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Service tax move
gives goose bumps to transporters Reva gets Rs
15-cr order from UK Bullet’s new
model to hit global market soon Excise duty
anomalies hurt us, say steel traders |
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Market
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Tax
advice
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Second-generation urban reforms in the offing New Delhi, July 4 The Ministry of Urban Development and Poverty Alleviation has proposed to offer incentives worth Rs 500 crore annually under Urban Reforms Incentive Fund (URIF) to states for introducing second-generation urban reforms. The ministry has also reportedly asked the Finance ministry to increase allocation under the scheme to push urban reforms. The fund under the scheme will be released to the states and union territories as additional central assistance. Allocation of funds to each state would be based on the percentage of its urban population to the urban population of the country. These reforms will emphasise, say ministry officials, on initiation of public-private partnership in the provision of civic services like drinking water, sanitation and lighting, and introduction of independent regulators for these services. These reforms will also address the issues of housing, employment opportunities in the urban areas. During the previous year, the ministry had pressed upon the states to introduce reforms in the rent control laws, property tax, rationalisation of stamp duty, and repeal of the Urban Land Ceiling and Regulation Act. Funds to the tune of Rs 188.14 crore were recommended for release towards the first instalment and Rs. 47.65 core towards the second instalment after assessment of the progress was made by the Empowered Committee against milestones set for the first year. Incidentally, Punjab and Haryana, besides other states, have not made adequate progress in the implementation of these reforms. For instance, these states have still to introduce computerisation of property certificates, reform Rent Control Act and rationalise stamp duty. Chandigarh has, however, made progress in the implementation of the Property Act and reforming the Rent Control Act. A senior official in the ministry said: “We have now written to all chief secretaries of the states and UTs to submit their suggestions to prepare the blue-print of second -generation urban reforms and criteria for incentives. We want to introduce second-generation urban reforms in consultation with states while keeping in view promises of the government under common minimum programme.” He said some of the possible reform areas could be revision of bye-laws to streamline the approval process for construction of buildings, development of sites; revision of municipal laws in line with model legislation prepared by the Ministry; reduction in staff strength and revenue expenditure of urban local bodies; introduction of property title certification systems and independent regulators for urban services. The second-generation urban reforms, he said, will also focus on implementation of the Urban Street-Vendor Policy to create employment for poor persons, besides the removal and further prevention of encroachment of government land. “The government is quite serious about increasing slums even in forward states like Punjab and Haryana and want a policy for the settlement of slum dwellers through cheap housing schemes and by providing basic amenities,” states ministry’s proposal to the states. Keeping in view the severity of problem of drinking water in urban areas, the Centre government will also ask for the statistics to introduce amendments in the bye-laws to make rain water harvesting mandatory in housing societies and colonies whether developed by private developers or by government agencies. To redress the problem for urban poor, the Centre has plans to offer incentives to those states, which will make mandatory for the housing boards and development authorities to reserve at least 20 to 25 per cent of plots or flats for economically weaker sections and lower income groups.
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Service tax move gives goose bumps to transporters New Delhi, July 4 Truck operators are apprehensive that the proposed 12 per cent service tax on transport sector will prove a death knell for the industry already in crisis. It will also result in double taxation as truck operators were already paying heavy excise duty, sales tax, octroi and surcharge on diesel and tyres — costing between 70 to 80 per cent of their total operational costs — in addition to toll tax, road tax and other overhead costs. Mr Ramesh Agarwal, general secretary, All-India Transporters Welfare Association (AITWA), representing around 60 per cent of the industry, said: “The profit margin in the transport business has already come down from around 16 per cent to 4.5 per cent over the past 5 years though total business has grown to around Rs 2,00,000 crore annually. Easy finance schemes and lack of regulations in the trade have only resulted in surplus capacity in the industry, which is already facing stiff competition from the subsidised railway sector.” He added: “The service tax will reduce margins as we will not be able to pass on the tax to customers. Further, due to multiple business locations of transporters, it will create additional problems for small operators with one or two trucks. The semi-literate operators will not be able to maintain additional account books.” During his previous tenure in 1997, Mr P. Chidambaram had tried to introduce service tax in the transport sector. Consequently, the truck operators had gone on a weeklong strike and the government had to roll back its decision. Opposing the service tax move, Mr Pradeep Singal, General Secretary, North Zone, AITWA, said: “In the VAT regime that is proposed to be introduced next year, total revenue collection from the road transport sector can rather come down with the imposition of service tax as the cargo is booked by the traders and the industry will pay service tax only on their service value.
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Reva gets Rs 15-cr order from UK
New Delhi, July 4 “We have got the order from British company Going Green Plc and the first shipment of about 40 cars will be leaving this month,” RECC Managing Director Chetan Maini said. He said Going Green Plc was a distribution and marketing company and the order would be spread over a one-year period. “The kind of clean fuel technology we have is well accepted in developed nations where the focus is gradually moving to more and more clean fuels and environment-friendly mode of transport,” he said.
— PTI
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Bullet’s new model to hit global market soon Chennai, July 4 The company’s only manufacturing unit in India is located on the outskirts of the city. The new model has the retro classic styling, which will bring memories of the ’60s. Commenting on the launch, Mr. Siddhartha Lal, CEO, Royal Enfield, said: “Royal Enfield is the oldest surviving brand in continuous production for over a century now. It enjoys a classic bike positioning in the international market and is popular, especially in the West.” He said: “The Bullet Sixty-5 has the retro classic styling with 5-speed gear, for the first time on an international model.” The company is at present developing another model, also exclusively for the international market. Enfield officials said the new model was presently undergoing tests and would be ready for export in ‘about three months time.’
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Excise duty anomalies hurt us, say steel traders New Delhi, July 4 The Federation, in a press release, claimed that the decision of the NDA government to reduce the excise duty from 16 per cent to 8 per cent on certain steel items in February this year, has created a peculiar situation, as duty on other steel goods had remained unchanged. Mr H.L.Bhardwaj, Secretary General of the Federation, said,” In the wake of rising steel prices, the previous government reduced excise duty from 16 per cent to 8 per cent on steel goods covered under Chapter 72 (mostly raw materials) but left the duty unchanged for Chapter 73 goods ( mostly steel articles) adding “it has created complications for thousands of small and medium scale engineering units using steel besides burdening the common man with additional 8 per cent excise duty.” He said the goods under chapter 73 included water tanks, irrigation pipes, cooking appliances, sanitary wares, window frames and other domestic appliances.
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Market update
After moving like a yo-yo between the positive and the negative territories, the indices finally closed in the positive territory last week. Sensex jumped 114.19 points and ended at 4,870.58. The S&P CNX Nifty gained 49 points to settle at 1,537.50. Last couple of months have been testing for the Indian stock markets with investors being rather apprehensive about their commitment towards equities for a long-term period owing to various uncertainties ranging from rise in the oil prices to political developments. This has put a lot of pressure on the indices, which continued to lose ground on selling pressure. Now with the Budget round the corner, the market awaits direction. There is a widespread expectation that the Budget may be market-friendly and that it may provide tax-breaks to the investors.
Tata Tea Investors can buy into the stock of Tata Tea at the current prices of Rs 350, which discounts its earnings by 9.6 times, which is extremely low for a FMCG company with a global presence. The branded tea business accounts for 86 per cent of company’s sales, while bulk tea contributes just 6 per cent to the revenues. Its conversion from a plantation to a branded player has reduced the sensitivity of profitability to tea cycles. Operationally, the company does not demarcate the domestic and international operations but runs them as one common business. A re-rating of the stock is imminent as market gives due recognition to the company’s inherent global distribution and brand strengths.
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Tax advice
Q:
As per latest instructions the age for qualifying as senior citizen is above 60 years. But for the purpose of tax relief to senior citizen, the age still remains over 65 years as per the Income Tax Act. If so, why are the tax benefits not available to the senior citizens below the age of 65 and above 60 years. Please clarify so that income tax returns for the assessment year 2004-05 can be filed accordingly. Please also advise if any additional tax relief is available to the senior citizen aged above 60 and below 65 years, in terms of the latest income tax rules? R.K. Kalra Ans: As per the current tax provisions, the rebate u/s 88 of the Act, which is available to a senior citizen can be availed, if any only if an assesses who is an individual and resident of India attains the age of 65 years at any time during the previous year. However, in case of women who are resident in India and are below the age of 65, a tax deduction up to Rs 5,000 is allowable against the tax payable by such women on their total income.
Physically challenged
Q: I am a government employee. My elder brother is blind and totally dependent on me. Medical certificate to this effect has been issued by the CMO. My DDO is not giving me the deduction of Rs 40,000 under Section 80DD. The DDO is insisting to submit the bills of expenditure incurred on his medical treatment, but my brother is not sick. How I can get tax exemption of Rs 40,000 u/s 80 DD which defines clearly, “Deduction in respect of maintenance, including medical treatment of handicapped dependents?” Nirmal Singh Ans Under Section 80 DD (1) (a) of the Act, deduction in respect of maintenance, including medical treatment of handicapped dependent is available only in respect of expenditure incurred for the medical treatment, training and rehabilitation of a handicapped dependent. Accordingly, where no expenditure has been incurred, you cannot claim deduction u/s 80 DD of the Act.
Partnership deed
Q: In the deed of one partnership concern, it was mentioned that the interest will be paid to the partners maximum 12 pc but if there will be book loss, the interest can be decreased accordingly. My questions are: Whether Assessing Officer can reject the interest paid to the partners. Whether the deed about the interest and salary to the partners should be written every year. Whether the deed should be written on a non-judicial stamp paper or will a plain paper do? Adesh Agnihotri Ans As per the provisions of the Act, where the rate of interest has not been mentioned, the Assessing Officer can disallow the interest paid to the partners. If you propose to vary the interest every year, then a supplementary deed incorporating such variation would have to be written every year. The supplementary deed would have to be written on a non-judicial stamp paper.
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