the midst of a turbulent market.

• Ravi Kumar’s involvement adds a personal twist to the legal drama, as he is a former Infosys executive who later joined Cognizant as CEO

Phrases like "Encouraging disloyal employee behavior" and "Cognizant bullies its clients" in the filing highlight the case's seriousness.

Dig deeper

Real-money gaming (RMG) firms can finally breathe easy now...at least for a while.

The Supreme Court has granted a stay on GST show cause notices, worth more than Rs 1.5 lakh crore, issued by the revenue department against RMG firms. 

• Over 50 petitions from RMG firms such as Gameskraft, Games24x7, and WinZO, as well as prominent industry bodies like the EGF and AIGF, challenging these retrospective tax notices, are currently pending in the apex court. These include several pleas transferred from various high courts

At the heart of the dispute is the differing interpretation of how GST should be levied on RMG platforms.

• The GST Council amended its laws last year to levy 28% GST on the full face value of player deposits

• Tax officials said that GST rates on RMG platforms were always 28% on full face value and the amendment was only "clarificatory" in nature

RMG platforms, who were paying 18% GST on platform fees until October 2023, however, argue that they should be taxed on platform fees since that is their actual revenue, instead of total deposits.

All eyes will now be on the Supreme Court's final hearing that is slated to begin on March 18. 

• Several industry executives have previously told us that any potential retrospective taxation dues will make it infeasible to operate these platforms and will likely lead to shutdowns. 

 Here’s what companies are saying about Supreme Court's decision

While the industry awaits clarity on retrospective taxation, some companies are beginning to adapt to the new GST regime. 

• Games24x7 co-founder Trivikraman Thampy told us in an interview that they are now in a better better position to navigate the new tax regime

• This comes on the back of the stellar growth across its offerings, particularly fantasy sports

Most of the fintechs provide a lot of services and products, but the main line of business that rakes in the moolah is lending.

• Over the last couple of years, several rounds of prodding and measures by the banking regulator Reserve Bank of India have seen a squeeze on the credit flowing to the fintechs

While a large segment of fintechs focus on consumer lending, where the stress is, another big area of focus for fintechs is the credit to MSMEs. A few measures can alleviate the pain.

• Continuation of credit guarantees allocation

• Exemption of TDS on interest paid

• A dedicated India Fintech Fund

The fintech or the startup business model, at least in the initial years, is growth. This helps the companies gain economies of scale and investor interest for primary capital infusion.

• Over the last few quarters, the NPAs have started cooling
  
  
• Most fintechs have exited the low-ticket loans as demanded by the regulator

• There are hopes of consumption and GDP picking up in 2025

Dig deeper

• Elon Musk’s AI startup, xAI, launched its first stand-alone consumer app, its latest step as the company tries to catch up with players such as OpenAI and Google in the generative AI race.
  
  
• TCS started seeing more Gen AI proof of concepts move into production in the December quarter, IT services major chief executive officer and managing director K Krithivasan said.

Looking for something that will keep you hooked all weekend long?

First up, All We Imagine As Light, a Golden Globe-nominated film that’s now streaming on Disney+ Hotstar. 

• Directed by Payal Kapadia, the story delves deep into the lives of two nurses, portraying the highs and lows of their personal and professional journeys

For those craving a darker, more intense watch, Black Warrant is your go-to series. 

Based on the bestselling book Black Warrant: Confessions of a Tihar Jailer, this show transports you to the heart of Tihar Jail, one of Asia's largest prisons. Watch it on Netflix

Note: By subscribing to Tech3 you have already made the right choice. Top it up with a premium offering, the Moneycontrol Pro Panorama, newsletter that gives you a sharp take on macros, markets, business and finance. Sign up for Pro from this link to get this newsletter in your inbox and also a host of content enjoyed by over a million subscribers.