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Sunday, February 14, 1999
Centre destroying tax
offers green expertise to industry
1,450 crore FDI proposals okayed
MUMBAI, Feb 13 (PTI) Former Finance Minister Dr Manmohan Singh today charged the Central Government with destroying the normal tax administration and called for modernising of the tax system.
The government has destroyed the normal tax administration through schemes like Voluntary Disclosure of Income Scheme (VDIS) and Samadhan (for quick settlement of litigation cases), Mr Singh said, adding that there was a lack of seriousness in the economic policy of the BJP-led government.
There is a great lacuna in the government that needs to be corrected, he said addressing a national conference on Indian economy challenges for the 21st century here.
Mr Singh, who initiated the liberalisation process in 1991, said policy statements were made but not backed by blueprints. Is someone ensuring that these policies are converted into reality, he asked.
Commenting on the health of the banking system, he said legal changes had to be brought in to support the prescribed financial norms and added our foreclosure systems are primitive and only add to the reluctance of the banking system to lend.
Leader of the Opposition in the Lok Sabha Sharad Pawar felt that by raising misplaced doubts and by creating baseless controversies, all that they (the BJP-led government) had managed to do was to slow down the whole (reform) process.
Mr Singh also called for an agenda to increase the savings rate by 0.5 per cent every year leading to a capital formation of 30 per cent of GDP and 8 per cent economic growth.
Indias growth strategy should accelerate wealth creation while protecting the interests of the unborn generation, he said adding that growth has damaged our environment in many villages and cities.
There was a lack of seriousness in the present government at the Centre. Policy statements are made but not backed by blueprints. Is someone ensuring that these policies are converted into reality. Singh asked.
offers green expertise to industry
NEW DELHI, Feb 13 The global science-based company, DuPont, today offered to share with Indian industry and government its experience in clean and green technologies to make sustainable growth a reality in the 21st century.
DuPont India President, Mr Pankaj H. Shah, said here today that there were five thrust areas which should be focussed to better the environment in the country.
This includes efficient use of material, energy and water, reduction of emission and waste with a goal of zero, substantial use of recycled and reused materials and renewable resources, using products, processes and distribution modes which are inherently safer and creating a significant value per unit of resources extracted for customer and society.
Technology, Mr Shah noted
had played a critical role in gradually generating
environmental consciousness in the industry, but it still
had a long way to go. On its part, improving quality of
life globally had led DuPont to a uniform standard in all
the 70 countries where it has manufacturing facilities or
with whom it does business.
promote NRI investment
JALANDHAR, Feb 13 Chief Minister of Himachal Pradesh Prem Kumar Dhumal said here today that Himachal Pradesh would be providing adequate facilities to encourage entrepreneurs and NRIs to invest in the heavy industry and tourism in the state.
Promising a single window system for the clearance of projects, Mr Dhumal said an officer would be deputed with every project to facilitate the investor to get clearance from the state pollution board and other departments concerned for the projects to avoid any harassment.
He said liberal rules had been framed to develop the tourism sector.
with a cost
CHANDIGARH, Feb 13 Love is in the air. But besides the emotion entwined with it, what makes the air thicker is the rupees spent in the name of love and friendship and relationships. Propounders of when-you-are-in-love-you-live-on-fresh-air-and-water theory take a back seat.
Come February and lovers begin to gather gifts to be presented to their Valentines on the 14th as proof of their feelings for each other.
The practice of Valentine Day began in the West as a celebration of love that human beings have for one another for brothers, sisters, parents, friends, sweethearts, kids, anybody.
Today, the concept seems to be largely concentrated in the boy-girl romance category. No wonder school and college students are the most excited. The youngsters can be seen thronging gift and card shops, at the cost of their parents, of course. Peer pressure and demonstration effect ensures a deep gush in the pocket. Depending upon your pocket (or is it the extent of love?), you can pick up a card for a few rupees up to a few hundred rupees. Add to it the cost of gift items like decoration pieces, statues, china pots, cuddly toys and wrap it up with a bouquet and a candle-light dinner, the scope for splurging is enormous.
Anything karega for Tina, says lovelorn Rakesh, even as Tina gets ready for the V-Day with a new hairstyle and a surprise for Rakesh. In fact, there is almost a race for who gets more number of roses. Flowers are presented by both known admirers and the secret Romeos who get the courage to express their desire that day.
This year, the ban by Panjab University authorities on celebrating the event due to some unpleasant episodes of boys forcing their affections on girls, is not likely to have much impact as Valentines Day happens to fall on a Sunday, a holiday. But this has posed a problem to Anju, who is finding it difficult to cook up an excuse to meet her beau that day. My parents are very conservative. Theyll never let me enjoy myself, she laments, while friend Taarika assures her to depend upon me. I will find a way out. Dont worry. Needless to say that the two have cards and presents hidden in their bags for you-known-who.
The guys have also already wrangled cars and mobikes from their dads or friends and are all set to woo the fairer sex and also impress the difficult ones. The geri route is the most popular round, besides the colleges, and even schools, and the university. Jaskiran who is not expecting anything since she has no valentine, is nevertheless taking it in her stride and buying herself a gift a nice dress since if nobody loves, I love myself.
Meanakshi who got engaged to a boy of her parents choice last week,is wondering if her fiance is the romantic type and will shower her with roses et al. Im keeping my fingers crossed, she says with stars in her eyes.
The day has become a rage over the past few years not only due to love being a universal phenomenon. The media has played a big role in promoting this celebration. With newspapers full of ads of various restaurants and discotheques offering attractive incentives and contests and the TV channels doling out Valentine Day Specials by the dozen and music companies coming out with V-Day songs, the fever has reached its pitch.
Thus, cashing in on the commercialisation of the matters of the heart are restaurants, which boast of lots of advance bookings of tables, and card makers whose sales graphs have registered a steep hike.
Since its very
difficult to reverse the trend, its important to
educate the youngsters to not get carried away and take
the day in their stride and in the right spirit, is
the advice of Mr Jaswant Singh, a father of two girls,
who has allowed them to have fun with their friends,
but in a group.
NEW DELHI, Feb 13 (PTI) The Foreign Investment Promotion Board (FIPB) today cleared 27 foreign direct investment (FDI) proposals totalling around Rs 1450 crore including that of General Motors (GM), Powergen and France-based Lafarge.
GM would acquire 50 per cent stake of C.K. Birla group in the car venture and infuse additional capital of $ 20 million, official sources said.
The additional money brought in by GM would be utilised for introducing a new car model early next year.
Lafarge groups proposal to set up a 100 per cent holding company with a capital base of Rs 200 crore was also approved by the board, sources said.
The holding company would set up independent operating companies for manufacture and sale of cement. As per the proposal, Lafarge would buy the cement division of Tata Steel (Tisco).
The cement plant is located at Jamshedpur (Bihar) and the clinker unit in Madhya Pradesh.
US based energy major powergen, which already operates through a 100 per cent subsidiary, had been allowed to bring in an additional amount of Rs 900 crore by FIPB taking the total investments by the company to Rs 1200 crore.
Tanir Bavi Power Corporation, which is setting up a barge mounted power plant near Mangalore, would reduce its stake to 90 per cent from 100 per cent and pump in an additional investment of Rs 156.5 crore, the sources said.
training college foundation stone laid
CHANDIGARH, Feb 13 Mrs Harbhajan Kaur, wife of Mr Harbhajan Singh, CMD, Allahabad Bank, today laid the foundation stone of the staff training college at Panchkula.
Mr Harbhajan Singh said that this college will be the best amalgamation of banking skills and modern technology which is desirable for bank officers in coming millennium. The college shall be equipped with the best infrastructural facilities at par with world class banking training institution in the world.
relief package for sick small units
LUDHIANA, Feb 13 The Reserve Bank of India is working out a relief package for the small-scale units which have gone sick. An indication to this effect was given by the RBI when a deputation of the Northern India Federation of Industrial and Commercial Undertakings called on the bank authorities at Mumbai last week.
The deputation was led by Mr Kanti K. Behal, and consisted of Mr Charan Kapoor, Mr Narinder Singh, Mr Mohan Talwar and Mr Tulsi Das Jetwani.
The deputation interacted with Mr S. Srinivasan, General Manager, RBI, who is also chairman of the RBI working group on write-off/compromise settlement of non-performing assets. Other officials included Mr Murlidharan and Ms Shivali Chaudhary.
Mr Behal told TNS here today that the response from the RBI to their problems was positive. The RBI said that it was already seized of this problem which was not confined to the Ludhiana industry alone. It was a countrywide problem.
Mr Behal said they were keen that the recommendations of the RBI with regard to relief package for sick small sector units which were facing liquidation proceedings from the tribunals, should be forwarded to the Finance Minister at the earliest for inclusion in the next Budget. But this might already be too late because the Finance Minister had almost concluded his pre-Budget round of meetings with different organisations.
Mr Behal said the federation told the RBI that the small-scale sector was making valuable contribution of about 60 per cent total exports and 40 per cent of total manufacturing sectors production in India, and provided employment to over 3.45 crore persons directly and double the number indirectly, whereas the advances to small-scale industry by public sector was 17.2 per cent of net bank credit.
During discussion it was also pointed out that northern region had passed through very disturbed conditions during the last decade followed by the currency crises of South East Asia and by economic crises in Russia and above all the recessionary trend through which the industry was presently passing had resulted in the sickness of the small-scale industry.
The federation made suggestions for de-clogging of the system which would not only help the genuine small-scale NPAs to keep the wheels of the industry moving and save direct and indirect employment but also the banking industry from prolonged litigation with reduction of load of pending cases and realisation of its dues. Such steps would make banks and borrowers more friendly. Different options for different problems at present being faced by the industry were put forward.
The federation would also
take up the problems of its members with respective
public sector banks so that the borrowers and the bankers
could arrive at a mutually beneficial scheme by which the
financial institution get their clogged principal amount
and the industry keeps the wheels running and continues
the employment of large work force.
KAITHAL, Feb 13 (PTI) Chief General Manager of the State Bank of Patiala M. Sitarama Murty, launched Patiala Bank Kisan Card scheme in Haryana here today as part of its efforts to speed up production credit flow to the agricultural sector.
The scheme is now available at all major branches of the bank in Haryana, Punjab and Himachal pradesh dealing with agricultural finance.
The credit extended under this scheme to the cultivating farmers would be in the nature of revolving cash credit like that available to traders and industrialists and would be fixed on the basis of operational land holding, scale of finance, ancillary needs of farmers such as maintenance of machinery, equipment and other unseen natural eventualities.
The special features of
the Kisan Card will be that farmers can now draw funds
from two more branches of the bank of his choice in
addition to the branch issuing him card. Under this
scheme, a farmer availing this facility in Kurukshetra
zone, owning 5 acres land and cultivating wheat and paddy
will be enjoying peak drawing of Rs 44,570 against Rs
25,000 available under ordinary crop loan scheme.
raise limit on loans
CHANDIGARH, Feb 13 The cooperative banks in Haryana have raised the maximum credit limit on crop loans to farmers from Rs 40,000 to Rs 60,000 so as to enable the farmers to meet the increased cost of agricultural inputs.
An official spokesman said today that crop loans and other short-term loans of about Rs 1802 crore had been advanced during the year 1998-99 for both kharif and rabi as against Rs 1293.48 crore last year.
He said that cooperative
banks had also reduced the rate of interest on crop loans
from 16 per cent to 14 per cent, benefiting the farmers
to the tune of Rs 30 crore during 1997-98. The expected
relief due to this reduction in rate of interest during
1998-99 would be about Rs 25 crore. The cooperative banks
postponed the recoveries of crop loans in those 15
districts where crops were damaged due to unseasonal
rains in October and November last and the damage was
more than 25 per cent but less than 50 per cent. Thus,
recovery of a loan of more than Rs 14 crore towards about
13,481 farmers in five districts of Bhiwani, Rohtak,
Faridabad, Sonepat and Panipat and about additional Rs 6
crore towards about 10,000 farmers in the remaining 10
districts had been postponed.
WANT to find out if youre addicted to the Internet? Newsweek magazine has a quiz you can take, but theres a catch:You have to go online to test yourself.
Do you sacrifice personal hygiene showering or shaving to spend more time online? reads one question in the quiz, posted on the Newsweek website (www.newsweek.com).
The quiz was written in consultation with Maressa Hecht Orzack, a Harvard University Medical School psychologist, who specialises in treating computer addiction at McLean Hospital in Belmont.
Whether its true addiction, or whether its a symptom of other compulsive behaviours, like gambling, people are losing control, Orzack says on the site.
Market researchers predict more health insurance, fancy toys and high fashion for pampered pets as owners think of them as humans.
Increasingly pet owners need no excuse to buy something special for a furry or feathered family member, Euromonitor has said in a report. When they give their pets a gift, according to surveys, pet owners feel they are expressing affection, as they would to a child.
Euromonitor has predicted continued growth in ready-made animal food for owners with little time and greater status for pets treated as fellow humans. Americans spent an average $ 143 on food and pet care products in 1998, closely followed by Britons with $ 136 and Japanese who spent $ 118, according to the study on the international market for pet products. The world market for pet food is estimated to be worth around $ 20 billion.
Engineers in the USA have designed a new smart tyre that will tell drives when it is going flat or needs to be replaced, New Scientist magazine has said.
The smart tyre, developed by researchers from Case Western Reserve University in Ohio and the Goodyear Tire and Rubber Co, uses tiny temperature and pressure sensors with microscopic components.
Each tyre also contains an ID chip that helps tyre makers keep track of their stock. To identify a tyre, or read its temperature or pressure, a radio signal is sent out by a transmitter built into a vehicle or a hand-held scanner, the magazine said.
Although Goodyear has successfully tested the sensor in truck tyres the company has not announced when it will be available in cars.
A Malaysian beauty queen has been stripped of her crown after posing nude in a foreign film and magazines, news reports in Kuala Lumpur said.
Joey Tan Eng Li, crowned Miss Malaysia Chinatown 1997-98, was featured as the January cover girl in Penthouse magazines Hong Kong edition. She appeared in another adult magazine and also played the part of a rape victim in a Hong Kong-made film, the Sun Newspaper reported.
The pageants organiser, Eva Productions, said that the work violated a three-year exclusive management contract and was calculated to bring discredit, disrepute, ridicule and contempt on herself and the promoter.
Eva Giam, the groups manager, said that legal action would be taken against Tan, who broke contact with organisers after being sent to Hong Kong last year to represent Malaysia in an international pageant.
Q: In a petition for eviction on the basis of reasonable bonafide requirement is option open either to approach the ordinary Civil Court or seek remedy under Chapter III-A to avail a special forum?
A: In Ashok Kumar Shiv Prasad Verma v Baboo Lal (1998 (2) R.C.J. 455) the Madhya Pradesh H.C. was expressing the opinion as under:
If any landlord wants to get a benefit of summary proceedings of the tenant, who is a landlord defined in S. 23. J of the M.P. Accommodation Control Act, then he can immediately invoke the remedy before the Rent Controlling Authority. But, if he does not want to invoke the benefit of that summary remedy, then there is no prohibition for him to go to a Civil Court and seek remedy of eviction of the tenant on the basis of reasonable bonafide requirement or on other grounds mentioned in S. 12 of the Act.
But, if any landlord defined in S. 23. J. files suit before the Civil Court raising a ground of reasonable bonafide requirement or on other grounds mentioned in S. 12 of the Act, then the Civil Court can decide the matter and there is no prohibition.
But, if the landlord does not want to avail the benefit of Ch. III-A and wants to lititgate the matter before the Civil Court as ordinary landlord then S. 45 of the Act will not come in his way. In fact, the benefit has been specially provided to the landlord defined in S. 23. J whereby he does not cease to be ordinary landlord.
The landlord can avail the expeditions remedy under Ch. III-A and if they do not want to avail the remedy under Ch. III-A and wants to litigate as an ordinary citizen, they it is their choice and they cannot be restricted to one particular forum.
The H.C. took the view
that an alternative forum has been created for the
benefit of those persons and does not exclude the
ordinary civil forum, if they do not want to avail the
benefit of a privilege which has been created for them
under the Act. In other words, it is the choice of the
landlord and it cannot be restricted that he can only
avail the remedy for eviction on the ground of reasonable
bonafide requirements before that forum alone. The
reference was answered accordingly.
Q: We are registered as a dealer under the provisions of the Punjab General Sales Tax Act, 1948 and the Central Sales Tax Act, 1956. Our business activities involve manufacture and sale of machinery parts and accessories. A Haryana based party has placed an order with us for the erection of machinery including its installation with the instructions that this work is to be executed in Uttar Pradesh for a third party. The payment will be made to us by the Haryana party against this supply, erection and installation of machinery. Kindly advise the taxability of this transaction under the provisions of the Punjab General Sales Tax Act, 1948 and the Central Sales Tax Act, 1956.
A: It appears from the contents of the query that the agreement for the supply of machinery and its parts involves movement of goods from Punjab to Uttar Pradesh. As per the provisions of Section 3 of the Central Sales Tax Act, 1956 if a sale of goods between the parties occasions the movement of goods from one State to another, the same will be regarded as a transaction in the course of inter-State trade or commerce and therefore the transaction sought to be clarified constitutes a sale governed by the Central Act.
As per section 9 of the Central Act Tax liability in relation to the sales taking place in the course of inter-State trade or commerce arises in the State from where the movement of goods commences. Admittedly, movement of goods commences from Punjab, this transaction will attract tax liability under the Central Sales Tac, 1956 in Punjab. Now if the buyer of Haryana issues a form C against this transaction, the rate of tax would be 4 per cent and in the absence of the form higher rate of tax of 10 per cent will be applied on this sale.
Q: We are engaged in the business of executing job work in Haryana mainly for registered dealers. We are also registered as a dealer under the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956. Raw material which is used in the execution of job work is purchased from the places situated outside the State of Haryana as well as within the State. Some times goods are purchased from within the State on payment of tax at the first point and occasionally the purchases are made without payment of tax on the strength of the registration certificate. Kindly advise if any tax becomes leviable on the goods involved in the execution of job work if the same is carried out for another registered dealer of Haryana.
A: Transfer of property involved in the execution of a works contract amounts to a sale of goods for purposes, and within the meaning of Section 2 (1) of the Haryana General Sales Tax Act, 1973 and therefore the transaction involving execution of job work will be considered as a sale if transfer of property in goods is taking place. It has not been made clear by the queriest as to what kinds of goods are used by him in the execution of the job work. If the goods so purchased and involved in the job work do not attract tax at the first point in the State, the same can be sold against ST-15 declaration forms without realising any tax.
On the other hand if the
goods are taxable at the first point, the queriest will
have to pay sales tax thereon but the tax paid at first
stage on the raw material consumed in the job work will
be allowed as a set off against the liability. It is
pertinent to note here if the contractee for whom the
work is executed does not furnish declaration form ST-15
against the transaction, tax liability will arise in case
unclassified goods are involved therein.
Q: My friend made a society of some persons and it is running a school which is duly affiliated to Punjab School Education Board. The society is not registered u/s 12A (2) of the Income Tax Act or under any Section of Income Tax Act. It filed the return and claimed that whole of the income of the school is not taxable as per Sec. 10 (22). But the Assessing Officer has written a letter that the income from school (educational institution) will be exempted u/s 10 (2) provided it is registered with the Income Tax Department (Commission of Income Tax). Kindly give your valuable advice in connection with the above.
It is clarified here that the income of the school is not for personal benefit. However, a formal Society has been made and registered with the Registrar of Societies, Punjab.
A.N. Chadha, Amritsar
Ans: For the purposes of registration of your society under the Income-tax Act please file Form No. 10A in duplicate. This form for registration is normally required to be sent to the Chief Commissioner or Commissioner or the relevant Commissioner In-charge before the expiry of a period of one year from the date of creation of your society. Although there is a delay in your filing the form but still you can file it now. If the registration application is filed late, the exemption of the income can be claimed from the first day of the Financial Year in which such application has been made. However, the concerned Commissioner have the power to condone the delay and grant exemption right from the day when the institution was formed. Together with Form No. 10A please submit original or certified copy of the Memorandum and Articles or the Rules & Regulations of the Society together with one extra copy of such rules and regulations. Please also enclose copies of A/c for the last 2 or 3 years as are available. You are also advised to file Income-tax return in Form No. 3A.
Q: Mr G.S. Sodhi of Ludhiana has stated in this column that senior citizen having gross income of Rs 1 lakh is not required to pay any income tax in the year 96-97 (Assessment Year 1997-98) whereas I have been told by the income-tax authorities that concession to senior citizens income of Rs 1 lakh is available in the year 1997-98 (Assessment Year 1998-99).
It has been stated in Form 2 (C) that senior citizen at the age of 65 years can only claim the rebate of the tax payable.
Whether it is mandatory for senior citizen having gross income in the year 97-98 (Assessment year 98-99).
When there is capital loss when the company is liquidated and the money invested in Share/Deposit became Zero whether the rebate is allowed to tax payer.
Krishan Lal, Chandigarh
Ans: In respect of the Assessment Year 1997-98 for a senior citizen the tax rebated is available if he has attained the age of 65 years during the previous Financial Year, namely, during the Financial Year 1996-97 and does not have total income exceeding Rs 1,20,000 then he was entitled to a deduction u/s 88B @ 40 per cent. For the Assessment Year 98-99 and the Assessment Year 1999-2000 the tax rebate u/s 88B is permissible irrespective of the total income of the senior citizen the total tax rebate now is available to the maximum extent of Rs 10,000 u/s 88B. In respect of capital loss suffered consequent to the company going in liquidation or money invested in shares or deposit, etc. becoming zero, no tax benefit or deduction is available within the framework of the Income-tax law.
Q: 1. I purchased MEP 93 Rs 10000 in Feb 1993 and offered the same for repurchase in July, 97 and received Rs 15780 having capital gain of Rs 5780.
2. I purchased MEP 1994 Rs 10000 in Feb. 1994 and offered the same for repurchase in July, 1997 and received Rs 9120 having capital loss Rs 10000-9120=880.
Q. 1. What is capital gain and capital loss?
2. How it is calculated?
3. Whether the capital loss can be adjusted against the capital gain in the same year?
4. What is capital gain tax liability in the above case after adjusting loss relating to MEP 94.
S.K. Bhagat, Jalandhar City
capital gain or capital loss is the difference between
sale price of the assets and the purchase price of the
assets. In case the sale price is higher than the
purchase price the assessee will have capital
gain, reversely if the sale price is lower than the
purchase price it will be a case of capital loss. The
simple formula for calculation of capital gains or
capital loss is to deduct from the sale price the cost
price of the assets and then we can get either capital
gain or capital loss. In arriving at the above
calculation as per section 48 of the Income-tax Act, the
benefit of Cost Inflation Index is available due to which
the cost price is adjusted to the prevailing Cost
Inflation Index which has been notified by the Government
for different years. The capital loss can be adjusted
against capital gain in the same year. On the facts cited
by the Querist firstly the calculation of long-term
capital gain as also long-term capital loss will have to
be ascertained by reference to the Cost Inflation Index
for different years. Thereafter the long term capital
loss will be allowed to be adjusted against the long-term
capital gain of the year.
NEW DELHI, Feb 13 (PTI) Silver prices continued to seek higher levels as they flared up on the bullion market today on hectic buying by stockists and closed at a recent record high of Rs 8400 per kg. Gold also improved on local parties buying along with higher Mumbai advices. The quotations: Silver .999 (ready) 8400, delivery 8340, coins buyer 10,800 and seller 11,000. Standard gold 4410, ornaments 4260 and sovereign 3800.
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