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Today’s Latest Business News Transcript at 5:30 pm on 4th July 2022
“You are listening to the Expresso Business Update. Here is the latest news from the world of Indian and International business brought to you by The Indian Express and The Financial Express.
The windfall taxes imposed by the government on domestic crude oil production and fuel exports will hit ONGC’s earnings severely while shaving off up to $12 per barrel in refining margins for Reliance Industries Ltd. The new levies will give the government up to Rs 1.3 lakh crore additional revenue, brokerages said. In a surprise move, the government on July 1 increased import duties on gold, added export duties on petrol and ATF and diesel and slapped a windfall tax on domestic crude production. While the export tax will be applicable on only-for-exports refinery of Reliance Industries, the restriction on product exports wherein at least 30-50 per cent is first supplied domestically will not apply to SEZ units. HSBC Global Research in a note said in May 2022, the government announced a cut in the excise duty of Rs 8 per litre on petrol and Rs 6 a litre on diesel, which is estimated to have reduced its revenues by Rs 1 lakh crore.
Now some economy news. Gujarat and Karnataka have been ranked as the best performers in developing startup ecosystem for budding entrepreneurs, according to the ranking of states and Union territories by the department for promotion of industry and internal trade. Among smaller states having population of less than one crore, Meghalaya has been adjudged as the best performer. The rankings are based on the initiatives taken to develop the startup ecosystem for promoting budding entrepreneurs. For the third time in a row, Gujarat was ranked as the best performer. The exercise is aimed at supporting states and Union territories (UTs) in developing their startup ecosystem and learning from each other’s best practices. A total of 24 states and 7 UTs participated in the exercise, which ranked them under five categories — best performers, top performers, leaders, aspiring leaders and emerging startup ecosystems.
Meanwhile, the government intends to continue with the top GST slab of 28 per cent for luxury and sin goods, but is open to discuss narrowing down the three slabs of 5, 12 and 18 per cent into two, Revenue Secretary Tarun Bajaj said on Monday. Addressing the industry leaders, Bajaj said the rate rationalisation exercise of the GST Council is a result of introspection of GST, five years after its rollout, and the policymakers do not have a “fetish” to raise the tax rates to the revenue-neutral level of 15.5 per cent.On the industry demand for bringing petroleum products under GST net, he said since fuel constitutes a larger part of their revenues, both the Centre and states have some apprehension. “We will have to wait for some time.” “Of the 5, 12, 18 and 28 per cent, we would have to continue with 28 per cent because in a developing economy, in an economy with so much of income disparity, there would be some luxury and sin items that would and should attract a higher rate of taxation.
In other news, Edtech firm Byju’s said on Monday that it has completed payment that was due for the acquisition of Aakash Educational Service and received majority of $800 million fund which it announced in March. The company is estimated to have acquired Aakash Educational Services Limited for around USD 950 million. “Our fundraising efforts are on track and the majority of the 800 million has been already received. The balance is also expected soon. Our payments to Aakash are closed and the audited financial results are going to be announced in the next 10 days,” Byju’s said in a statement. Byju’s founder and CEO Byju Raveendran has made a personal investment of over Rs 3,000 crore of the total $800 million (about Rs 6,000 crore) raised in the latest funding round by the company. The fresh round of funding has been conducted valuing the company at USD 22 billion. Talking about lay-offs at the company, the statement said that the decision has been made to improve business efficiencies throughout the Byju’s and its group companies.
Bulls returned to Dalal Street and halted the three-day losing streak on Monday as headline indices rose in the last hour of trade. S&P BSE Sensex gained 326 points or 0.62% higher at 53,234 while the NSE Nifty 50 index added 83 points or 0.53% to end at 15,835. Hindustan Unilever was up 4% as the top Sensex gainer, followed by IndusInd Bank, ITC, and ICICI Bank. TCS was the top laggard, accompanied by Tata Steel, Mahindra & Mahindra, and Dr Reddy’s laboratories. Bank Nifty zoomed 1.2% to closed at 33,940, and broader markets followed. India VIX slipped 1.32% to end at 20.97. Elsewhere in Asia, markets in Tokyo and Shanghai ended in the green, while Seoul and Hong Kong settled lower.
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