The Week in News

From the constant flow of information out there, we curate the news and updates that have the most significant impact on your finances.

Updated by Clarified Team

BUSINESS STANDARD
05/10/2018

"The Centre on Thursday reduced excise duty on petrol and diesel prices by Rs 1.50 a litre and urged oil distribution companies to absorb another Re 1 per litre, bringing down the price of petrol and diesel effectively by Rs 2.50 a litre. The decision was followed by several BJP-ruled states. Soon after Centre's announcement, Maharashtra, Uttar Pradesh, Gujarat, Madhya Pradesh, Himachal Pradesh, Jharkhand, Assam, Arunachal Pradesh and Tripura announced a Rs 2.50 cut in VAT on these fuels."

ECONOMIC TIMES
27/09/2018

"India raised import duty on a range of items including air-conditioners, refrigerators, washing machines, footwear, jewellery, furniture fittings and tableware besides imposing it on aviation turbine fuel (ATF) as the government seeks to rein in the current account deficit and shore up the rupee"

How this impacts your wallet

Imported products under the 19 categories subject to the hike in customs duty are likely to get expensive. Duty on consumer durables like air conditioners, refrigerators, and washing machines has been increased from 10% to 20%, on diamonds and gem stones from 5% to 7.5%, on a range of household items from 10% to 15%, and so on.

This increase in import duty came into effect on Thursday, September 27.

BLOOMBERG QUINT | SEBI
18/09/2018

"The total expense ratio will be brought down considering economies of scale, Ajay Tyagi, chairman of the Securities and Exchange Board of India, said in a press conference after the regulator’s board meet where it took a host of decisions."

How this impacts your investments

Managing a mutual fund involves a number of recurring expenses such as the management fee, distributors’ commission, registrar’s fee, trustee fee and marketing expenses. These expenses are charged to the investor every year in the form of Total Expense Ratio (TER).

 

SEBI limits the TER that mutual funds can charge to customers based on the scheme category and the Assets Under Management (AUM). SEBI's decision to further lower the limits on TER would lead to marginally higher returns for the investors in mutual funds.

Moreover, SEBI has also barred upfront commissions paid by the Asset Management Companies to mutual fund distributors. An upfront commission is a one-time payment to distributors made in the same month as the the mutual fund investments. In addition, a trail commission is paid every year until the investment is withdrawn. Upfront commissions have previously been responsible for misselling and frequent churning of mutual fund portfolios. This move is likely to go a long way curbing such malpractices.

BLOOMBERG QUINT | PTI
10/09/2018

"A cut in taxes on petrol and diesel has been ruled out for now as neither the central government nor some states have the appetite to stomach revenue loss from such a move. . ."

How this impacts your wallet

The price you pay for petrol and diesel is very different from the price which petrol pump dealers pay. To the price paid by the dealers three additional components are added: central excise duty of ₹ 19.48 per litre of petrol and ₹ 15.33 per litre on diesel, value added tax which varies by the state, and dealer commission.

 

As a result, Factly points out, ₹ 39.21 paid by dealerships in Delhi for one litre of petrol was translating into ₹ 79.15 for the customer as of September 3rd. Unless the Centre and the state governments decide to reduce taxes, fuel prices are likely to remain high for the time being.

This website is managed by Sahas Gulati, a SEBI Registered Investment Advisor - Registration Number INA100010493

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