Flights love weight reduction. Not the diet kind of course, but the baggage kind.
If you’ve taken a flight in the last few months you may have observed airlines being a little too strict about how many handbags you carry onboard. Sometimes you can fly with no more than a laptop bag. Everything else is tossed into the check-in baggage, which has ceilings too.
And they don’t do this just to avoid overcrowded cabins. There’s another reason behind it ― fuel savings. Because the heavier the flight, the more fuel it burns.
On these lines, Indigo has gone quite the extra mile to save on fuel costs. A couple of days ago, they actually got permission from the DGCA (Directorate General of Civil Aviation) to do away with piles of technical paper manuals from their cockpits. Precisely about 40 kilos per aircraft.
What they’ll do instead is have digitised versions of these manuals just like they did in 2015. Back then, Indigo was one of the first airlines to replace paper charts and manuals with iPads. This not just helped cut weight, but also let the crew access manuals more easily because they had colour-coded highlights and hyperlinks.
In fact, back in 1987, American Airlines was able to save up nearly $40,000 a year just by removing one olive from each of its in-flight salads, reducing not just fuel costs but also grocery shopping spending.
So if one olive can do this magic, 40 kilos of paper can work quite a wonder for Indigo no?
Here’s a soundtrack to put you in the mood 🎵
Alfaazo by Mitraaz
Our reader Aakankshi Bothara has sent in this amazing recommendation. Thank you!
Let’s jump to the mains now…
A couple of things caught our eye this week 👀
The GST way to increase small retailers’ incomes
Everyone enjoys a chilled flavoured soda on a summer day.
It could be carbonated colas like Pepsi or Coca Cola. Or even local beverage brands that make fruit-based aerated beverages like Licta, Richyaaa, Joy and Zaffa that are cheaper and appeal to certain regions of the country.
If you’re wondering why we’re suddenly talking about carbonated beverages, here’s the thing. Since the introduction of GST, aerated drinks have attracted a massive tax — 28% with an additional 12% cess that brings it to a whopping 40%.
But you see, according to the Confederation of All India Traders (CAIT), 30% of the sales of small stores come from these sorts of aerated and non-aerated beverages. And with the overall consumption in the country stuttering, they want some respite for the kirana stores and for the consumers too. So they’re asking the finance minister to cut tax on all of those beverages that are taxed at 40%.
They say that it will free up capital for the stores. And people will open up their purses too.
Will that not mean the government will lose out on revenue?
Well, 80% of the Indian non alcoholic beverage sector is informal. So higher tax rates encourage counterfeits and unsafe beverage production. This means that the government loses out on GST revenue if it stays this way. If taxes come down, the unorganised sector won’t feel the pinch of high GST, the sector could get more organised and the government makes more money.
But wait… Aren’t these aerated beverages unhealthy and loaded with sugar?
Well, CAIT’s solution to that is to simply introduce a sugar-based tax instead of this high GST. That way, in-demand beverages such as aerated lemonades that are fruit based and apparently have a lower sugar content than your regular colas will be cheaper. This will nudge people into buying these too.
We’ll just have to see if the finance ministry pays heed to these requests now.
Why are income tax authorities knocking on Netflix’s door?
Netflix India might soon receive a notice for a ₹55 crore tax demand for its earnings in FY22.
Okay, but why is that surprising? Shouldn’t companies that earn money in India pay tax here?
Well, tax rules aren’t so simple. IT rules look at who runs the show at foreign companies that earn in India. Like, is it controlled from another country despite having offices here?
And since India has an agreement with the US to avoid foreign companies paying taxes twice on the same income in both countries, Netflix can choose the rules that benefit its tax payouts.
Here’s where something called the rules of ‘permanent establishment (PE)’ come into play. A PE refers to a fixed place from where a foreign entity carries on its business. Now Netflix might have offices in India but it’s not exactly the same thing for tax purposes. And here’s where Netflix is in a bit of a fix. Back in 2020, the Delhi bench of the ITAT (Income Tax Appellate Tribunal) ruled that if a foreign company sends its employees on secondment (a temporary work arrangement) to India, then it’s a lot like having a PE here.
And guess what?
The tax authorities seem to have proof that Netflix too had sent its employees on secondment in FY22. And if that is proven right, it could be the first such case of an overseas streaming company paying taxes in India.
Unless there’s a plot twist and Netflix comes up with some smart defence. That’ll make a great tax case study.
Money tips 💰
How to mint money during a cash crunch
Doesn’t it feel amazing when you suddenly find some money in your jeans pockets or in a forgotten corner of your drawer?
It sure does. Now what if you could feel the same when you’re facing a cash crunch? Here’s what we mean.
Imagine you just got a raise at work. And you might excitedly want to splash it on upgrading your lifestyle.
But here’s another way to deal with it. Instead of spending the entire extra income, invest a part of it somewhere. Maybe put it away in a bank account, buy some mutual funds or even investible gold. This investment can work wonders for you when you feel the pinch of inflation or even in tough times when you simply can’t make your budget work.
This magical trick is called ‘consumption smoothing’, where you simply hold your horses and maintain a decent lifestyle whether you’re making a lot of money or not.
And if you feel that this isn’t for you because you aren’t earning yet, then think again. Sometimes you could get cash gifts from family and friends on your birthday or if you’ve achieved something they’re proud of. Consumption smoothing works perfectly well here too.
Here’s to never having to feel broke again!
Readers Recommend 🗒️
Here’s a documentary created by Oscar-winning filmmaker Alex Gibney, who’s known for his documentaries on Enron, Wikileaks and more. This docuseries takes a look at scandals and corruption in businesses, while it uncovers corporate greed and corruption. The episodes feature firsthand accounts of unscrupulous activities from the perspective of both the perpetrators and their victims.
You can thank our reader Nagesh Tiwari for this gripping recommendation.
Finshots Weekly Quiz 🧩
It’s time to announce the winner of our previous Weekly Quiz. But before that, we know that many of you got confused with our last week’s 3rd quiz question. We’re sorry. We goofed up and didn’t list out the right options. So we decided to pick a winner out of those who’ve answered the rest of the questions correctly.
So the winner is… 🥁
Saurav Sureka! Congratulations. We’ll get in touch with you soon to send over your Finshots merch.
And for the rest of you, here’s your next chance to grab the winner’s crown. Click on this 👉🏽 link, answer all the questions correctly and tune in next week to check if you got lucky.
Until then, don’t forget to tell us what you thought of today’s newsletter. And send us your book, music, business movies, documentaries or podcast recommendations. We’ll feature them in the newsletter! Just hit reply to this email (or if you’re reading this on the web, drop us a message: email@example.com).