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Excise duty on aviation fuel cut to 11% from 14%

The move will provide relief to airlines who are facing high fuel costs and falling rupee. It assumes significance as ATF costs constitute 35-40 per cent of the total operating cost of an airline in India.

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New Delhi, Oct 10 : Days after central excise duty cut in petrol and diesel, the government on Wednesday reduced the excise duty on aviation fuel to 11 per cent from 14 per cent in order to provide relief to airlines from high fuel costs.

The Central Government “on being satisfied that it is necessary in the public interest” took the decision to reduce the excise duty on aviation turbine fuel (ATF) to 11 per cent, a notification by the Revenue Department of Ministry of Finance said.

“This notification shall come into force with effect from the 11th day of October, 2018,” it said.

The move will provide relief to airlines who are facing high fuel costs and falling rupee. It assumes significance as ATF costs constitute 35-40 per cent of the total operating cost of an airline in India.

The government on September 26 had raised import duty on ATF to five per cent from zero per cent, along with duty hikes in 18 other items, to cut current account deficit.

The excise duty on ATF was raised to 14 per cent from 8 per cent in March 2014 when Brent crude oil prices had fallen to $36 a barrel. However, with oil prices hovering above $83 a barrel, several airlines posted losses in the first quarter this fiscal.

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Paytm Dares Google, Brings Back Cricket League With UPI Cashback

Paytm said that the cashback was being given following all rules and regulations set by the government.

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New Delhi: Home-grown financial services platform Paytm, which was briefly removed from Google Play Store for alleged policy violations earlier this month, said on Monday that it has brought back the Paytm Cricket League with UPI cashback and scratch cards.

Now, users can collect stickers of their favourite cricket stars as they pay digitally for their mobile bills, recharges, buying groceries or money transfers, Paytm said.

Once they complete a set, they can redeem it for cashback up to Rs 1,000, it added.

Every sticker collected by the user is automatically added to the cricket album. There are three different milestones to be achieved for getting cashback — 11 unique cricket players, 11 unique bowlers or 11 unique batsmen.

Whenever a milestone is achieved, the users get a scratch card with an assured cashback.

“We are excited to bring Paytm Cricket League back on our app to reward users with UPI cashback on reaching various milestones, accomplished by collecting player stickers,” a Paytm spokesperson said in a statement.

Earlier, Paytm in a blog post stated that Google mandated it to remove the UPI cashback and scratch cards campaign to get re-listed on the Android Play Store even though offering both is legal in India.

Paytm said that the cashback was being given following all rules and regulations set by the government.

The company alleged that it was “arm-twisted” by the search engine major to comply with what it called “biased Play Store policies that are meant to artificially create Google’s market dominance.”

Later, the Paytm app was restored on the Play Store after a gap of a few hours.

“We maintain that our promotional campaign was within guidelines and there was no violation. We believe that such arbitrary actions and accusatory labelling go against the laws of our country and acceptable norms of fair competition by arbitrarily depriving our users of innovative services,” the Paytm spokesperson said.

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‘Corporate vultures eying small banks, merge Lakshmi Vilas Bank with govt bank’

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Chennai: The Reserve Bank of India (RBI) should take a prompt and correct action of merging the 93-year-old Lakshmi Vilas Bank (LVB) with a nationalised bank, a top leader of one of the largest bank unions said.

“There are a number of corporate vultures that are circling the small-old generation private banks for a take over. These regional banks have their own tradition and culture and taking them beyond certain borders and expanding their size will result in failure,” All India Bank Employees’ Association (AIBEA) General Secretary C.H. Venkatachalam told IANS.

It is not known who brings the suitors for the south-based, regional old-generation private banks and for what purpose.

Referring to the voting out of seven Directors of the Lakshmi Vilas Bank, and the statutory auditors by a group of shareholders at annual general meeting held on September 25, Venkatachalam said it is time for the RBI to act quickly in the interests of depositors.

“The RBI should take necessary steps to merge the LVB with a public sector bank to protect the depositors, rather than looking out for suitors who may not be suited for the bank’s culture,” he said.

According to Venkatachalam, banks like the LVB, Karur Vysya Bank (KVB), Tamilnad Mercantile Bank (TMB), Karnataka Bank and others are largely regional banks steeped in their own tradition.

“Expanding them into unknown territories would result in trouble for them,” he said.

Citing the case of Kerala-based small-sized Dhanlaxmi Bank, Venkatachalam recalled that around 2008-2012, it made a loss of over Rs 850 crore as the top management brought it to serious problems in the name of modernising it.

He said with the intervention of the RBI, a change in top management, and strengthening its capital base, etc. and inducting some reputed people on the bank’s Board, Dhanlaxmi Bank turned around and earned profit.

As a part of turnaround, the bank closed down many of its branches in north Indian states, where inadequate controls landed it in problems, he said.

Venkatachalam said for the past two years, the Dhanlaxmi Bank is making profits with the profit for last fiscal being Rs 65 crore – the highest since the bank’s inception.

He pointed out the Kumbakonam-based City Union Bank, which is operating steadily, as an example of a well-run, small-sized old generation bank which was started in 1904.

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Govt may consider halving cess on domestic crude

The changes would also provide a level playing field to domestic companies as imported crude does not attract cess.

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New Delhi: The government may give a ‘Make in India’ push to oil and gas explorers, as it is considering a proposal to halve cess on domestic crude oil to encourage exploration activity and allow Covid-hit oil producers to protect their margins at a time when a glut in the market and suppressed demand is pushing down prices.

Cess on domestic crude is currently levied at the rate of 20 per cent of the value of oil. Official sources said that this may come to 10 per cent if a proposal given by the industry and the Oil Ministry is accepted by the Finance Ministry.

A top Oil Ministry official said that they are looking at extending tax concessions, along with reduction in oil cess and the Finance Ministry has been apprised of the matter for action.

Though the larger view is in favour of halving the cess, the exact quantum would be worked out later. The reduction in the levy has huge revenue implications as ONGC alone pays cess in excess of Rs 10,000 crore annually.

The changes would also provide a level playing field to domestic companies as imported crude does not attract cess.

“Cess is levied only on crude oil produced domestically. Thus, it places domestic crude oil production vis-a-vis imported crude oil at a significant disadvantage as imported crude does not attract such duty. This levy is against the spirit of ‘Make in India’,” industry chamber FICCI had said in its memorandum given to the Finance Ministry earlier.

The Finance Ministry had revised oil cess in the FY17 Union Budget, shifting it from specific charge of Rs 4,500 per tonne of crude to an ad valorem rate of 20 per cent. This was done to help the exploration firms from higher cess burden at a time when crude oil prices were falling.

Though oil prices are moving at over $40 a barrel for some time now, fluctuations in pricing always puts domestic crude producers at a disadvantage.

The problem is magnified as cess incurred by producers is not recoverable from refineries and forms part of cost of production of crude oil. The Oil Industry (Development) Act, 1974, provides for collection of cess as a duty of excise on indigenous crude oil. This adds to loss of revenue for exploration companies.

The government is looking to reduce tax burden on oil companies to push up domestic production that has stagnated for past several years at around 30-34 million tonne.

The reduction in oil cess would benefit upstream companies such as ONGC and Cairn India whose production is subjected to the oil industry development cess levied on an ad valorem basis.

But under the new open acreage licensing policy (OALP), which provides pricing and marketing freedom to operators along with the power to select the block for exploration, does not attract oil cess. This puts the older oil and gas blocks at a disadvantage to any new hydrocarbon finds.

Currently, state-owned ONGC and OIL pay a cess on crude oil they produce from their allotted fields on a nomination basis. Cairn India has to pay the same cess for oil from the Rajasthan block.

Most of crude oil produced in India comes from pre-NELP and nomination blocks and is liable for payment of cess. NELP blocks like Reliance Industries’ KG-D6 are exempt from payment of cess while pre-NELP discovered blocks like Panna/Mukta and Tapti and Ravva pay a fixed rate of cess of Rs 900 per tonne.

The cess was levied at Rs 60 per tonne in July 1974 and subsequently revised from time to time. In 2005-06, when the crude oil prices had increased from an average of $40 per barrel to $60, the OID cess was raised from Rs 1,800 to Rs 2,500 per tonne from March 1, 2006. Again, when the crude prices climbed to over $100, the rate of cess went up to Rs 4,500 ($12 per barrel) with effect from March 17, 2012.

–IANS

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