Government rolls back decision to apply 1% TCS on cash purchase of gold jewellery
In a move that may boost demand for gold jewellery, the government has rolled back its budget decision to apply 1% tax collection at source (TCS) on cash purchase of gold jewellery of Rs 2 lakh and above and raised the threshold to the earlier Rs 5 lakh with effect from June 1. The decision comes at a time when jewellers are finding it difficult to offload their inventory that piled up following a 42-day strike in protest against imposition of 1% excise duty on gold and diamond jewellery that ended unsuccessfully in mid-April. Bachhraj Bamalwa, director at All India Gem & Jewellery Trade Federation (GJF) , said the increase in TCS threshold limit is “a major relief to those who would purchase wedding jewellery”. “Rs 2 lakh was a very small sum for wedding jewellery,” he told ET. Gold demand in the country hit a seven-year low in the first quarter of 2016 when sales declined 41% year on year at 88.4 tonnes. This is 44% below the five-year quarterly average of 156.7 tonnes. India’s annual consumption of gold is 850-900 tonnes. Yet, gold prices have gone up since this year. Saurabh Gadgil, managing director at PNG Jewellers, said prices have increased almost 20% since January and is currently ranging between Rs 29,500-30,000 per 10 gm. “There is very little demand in the market. However, the Rs 5 lakh relief is expected to create some movement as there are wedding dates in June as well,” Gadgil said. TCS introduced as a measure to curb tax evasion and check black money transactions is collected by the seller from the buyer at the time of sale and is deposited with the government. The person from whom the TCS is collected gets credit for the same amount in his income tax return. TCS of 1% was imposed on cash purchase of jewellery worth Rs 5 lakh or more and of bullion worth Rs 2 lakh or more in 2012. The government in this year’s budget had reduced the TCS threshold on jewellery to Rs 2 lakh. Gold jewellery demand was already tepid in February down due to a sharp rise in the local gold price and anticipation of a correction in prices and a reduction in customs duty. The widespread strikes across the jewellery industry against 1% excise duty which the government refused to roll back despite the six weeks-long protests further impacted the demand. Ben Harpur Authentic Jersey
E-commerce breathes new life into postal deptartment
Gone are the days when a khakiclad postman came knocking the doors with letters or telegrams from loved ones from a faraway land. The advent of cellphones and internet might have made postal jobs obsolete in recent times, however e-commerce, a byproduct of the IT boom, is giving them a new lease of life now. Changing well with the times, these days they bring home products ranging from prized mobile phones to wedding gowns purchased online by tech-savvy Bengalureans. Not just image makeover, gaining a foothold in e-commerce delivery platform has helped the department achieve a commendable growth in revenue generation. In 2014-15, the Karnataka circle of India Post generated Rs 269 crore through speed post. In 2013-14, it was Rs 200 crore, a remarkable jump from the Rs 60 crore revenue in 2010-11. According to the department, it’s the highest in India. The branch was recently honoured by minister of communication and IT Ravi Shankar for this achievement. Tie-up with e-sellers Products booked through e-commerce giants such as Amazon, Flipkart, Myntra or Snapdeal reach the parcel hubs (Yelahanka and the general post office) where they are sorted and despatched to various delivery centres. These hubs receive 2,000 to 5,000 parcels every day . Products are delivered to parcel hubs by 12.30pm and after sorting, they reach delivery centres by 2.30pm. From there, they are dispatched to different addresses. “No doubt, e-commerce has helped postman and postwoman regain their importance,” said Usha Chandrashekar, chief post master general, Karnataka circle. The biggest advantage that the department has is its wider reach; India Post can deliver products to the remotest parts of the country. According to Usha Chandrashekar, chief post master general, Karnataka circle, the department has ensured that its employees have the right amount of motivation by incentivizing parcel deliveries. “A large number of people who buy products online are techies who aren’t at home during 9am-5pm. We stagger the timings of the delivery staff. By using twowheelers and autorickshaws for delivery, we ensure the products reach customers on time,” she said.”India Post has definitely been a major player when it comes to delivering products. However, we had to fight Amazon’s own delivery system for express deliveries –what they call the Metro Services,” said Veena Srinivasan, post master general (business development and mails). SECOND PARCEL HUB IN PEENYA The department is setting up a second parcel hub in Peenya. “The structure for the 7,500 sqft semi-automated sorting hub is ready. We are calling tenders for conveyor belts that can measure volume and weight of the product and calculate the price.At Yelahanka, parcels are sorted manually,” said TR Shankar, assistant post master. Julian Green Womens Jersey
Reliance, Essar’s fuel-retail operations have gained from deregulation
In late 2014, when the government allowed market pricing of diesel, oil marketing companies (or OMCs as they are called in India) feared that they would begin losing share to private retailers. After all, the only reason private retailers such as Reliance Industries and Essar Oil had failed in their first attempt to crack open the market in the 2000s was the fact that they had no control over prices. The OMCs—IndianOil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL)—expected Reliance Industries and Essar Oil to take three to four years to garner a 5-8% market share. It’s happened much faster. In less than two years, RIL and Essar Oil have cornered nearly 5% of the fuel retail market. “Private players have captured 4.7% market share in 2015-16; h IOCL and BPCL lost 1% each; HPCL lost 0.3%,” said Dhaval Joshi and Nilesh Ghuge of Emkay Global Financial Services, a domestic brokerage, in a note dated 27 May. While deregulation of petrol and diesel prices has augured well for RIL and Essar Oil, their cause has also been helped by cheaper crude oil, stable fuel prices and rise in demand, the note added. Brent crude, the global benchmark, closed at $49.20 on Monday, down 46% from October 2014 levels when it was at $90.94 per barrel. Crude was trading at $115.71 on 19 June 2014. While petrol prices were deregulated or market-linked in June 2010, diesel prices were market-linked only in October 2014, phasing out subsidies and making the fuel market attractive for RIL and Essar Oil which could, as a result of the change, sell petrol and diesel at the same rate as that of OMCs. Historically, diesel was sold at subsidised prices in India, with the government compensating the OMCs later. Private fuel marketers received no such subsidy, and were thus edged out of the market when crude oil prices climbed as high as $150 a barrel in 2008. To combat competition, state-owned oil companies plan to spend Rs.25,000 million to open close to 3,100 fuel stations this financial year even as their rivals from the private sector step on the gas. The three OMCs together sell over 95% of all petrol and diesel consumed in India. Officials from the OMCs admit they expect tough competition from private companies but add that they have already undertaken several measures, including automating retail outlets and strengthening their customer loyalty programs, to beat competition. “We are aware of the expansion that RIL and Essar Oil have undertaken. But we will be expanding too. We have also introduced automation, better customer interface and a transparent mechanism in terms of billing. We don’t expect RIL and Essar to capture more than 8-10% market share,” said a BPCL official who spoke on condition of anonymity. BPCL plans to open around 500 outlets this financial year at a cost of Rs.4000-5000 million. It opened 630 outlets last year. It has automated 8,000 of its 13,000-odd retail outlets so far. HPCL, the second largest fuel retailer which opened 590 outlets last year, plans to open 800 outlets this year at a cost of Rs.9000 million. “We have a 26% market share in the fuel retailing segment. But with the measures that we are putting in place, we will continue to grow,” said an HPCL official, who did not wish to be identified. The HPCL official added that the company is confident about the stickiness of its loyalty schemes and the revenue it can generate from the non-fuel segment. Meanwhile, private fuel retailers are expanding too. Last quarter, RIL said it may look at opening new fuel retail outlets later this year. RIL has been re-opening its retail outlets and had re-started 950 of its 1,400 retail outlets till April 2016. RIL had around 14% market share in fuel retailing in 2005-06, but had to shut down its outlets in 2008 as crude oil hit $150 a barrel and lack of subsidies made the business unviable. Essar Oil has 2,100 fuel retail outlets commissioned. It plans to have a total of 5,000 retail outlets. This will make it the largest private fuel retailer in India. India’s fuel demand jumped 11% in 2015-16, the fastest in two decades, according to data from the government’s Petroleum Planning and Analysis Cell. Demand for diesel, which accounts for roughly 40% of India’s total oil products demand, rose 15.12% over the previous year to a record high of 6.78 million metric tons (mmt). Petrol consumption was up 14.5% to 21.8 mmt Zack Kassian Jersey
RIL sells entire 76% GAPCO stake
Reliance Exploration and Production DMCC, an indirect wholly owned subsidiary of Reliance Industries Ltd and Total, have executed agreements to sell the entire 76 per cent interest held by the former in the Mauritius-incorporated Gulf Africa Petroleum Corporation (“GAPCO”), RIL said in a press statement. The proposed transaction is subject to regulatory approvals and other closing conditions that are customary for similar transactions. GAPCO is a holding company with operating subsidiaries in Tanzania, Kenya and Uganda which are primarily engaged in petroleum product import, and trading, storage, distribution, marketing, supply and transportation of oil products in East Africa. Since the acquisition of 76 per cent equity interest in GAPCO by REPDMCC in 2007, GAPCO has significantly grown and is one of leading petroleum marketing company in East Africa, which now operates 108 retail outlets and owns 260 TKL of storage capacity, the company said. REPDMCC’s agreement to sell its interest in GAPCO is part of a joint transaction, wherein both REPDMCC and the minority shareholder have agreed to sell their entire respective holdings in GAPCO for cash. The net proceeds for the sale will be finalized on completion of the transaction which is expected to be within the coming months, the statement added. S&P retains RIL rating, outlook; sees Jio rollout by FY17-end International ratings agency Standard & Poor’s (S&P) today affirmed the BBB+ rating on Reliance Industries with stable outlook, citing likely fall in its leverage due to improved operational performance. “We reaffirm the rating of RIL to reflect our expectation of significant improvement in its operating performance over the next three years. This will help return RIL’s financial leverage back to levels comfortable for the rating,” S&P said in a note. On the stable outlook, the agency said, “It reflects our expectation that RIL’s leverage will significantly improve over the next two years with the debt-to-Ebitda ratio close to 2 times. “It also shows our expectation that RIL will continue to maintain its operating performance, and its competitive position will be supported by timely commissioning of large projects in refinery and petrochemical businessover the next 12 months.” The agency further said it expects improvement in RIL’s operating performance over the next three years from commissioning of large refinery and petrochemical projects as well as rollout of its much-delayed telecom operations, S&P’s Global Ratings Analyst Mehul Sukkawala said. He expects RIL to report an Ebitda CAGR of about 23 per cent over the next three years as the low oil prices have already helped its operating performance. RIL is close to commissioning its multi-billion dollar expansion of its petrochemical project, ethane import project, a petcoke gasification unit, and a refinery off-gas cracker facility over the next 12 months. “We believe improvement in operating performance will enable RIL to reduce its leverage over the next three years. This is despite our expectation that its capex will be 70 per cent higher over the next two years, primarily because of faster and wider rollout of telecom operations. “We expect the ratio of debt-to-Ebidta to decline to about 2 times by fiscal 2018 and fall further to below 1.5 times by fiscal 2019 from the current moderately high level of about 2.8 times in fiscal 2016,” he said. In addition to increasing petrochemical capacity, the projects will increase the integration of refinery and petrochemical operations as well as improve the cost position of the petrochemical and refinery business, he said. “We also expect RIL to commercially launch its 4G telecom operations RJio over the next six months and roll out by the end of the current fiscal. We believe 4G combined with its telecom spectrum portfolio offers a competitive advantage to provide high-quality voice and high-speed data services,” Sukkawala said. Hardy Nickerson Authentic Jersey
Regulator allows GAIL to hike tariff on sections of Cauvery pipeline
GAIL (India) Ltd will be allowed to more than double the tariff on two sub-networks of the Cauvery Basin Natural Gas Pipeline from 2016-17 after the Petroleum and Natural Gas Regulatory Board (PNGRB) approved the increase. In a tariff order passed by the PNGRB on May 27 and made public on Monday, the regulator has set the tariff for the 230 km Narimanam and Kuthalam (NKM) sub-network at RS.7.47 per million British thermal unit till March 31, 2016 and at RS.17.41 per million British thermal unit from April 1, 2016. For the Ramnad (RMD) sub-network on the Cauvery Basin Natural Gas Pipeline, the regulator has set the tariff at RS.3.07 per million British thermal unit till March 31, 2016 and from April 1, 2016 the tariff will be RS.16.63 per million British thermal unit. In both cases, the tariff set has been lower than that sought by GAIL (India) Ltd. The company had sought RS.43.58 per million British thermal unit for the NKM sub-network from April 1, 2015 onwards while for the RMD sub-network, it had sought RS.17.81 from the same date. Meanwhile, GAIL also announced that it has started drilling its second exploratory well as an operator in its New Exploration Licensing Policy — IX block in the Cambay basin. The well is situated in the Nabhoi village in Tarapur Tehsil of Anand District in Gujarat. Ryan Johansen Authentic Jersey
Regulator allows GAIL to hike tariff on sections of Cauvery pipeline
GAIL (India) Ltd will be allowed to more than double the tariff on two sub-networks of the Cauvery Basin Natural Gas Pipeline from 2016-17 after the Petroleum and Natural Gas Regulatory Board (PNGRB) approved the increase. In a tariff order passed by the PNGRB on May 27 and made public on Monday, the regulator has set the tariff for the 230 km Narimanam and Kuthalam (NKM) sub-network at RS.7.47 per million British thermal unit till March 31, 2016 and at RS.17.41 per million British thermal unit from April 1, 2016. For the Ramnad (RMD) sub-network on the Cauvery Basin Natural Gas Pipeline, the regulator has set the tariff at RS.3.07 per million British thermal unit till March 31, 2016 and from April 1, 2016 the tariff will be RS.16.63 per million British thermal unit. In both cases, the tariff set has been lower than that sought by GAIL (India) Ltd. The company had sought RS.43.58 per million British thermal unit for the NKM sub-network from April 1, 2015 onwards while for the RMD sub-network, it had sought RS.17.81 from the same date. On Monday, GAIL’s shares closed 0.05 per cent higher on the BSE at RS.379.60. Meanwhile, GAIL also announced that it has started drilling its second exploratory well as an operator in its New Exploration Licensing Policy — IX block in the Cambay basin. The well is situated in the Nabhoi village in Tarapur Tehsil of Anand District in Gujarat. Josh Jones Authentic Jersey
ONGC Videsh inks marketing agreement with SOCAR Trading
ONGC Videsh Ltd has signed a memorandum of understanding with SOCAR Trading SA to explore the possibility of joint marketing of the Indian firm’s crude oil portfolio. “Initially, both parties agreed to initiate discussion on a Joint Marketing Agreement in respect of ONGC Videsh’s equity crude oil from ACG, Azerbaijan, and based on the performance of this agreement both parties will mutually agree to optimise the price realisation of other crudes from ONGC Videsh’s portfolio either through the joint marketing or joint venture route,” an official statement said. The MoU was signed on May 27 at Geneva by S P Garg, Director (Finance) of ONGC Videsh Ltd and Arzu Azimov, CEO of SOCAR Trading. Joe Berger Womens Jersey