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US Crude Rises, US Job Numbers Expand, Govt Considers Strict Measures to Trace Tax Evaders as GST Collections Fall et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 5, 2019 3:27 PM 4 min read
Editorial

US crude rises on back of supply cut and trade talks. Top corporates and banks experiment with virtual currency for internal use. Govt considers strict measures to trace tax evaders as GST collections fall.

 

Now to Today's Top Business News Stories in Our End Of Day Wrap Up:

 

US Crude Rises, US Job Numbers Expand, Govt Considers Strict Measures to Trace Tax Evaders as GST Collections Fall et al.

OILPRICE

 

US crude rises on back of supply cut and trade talks.

 

Up Close: Brent crude rose c. 3% to $57/bbl. US crude oil was up c. 3% at $48/bbl.

 

The Why: The rise in prices was also augmented by the decreasing number of active oil rigs. As per a report by Oilprice.com, Baker Hughes, the world's largest oil field services reported a decrease in number of active oil rigs in US by 8.

 

Follow the oil price evolution over the last 5 years here

 

JOBS

US job numbers expand in December, beating expectations. 
 

More jobs: As per a report by The Guardian, US added 312,000 jobs in December, up from 155,000 jobs in November. Average hourly earnings also climbed up 3.2% vs. previous year, largest gain since 2008.

 

Unemployment rises: Unemployment rate had risen to 3.9% from 3.7% during this period. However, as per a MarketWatch report, the increase in unemployment rate is in fact a good sign, signalling that wage gains are now sufficient to begin drawing people back into the labour force.

 

GST

Govt considers strict measures to trace tax evaders as GST collections fall. Penalizes 9 businesses for not passing GST rate cut benefits worth INR560cr to consumers. Law Committee setup to create easier GST complaint form for consumers. 
 

Tax evasion: As per an India Today report, the number of taxpayers who have not filed GST returns has shot up to 28% over the last 12 months vs. 10% in November 2017.

 

Crack the whip: Amidst concerns of a dip in GST collection, rise in late filers and evaders, the govt has now permitted tax authorities to visit premises of non-compliant taxpayers, conduct search and seizure operations to increase revenue collection.

 
The Big Picture: The government has so far collected c. INR9L crore as GST in eight months against the full-year budget target of INR13L crore and is likely to fall short of its target by almost INR1L crore.

 

Also, this: As per an Economic Times report, a law committee has been asked to work on a new anti-profiteering format, which will make it easier for consumers to complain against companies that may not be passing on the benefits of lower GST rates after they were slashed.

 

HEALTH

Domestic drugmakers and civil rights activists push against Govt’s decision to remove price caps on Orphan Drugs.
 

The What: The Govt on Thursday had exempted innovative medicines, including Orphan Drugs used for treating rare medical conditions developed by foreign companies from price control for five years. The move was aimed at giving Indian patients access to drugs that are currently only available abroad.

Backlash: As per a Livemint report, activists said that the step was “pro-pharma”, with “no element of public interest”, leaving patients at the mercy of big pharmaceutical corporations who charge exorbitant prices for monopoly medicines.
 

Wondering what Orphan Drugs are?: Click here to know more about them.

 

US Crude Rises, US Job Numbers Expand, Govt Considers Strict Measures to Trace Tax Evaders as GST Collections Fall et al. 

 

CRYPTO

Top corporates and banks experiment with virtual currency for internal use. Reliance Jio acquires stake in blockchain startup Vakt..

 

The What: As per an Economic Times report, several top corporates and banks are experimenting with virtual currency and uses of blockchain for internal purposes, including management of intra-group transactions, payment of vendors and suppliers and more.

 

Acquisition: RIL has also acquired c. 6% stake in UK-based blockchain startup Vakt for $5m as per a report by Entrackr. This is in addition to its plan to build a 50-member team to work on blockchain technology for its own cryptocurrency JioCoin. The technology shall also be used to develop applications such as smart contracts and supply chain management logistics.

 

Zoom Out: In light of these developments, it is worthwhile to note that the Indian government’s stand on cryptocurrencies remains hazy, having earlier last year cautioned the country against them, stating that virtual currencies were not backed by assets and posed risks such as money laundering.

 

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