ADAG to take stake in Nicco
Volvo may set up base in Himachal
Tractor sales plummet
KK Birla Group divests 50 pc in Zuari Cements
Ginni Filaments to invest Rs 131 c
Myanmar offers gas to India
New Delhi, May 13
Consequently, both countries are unlikely to meet the target of achieving $1 billion bilateral trade this year, set up by India-Myanmar Joint Task Force in 2004, after trade reached about $550 million in 2005-06.
“Despite huge potential of bilateral trade between the two countries, poor infrastructure on both sides of border, limited list of commodities under barter trade and attitude of the customs officials are adversely affecting the trade between two countries,” said Mr U.Win Myint, President, Myanmar Federation of Chambers of Commerce and Industry here today.
Myanmar Commerce Minister Brig Gen. Tin Naing Thein, along with a business delegation, is currently on a visit to India. He met Indian Commerce Minister Kamal Nath and industry representatives urging them to invest in Myanmar and increase trade to improve ties between the neighbouring countries.
Businessmen complained that lack of equal standards, delay in registration of products and companies, banking regulations and artificial exchange rate of currency coupled with US sanctions affecting the trade.
Speaking at an industry interaction at FICCI today, Myanmar Ambassador in India U Kyi Thein admitted that lack of good roads, shortage of manpower in Yangoon to facilitate Indian investment are affecting the growth of trade.
On gas supply to India, he said Myanmar was ready to sell part of the gas being produced in his country. State-owned GAIL is developing gasfield and is considering to set up a gas pipeline to bring it to India.
“Considering Myanmar as a gateway to SE Asia and a transit route for trade with Thailand and China, India should speed up the construction of railway line between the two countries,” said Mr R.C. Agarwal, President, North East Federation of International Trade.
India is currently ranked as the second most important market for Myanmar exports and the seventh most important source of Myanmar’s imports.
On border trade, India has proposed opening of Pangsau Pass as an additional facility for the benefit of the people of both sides living along the border.
Mr Agarwal said at the current pace proposal railway line to Myanmar is unlikely to come up even in next 10 years, though its scheduled completion has already been postponed by five years. Considering the geography of the region, the government should build a railway line via Arunachal Pradesh to reach the Chinese market.
Due to lack of proper trading between the two countries, he said, there is widespread of smuggling of goods, estimated to over Rs 3 crore a day around Moreh border alone.
Mr Myint said there was a tremendous potential for Indian in pharmaceutical, oil and gas exploration, besides consumer durables.
Kolkata, May 13
Chairman of Nicco Corporation Rajive Kaul told shareholders at the court-appointed extra ordinary general meeting (EGM) here today that Reliance-ADAG would be given optionally convertible cumulative preference shares (OCCPS) amounting to Rs 5.88 crore. The size of the OCCPS issue is Rs 20 crore.
The OCCPS would be alloted to Sonata Investment Limited, a part of Reliance-ADAG. The exact percentage of shareholding would be determined by the extent of conversion.
Mr Kaul said EGM had been called to seek shareholders’ approval for the company’s restructuring programme under the Corporate Debt Restructuring package, which Nicco had received in March.
He said ARCIL has also agreed to reduce the interest on term loan outstanding balance of Rs 29 crore from 12 per cent to nil.
The Nicco Corporation Board would meet on May 31 to finalise the accounts for 2005-06. — PTI
Volvo may set up base in Himachal
Shimla, May 13
The proposal was made by Mr Fredrik Ahlberg, General Counsel and Mr Akash Passey, Director, Business Strategy and Operational Development of the Volvo Bus Corporation, who called on Mr Virbhadra Singh, the Chief Minister, here today. The project would generate employment for 3,000 persons.
The Chief Minister said his government would welcome investment by the bus company. He said a number of multinational companies were coming forward with proposals to set up industrial units in the state. The state would soon be setting up Special Economic Zone (SEZ) in Kangra and Una districts, which would be of global standard.
The government had invited global tenders for setting up SEZ and it intended to start work on the project immediately. Proposals had also been received for setting up of Special Agriculture Zone in the state and big companies were keen to manufacture value added
Tractor sales plummet
Chandigarh, May 13
Sources in the tractor industry informed TNS that maximum decline in sales (per unit) of tractors has been observed in Punjab and Uttar Pradesh, where sales have plummeted by 18,000 units and 15,000 units, respectively, in the past seven years.
As compared to a sale of 32,000 units in Punjab in 1998-99, only 14,000 units were sold in 2005-06. Similarly, in Uttar Pradesh, which is the biggest market for tractors in the country, the sales declined from 61,000 units in 1998-99 to 46,000 units in 2005-06.
In Madhya Pradesh, the sale of tractors have come down by 6,000 units (from 34,000 in 1998-99 to 28,000) and in Haryana by 7,900 units (from 22,500 in 1998-99 to 14,600 units in 2005-06).
Sources informed that the main reason for the decline in sales was that agriculture credit was being used to maintain a flamboyant lifestyle in these states.
"More and more farmers are misusing the Kisan Credit Cards for buying new cars, mobikes or on social functions. Also, the dip in profit margins in agriculture, subsequent failures of cotton belt in Punjab have all added to the negative growth in the tractor market," said Mr Umeed Singh, Chief Manager, Agriculture Debit, SBI, Chandigarh Circle.
Mr A.M. Sawhney, Director, Marketing, Punjab Tractors Limited, said in the above mentioned states, the sales have plummeted because growth had reached a saturation point.
Interestingly, the total sale of tractors in the country has remained stable during this period (from 2.57 lakh annual sales in 1998-99, to 2.60 lakh in 2005-06). This is mainly because sales have increased in the southern states of Karnataka, Tamil Nadu and Andhra Pradesh. The sales in Andhra Pradesh have increased to 22,000 tractors last year (as compared to 10,000 units two years ago), while sales in Karnataka have increased by 8,010 units and in Tamil Nadu by 4,000 units.
KK Birla Group divests 50 pc in Zuari Cements
New Delhi, May 13 Zuari Industries Ltd took the decision to sell its stake to the French cement major in its Board meeting held today, the company said in a statement. "The decision of ZIL to sell its stake in cement business is based on the company business strategy to focus on its core competence in fertilisers and agri-related businesses in India and overseas," the company said.
New Delhi, May 13
Zuari Industries Ltd took the decision to sell its stake to the French cement major in its Board meeting held today, the company said in a statement.
"The decision of ZIL to sell its stake in cement business is based on the company business strategy to focus on its core competence in fertilisers and agri-related businesses in India and overseas," the company said. — PTI
Ginni Filaments to invest Rs 131 cr
Ludhiana, May 13 "The new plant at Gujarat will have a production capacity of 12,000 MT tonne per annum and be operational by December," company's Chief Operating Officer Sanjay Srivastava told reporters here. This facility would cater to export markets, including SAARC and West Asia, he said. "We had already raised Rs 60 crore from our public offer to fund this project while the rest of the money would be contributed through internal accruals," he said. The company has already launched its beauty and baby-care wipes and aims to capture 50 per cent market share in next couple of years, Mr Srivastava said. He said we have already launched our product in Delhi, Chandigarh and Uttar Pradesh and is now looking at other major metro cities. We would now expand our reach to cities like Ludhiana, Jalandhar, Amritsar, Ahmedabad, Mumbai, Chennai, Hyderabad and Kolkata, he added.
Ludhiana, May 13
"The new plant at Gujarat will have a production capacity of 12,000 MT tonne per annum and be operational by December," company's Chief Operating Officer Sanjay Srivastava told reporters here.
This facility would cater to export markets, including SAARC and West Asia, he said.
"We had already raised Rs 60 crore from our public offer to fund this project while the rest of the money would be contributed through internal accruals," he said.
The company has already launched its beauty and baby-care wipes and aims to capture 50 per cent market share in next couple of years, Mr Srivastava said.
He said we have already launched our product in Delhi, Chandigarh and Uttar Pradesh and is now looking at other major metro cities.
We would now expand our reach to cities like Ludhiana, Jalandhar, Amritsar, Ahmedabad, Mumbai, Chennai, Hyderabad and Kolkata, he added. — PTI
by K.R. Wadhwaney
There are apprehensions that some civil aviation projects and programmes may be adversely affected as the Left has gained an additional muscle power through election results in West Bengal and Kerala.
The changeover from the Airports Authority of India (AAI) to private consortiums for Delhi and Mumbai airports has been brought about under anxious moments but a lot of haze still remains. Some anti-privatisation die-hard politicians maintain that anything is possible now.
In the event of merger of Indian and Air-India (A-I), uncertainty looms large in the changed political scenario. The murky situation wears a complex outlook as a majority of staff, senior and junior, technical and non-technical, are vehemently opposed to the merger.
In another month or so, it will be known whether Minister of Civil Aviation Praful Patel is able to translate his desire into reality or he also buckles under pressure, as his predecessors, including Jagdish Tytler, did.
Four-month-old Chairman and Managing Director (CMD) of Indian Vishwapati Trivedi is totally unconcerned about ‘merger aspect’. Settled in new environment sooner than expected, he is reported to have said that he has learnt to live from suitcase although his tenure is for five years. He is 53. He belongs to Madhya Pradesh cadre of IAS (Indian Administrative Service).
Apart from usual bottlenecks between AAI and private officials at Delhi airport, Air Traffic Controllers (ATC) are playing their own tricks in causing inconvenience to passengers and losses to airlines. For two days on May 10 and 11, several flights were delayed under the plea of shortage of staff. “Operation of two runways, main and subsidiary, has increased our workload without any additional staff,” said ATCs for delays.
The ATC demand may not be unreasonable, but they continue to show liking for giving preference to private and foreign carriers in relation to national airlines, Indian and Air-India. What causes concern is that there is little rapport between the AAI and ATCs. If this abnormal situation obtains in this murky weather and aircraft are made to circle for 30 to 60 minutes before getting clearance for landing, any untoward incident may take place.
The GMR group-led consortium will be making a presentation on Monday (May 15). The site for new terminals — one for international operations and another for domestic — in the vicinity of the Centaur hotel has been identified.
The enlarged simultaneous runway to handle, among other aircraft, A-380 aircraft, is expected to be ready before 2007 is out. If the builders stick to their schedule, Delhi will be the second airport to handle new version of A-380 aircraft. The first airport will, however, be Hyderabad where new international airport is being developed on a war footing. The Hyderabad airport is seen to be believed, according to those who have had the privilege of seeing it.
by A.N. Shanbhag
Q: For the accounting year 2005-06, my HUF income/loss is as follows:
1. Income from short-term capital gains: Rs 2,38,000.
2. Speculative loss from future trading contracts: Rs 26,000.
Can these two be set off against each other? Please clarify.
A: Income from futures & options (F&O) is not treated as speculative any longer. Therefore, you may setoff the loss from F&O against your normal income, including short-term capital gains. However, if the short-term capital gains arise out of sale of shares on a recognised stock exchange in India or from redemption of equity-based scheme of any MF, it has to be taken as a separate block and charged to tax @ 10 pc. The benefit of the initial threshold is available for short-term gains.
Section 80 DD
Q: I want to avail tax rebate u/s 80 DD. I have the relevant certificate duly issued by the competent authority. I would like to know that whether I have to take bills for all expenditure, or I will get a fixed rebate of Rs 50,000 or Rs 75,000.
A: Deduction u/s 80DD is statutory in nature and is allowed in full, irrespective of the actual expenditure incurred on medical treatment.
Q: I had been working in India from 1984 to 1999 and have filed tax returns & have a PAN too. Since 1999, I am out of India. Is it necessary to continue to file tax returns? Please advise on how to & if necessary to file regular returns from 2000-2001 onwards.
A: There is no legal obligation to file tax returns unless the income chargeable to tax, exceeds the minimum tax threshold of Rs. 1,00,000. However, if you want to maintain continuity, you may file your return, regardless of the fact whether your income is below the tax threshold.
Date of investment
Q: My query is regarding date of investment in New Fund Offer (NFO) of Mutual Funds. For instance, NFO closes on 9th February 2005 and opened on 2nd March, 2005 for repurchase. In account statements of that scheme, date of purchase is mentioned as 02.03.2005. Now for computing short-term capital gains which date will be considered as ‘Date of investment” whether the date on which bank account has been debited or the date of opening of NFO mentioned on account statement.
A: The date of investment will be the date mentioned on account statement.
Q: I opened PPF account in February 1985. I got PPF account extended in April 2000 on expiry of 15 years. I again got it extended for 5 years in April 2005. Please clarify whether I withdraw the amount in four or five instalments i.e. on withdrawal financial year or I can withdraw 60 pc of balance ending March 2005 only once in the extended period of five years. Also clarify if I can every year withdraw 50 pc of balance ending three preceding years.
— N. C. Gupta
A: A subscriber, continuing his account with fresh subscriptions, can withdraw up to 60 pc of the balance to his credit at the commencement of each extended period in one or more instalments, but only one per year. On the other hand, the balance can be merely retained in the account without contribution till it is needed. Any amount, in part or full, can be withdrawn in instalments, not exceeding one in a year. The balance will continue to earn interest till it is completely withdrawn.
Gift to mother
Q: I am a salaried bank employee earning Rs 3 lakh as gross income. During the last 7 years, I have accumulated Rs 1,50,000 lakh worth of NSC. Can I take a loan against the NSC’s and gift the entire amount to my mother who is a senior citizen having taxable income of Rs 10,000 p.a. Am I or my mother liable to pay gift tax? If she invest the same money in shares and gets capita gains, is she liable to pay short-term capital gains even if her taxable income is below Rs 1,85,000 from all the sources. Is the Section 80C available for her?
— Shailendra Zha
A: Yes, you can take a loan against hypothecation of NSCs, if the bank is willing to give you a loan. You can use the money any way you like. The interest paid by you is not a deductible expense.
This particular gift will be tax-free. The capital gains can occupy the initial threshold of Rs 1.85 lakh. Section 80C is available to all the tax assesses, however, Section 80C is not available as a deduction for income from short-term capital gains.
Q: I shall be grateful if you will kindly give a prompt reply to my under mentioned queries —-
1) Portfolio managers undertake dealings in shares on behalf of their clients resulting in profits both short-term as well as long-term. Are these to be treated as capital gains or income from business?
2) Portfolio management fees are charged on the basis of increase in NAV of shares which is only notional gain. Can this expense be treated as deduction from capital gains or income from business?
— D. Dumasia
A: This is a grey area and requires clarification from the authorities. In our opinion, under PMS, a person appoints a professional portfolio manager to carry out his securities transactions for which he pays the specified fees to such portfolio manager. Unlike a Mutual Fund, which has a specific exemption for its income under Section 10(23D), the Act has not conferred any such tax benefit on a PMS. In such a situation, the PMS functions merely as a pass through vehicle and the actual liability of tax emanating from the securities transactions carried out by the PMS is that of the individual owning the securities. It will be treated as capital gains or business income depending upon the frequency of transactions.
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