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IT rates likely to be moderate
Unprecedented growth in tax collection, says FM
Airlines asked to clarify tax part in fares
Spectrum Issue
Kuwait Petro scouts for partners in India
GoM on fuel prices to meet on Dec 14
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ADB to lend $3b annually
NTPC to float SPV for power plants
Ganga Expressway REL, DLF among bidders
Citibank to open 3 new branches
Tata Motors’ Thai plant to roll out trucks
PNB introduces branchless banking
EPF board rejects proposal India world’s third largest economy: OECD Kuwait Petro scouts for partners in India
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IT rates likely to be moderate
New Delhi, December 6 "We can't have marginal rates (of income tax) that is too high," Parthasarathy Shome, adviser to finance minister P Chidambaram, told a tax conference. He, however, did not say whether tax rates could be cut in the Budget for 2008-09. Citing finance minister's earlier statements, he said: "If voluntary compliance increases at some point, the whole (tax) structure would be looked at." Industry chambers like Ficci are lobbying for a cut in income tax rates to 25 per cent in the next Budget from the present 30 per cent. "Over past decades, we have moved away from very high tax rates to commonly acceptable tax rates.... We are not terribly away from international comparison," Shome said referring to tax rates in Latin America, Europe and Southeast Asia. Shome further said the Centre would soon come up with an Income Tax Code, which would simplify the laws and tax structure. He also said the finance ministry wanted to review some of the double-taxation avoidance agreements (DTAAs) with several countries to facilitate Indian firms in mergers and acquisitions abroad. "Some of them (DTAAs) are being renewed and renegotiated,” he said, adding “the nature and premise of DTAAs must change." Shome said the government wanted to protect not only revenue at a time when foreign capital came to India and the returns go abroad, but also when domestic companies invest abroad. The government also wants to encourage such firms investing abroad to send their profits back to India through market mechanism, he said. Indian companies have invested over $20 billion abroad over the past one year. According to an estimate of Ernst & Young, Indian firms are expected to spend more than $35 billion this year on overseas acquisitions, compared with $15 billion in 2006.
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Unprecedented growth in tax collection, says FM
New Delhi, December 6 Addressing a meeting of the Parliamentary Consultative Committee of Finance, Chidambaram also attributed “the changing attitude of the people to pay tax” to the unprecedented growth in tax collections. Speaking about direct taxes, Chidambaram said the TDS administration, refund bankers, tax return prepares scheme, large tax payers unit, e-filing of taxes and business process re-engineering are some of the important initiatives which have brought an unprecedented growth of tax collections. With the attitude of people to pay taxes changing, the personal income tax grew by 42.5 per cent and corporation tax by 46.6 per cent during April-November over the corresponding period of last fiscal. The overall direct tax collection growth rate is 44.9 per cent during this period, he added. Chidambaram said the number of taxpayers in the country has been increasing. While the number of assesses increased from 301.78 lakh in 2003-04 to 319.26 lakh in 2006-07, the number of assesses filing return of income increased from 234.25 lakh to 275.44 lakh during this period. The various initiatives taken by the CBEC like risk management system for customs, automatic clearance of courier consignment, automation of central excise and service tax, e-payment, large tax payer units, streamlining of customs procedures are some of the major initiatives which contributed buoyancy in collection of indirect taxes.
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Airlines asked to clarify tax part in fares
New Delhi, December 6 The government has asked all airlines to clarify as to what are the charged tax components. The government’s call for transparency comes as a large number of airlines have been showing the fuel surcharge being charged by them under the “taxes” head. While the fuel surcharge stands at a staggering Rs 1,650 in the ticket as taxes, the other surcharge, named as the congestion surcharge of Rs 150 is also part of the taxes. In the directive issued, the government has asked the airlines to provide confirmation whether all taxes shown by them in their tickets and website are deposited with it. The airlines have also been asked to submit the record of the taxes deposited with the government at the earliest. Incidentally, sources said the airlines only deposit Rs 225 with the government as taxes while the passengers pay as much as Rs 2,025 under the taxes head. In the letter the Director General of Civil Aviation has said that perusal of the fare shown on the airlines website has revealed that the air fares have two components — the basic fare and the taxes. It is not clarified as to whether components like passenger service fee and fuel surcharge are included in the basic fare or have been clubbed under the heading of “taxes”. What has forced the government to come forward for this step is that the airlines have been raking in undue money, specially in the event of cancellation. While they charge Rs 2,025 as taxes on the ticket, just Rs 225, which is the passenger service fee, is returned to the passenger in the event of cancellation. A release issued by the ministry of civil aviation clarified that a “tax” is defined to be a fee levied by the government on a product, income or activity and such amounts are to be deposited with the government and a record is required to be maintained for the same. This move would prove to be a deterrent to the airlines before they add undue charges on the passengers through the mode of taxes. Besides, it would help the government to recover any outstanding tax dues from the airlines.
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19 MPs seek PM’s intervention
New Delhi, December 6 “For the sake of fair competition, consumer benefit in terms of lower tariff and better services, it is imperative that the government allows new players in the cellular mobile sector,” a letter signed by 19 Members of Parliament said. The parliamentarians have supported the recommendations of telecom engineering centre and regulator TRAI, saying their technical capabilities are second to none. The main GSM operators have questioned these recommendations for the sole purpose of retaining their hegemony, they said. According to them, the dominant GSM players have cornered 10 MHz of spectrum across all circles. “This is in clear violation of licensing conditions which stipulate that each operator is entitled to get only 6.2 MHz of spectrum.” These firms have hoarded frequency and it is estimated they have close to 60 MHz with them illegally. The government must order a CBI enquiry to fix responsibility and bring the culprits to book for obtaining this illegal allocation and consequent revenue loss to the exchequer, the MPs said. The GSM players, led by Bharti Airtel, and CDMA companies - mainly Reliance Communications - have been slugging out in public about their claims on spectrum. The GSM operators have said they have only 25 MHz of airwaves, while CDMA players claim these companies have 60 MHz excess spectrum. — PTI
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Kuwait Petro scouts for partners in India
New Delhi, December 6 KPC CEO Saad A. Al-Shuwaib met top officials of RIL in Mumbai yesterday and held a luncheon meeting with IOC board here today to explore possibility of setting up a 400,000 barrels a day refinery and a chemical plant with an annual capacity of one million tonnes. The company plans to export fuels and chemicals from the proposed plants in India. "India is a very strategic place for us... we are interested in an integrated refinery and petrochemical complex," he told reporters here. KPC, which some years ago was in talks with IOC for a possible partnership in the state-run firm's greenfield refinery at Paradip in Orissa, is looking at new ventures and is not keen on any of the existing projects. Al-Shuwaib said KPC was not looking to buy stakes in existing Reliance refineries, including the 580,000 barrels per day refinery being built by Reliance Petroleum at Jamnagar in Gujarat. Petroleum minister Murli Deora, who met Al-Shuwaib, said KPC may be interested in IOC's proposed 300,000 barrels per day refinery at Ennore in Tamil Nadu. — PTI
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GoM on fuel prices to meet on Dec 14
New Delhi, December 6 "The first meeting of the Group of Ministers constituted by Prime Minister Manmohan Singh will be held on December 14," petroleum minister Murli Deora told reporters here. The GoM, he said, would look into pricing of essential commodities, including the pricing of petrol, diesel, domestic LPG and PDS kerosene. Earlier, Deora, in a written reply to a question in the Lok Sabha, said international oil prices have risen to record levels. But, "to protect the common man, domestic retail prices of PDS kerosene and domestic LPG have not been increased over the past three years." — PTI
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ADB to lend $3b annually
New Delhi, December 6 "India requires huge investments in the infrastructure sector and 70 per cent of the annual $3 billion would go to sectors like power, roads and rural infrastructure," ADB managing director General Rajat Nag told reporters on the sidelines of the CITI-FT Financial Education Summit here. ADB currently lends about $2-2.5 billion to India and beginning 2008, this would be increased to $3 billion, which would be invested through the public sector for infrastructure development. Nag said it is estimated that about $1.6 trillion would be required for infrastructure development in India over the next 10 years. The bank is also in the process of raising money through bonds in fiscal 2009 for investment in India, he said. "We are ready and have talked to the authorities concerned to raise local currency for investment in the country. We are waiting for the market conditions to be right," he said without divulging the quantum of money that the bank would raise.
— PTI |
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NTPC to float SPV for power plants
New Delhi, December 6 "NTPC and CIL will sign a memorandum of understanding (MoU) to float a SPV to build two integrated power plants at a cost of Rs 7,500 crore and develop two coal mines in Jharkhand at an estimated cost of Rs 500 crore. The draft MoU will be given final shape in the coming days," a top coal ministry official told PTI. He said both companies would have equity stake on a 50:50 basis and the power produced from these plants would be commercially sold, mostly through power purchase agreements (PPAs). "NTPC and CIL have been allocated two coal mines-Brahmini and Chichro Patrimal, which together have a thermal coal reserves to the tune of a whopping 2000 million tonnes and the reserves are expected to last for at least 30 years," he said. The official, however, did not say whether the proposed SPV would be listed but pointed out that it would be decided in due course of time. — PTI
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Ganga Expressway REL, DLF among bidders
New Delhi, December 6 "Eighteen companies submitted the pre-qualification bids for the project on the last day today," sources told PTI. Infrastructure major GMR Group and JP Associates, which has interests in cement, roads and power, are also among the bidders for the Ganga Expressway project, they said. The project would be developed on public-private partnership model. The state government seeks to build an eight-lane expressway connecting Greater Noida to Ballia. The 1,047-km expressway to be built along the Ganga river would also help in preventing floods, besides ensuring high speed direct connectivity from western to eastern boundaries of the state. — PTI
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Citibank to open 3 new branches
New Delhi, December 6 "Citigroup currently has 39 branches in India and is going to increase it to 42 by February next year," Citigroup's Asia Pacific CEO for global consumer group division Stephen Bird told PTI. "The bank will make multi-million investment for technology upgradation at its India operations over the next 12-18 months," Bird said, but he did not divulge the exact investment figure. "The two new branches will be set up in Nanded and Akola in Maharashtra and the third will come up in Kurnool, Andhra Pradesh," Bird said on the sidelines of a conference here.— PTI |
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Tata Motors’ Thai plant to roll out trucks
Bangkok, December 6 Tata Motors (Thailand), a subsidiary of the Indian company, will invest 1.3 billion baht ($38 million) to launch its first output base in the kingdom, the biggest auto market in Southeast Asia. Tata Motors "will leverage its presence in Thailand to address other Asean markets. The pick-up is the first in a series of exciting products planned for the region," the company said in a statement. Production will begin in March 2008 with output capacity of 35,000 units per year, it said. Thailand is the world's biggest maker of one-tonne pick-up trucks.
— AFP |
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PNB introduces branchless banking
Patna, December 6 Launching the new service, PNB chief KC Chakraborty described the initiative not only as part of the bank's social responsibility, but also as a ''holistic approach'' towards providing basic banking facilities to the poorest of the poor in all corners of the country. Under the project each family in the village would be provided with a biometric card, a thermal filter and a Near Field Communication (NFC) mobile handset at a total cost of only Rs 110, at least half of which was expected to come from the state government as subsidy. — UNI
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EPF board rejects proposal New Delhi, December 6 A meeting of the central board of trustees (CBT), chaired by union labour minister Oscar Fernandes, turned down the proposal for parking money in the debt market citing safety and security factors in the investment pattern. A proposal to invest 5 per cent of PF money in the equity market was rejected earlier following opposition from trade unions. CITU leader and a member of the board WR Vardharajan said: “We have rejected the proposal of the government to invest (subscribers' money) in the equity market. We do not think that this proposal is a safe option. A draft of investment pattern was prepared in September. It suggested investing part of the PF money in equities share market and rupee bonds and the option of multiple fund managers to administer the EPF money. The agenda of the meeting was also to discuss the conversion of a single fund manager into multiple fund managers. The SBI was the sole manager of the EPF money so far. The government will now introduce other banks as fund managers to create competition and for the betterment of services as per the draft. However, the board has not decided on introduction of private banks as fund managers. A three-member committee has been formed to work on the guidelines to select banks for administering the funds.
— PTI
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India world’s third largest economy: OECD Paris, December 6 In a twice-yearly report, the OECD said China, India, Russia and other rising stars would continue to grow fast if not quite as furiously as before, and that the financial market troubles were the biggest, and simply unquantifiable, risk right now. It commended recent interest rate cuts by the US central bank to help the world’s largest Economy weather a housing slump and crisis in subprime mortgage loans that has since snowballed into a more global credit market crunch, hitting mostly banks. The European Central Bank and Bank of Japan should forget about raising interest rates for the next year or more and the Bank of England should cut rates, the OECD said. High oil and food prices did not herald unmanageable levels of inflation and pressures on that front were expected to ease off with time even if the OECD was counting on oil remaining at an average $90 per barrel next year and still-high food costs. The OECD forecast annual US economic growth of 2.0 per cent next year before a return in 2009 to the 2.2 per cent expected in 2007, but chief economist Jorgen Elmeskov said the immediate dip in growth would be sharper than those figures suggested. “Several shocks have hit OECD economies recently: financial turmoil, cooling housing Markets and higher prices of energy and other commodities,” the report said. “2007 is set to become the fourth year of above-trend growth in the OECD area but activity is now moderating.” The OECD forecasts for its 30 largely industrialised member countries but its report covered emerging market economies such as China too and said they would continue to provide support for overall economic growth despite the U.S. woes. Growth in the 13-country euro zone was set to slow to 1.9 per cent next year from 2.6 this year and Japan to 1.6 per cent from 1.9 in 2007, figures which pale beside the 10.7 per cent expected in China or 6.5 per cent in Russia in 2008. Nonetheless, the OECD said the situation — credit crunch unknowns aside — remained “relatively benign” and that the end of an international housing boom in many countries in addition to the USA did not spell catastrophe.
— Reuters
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Kuwait Petro scouts for partners in India New Delhi, December 6 KPC CEO Saad A. Al-Shuwaib met top officials of RIL in Mumbai yesterday and held a luncheon meeting with IOC board here today to explore possibility of setting up a 400,000 barrels a day refinery and a chemical plant with an annual capacity of one million tonnes. The company plans to export fuels and chemicals from the proposed plants in India. "India is a very strategic place for us... we are interested in an integrated refinery and petrochemical complex," he told reporters here. KPC, which some years ago was in talks with IOC for a possible partnership in the state-run firm's greenfield refinery at Paradip in Orissa, is looking at new ventures and is not keen on any of the existing projects. Al-Shuwaib said KPC was not looking to buy stakes in existing Reliance refineries, including the 580,000 barrels per day refinery being built by Reliance Petroleum at Jamnagar in Gujarat. Petroleum minister Murli Deora, who met Al-Shuwaib, said KPC may be interested in IOC's proposed 300,000 barrels per day refinery at Ennore in Tamil Nadu. — PTI
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