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Saudi Arabia, UAE launch VAT for first time

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Riyadh, Jan 1: Saudi Arabia and the United Arab Emirates (UAE) launched the Value Added Tax (VAT) for the very first time from Monday.

It is a five per cent tax on most goods and services to boost revenue. The VAT will be applied on food, clothes, electronics and gasoline, phone, water and electricity bills, as well as hotel reservations, the BBC reported.

Some outgoings were exempt from the tax or given a zero-tax rating, including medical treatment, financial services and public transport.

The UAE estimates that in the first year, VAT income will be around 12 billion dirhams ($3.3 billion).

“The imposition of VAT will help to raise tax revenues of the Saudi government to be utilised for infrastructure and developmental works,” said Mohammed Al-Khunaizi, a member of the Shoura (consultative ) Council.

Organisations such as the International Monetary Fund have long called for Gulf countries to diversify their sources of income away from oil reserves.

In Saudi Arabia, more than 90 per cent of budget revenues come from the oil industry while in the UAE it is roughly 80 per cent.

Both countries have already taken steps to boost government coffers.

In Saudi Arabia, this included a tax on tobacco and soft drinks as well as a cut in some subsidies offered to locals. In the UAE, road tolls were hiked and a tourism tax was introduced.

But there were no plans to introduce income tax, where most residents pay zero per cent tax on their earnings.

The other members of the Gulf Cooperation Council — Bahrain, Kuwait, Oman and Qatar — have also committed to introduce VAT, though some have delayed plans until at least 2019.

IANS

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Gold may cross Rs 52,000 per 10 grams by Diwali

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New Delhi, July 6 : The price of gold in the spot and futures markets remained soft for the fourth consecutive day on Monday, but during the corona period the fundamentals of the precious metal are strong due to which it may touch a new high later this year.

The demand for the yellow metal may not be much in the upcoming festive season due to the uncertainty caused by the corona crisis, but considering the investors interest in gold, its price is expected to cross the psychological level of Rs 52,000 per 10 grams by Diwali.

On July 1 last week, gold had risen to Rs 48,982 per 10 grams on the domestic futures market — Multi Commodity Exchange (MCX), which is the record level so far, while the price of gold in the domestic spot market has breached the Rs 50,000 per 10 gram mark.

At the same time in the international market, gold prices are being speculated to go up to $2,000 per ounce. Last week, on July 1, gold rose to $1807.70 per ounce, which is the highest level since September 21, 2011, when the price of gold was $1,812 per ounce, while gold on Comex was recorded at the record level of $1911.60 on September 6, 2011.

Ajay Kedia, director of Kedia Commodity, told IANS that all the fundamentals of gold are strong at the moment and the spot demand is also strong due to which the price of the yellow metal can breach the Rs 52,000 per 10 grams level on MCX till Diwali, while on Comex it can go up to $2,000 per ounce.

When asked about the reasons for the slowdown in the demand for gold in the last four days, Kedia said that the strength of the rupee in the domestic market has put pressure on the price of gold, while the price softening in the international market was triggered by good economic data in the United States, which indicates signs of recovery in economic activity affected due to the corona crisis. However, this is transient and gold will remain bullish in the long term.

Anuj Gupta, deputy vice president (energy and currency research), Angel Broking, said that gold has softened slightly due to the rebound in the stock market and recovery in the rupee, but investment in gold in an environment of uncertainty created by the outbreak of coronavirus will remain robust. He said that in times of crisis, the investor prefers a safe investment such as gold.

The traders of the bullion market also predict that gold will continue to rise this year.

India Bullion and Jewellers Association (IBJA) National Secretary Surendra Mehta told IANS that 24 carat gold price without GST would cross Rs 52,000 per 10 grams in the spot market by Diwali. However, at this level the price will not last long and will break soon. He said that the main reason for the rise in gold prices is the reduction in interest rates by the central banks worldwide during the corona period, due to which investors demand in gold is likely to stay.

However, Shanti Bhai Patel, president of the Gem and Jewellery Trade Council of India (GJTCI), expects a further rise in gold prices. He says that at the moment demand is more in gold than in jewellery, which is likely to continue.

Patel said gold reached close to Rs 51,000 per 10 grams last week, but it is not difficult for it to go up to the Rs 55,000 level due to increased demand during Diwali and Dhanteras. He however, added GST also to the price which is currently 3 per cent. He said in Ahmedabad, the price of 24 carat gold jumped to Rs 50,600 per 10 grams last week.

On MCX, August expiry futures gold was trading at Rs 48,000 per 10 grams at 1.42 p.m. on Monday, with a fall of Rs 46 from the previous close. At the same time, the silver September futures was trading at Rs 49,265 per kg with an increase of Rs 88 from the previous close.

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Airtel deploys Nokia’s open Cloud-based VoLTE network

According to Nokia, the network supports over 110 million customers, making it the largest cloud-based VoLTE network in India and the largest Nokia-run VoLTE in the world.

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New Delhi, July 6 : Nokia on Monday announced that its CloudBand-based software products have started powering Bharti Airtels Voice over LTE (VoLTE) network in India.

Finnish telecom gear maker firm Nokia in April bagged a deal worth more than Rs 7,500 crore from Bharti Airtel to deploy 5G ready network across the country.

According to Nokia, the network supports over 110 million customers, making it the largest cloud-based VoLTE network in India and the largest Nokia-run VoLTE in the world.

“Nokia”s carrier-grade cloud software solutions drive simplicity and flexibility and will further strengthen Airtel”s solid 5G network foundation and transition to innovative digital solutions that are customer and experience centric,” said Bhaskar Gorti, President of Nokia Software and Nokia Chief Digital Officer.

The cloud-based VoLTE deployment allows Airtel to provide its mobile customers faster and more reliable, cost-efficient call connectivity.

Nokia, which is the largest 4G vendor in Airtel network, will help lay the foundation for providing 5G connectivity in the future by deploying 300,000 radio units across several spectrum bands in all 22 telecom service areas expected to be completed by 2022.

Nokia”s VoLTE solution enables Airtel to free up spectrum by ramping down its 3G network, allowing the operator to utilize the freed up spectrum to deploy 4G/LTE services for better speed and capacity.

“We are delighted to deepen our strategic partnership with Nokia to build a future ready and agile network. The country”s largest open cloud based VoLTE network is a major milestone in Airtel”s journey,” added Randeep Sekhon, CTO of Bharti Airtel.

India currently is the second-largest telecom market in the world and is expected to reach 920 million unique mobile customers by 2025, which will also include 88 million 5G connections according to the GSMA.

The country is experiencing a massive increase in demand for data services with traffic increasing by 47 per cent in 2019 alone, according to Nokia”s MBiT Index 2020.

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SEBI norms tweak boost chances of CG Power resolution

There are complaints pending in SEBI against KKR for violation of the Takeover Code and SEBI is investigating the violation.

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New Delhi, July 6 : The relaxation by SEBI in pricing methodology for listed companies having stressed assets has brightened the prospects of early resolution of CG Power.

SEBI has decided to relax the pricing methodology for preferential issues by listed companies having stressed assets and exempt allottees of preferential issues from open offer obligations in such cases.

CG Power, a large engineering company having its operations worldwide and having a consolidated turnover of more than Rs 6,200 crore and an EBIDITA of Rs 500 crore in 2018 and which is asset rich ran into financial problems amidst a controversy between erstwhile promoter Gautam Thapar and its lenders KKR and L&T Finance who had lent money against pledge of the promoter”s holding.

Gautam Thapar was removed on an allegation that funds were diverted in a convoluted manner to lenders of other group companies.

In view of the controversy, bankers refused to support requests for working capital. Due to shortage of working capital, the profitability was severally affected in spite of pending profitable orders.

Lead banker SBI has mandated SBI Capital Markets to carry out a resolution process and it is expected that invitations for EOI will be announced very soon.

Lenders have shown willingness to restructure the debt and monetise valuable non-core assets like Crompton House at Worli and valuable land at Kanjurmarg. As part of the restructuring exercise, CG Power sold its holding in CG Power Ireland.

It is learnt from reliable sources that many industrial groups like Sunil Mittal of Bharati Telecom, Muruggapa group, Aeon Capital and many PE funds are actively considering a buyout. Sunil Mittal through Bharati SBM Holding had shown interest and bought 8.30 per cent equity from the market between March 2019 and May, 2019.

There are complaints pending in SEBI against KKR for violation of the Takeover Code and SEBI is investigating the violation.

SEBI has stated this in its order dated March 11, 2020 that there has been a specific allegation against KKR, a private equity firm, which holds 8.10 per cent of the shares in the Company, through KKR India Financial Services Private Limited, with respect to market manipulation, insider trading and change in control of the company.

They also note that certain allegations have been made against Narayan Seshadri, an Independent Director on the board, with respect to his firm Tranzmute”s partnership with KKR. SEBI is independently looking into these complaints. In case the investigation finds any violation it can result in an open offer around at Rs 45.

–IANS

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