Government to collab on taxes with influencers for free stuff
Trend alert for Indian Influencers as taxes got into the game now. Money actually got “Jiggled” out of the influencer’s pocket, when the government decided to step in with the TDS scheme.
One of the booming industries and much-preferred professions of “Social Media Influencers” is experiencing its first taxation wound.
Now, these influencers will be required to pay tax on the free products availed from the brands in the name of promotions. Effective from 1st July, the government got their eyes on the barter promotions of the influencers with lakhs of followers and decided to regulate it.
But what was the need for it?
See, whenever any brand approaches an influencer for barter collaboration, the influencer is paid with either a product or an experience, say a lavish stay or self-care treatment. Now the brand obviously will deduct such expenses as marketing expenditure from their business income.
While on the other hand, since the influencer is not getting any monetary benefit, he can’t be taxed for this. Hence such barter collabs didn’t allow the money to shift bank accounts but still got the job done which got the government’s attention.
Crypto lost to taxes AGAIN!!
After Capital Gain taxes on Crypto assets, the centre is yet not satisfied with the Crypto trader’s money. It has now introduced a TDS collection on every trade by 1% of the transactions.
TDS on Crypto? How and What?
So basically TDS is Tax Deducted at Source by the buyer while making payment to the seller of any crypto asset. Mind you, such assets include all the Virtual Digital Assets called VDAs such as Cryptocurrencies, Defi ( Decentralised Finance ) and NFTs (Non-Fungible Tokens).
As the name suggests, the tax will be dedicated by the buyer at the time of crediting the amount to the seller or at the time of payment, whichever being earlier. But a moment of relief for crypto traders is that it’ll be effective only on the amount exceeding specified limits as stated by CBDT.
Okay, but where do investors stand in this TDS saga?
Investors seem way too heartbroken after the 1% TDS rule it seems. The reason for this is the agitated Tweet storm on Twitter neglecting this taxation rule and the sudden flee of retail investors from Indian Crypto exchanges.
WazirX, one of the leading crypto exchanges saw a 70% decline in its trading volume owing to the TDS rule. Such growing regulatory uncertainties make retail investors tremble to their knees and leave them with no option other than shifting to foreign none KYC compliant exchanges to avoid 1% of their trade.
Bottom Line: Though there’s a sudden decline in trade volumes, investors are very sure about it getting back to normal. The reason behind such confidence is the already observed pattern at the times of 30% regulation. Still, it got the momentum and so it is expected this time.
VAULD gave 440-volt shocks to its users
Freezing payments and withdrawals of investors’ money due to mismanagement is a fashion for the exchanges it seems. First Celsius and now Vauld, both have paused withdrawals from their exchange platform citing “financial challenges” faced by the Crypto Companies.
Let’s dig in at Vauld first.
So, Vauld is a Singapore-based crypto platform which provides a range of Crypto products that anyone didn’t know could’ve existed. What made it an overnight success was its product called “Fixed Deposit” but in crypto. Or should I say that the rigorous influencer marketing campaigns by the team through collaborating with so-called “Finfluencers” got them the hype? Wouldn’t be untrue either.
Nevertheless, Indians are suckers for FDs and Vauld knew that very well. So it created a product by offering an FD-like investment plan but in cryptocurrencies. What an idea of blending the ancient FD culture with recent Crypto trends!!!
Vauld Returns, maybe???
With constant declining Crypto prices, it made the crypto climate problematic. And such market conditions led to high customer withdrawals from the market. This domino effect further stabbed Vauld’s liquidity and now it’s running out of funds to pay back.
But as a sign of hope for investors, Vauld is already in discussion with potential investors and VCs for clearing up the mess. Soon it might be in news for its acquisition by any Fintech or Crypto giant.
Till then, it has filed for a moratorium regarding the suspension of continuation of any transactions or proceedings against it.
Bottom line: Too good to be true.
Blending FD culture with Crypto hype worked out very well on the front-end. Surely, the marketing team deserves a raise for it. But the backend operations failed miserably at maintaining liquidity and lead to a crisis. Another example of “All that glitters isn’t Gold”.
Satisfy your cravings without any service charges.
Finally, the CCPA opened its eyes regarding the exuberant service charges levied by restaurants. The Central Consumer Protection Authority (CCPA) heard the consumer’s cry and regulated the service charge on the food bills with new provisions.
Five ways to tackle service charges.
- Hotels must not charge service charges automatically into the bill.
- Service charge shouldn’t be grabbed under any other name from now onwards.
- Hotels can’t “ASK” consumers for service charges unlike before. It must be left to the consumer’s discretion whether to pay the service charge or not.
- Consumers can’t be restricted upon any services concerning payment of service charge.
- The food bill must not contain a service charge and no GST must be levied on the same.
Was there an actual need?
Unapologetically YES, there was a legit need for such regulation. The reason being there is no hard and fast basis for charging the service fees in the first place. Many restaurants charge it as high as possible due to ignorance on the customer’s part.
But now these hidden charges are not hidden anymore. See, the centre didn’t term service charges as “illegal” or such. Rather, it clearly mentioned that charging such fees without any “expressive consent” is an “unfair trade practice”. Further, it’s a matter of the individual policy of the restaurant on how to collect its service charge and handle it.
The restaurants and hotels seem a bit off as it’ll highly affect their net revenue of course. In their defence, it stated that the service charges actually satisfy the hospitality that it offers and most importantly bring revenue to the government as tax is paid on it.
IndiGo got ditched as AI stepped in.
Small world it seems when one company’s recruitment interviews affect the operations of a rival company significantly. That’s what airline companies are going through right now.
Long story short…
On Saturday, Tata-owned Air India conducted a walk-in-interview for its cabin crew openings in metro cities such as Delhi, Mumbai and Kolkata simultaneously. And guess what, around 55% of the Indigo’s cabin crew staff opted for sick leave on the same day.
Now anyone can draw an obvious connection between both the events and that’s what made it the news of the day.
As a result,
Due to a lack of proper workforce, many flights got delayed and cancelled which left the passengers in agony. Terminals of many domestic and international airports were crowded with passengers and pilots waiting impatiently for their take-off.
But where did Indigo go wrong?
- India’s only profitable airline has been in the news for a long time for its employee pay cuts.
- Employees are kept into discontent with the late salary clearances and such arrears affected its reputation adversely.
- Mass pilot layoff by the airlines for violating ” terms of employment” and the airline’s “code of conduct”.
- This made the aviation employees look out for another employer and what better than a TATA-backed airline.
Since when Air India returned to its guardian TATA, it’s growing exponentially like no before. This calls for countless hiring by the aviation giant in all positions. This made other aviation players such as Indigo request Air India to not hire their existing crew without a “No objection” certificate.
What else made the news?
- UK politics under Indian Reign:
- Indian origin Rishi-Sunak to be the next British PM. Karma hitting the British land it seems.
- Dolo 650 got sick: Micro-Labs got into major trouble as IT departments raided this pharma giant’s Bangalore HQs with other linked locations.
- “I Quit” says voyager over bankruptcy: Voyager Digital Ltd. adds to the list of messed up crypto companies by dissolving $1.3 billion of crypto assets.
- Reliance to bridge the GAP into Indian clothing: American clothing retail giant GAP entered into a long-term franchise contract with Reliance India for capturing Indian Markets.
- Smartphone stagnation: Smartphone markets got affected by 5% this quarter. Analysts cite supply chain issues for the slump.
- Govt oiling taxes harder than ever: Tax of Rs.6 per litre of petrol and ATF and Rs. 13 per litre on diesel to be collected by the government.
- The gold hike continues: With 12.5% custom duty + 2.5% AIDC, gold shines at 15% import duty hikes. This shoot the gold prices at 52,000 but finally relaxed at 50,667.
- Tariffs at terrific low: Soaring inflation got Biden to relax tariffs on some Chinese imports for controlling price hikes.
What Tavaga Tribe has been up to this week?
Reading: Little Women by Louisa May Alcot – In this book, you will get to join four sisters, each boasting their own personality, as they grow up during 19th Century New England. You will get to bask in their unique struggles and understand their flaws as they turn into strong women.
Listening: My Favourite Murder- We all love a good true crime podcast, and that’s exactly what My Favorite Murder is. True crime fanatics, Karen Kilgariff and Georgia Hardstark, share their favorite true crime stories and also discuss hometown crime stories that they gather from friends and family, just to make it a little more spooky.
Disclaimer: This write-up is solely for educational purposes. This in no way should be construed as a buy/sell recommendation. Please consult your investment advisor before investing.
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