| News Announcement |
Impact Analysis |
| Finance Minister announces cut in corporate tax rates to 22% |
- This will be the new formula that all corporates can opt for but they will have to forfeit all rebates and exemptions
- This formula will not attract any MAT but the effective rate of tax will be 25.17% inclusive of surcharge and cess
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| FM introduces new 15% corporate tax category for new manufacturers |
- This will be a new bracket of corporate tax applicable to new manufacturing facilities between Oct-19 and Mar-23
- Even in this case, the exemptions will not be available and it is likely to provide a major boost to Make-in-India
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| FM clarifies on the buyback tax on pre-announced buyback offers |
- The FM has clarified that buybacks announced before July 05th will not be liable to pay the buyback tax
- However, the buyback tax at 20% of the difference between buyback price and issue price will apply to other buybacks
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| Derivative income of FPIs to also be exempt from additional surcharge |
- This was a confusion as to whether the capital gains exemption was applicable to derivatives income also
- While FPI s will enjoy additional surcharge exemption for all securities, retail investors will pay higher surcharge on F&O
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| MAT (minimum alternate tax) scrapped for companies opting for new formula |
- For companies opting for the 22% or the 15% tax formula, there will be no MAT that will be deducted
- However, for the existing tax formula users MAT will now apply at a lower rate of 15% instead of 18.5%
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| GST Council cuts rates with a view to boost the gems & jewellery sector |
- The Council announced reduction on GST rates on contract work for the diamond industry
- The Council also recommended reducing the GST on semi-cut stones to just 2.5% to give a boost to the industry
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| GST Council gives the much needed boost to the hotel industry |
- GST rates have been reduced across all tariff brackets with rooms below Rs.1000 exempted from GST altogether
- In addition, the GST on outdoor catering has also been sharply reduced in an indirect boost to the hotel industry
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| Essel Group gets another 6 months to fulfil obligations to mutual funds |
- With Essel Group unable to sell the shares ahead of September 30th, MFs had little choice but to postpone
- Ironically, a week before the deadline, the non-pledged shares of promoters were frozen based on a Delhi HC order
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| Oil shoots up during the week after drone attacks on Aramco facilities |
- The attack led to Aramco halting nearly 50% of its production leading to a 15% spike in Brent prices on Monday
- Even as Saudi Arabia has promised to get production on stream by Sep-end, falling inventories will be a worry
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| BSE Sensex rallied by a 10-year record 1921 points on Friday |
- This sharp rally was led by the FM decision to cut corporate taxes sharply by over 8%
- This sharp rally on Friday more than compensated for the sharp falls on Tuesday and Thursday in the indices
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| Fed cut rates by 25 basis points but votes for cuts in ratio of 7:3 |
- Stock markets across the world were hardly impressed by the cautious tone of the Fed and the vote share
- The tone of the Fed almost appeared to rule out another rate cut this year and that is what the CME Fedwatch also indicates
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| India issues a blanket ban on the production and sale of e-cigarettes |
- With vaping becoming an addiction globally and its harmful side effects, India joins the growing list of countries
- The move was immediately positive for the cigarette manufacturers, although it did not really sustain
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| Hopes for US-China trade talks fade after China cancels farm visits |
- Trump was looking at a quid pro quo where the US would go slow on tariffs and China would increase farm imports
- However, this cancellation of farm visits raises questions over China’s commitment to go in for a trade pact
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| Economists warn of fiscal slippage on the back of corporate tax cuts |
- According to economists, the tax cuts would result in revenue loss of Rs.145,000 crore for the government
- It is estimated that this could push up the fiscal deficit higher to 3.7%, something that was visible in bond yields
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| SBI withdraws its repo rate linked home loan product from the market |
- This product was pioneered by SBI in India after RBI announced the shift to external benchmarks
- The withdrawal comes just a week ahead of the October 01 deadline to shift to the new pricing model
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| RBI governor warns that scope for monetary measures were limited |
- This was basically an indication of limited legroom for policy makers on rate cuts or liquidity
- The RBI governor stressed that structural reforms were the only real option available at this point of time
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| Trump and Xi to meet for full-fledged trade talks in October |
- The main agenda is likely to focus on tariff rate extension and an assurance that China would buy more US farm products
- Both the US and China will not be discussing sensitive issues like intellectual property rights and Huawei
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| Foreign funds infuse Rs.25,000 crore into road assets in India |
- The buyers include some of the world’s largest pension funds and sovereign funds with long holding periods
- The road assets have been purchased from most of the marquee names like IRB, GMR, L&T and Dilip Buildcon
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| Commodity mutual funds may finally get a push from Deutsche |
- Almost 4 months after SEBI permitted commodity funds, the progress was slow over commodity custody responsibility
- However, with market leader, Deutsche applying for a commodity custodian license, there could be some progress
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| Microsoft Corporation approves $40 billion buyback program |
- This will be one of the largest buyback program and will help the company to further consolidate its market value
- In the last few months, MSFT has gotten the better of the high profile FAANG stocks in the market place
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| Morningstar survey finds Indian MF fees still among the highest |
- On a global scale, the total expense ratio (TER) of Indian equity funds still remains among the highest
- However, debt fund TERs had fallen sharply and the gap with equity fund TERs was also widening significantly
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