QBiz: New Fuel Prices in Five Cities; Ola Losses Tripled in 2016

The Quint brings to you a collection of important business stories from the previous day.

The base prices of petrol and diesel will continue to be the global benchmarks. (Photo: iStock)

1. New Fuel Prices Every Midnight From 1 May in Five Cities

Starting Monday, five places – Puducherry, Visakhapatnam, Udaipur, Jamshedpur and Chandigarh – as part of a pilot project will see petrol and diesel being sold under a daily price change regime.

The base prices of petrol and diesel will continue to be the global benchmarks. Marketing margins, dealer commission, tax and other levies will be added to the base price. Prices will be conveyed to dealers a day earlier at 8.30 pm.

We will continue to take 15 days’ average, but it will change every day in these cities. The days will be calculated skipping the previous two days to make the pricing more precise. For instance, for a new price on April 29, global prices of previous two days will be skipped. An average of 15 days will be backdated from April 26.

An Indian Oil Corporation executive said. 

(Source: Business Standard)

2. Ola Losses Tripled to Rs 2,313 Crore During 2015-16: Tofler Report

Ola Cabs, which is run by ANI Technologies Pvt. Ltd, reported a seven-fold revenue growth in the year ended 31 March 2016, but losses nearly tripled at India’s largest cab hailing start-up on the back of heavy discounts to customers and spending on incentives to its drivers.

According to regulatory documents sourced from data platform Tofler, Ola posted revenue of Rs 758.23 crore in 2015-16, compared with Rs 103.8 crore in the year-ago period. Losses nearly tripled to Rs 2,313.7 crore from Rs 796 crore in the same period.

Cab-hailing services such as Ola and Uber generate revenues from the commission that they charge drivers.

(Source: Livemint)

3. Govt Under Pressure to Push GST Rollout to 1 September

Faced with multiple implementation challenges as they race to roll out the Goods and Services tax (GST) from 1 July, a number of states as well as businesses want the new levy to be introduced from 1 September.

According to official data, barring the southern States, enrolment of businesses under GST continues to lag, with only about 70 per cent of them migrating as of the 30 April deadline.

Migration of service tax and Central excise assessees to GST was also low at 43.73 per cent and 24 per cent, respectively.

The issue is likely to be taken up at the GST Council meeting in Srinagar on 18 and 19 May.

(Source: The HIndu Businessline)

4. Finance Ministry to Reduce Corporate Tax to 25% for Bigger Companies

The Finance Ministry is considering a plan to extend the benefit of a lower 25% corporate tax rate to relatively bigger companies in 2018-19, a person privy to early discussions in the government said.

With tax revenue growth surpassing expectations in 2016-17, the government is now planning to raise the revenue eligibility for companies to anywhere between Rs 100 crore and Rs 500 crore subject to revenue implications of the move at the time of finalising the budget for 2018-19, the person said on condition of anonymity.

Finance Minister Arun Jaitley in 2015 first proposed to cut corporate tax from 30% to 25% over the next four years.

(Source: Livemint)

5. Government Keen to Push Ahead With Consolidation of More Public Sector Banks

Fresh from the successful merger of five associates with the State Bank of India Ltd. (SBI), the government is looking to consolidate more public banks going forward, with an aim to create only a few lenders of global size and scale.

The Finance Ministry, according to an official, “will soon undertake a broad study on further consolidation and look at various options for merger among the remaining 21 public sector banks”.

Last week, Reserve Bank of India (RBI) Governor Urjit Patel said Indian banking system could be better off if some public sector banks are consolidated to have a fewer but healthier entities as it would help in dealing with the problem of stressed assets.

The merger proposals in the banking sector would require clearance from the Competition Commission of India (CCI), the ministry official added.

(Source: BloombergQuint)

6. Foreign Investors Pour in a Whopping Rs 22,758 Crore in April

Foreign investors poured in a whopping $3.5 billion in the Indian capital markets in April as Sebi raised investment limit for FPIs in government debt coupled with strong global cues.

Most of the funds were invested in the debt markets during the month.

"Foreign Portfolio Investors (FPIs) are investing more in debt mainly due to two reasons. Sebi raised FPI investment limit for government debt and benchmark 10-year government bond yield rose to its highest in 7 months," Advisorymandi.com CEO Kaushalendra Singh Sengar said.

Besides, RBI Governor Urjit Patel recently said that banks still have scope to cut loan rates even though demonetisation has already helped faster monetary transmission into interest rates, which has further raised investors' sentiments.

(Source: The Economic Times)

7. If Housing Board Has Its Way, Stamp Duty & Registration Fees on Houses May Fall to 5-6%

Home-ownership costs in India may fall if the regulator for the country's housing finance companies is successful in convincing the state governments to cut stamp duties and registration fees, arguing that more revenue streams would help compensate losses from the reduced rates.

"We have engaged with some state governments on how they could reduce stamp duty for affordable housing," Sriram Kalyanaraman, MD of the National Housing Bank (NHB), told ET.

Such a reduction will bring down their margin money and provide relief to many Indians, for whom owning a 'home' is still an aspiration." If the NHB succeeds, stamp duties and registration fees may decline to 5-6% of the basic cost of an apartment or a property, compared with the existing rate that is as high as 12.5% in some states.

(Source: The Economic Times)

8. Essar Group Seeks Rs 4,000 Crore Refund From Tax Department

Ruias-owned Essar Group is seeking a refund of Rs 4,000 crore capital gains tax deducted six years ago when it sold its stake in telecom venture to Vodafone Plc. of the U.K.

The group's Mauritius unit, Essar Communications in July 2011 had sold 22 percent in Vodafone Essar for $4.2 billion.

Vodafone, however, paid Essar $3.32 billion after withholding $0.88 billion (around Rs 4,000 crore) as tax deducted at source (TDS). It deposited that money with the income tax department as tax on long-term capital gains made by Essar.

Official sources said Essar Communications has moved the Authority for Advanced Rulings (AAR) seeking a refund of the tax deposited by Vodafone as it believes that no tax was due on the transfer under the India-Mauritius treaty.

The tax department is, however, contesting the claim of Essar Communications, saying the deal was structured in a way so as to misuse the provision of the treaty.

(Source: BloombergQuint)

9. Apple Set to Make Its Online Store Debut This Year

Apple's iconic offline stores in India is still far away, with the company first planning to set up its own online store by this year piggy-riding on the fact that local manufacturers can have a direct online presence in the country.

Apple will initially start its online store by selling iPhone SE which will be manufactured in India and the product portfolio will be expanded as it grows the local production to other models.

Two senior industry officials said Apple's online store plans does not require foreign direct investment (FDI) approval in retail since the government allows companies to directly sell online models manufactured locally. The company plans to start assembling of iPhones in Bengaluru by June.

(Source: The Economic Times)