Sunday, November 21, 1999
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B U S I N E S S | Sunday, November 21, 1999 |
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KVIC plans show at Ludhiana in
December Power cuts cause workers’
lay-off
Kisan
card |
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PM to form
group for telecom problems NEW DELHI, Nov 20 — A Group under the Chairmanship of the Union Finance Minister, Mr Yashwant Sinha will be constituted to look into the problems in the telecom sector, Prime Minister Mr Atal Behari Vajpayee said here today. The Group will look into several issues including the need to strengthen TRAI through a suitable legislative amendment, replacement of the Indian Telegraph Act,1885 with a new comprehensive law “ that fully reflects the revolutionary convergence of telecom, computers, television and electronics”, and also draw out a clear roadmap for corporatisation of the Department of Telecom Services. “There are also problems to be resolved in the implementation of the ISP policy for achieving rapid spread of the Internet in India, especially through liberalisation of the Gateway Policy”, Mr Vajpayee said while inaugurating the 72nd Annual General Meeting of FICCI here. He said that the reconstituted Group on Infrastructure will draft a clear programme with specific time targets of the ambitious National Highway Project involving the East-West and North-South corridors. A target of 7 to 8 per cent annual growth rate has been set by the Government, Mr Vajpayee said adding that this was possible only through faster reforms. Seeking cooperation from the industry in this regard, Mr Vajpayee said that they (industry) should contribute fully in strengthening the social infrastructure for their employees through the spread of education, healthcare, housing and sanitation. “We will not be able to build adequate support for reforms unless the government and business together can demonstrate that they benefit the poorest and the most deprived”, he said. The Prime Minister said that Indian business establishments should quickly restructure themselves to bring greater efficiencies, protect the interests of their consumers, and improve the quality of their products to compete aggressively in the global market. Admitting that the fiscal situation in the states was a cause for worry, the Prime Minister said that bringing fiscal discipline, both at the Centre and in states will receive high priority from the Government. “The Centre has
already initiated several initiatives on tax reforms and
expenditure management. The State Government must act
decisively to cooperate with the Centre in implementing
these measures to repair finances”, Mr Vajpayee
said. |
‘Zero
duty to cut PC prices’ NEW DELHI, Nov 20 — The computer hardware manufacturers have urged the Government to allow duty-free import of computer parts to wipe out the grey market, to increase PC penetration and to reduce PC prices. The National IT Task Force report on Hardware sector had suggested duty-free import of computer parts to wipe out grey market and increase Government revenue. “Duty-free import of computer parts would wipe out grey market as they now have over 50 per cent market share of the PC market,” Mr Vinnie Mehta, Director of Manufacturers Association of Information Technology, said. Under the present policy components like micro-processors and hard-disks attract import duties ranging from 5.5 to 20 per cent. The IT Task Force report said significant proportion of the hardware industry was in the unorganised sector which is growing at a rate of over 50 per cent. The grey market is resulting in huge losses to the Government in the form of import duty, excise duty, sales tax and octroi and other state taxes, the report said. Mr Mehta said “the present policy of the Government is resulting in loss of revenue over Rs 240 crore per annum.” The duty-free import, he said would encourage hardware majors to set up plants and source their products from the country. A study by MAIT said if
the report of the IT task force is implemented then the
PC penetration in the country would spur from 3 per
thousand to 30 per thousand in 2005. |
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NEW DELHI, Nov 20 (PTI) — Former Finance Minister, Dr Manmohan Singh today said that Telecom Regulatory Authority of India (TRAI) had been completely marginalised despite many promises made by the Government to give more powers to it.“If the regulator is so helpless, then who will come to invest in the sector,” Singh said adding that telecom was one sector which could have attracted huge private investment both from the domestic as well as foreign investors. “Let the regulator function in a credible manner to realise full potential of this sector,” Singh said adding that the Government must amend the TRAI Act to give more powers to the regulator. Addressing the seminar on Mid-Year review of the Indian economy, Singh said that similar was the position in power sector. Despite various steps
taken by the Government, private power producers were yet
to make positive contribution in the sector. |
Tanishq
unveils Karatmeter CHANDIGARH, Nov 20 — Tanishq, a jewellery brand in India today announced the introduction of its Karatmeter at Tanishq showrooms in Chandigarh, Delhi, Ludhiana, Jaipur and Lucknow. Designed to give an accurate and quick reading of karatage of gold jewellery, the Karatmeter is the most accurate and non-destructive means to test purity of gold. Mr Vasant Nangia, Vice-President - Jewellery, Tanishq unveiled the Karatmeter here. The internationally acclaimed Karatmeter that uses X-rays to give an exact reading of the purity of gold without destroying it in just three minutes will now give the consumer an unmatched benefit when buying or selling gold”, said Mr Nangia. Mr Nangia, said India is
the largest consumer of gold in the world and according
to the World Gold Council, the domestic consumption of
gold in India in 1998-99 was estimated to be over 830
tonnes, which corresponds to about 20 per cent of the
world gold production at a value of over Rs 35,000 crore.
Therefore, even a small percentage of underkaratage could
mean a huge amount of money lost by the unsuspecting
consumer. |
KVIC plans
show at Ludhiana in December CHANDIGARH, Nov 20 — A State level Khadi Gramodyog exhibition is going on at Sector 34 here. To promote the sale of khadi and village industries products Khadi & Village Industries Commission (KVIC), has sponsored this exhibition. The Government of India is providing special rebate on cotton, woollen and silk khadi up to 30 per cent during the exhibition. The village industries units certified by KVIC from Punjab, Chandigarh, Haryana, Himachal Pradesh, Uttar Pradesh, Jammu & Kashmir and Rajasthan are participating. Mr Karnail Singh, Director KVIC, Chandigarh said during the first 20 days of the exhibition, khadi worth Rs 34.50 lakh was sold. Other village industries products like artistic wooden furniture, leather garments and footwear willow work of J&K, lac bangles of Rajasthan worth Rs 9 lakh have also been sold so far. Mr Singh hopes the total sale during the exhibition will cross Rs 80 lakh upto 28th November. He said the KVIC is also
planning to hold another State level exhibition during
December ‘99 at Ludhiana. |
Power cuts
cause workers’ lay-off SONEPAT, Nov 20 — Economic misery is fast engulfing a vast majority of industrial workers resulting from unprecedented lay-offs in industrial units of this region due to power cuts enforced by the Haryana Vidyut Prasaran Nigam. According to industry sources, on an average between 5,000 and 7,000 industrial workers are facing lay-offs everyday depriving them of their basic means of livelihood. The workers were in the midst of worst financial disaster driving their families to the point of starvation now. Industrialists said they
were unhappy over the lay-offs and retrenchments which
they were being compelled on account of non-availability
of power. Production in their units had slumped to the
non-profitable levels and if the power situation did not
improve, a majority of the industrial units would be
shattered. |
Punjab’s
loan waiver turned down PUNJAB’S loan waiver remained quite a contentious issue for some time. The first loan waiver of Rs 803.23 crore was affected in 1995-96. Second waiver of Rs 2,114.66 crore was materialised in 1997 during Mr Gujral’s tenure. According to CAG character of the award of the 10th Finance Commission is upset by going outside its recommendations. The Finance Commission is set up every five year under Article 280 of the constitution. It is held by constitutional experts that the Finance Commission is not constituted in the spirit of the provision. Justice Qureshi a member of the Ninth Finance Commission, had given his dissent note. According to him the Finance Commission should be set up on the permanent basis and only reconstitution should be done after five years. There should be no interregnum between two transitory Finance Commissions as is the practice. The Finance Commission is constituted for one or two years and financial matters between the Centre and States are settled through the Planning Commission and the Finance Ministry. At present the Commission is constituted on part-time basis. The Finance Commission should consist of Chairman and four members. The work of the Commission is semi-judicial in nature. It needs great objectivity and impartiality. To ensure this it is essential to appoint persons who are truly independent. So active politicians or serving civil servants should not be included in it. Almost all Finance Commissions have defied this principle. Hence controversial issues like loan waiver of Punjab cannot be expected to get objective treatment. Moreover, the Finance Commission is treated as an adjunct of the Finance Ministry and subservient to it. But it has to go to the Finance Ministry for every trivial thing as it has no permanent office or staff. CAG has taken of the recommendations of the 10th Finance Commission while overlooking those of the Ninth Finance Commission. On Punjab’s loan waiver recommendations of 9th and 10th Finance Commissions are reproduced. The Ninth Finance Commission recommended; “Special loans to the tune of Rs 2,300 crore were given to Punjab during 1984-89. An amount of Rs 766.95 crore in respect of these loans is due for repayment during 1990-95. It is seen that the indebtedness of Punjab has been rising rapidly due to Plan and Non-Plan loans of Rs 600 to Rs 700 crore a year flowing to it from the Centre. These loans became necessary because of three factors, namely, (a) the high cost of combating terrorism, (b) the power tariff policy on account of which the State electricity board, though otherwise performing well, is losing Rs 300 to Rs 400 crore a year due to highly concessional tariff, and (c) the State wishing to have a plan far bigger than what its resources could sustain. The special circumstances prevailing in the State might be inhibiting the administration from raising resource. And the State certainly has had to bear a high burden in terms of expenditure on law and order. As this case is of a special nature, we recommend a moratorium of two years on repayment of principal and interest. We further recommend that the Central Government, meanwhile, work out a suitable package of measures including debt relief in order to put Punjab’s finances on a more sound footing”. The Finance Commission’s recommendations run like this; “An amount of Rs 1,471.90 crore is due for repayment during 1995-2000 by the Punjab Government on account of special term loans which were advanced to it to fight militancy and insurgency. These repayment liabilities refer to an outstanding amount of Rs 5,522 crore as on March 31, 1994, as indicated to us by the State Government. In view of the special circumstances when these loans were advanced, and the need for the State to re-invigorate its development efforts, it is recommended that one third of the repayment of principal falling due during 1995-2000 on these special term loans be waived. The estimated amount of relief would be Rs 490.63 crore”. Political tilt in the Finance Commission’s recommendations is visible from some recommendations of earlier commissions. Punjab’s loan waiver was being turned down on the plea that law and order is a State subject and the State should meet such an expenditure. In view of all these
provisions and precedents Punjab’s loan waiver
should be treated as closed for all time to come. It is
not understood as to why big gap has been left to loan
waiver. As per State Government loan waiver should be Rs
5,522 crore while only Rs 2,917.89 crore has been
affected. |
Kisan card CHANDIGARH, Nov 20 — The Patharkallan branch of Indian Overseas Bank Jalandhar, celebrated its 24th anniversary yesterday. The function was presided over by the Chief Regional Manager, Mr G.S Matta, Ludhiana, and was attended by villagers. The bank also distributed Kisan Cards to various beneficiaries. The SAS Nagar branch of
the bank has started “online” service to
provide better customer services. |
Q: 1. What is the standard deduction for the F/Y 1998-99 i.e. A/Y 1999-2000. 2. (a) I am completing 65 years of age in January 1999. Shall I be eligible for tax rebate entitle to senior citizens. (b) If yes, what are the tax concessions for the A/Y 1999-2000. — M.L. Monga, Dharamsala Ans: For the Financial Year 1998-99 relevant to the Assessment Year 1999-2000 the standard deduction which is permissible to the salaried employee is 331/3rd of the salary subject to a maximum of Rs 25,000, where the salary does not exceed Rs 1,00,000 p.a. The standard deduction gets reduced to Rs 20,000 if the salary income exceeds Rs 1 lakh but does not exceed Rs 5 lakh. There is no standard deduction if a person possesses salary income over Rs 5 lakh. As you are a senior citizen you will be eligible to tax rebate u/s 88B subject to maximum of Rs 10,000 in respect of the year ending on 31st March, 1999. This tax rebate is equally relevant and applicable for the Financial Year 1999-2000 relevant to the assessment year 2000-2001. Q: I have raised a housing loan of Rs 6,00,000 in January ’99. For this loan, my wife and myself are co-applicants and both the incomes were clubbed for determining the loan amount. The deduction of interest instalment is being done from the salary of my wife. The queries are as under:- 1. Whether the enhanced limit of exemption of interest on housing loan of Rs 70,000 is applicable to loans raised after 1.4.99 or to loans raised prior to 1.4.99. 2. Since both of us have taxable income in 30 per cent slab, can both of us avail income tax exemption on account of loan interest instalment i.e. 30,000 each. If yes, then what is the procedure (rule) to be followed. 3. Can tax exemption on account of repayment of principal amount of Rs 10,000 be availed of by each of us if we repay Rs 20,000 as principal amount. — Jatinder Bir Singh, S.A.S. Nagar (Pb.) Ans: For getting the correct answer on the facts mentioned by you, it is hereby suggested that you and your wife should make equal contribution for the house property because you are co-applicants. Hence, even in the repayment of the loan the repayment should be done ½ and ½ for both the applicants (assuming co-ownership of husband and wife being equal). The exemption limit in respect of the interest on housing loan upto the enhanced limit of Rs 75,000 is applicable only in respect of the loan which has been raised after 1st April, 99. Thus, the loan and advances which have been organised earlier would be eligible to tax deduction only to the extent of Rs 30,000, namely the maximum amount which is allowed as a deduction. However, if both the husband as well as the wife are making repayment of the loan as also the interest on loan from out of their individual incomes, then the interest amount benefit as a deduction from the income would be available to both the husband as well as the wife. Likewise, the tax benefit of section 88 towards tax rebate for repayment of the principal amount would be available to each co-owner namely, the husband as also the wife. The maximum amount i.e. allowed a tax rebate u/s 88 on repayment of the principal amount for house property loan etc. is Rs 10,000 p.a. Hence the husband as well as wife will be entitled to claim tax rebate u/s 88 of the Income Tax Act, 1961 based on the above mentioned observations namely, that the loan should be available in the names of both the co-owners and that both of them make the payment of the principal as well as loan amount and if it is found that possession has already been given then both can claim deduction u/s 24 as well as section 88 of the income-tax, 1961. Q: I am an employee of Punjab government. Last year my wife took loan from a bank for house building who is the owner of the house but wholly dependent on me. The loan is being returned by me in instalments. Is the loan returned by me deductible under any clause? — Manmohan Kumar, Jalandhar Ans:
You will not be eligible for tax rebate or deduction in
respect of the repayment of the loan instalment amount
which has been taken in the name of your wife. It is
advised that in years to come this tax deduction will be
of a substantial amount. Hence, you should change the
ownership of the house building in your name so that you
can claim the deduction for the interest on loan paid by
you. |
ABOUT six years ago, school students in Delhi would not dream of giving up the pleasure of bursting firecrackers on Divali. They would, in fact, resist strongly any suggestion to that effect. Today, thanks to the persistent efforts of non-Government organisations, officials of the Pollution Control Board and the Fire Control Department, the students have voluntarily given up buying and bursting of firecrackers. Even better, they have also converted their parents to their way of thinking. It’s no mean achievement. While the voluntary organisations campaigned against the use of child labour in the firecracker industry, the pollution control department spoke about the adverse effects of bursting crackers on the environment and the fire department highlighted the injuries caused during Divali on account of playing with fireworks. It took about four years of persistent campaigning and finally this Divali, the noise level was low, the pollution was far less than the previous years and so also the number of fire accidents. I am quoting this success story to focus attention on the need for a similar sustained campaign (a) to make safety an important aspect of our life, (b) to create quality consciousness and (c) to curb corrupt practices. On the safety issue, for example, all that we need to do is to get students to start thinking about safety and begin asking questions on the subject. Do cinema halls have adequate fire exits? Are there fire-fighting equipment? Is the staff trained to handle an emergency like a fire accident or a bomb blast or even a bomb scare? Are there any regular drills for them? Similarly, if you are buying a ticket for a boat ride, it is only right to ask whether there are any safety provisions, whether life jackets are being provided, whether there are life-guards and emergency first aid facilities. Be it a circus or an amusement park, a playground or a school, so long as questions are not asked, safety never gets the attention that it deserves. In the past, thousands of precious lives have been lost only because we did not ask these questions. The circus fire in Bangalore in which hundreds of innocent children were charred to death, the tent fire in Sirsa that killed many youngsters attending their school’s annual day celebrations, the Uphar cinema tragedy in New Delhi, are all grim reminders of this. Equal emphasis requires to be laid on the need for safe products. The United States Consumer Product Safety Commission, for example, sometimes enlists the support of victim’s of unsafe products in their campaigns for better and safer products. Similar methods can be used to effectively convey the message to school children. Students should also learn to question the quality of goods and services that is available to them. They must be encouraged to constitute quality forums in their schools through which they can start enquiring about the quality of uniforms that they get at the school uniform shops, the quality of food in the canteen besides books and other goods that they purchase. The forum can also interact with teachers and school authorities on the quality of education being imparted. Initially, schools are sure to resist this idea, but if accepted, it can certainly create an effective two-way communication between teachers and students, which is at present lacking in many educational institutions. Students should also be encouraged to write to manufacturers, public utilities and civic authorities on the quality of goods and services that they expect. Talking of civic services and public utilities, whether one is trying to obtain a power connection or a telephone connection, payment of “speed money” is becoming a very common phenomenon. A study conducted by a Bangalore-based organisation, the Public Affairs Centre, revealed that while in Chennai, every fourth person ended up paying a bribe while dealing with these agencies, in Bangalore, one in eight persons paid and in Pune, one in seventeen. It is unfortunate that most people have begun to accept corruption as a way of life. If this attitude has to change, then the campaign has to begin at the school level. Students should be taught to condemn corruption. They must be made to feel that taking as well as giving bribe is reprehensible. For some time now,
consumer organisations as well as the Union Ministry of
Consumer Affairs have been deliberating over ways and
means of imparting consumer education at the school
level, because it is increasingly felt that to spread
consumer awareness, students have to be targeted. Well,
the Divali campaign has shown the way. Consumer
organisations, departments of consumer affairs and
education should now join hands for a programme that
could eventually lead to better quality of goods and
services in the country. Of course commitment to the
cause and perseverance are two vital aspects of any
successful campaign and this has to be borne in mind by
those taking up the work. |
Q: Whether petition under Art. 226 is maintainable when the employees have not exhausted alternative and efficacious remedy?Ans : The Bombay H.C. in Khalil Abdool Samad v Govt. of Maharashtra (1999-II-LLJ 855) expressed the view thus: The petitioner, along with other employees, has filed the present petition U/Art. 226 read with Art. 21 of the Constitution for a direction to the respondent employer for payment of their legal dues. The petitioner submitted that the company is closed and all the assets are in the hands of the Court Receiver. The H.C. enquired from him whether he had approached the Court Receiver. The answer was that the Court Receiver refused to pay any amount to the employees. The H.C. further enquired whether the employees had exhausted the alternate and efficacious remedy under the provisions of the Payment of Wages Act and I.D. Act or even the M.R.T.U. and P.U.L.P. Act, 1971. The answer was in the negative. The H.C. pointed out that these are the alternate and efficacious remedies provided under the labour legislations, to which the petitioners have not resorted to and have straightway filed the present petition. The legal dues will have to be computed and determined on the basis of evidence. The H.C. said that it cannot go into all these facts under Art. 226. It is a far fetched argument that Art. 21 is also attached. So far the alternatives remedies which are equally or more efficacious, under the labour legislations have not been scrapped and it is not shown why the employees had not resorted to such cheap remedies easily available to them and exclusively meant for them. In view of the alternate
remedy being available, the H.C. held, this petition
cannot be entertained and the same is rejected. The
petitioners are at liberty to resort to the appropriate
alternate remedies. |
Q: We are registered as a dealer under the provisions of the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956. Periodical returns as prescribed under the statutory provisions are being submitted to the assessing authority regularly without any default. However, during the last two quarters tax due as per the returns could not be deposited within the stipulated period owing to bad financial health. The default in payment of tax in accordance with the returns did not flow out of an intentional act on our part. A request in writing was made to the assessing authority explaining away the reasons for non-payment of tax. The amount of tax due now stands paid along with interest due thereon as required by sub-section (5) of section 25 of the Haryana General Sales Tax Act, 1973. The assessing authority has now initiated penalty proceedings in terms of section 47 for what is described we have violated the provisions of sub-section (2) of section 25. Kindly advise. —Anil Kumar Sharma Ans: It is now a well settled law that a penalty under the provisions of the sales tax law cannot ordinarily be levied merely because a default has been committed by a registered dealer. Unless it is established on record that the party sought to be proceeded against has wilfully failed to discharge its statutory obligation, no penalty provisions can be invoked against him. If the non-deposit of the amount of tax due as per returns was really because of non-availability of funds or some other financial difficulty no case for imposition of penalty within the meaning of section 47 of the Haryana General Sales Tax Act, 1973 is made out. Moreover payment of interest along with amount of tax due also shows that the default occurred not as a result of deliberate disregard of the provisions of law. It would also be appropriate to refer to in this context a decision of the Supreme Court of India that came to be delivered in the case of Hindustan Steels Ltd. V. State of Orissa (1970) 25 STC 211. Q: Our unit is aided and financed by the Khadi & Village Industries Commissioner, Haryana and genuineness certificate was issued granting the benefit of tax exemption in terms of section 13 of the Haryana General Sales Tax Act, 1973 for a period of two years. However, this certificate genuineness was received at a belated stage. Now we have submitted an application to the assessing authority for the grant of exemption certificate on the basis of the recommendations made by the authorities of the Khadi & Village Industries Commission. Kindly let us know as to what would be the date of the operation of exemption certificate? —Surinder Mohan, Rohtak Ans: While issuing the exemption certificate under the provisions of section 13 of the Haryana General Sales Tax Act, 1973 read with notification No. S.O. 120/H.A. 20/73/S.13/92 dated September 14, 1992 issued by the State Government, the assessing authority is bound to give full effect to the genuineness certificate which the unit obtains from the Khadi & Village Industries Commission’s authorities. The exemption certificate, even if the application for the grant of the same has been submitted belatedly, would be operative from the date as specified in the genuineness certificate. The period of exemption as envisaged by the certificate of genuineness cannot be cut down by the assessing authority while passing appropriate orders granting the benefit of tax exemption. Q: Can a person who has been imposed with a penalty under sub-section (7) of section 14-B of the Punjab General Sales Tax Act, 1948 prefer an appeal to the appellate authority without payment? Please advise. — Arun Batra. Ans: An
appeal under section 20 of the Punjab General Sales Tax
Act, 1948 lies without payment of the disputed amount of
tax or penalty only on the satisfaction of the Appellate
Authority that the appellant is unable to deposit the
amount involved. If it is established on record that the
appellant has the capacity to deposit the disputed amount
of tax or penalty he can be called upon to do so as a
condition precedent to the entertainment and hearing of
the appeal. |
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