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GST will have positive impact on states’ finances: Ind-Ra

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New Delhi, Aug 28: The implementation of the Goods and Services tax (GST) will have a positive impact on state governments’ finances in the medium to long term, domestic rating agency India Ratings and Research (Ind-Ra) said on Monday.

Even in the short term, the impact on aggregate state finances will be positive but calculations show that the picture may vary from state to state, it said in a report.

The report said that GST revenues of all states combined will grow at 16.6 per cent in 2017-18 over 2015-16. However, since the picture at the individual state level differs, eight states namely Andhra Pradesh, Chhattisgarh, Gujarat, Himachal Pradesh, Madhya Pradesh, Odisha, Punjab and Tamil Nadu would need compensation from the central government for any revenue loss under baseline scenario, it said.

Post introduction of GST, input tax credit is available on both goods and services. The growth of GST component of states’ own tax revenue for all states in such a case would drop to 15.5 per cent in 2017-18 and three more states namely, Goa, Jammu and Kashmir and Jharkhand would require compensation from the central government, it said.

“The total compensation amount therefore would increase to Rs 95 billion in current fiscal. This is based on the assumption that in the final production of goods and services, service tax accounts for 10 per cent,” the report stated.

The Centre has agreed to compensate states for five years at the growth rate of 14 per cent. During FY12-FY17, the states’ tax revenue on an average grew by 14 per cent. However, there are wide variations across states, with Punjab taxes growing at just 8.47 per cent during FY12-FY17 while Telangana’s at 39.70 per cent.

Nine state-level taxes subsumed in GST include state value added tax, central sales tax, purchase tax, luxury tax, entry tax (all forms), entertainment tax (except those levied by local bodies), taxes on advertisements, taxes on lotteries, betting and gambling and state cesses and surcharges so far as they relate to the supply of goods or services.

However, taxes on income, property and capital transactions, petroleum products, state excise and electricity duty are not part of GST and states would continue to levy and collect these in the same manner as earlier.

At an aggregate level, the state taxes that are subsumed in GST accounted for 55 per cent of states’ tax revenue.

“Like the state VAT which was rolled out from April 2005 to January 2008, implementation of GST will also bring in some efficiency gains. If we combine the 5 per cent efficiency gain with 10 per cent input tax credit on services tax, then only five states namely Chhattisgarh, Gujarat, Odisha, Punjab and Tamil Nadu would need compensation from the central government and the total compensation amount would drop to Rs 37 billion in 2017-18,” it said.

To be able to absorb the positive impact of GST on state finances, states will have to keep a constant vigil on the buoyancy of taxes that are outside the purview of GST as also their own non-tax revenues, it added.

IANS

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Sensex over 50K mark as Biden, Budget fuel fast recovery hopes

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Positive global cues and expectations of healthy quarterly results, along with that of a supportive Union Budget FY22, powered the ascent of India’s barometer index — the S&P BSE Sensex — to cross the 50,000 mark on Thursday.

However, the barometer index dipped below the psychologically important mark due to profit booking at the end of the day’s trade.

The Sensex closed at 49,624.76, lower by 167.36 points, or 0.34 per cent, from its previous close of 49,792.12.

It opened at 50,162.05 and touched a fresh all-time high of 50,184.01 points.

The Nifty50 on the National Stock Exchange (NSE) also touched a new record high of 14,753.55 points. It ended the day’s trade at 14,590.35, lower by 54.35 points, or 0.37 per cent, from its previous close.

Earlier in the day, Sensex crossed the 50,000-mark.

Coming a day after Joe Biden’s inauguration as US President, the BSE Sensex mirrored its Asian counterparts in having a gap-up opening.

In fact, the positivity sentiment led it to open above the 50,000-mark. The gains of the last 5,000 points in Sensex has come in just 32 trading sessions.

Moreover, expectations of an even faster economic recovery on the back of the vaccination programme have been cited as other factors for the up-move.

Besides, easy liquidity conditions across the global have been funnelling into India’s market, as FIIs shore up their stakes and pump-up this rally.

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Mi India’s Republic Day Sale: List of TVs, Smart Bands, and Smartphones available at Huge discounts

Flipkart VIP, Amazon Prime, and Mi VIP Club members will be able to take advantage of this sale from January 19, a day before.

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Mi India has announced the Republic Day offer. The sale offers huge discount offers on a variety of products including smartphones, smart TVs, and Smart Bands.

Mi India’s Republic Days offer sale will start from 12 noon on January 20, 2021, which will continue till 11.59 PM on the night of January 24, 2021.

This offer can be enjoyed on the e-commerce sites Amazon, Flipkart, and Mi.com. Flipkart VIP, Amazon Prime, and Mi VIP Club members will be able to take advantage of this sale from January 19, a day before.

Mi Smart Band 4

Selling Price – 2,299

Sale price – 1,899

Mi TV Stick

Selling Price – 2,799

Sale price -2,299

Mi Box 4K

Selling Price – 3,499

Sale price – 3,299

Mi LED TV 4A PRO 108 cm (43)

Selling Price – 24,999

Sale Price – 23,999

Mi LED TV 4X 50

Selling Price – 34,999

Sale Price – 33,999

Mi Watch Revolve Midnight Black & Silver

Selling Price – 10,999

Sale price – 8,999

Earphones (TWS) – Mi True Wireless Earphones 2C

Selling Price – 2,499

Sale Price – 1,999

Earphones (TWS) – Mi True Wireless Earphones 2

Selling Price – 3,999

Sale price – 2,499

Mi Beard Trimmer 1C

Selling Price – 999

Sale Price – 799

Mi Smart Water Purifier (RO+UV)

Selling Price – 12,999

Sale price – 9,999

Redmi Earbuds S

Selling Price – 1,799

Sale price – 1,499

Redmi Smart Band

Selling Price – 1,599

Sale price – 1,299

Redmi 9i (4+ 64GB)

Selling Price – 8,299

Sale price – 7,999

Redmi 9 Prime (4+64GB)

Selling Price – 9,999

Sale price – 9,499

Redmi Note 9 (6+128GB)

Selling Price – 14,999

Sale price – 13,999

Redmi Note 9 Pro (4+128GB)

Selling Price – 15,999

Sale price – 13,999

Redmi Note 9 Pro Max (6+64GB)

Selling Price – 16,999

Sale Price – 14,999

Mi LED TV 4A PRO 80 cm (32)

Selling Price – 14,999

Sale Price – 14,499

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Dogfight: Airlines unleash deep discounts to dominate the sky

IndiGo’s Chief Strategy and Revenue Officer Sanjay Kumar said: “Low fares always helps stimulate the demand for the travel period far out and works as a part of airline strategy.”

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Preparing for Landing

New Delhi, Jan 19 : Fare wars induced deep discounting has reappeared in India’s aviation sector, as airlines seek to augment cash reserves, consolidate market share and bring back more capacity.

The first shot in this war of extremely low prices was fired recently with most airlines commencing their sales offers.

The development comes around a year since Covid-19 lockdown devastated the sector.

Industry insiders, however, now believe that the roll-out of anti-Covid-19 vaccination programme will give a boost to air travel.

Besides, some of the travel period offered under these schemes are beyond the current expiry of the fare cap imposed by the Centre.

IndiGo’s Chief Strategy and Revenue Officer Sanjay Kumar said: “Low fares always helps stimulate the demand for the travel period far out and works as a part of airline strategy.”

“These sales stimulate traffic among extremely price sensitive customers and helps airlines meet overall objectives.”

The latest passenger traffic data from the sector regulator DGCA indicate that the growth in passenger volumes is not yet adequate enough for a revival in the airline sector.

The aggregate passenger traffic in December 2020 at 73.27 lakh was still 43.7 per cent lower on a year-on-year basis.

“Lack of adequate demand in the post festive season along with higher available capacity has therefore, led a drop in passenger load factor for some of the airlines in December 2020 on a sequential basis vis-a-vis Nov 2020,” said Suman Chowdhury, Chief Analytical Officer at Acuite Ratings & Research.

“Such a scenario is possibly leading to a deep discounting strategy from airline companies. This involves sale of seats over the next few months through an attractive discount or add ons to ensure higher PLF over the next 1-2 quarters.”

Nevertheless, deep discounts are expected to hurt the already fragile financial condition of the sector.

“It will have an impact on the profitability of airline operations which has already been under losses in the last few quarters. In our opinion, however, passenger demand will witness a significant improvement in the next few months with the tapering of the Covid infection rate as well as the progress on the vaccination,” Chowdhury said.

Apart from ensuring a minimum PLF in the coming months, experts contend that deep discounts will trigger liquidity enhancement for airlines.

“Low airfares this month indicate the expected dip in travel post holiday season in December. Airfares in Jan across key routes have decreased 15-20 per cent MoM,” said Rajnish Kumar, Co-founder & CTO, ixigo.

“Heavy discounts being rolled out by major domestic and international airlines will definitely woo travellers who are planning vacations this year. With government caps ending on March 31, the discounts will attract flyers to plan their trips in advance and accelerate recovery in bookings to pre-Covid levels this year.”

On the other hand, the government has till now permitted the industry players to operate at 80 per cent of their pre-Covid capacity.

The operational capacity deployment level is expected to reach pre-Covid mark by the end of calendar year’s first quarter.

“In the current scenario of impact on demand due to the pandemic, while some aircraft continue to be grounded, the passenger load factors (PLFs) of airlines have also been impacted despite the lower capacity,” said Kinjal Shah, Vice President, ICRA.

“Thus, airlines have to take a calculated call on fares and its impact on demand.”

(Rohit Vaid can be contacted at [email protected])

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