|B U S I N E S S||
Sunday, November 28, 1999
by India at WTO meet
ASEAN ministers agree to work
Pakistan signs agreement on debt
Charge excise on ST pattern
How regal is the Indian consumer?
NEW DELHI, Nov 27(UNI) India will not compromise on non-trade issues like core labour standards or environment as these could be misused as protectionist measures by the developed countries, according to the Indian delegation to the World Trade Organisation (WTO) meet starting on November 30 in Seattle.
Commerce Minister Murasoli Maran, before leaving for Seattle this morning heading a 40-member high-level delegation, however, made it clear that India would adopt a flexible approach for a more liberalised trade environment. We would like to go in for some give and take, some trade-off and some quid pro quo at the negotiations for setting agenda items for multilateral trade agreements at the third ministerial WTO meeting, said Mr Maran in an interview telecast on Doordarshan today.
The 134 country four-day Seattle meet would only discuss the agenda on which negotiations would take place later in two-three years, he said adding that winning and losing should not be taken in the sense the country fought the Kargil battle.
The developed countries did not implement the WTO agreements and open up those areas which would have benefited the developing countries, but pressing for nor-tariff areas and liberalisation of the farm sector, he said.
The Commerce Minister clarified that India would adopt a pro-active approach for achieving better market access for countrys goods and services while protecting the domestic concerns of keeping food security intact and sustaining marginal and small farmers in agriculture.
The delegation includes
three leaders from opposition parties Mr Kamal
Nath of the Congress, Mr Bipil Das Gupta (CPI-M) and Mr
Amar Singh of Samajwadi Party Secretary to Prime
Minister N.K. Singh, Commerce Secretary P.P. Prabhu,
Economic Relations Secretary S.T. Davare, Special
Secretary N.N. Khanna, Senior officals from Agriculture,
Textile, Commerce and Information Technology Ministries
besides representatives of CII and FICCI taken on
official delegation for the first time.
ASEAN ministers agree to work together
MANILA, Nov 27 (Pool-PNA) ASEAN Economic Ministers have agreed to work together to come out with a common agenda that will serve the collective interests of the economy of the region, a move intended to take the member nations on the path of economic recovery.
Thailand Foreign Minister Surin Pitsuwam told newsmen here yesterday that the Economic Ministers have resolved import and economic and financial issues and presented challenges that await approval by the ASEAN leaders who are gathering here for their annual summit beginning here tomorrow.
For the first time, the Finance and Economic Ministers have come together as a reflection of a deep realisation that from now on they are committed to work closely as a group, giving much emphasis on economic and financial cooperation, the Thai Minister said.
The group agreed to coordinate effectively as the financial crisis had awakened them about the realities brought about by the impact of the said crisis, he added.
He identified the human resources development as one of the major important issues to prepare the region for future growth and development by working on homegrown technology.
He revealed that Japan has shown interests to come in with some initiatives that would contribute to the human resource development in the region.
In the past, transfer of technology into the ASEAN region was very limited so the production could not be sustained in the long-term, as ASEAN countries are heavily dependent on foreign technology, Pitsuwam said.
Unlike in Europe and the USA, the ASEAN has less competing academic centres of excellence which is the reason why there is a strong need to develop a homegrown technology that could largely contribute towards enhancing intra-regional productivity.
Likewise, social safety
nets are some of the important issues considered during
the joint meeting because to open up the ASEAN economies
and compete effectively, all levels of the sectors will
have to be prepared.
training Punjab gold artisans?
LUDHIANA, Nov 27 The World Gold Council has offered help to set up a world-class training institute for gold artisans in Punjab.
Mr G.S. Pillai, Manager WGC (North), told TNS here today that such an institute could be set up either by the Punjab Government or any individual or organisation.
Although Ludhiana was
the commercial hub, Amritsar might be a better choice for
locating the institute because it had a rich tradition of
making fine gold jewellery. Such training institute were
already in operation at all the four metropolitan centres
of the country and it was time, Punjab too had one, he
Pakistan signs agreement on debt with USA
ISLAMABAD, Nov 27 (PTI) Pakistan has signed an agreement with the US to reschedule $ 926 million in debt, an official announcement said.
The agreement, signed in Islamabad yesterday between Javed Akram, Secretary Economic Affairs division of Pakistan Government, and the US Ambassador in Islamabad William B. Milam, will help Pakistan to repay after the year 2003, the announcement said.
Under the original arrangement this amount was to be paid before the end of next year.
The rescheduling was part of an overall relief package of $ 3.3 billion arranged through the Paris Club by the ousted Nawaz Sharif Government earlier this year.
Pakistan, however, had to negotiate and sign bilateral agreements with the individual creditor countries of the Paris Club before December 31 this year.
The deal with the US was the largest in debt relief amount for Pakistan which would provide enough breathing time for the Government which is yet to settle down.
The agreement has come at a time when the countrys deepening economic crises shows little sign of recovery even as the Pakistans foreign exchange reserve continues to hover around the danger level of $ 1.6 billion while the IMF is yet to resume negotiations for clearing a much awaited $ 280 million loan package.
Under the agreement the US aid project, commodity and PL-480 loans will be repaid after July 2010, while the debt of wheat credit and US Exim Bank is to be repaid after July 2003, the official announcement said, adding that the defence and housing guarantee programme debt would also have to be paid after July 2003.
The granting of this relief to the Army Government by the US sends out positive signals to other creditor countries to enter into similar kind of arrangements as well as to the IMF to clear the loan package, financial analyst here believe.
Gen Pervez Musharrafs financial team led by National Security Council member Mohammad Yaqub and Finance Minister Shaukat Aziz will now have to turn their attention towards convincing IMF to release the $ 280 million tranche which is part of a $ 1.6 billion soft loan package sanctioned to Pakistan in late 1998.
This tranche, however, has been held back since July this year, first due to Kargil conflict with India and later when the Sharif Government was toppled by the army.
unveils Somany tile arcade in city
CHANDIGARH, Nov 27 The Delhi based Rs 136 crore SPL Limited, the second largest player in the Indian tile industry, inaugurated the Somany tile arcade at 4A, Madhya Marg, Sector 7C, here today.
Speaking on the occasion, Mr Shreekant Somany, Managing Director, SPL Limited, said the arcade will offer the discerning consumer in Chandigarh the choicest tile designs in the most appealing environment.
Asked to comment on the companys rationale behind opening its centre at Chandigarh, Mr Somany said the arcade is a relatively new concept. Our first arcade opened at Delhi in April this year and has since, met with tremendous response. This has prompted us to extend this concept to other cities as well. We have opened three more arcades at Ahmedabad and Indore. The company has targeted 12 such arcades across the country by the end of this year.
The ISO 9002 company,
currently holds 20 per cent market share in the organised
sector of the Rs 1,200 crore Indian tile industry. With
state-of-the-art manufacturing plants at Kadi and Kassar,
its present production is 34,500 square metre per day.
excise on ST pattern
BASICS of central excise policies, their implementation and aberrations came under focus in the meeting of Industry and Trade at Phagwara on Thursday with Mr K.L. Verma, Member, Board of Central Excise and Customs. This being the time for starting Budget exercises the meeting gave very fruitful outcome. Plight of steel furnace industry; SSI sector and implementation of Service Tax got main thrust.
Steel induction furnace industry of Punjab in particular and elsewhere in general is in deep crisis. This is due to depressed environments for steel sector and wrong Central Excise policy of compounded levy scheme. Unjust enrichment due to undue advantage of excise policies is bad in law. So undue impoverishment for the same reason should be considered worst. Compounded levy scheme for induction furnaces was evolved to check evasion in this evasion prone industry. The very way the policy was framed looks grotesque.
Middle level officers deputed to get feed back came to Ludhiana in a flying visit by making arrangement with non entities of the industry ignoring the active units in this exercise. They might not have been well received as per their own revelation some time later. This resulted in the introduction of harsh but isolated facts about the industry rather than the average conditions.
Policy was so much away from the ground realities that industry could not be run.
A deputation of the industry from Punjab went to Chairman, CBEC who hesitated to even given time to listen even at the instance of some Central Minister. He yielded to give just 5 minutes. When the deputation met him it asked for two just minutes instead of 5. Miracle worked in 2 minutes and the deputation took 90 minutes with further invitation the next day.
Problems of SSI sector were discussed. The main thrust was laid on the simplification of procedures. It was suggested that long pending view that central excise should be charged on the pattern of sales tax should be given practical shape in the coming Budget. Simple return like Sales Tax should be enough. The rate of duty should be nominal and in the simplified procedure even the exemptions can be done away with.
Chartered Accountants associations of Ludhiana presented a very interesting case. On service tax being charged from CAs some department officials were charged with serious allegations. A circular was issued indicating that amounts charged by CAs from their customers is generally higher than the bill amount.
Representative of Spinning industry presented yet another interesting case. Under Indo-Nepalese trade treaty some well meaning clauses were initially introduced to check the infiltration of imported goods from other countries through Nepal. Gradually these clauses have deleted. As a result imported material is entering the country through Nepal at a notional rate of custom duty against our own rate of 42 per cent. This has put this industry in workable condition.
Very interestingly Mr Verma said in no uncertain terms that he for one likes to listen cases which emit smell of corruption. He had to say this because earlier it was announced from the podium that no such cases should be discussed much less elaborated. On CAs case Mr Verma took a very serious view.
is the Indian consumer?
NEW DELHI: Faced with lots of choices and options, the Indian consumer is no less than a king today, but making a mockery of this royalty are thousands of consumer cases, pending in courts for donkey number of years.
Consumer activists advocate more teeth for laws on consumer protection to solve the problem.
Even 13 years after the enactment of the milestone Consumer Protection Act, there are lakhs of cases pending in the various consumer courts though the stipulated time span for disposal of a case is 90 days, says Roopa Vajpayee of VOICE, an NGO for consumers.
While consumer courts are spread over 587 odd districts across the country, most of them are not manned properly. The vacancies are not filled quickly, rue consumer activists noting the cases thus linger on for years.
And the corrupt and the criminal escape punishment by taking advantage of the delay in the legal process and litigation has become a convenient method for avoiding retribution by many people on the wrong side of the law, says Central Vigilance Commissioner N. Vittal.
Although the procedure has become quick over the last many years, unfortunately a lot many cases are being filed which is adding to the backlog, says H.D Shourie, the countrys most celebrated consumer activist.
The real job of all these redressal forums is to create a parallel mechanism for empowering the consumer to take legal recourse, says Dr Ram Khanna, Chairman of the Consumer Coordination Council, a body of 46 member voluntary consumer organisations.
But a major complaint is that the consumer forums do not have powerful teeth as their orders are not respected and hence the difficulty in implementation with consumers reverting back to the forum.
However, section 27 of the Consumer Protection Act gives them other remedial measures such as resorting to police help in securing compensations, says Banerjee.
In recent times forums have taken police action in case of non-compliance of orders, he says.
But the legal sanction of such a practice has again been challenged, says Dr Khanna.
Improving the infrastructure will help solve a majority of problems, says Dr Khanna.
The Consumer Protection Act, 1986, was meant to protect unscrupulous traders and service providers. If a consumer finds he has suffered through deficiencies, he can go to the consumer courts to claim compensations, says Banerjee.
are there for everybody. This requires no lawyer and it
is between the court and the client. Armed with authentic
purchase bills, the consumer can go to any of them and
air his grievances after which steps are taken,
says Banerjee. PTI
You place an order for a vehicle, pay the full amount and eagerly await its delivery. The dealer not only fails to deliver on the promised date, but also demands an additional amount to take care of the escalation in the price of the vehicle. You fret and fume, but eventually pay the amount, as otherwise the dealer refuses to hand over the vehicle. Sounds familiar?Take the case of Dr P.K.Jain, decided by the Supreme Court recently. (Vikas Motors Ltd vs Dr P.K.Jain) Dr Jain had booked a Maruti car after paying an initial amount of Rs 35,000. Subsequently, he received a letter from the dealer informing him that his order had matured and he could take delivery of the vehicle soon after making the full payment. The letter also informed him that in the normal course, the vehicle would be delivered immediately on receipt of payment, but in some cases, due to unforeseen circumstances, the delivery may get delayed by a few days.
On August 6, 1990. Dr Jain made the payment, but the vehicle was not delivered to him. He had to wait for nearly a month, make repeated calls to the dealer, before he got the vehicle on September 3. In the meanwhile the price of the car had gone up by Rs 9,232 because of an increase in excise levy and Dr Jain was forced to pay this amount before taking delivery.
The District Consumer Disputes Redressal Forum, before which Dr Jain filed a complaint, directed the dealer to pay back the excess amount collected from the consumer. The State Consumer Disputes Redressal Commission before which the dealer filed an appeal upheld the District Forums verdict and said the dealer had acted contrary to the terms of the agreement and had unjustifiably delayed delivery. And if during this period the price of the vehicle went up, obviously the consumer cannot be made to pay. It also pointed out that the dealer had failed to show any unforeseen or extenuating circumstances that had delayed delivery. So the unjustifiable delay constituted deficiency in the service rendered by the dealer.
The National Consumer Disputes Redressal Commission also dismissed the dealers revision petition, following which he filed an appeal before the Supreme Court. The Apex Court agreed with the verdict of the consumer courts and said there was no justification for the dealer to charge the revised price from the consumer.
In a more or less similar case (Mohinder Pratap Dass vs Modern Automobiles), the Supreme Court had in 1994 held that intentional delay constituted deficiency in service and where such deficiency led to an increase in price, consumers were entitled to relief. Here, the grievance of Mr Dass was that even though he had paid the full amount towards the car, the dealer had deliberately delayed delivery to take advantage of an impending price hike and charged an additional amount of Rs 5858 from him. The SC here had clarified that delivery of the vehicle within the specified time was part of the service to be performed by the dealer and there was patent deficiency in that service when such delivery was intentionally withheld or delayed.
Interestingly, in this case, both the District Forum and the State Commission had asked the dealer to pay back the excess amount collected from the consumer, along with interest and compensation. But the National Commission had disagreed and said the transaction between the dealer and the consumer was one of sale of goods and there was no arrangement between them for performance of any service for a consideration. The SC, however, set aside the order of the National Commission and upheld that of the District Forum and the State Commission.
Similarly, in the case of Om Prakash vs Assistant Engineer, Haryana Agro Industries Corporation , the SC held that if a trader intentionally delayed delivery of any goods to the consumer, thereby causing suffering to the consumer, it amounted to an unfair trade practice. It also constituted deficiency in the service provided by the trader or the dealer and the consumer had every right to seek relief in such cases.
Mr Om Prakash had paid Rs 2500 and booked a tractor. Even though he was first in the list, the dealer had ignored his seniority and supplied the tractors to others. As a result of this intentional delay, Mr Prakash had to pay Rs 40,690 more because of an upward revision in the price of the tractor.
Here, the State
Commission had ordered the dealer to pay back the
additional amount with 18 per cent interest and also pay
Rs 2,000 as compensation, but the National Commission
held a contrary view and said the consumer had to pay the
price prevailing at the time of delivery. The Supreme
Court, however, disagreed and upheld the verdict of the
State Commission. So if you face a similar situation, you
know where to go for relief.
IT is a must for every marketman at the BSE to do at least a token trade on the Mahurat Trading day for the New Samvat year. Every Divali, our clients follow this custom and this time around the three potential dark winners chosen by our research team included Esab India, Eternit Everest and Rolta India.Esab India is a leading player in the welding consumables industry. In fact, it has the distinction of being the second largest player in the industry. The company is dominant in the premium segment, evident from the 70 per cent market share. The company has been affected by the slowdown of the economy. The same is reflective in its lacklustre financial performance during 1998-99. The sales and net profit stood at Rs 162.8 crore and Rs 8.7 crore, thus translating into an EPS of Rs 5.4. The main revenue earner for the company is welding electrodes which account for 55 per cent of the turnover, 30 and 10 per cent from gas welding equipment and continuous wire electrodes, respectively.
It has managed to improve its working capital management which should hold it in good stead for the future. Though the performance of the company was below par, it is likely to improve in the years to come. In view of the good prospects, discerning investors and advised to invest for medium to long term gains.
Eternit Everest Ltd (EEL) is engaged in the manufacture of cement based products, asbestos-sheets being one of them. The company belongs to the Eternit group from Belgium. ACC also enjoys a 26 per cent stake in the company. On the financial front, the performance of the company was adversely affected by the lull that was prevalent in the housing sector. Till December, 1998, the company posted sales and the net profit at Rs 140 crore and Rs 3.4 crore, thus resulting in an EPS of Rs 2.3. With a major thrust been given to the housing sector, the fortunes of the company are expected to improve. The strong parental backing is likely to prove beneficial to the company. The prospects of the company appear to be promising.
Rolta India is a prominent player in the computer hardware and software industry. The company has a niche market in providing solutions in CAD/CAM/GIS and office automation. The company functions under the technical collaboration of Intergraph Corporation, USA. Financially, the results of the company depict a sound performance.
For the first quarter of 1999, the company registered sales and the net profit at Rs 40.6 crore and Rs 14.1 crore. The company has a tie-up with the Dell Corporation of USA for PC products. It also has ties-up with Madge and Intel Corporation for Internet and Internet technology/RIL provides a range of Intels latest Pentium and Pentium II-based desk tops, notebooks and servers. The company is expected to continue with its major thrust in softwares. It has recently developed a software called Robust which finds application in the banking sector. It appears that RIL will continue to perform well in the future.
Finally, to the million
dollar question which direction will the markets
move during this new Samvat year. Well, provided our
politicians behave themselves, which, I must confess, is
a tough task, the markets should surge and I for one
would not rule out the possibility of the Sensex crossing
the 5500 points-level at least once before the next
Samvat year commences.
Q: I am a State Government employee and consequent upon the revision of the pay scale on the recommendations of 5th Pay Commission, an amount of Rs. 40,758/- has been credited to my Provident Fund by my DDO during the financial year 1998-99 on account of arrears of revised pay from 1.1.1996 to 31.12.1997 in compliance with the decision of the State Government. Incidentally, my savings that qualify for 20 per cent rebate u/s 88 of the Income Tax Act, 1961, already exceeds the overall mandatory limit of Rs. 60,000/- during 1998-99 without taking into account the arrears of Rs. 40,758/- credited to my Provident Fund. To reduce the tax liability on arrears. I intend to take recourse to Section 89 which permits splitting and including such arrears in the incomes of the years to which they relate. In my case the amounts includable in the incomes for the financial years 1995-96, 1996-97 and 1997-98 calculate to Rs 3,588/-, Rs. 18,385/- & Rs 18,785/-, respectively.
Kindly clear whether inclusion of aforementioned arrears in the income of relevant financial years would also qualify for 20 per cent rebate u/s 99 during the years 1995-96, 1996-97 and 1997-98 since they have not been paid to me in cash rather credited to my PF Account in pursuance of the directions of the State Govt.
Ans: On the facts stated by you even if the arrears of salary are split into different accounting years as per Section 89 of the Income Tax Act, 1961, still you will not be eligible for 20 per cent tax rebate u/s 88 even when the Government Department has paid the money to your Provident Fund A/c and not to your individual A/c. Thus, the benefit of amount credited by your employer directly to the Provident Fund will not be available for the spread over in respect of arrears income for different years.
Q: I have come to know from Sarita in January 99 (first edition) that bank interest accruing on deposits of retirement benefits i.e. PF, Gratuity and Commutation of pension etc. is totally exempt from Income Tax and you were requested to guide me in this respect through your esteemed paper. But so far you have not replied my query. Please do it at an early date.
J.N. Singla, Ludhiana
Ans: At the time of retirement the amount received from the Provident Fund A/c as well as commutation of pension amount is completely exempt from Income Tax without any limit. As far as the gratuity amount is concerned the same is exempted to the maximum extent of Rs. 3,50,000.
Q: I want to know the following about long term capital gain. A person is having taxable income plus a small amount of long term capital gain. He is having savings under Section 88 the rebate on which at the rate of 20 per cent is more than sufficient to cover his tax liability in both cases i.e. taxable income and long term capital gain. I would like to know even after having sufficient saving under Section 88, is it necessary to pay tax on capital gain.
P.A. Menon, Rajpura (Punjab)
the facts stated by you there will be no liability on
payment of tax in respect of long-term capital gains at
the rate of 20 per cent specially because the total
Income Tax payable in respect of your various incomes
including the long-term capital gain is either within Rs.
50,000 P.A. or in the alternative the sum total of your
other income and income from long-term capital gains
taken together comes within the tax slab of say 10% only.
However, if the tax slab is calculated on your other
income and it comes within the 30 per cent slab group,
then you cannot say that the capital gains should be
included in the gross total income and thereafter tax
rebate should be permissible. Ultimately when you find
that there is no further tax liability remaining to be
paid as a result of taking the advantage of the tax
rebate, then there will be no liability to income tax.
However, if you find that the gross amount of income tax
liability in respect of capital gains is also 20 per
cent, then you should make payment of such liability
equal to 20 per cent on the amount of long-term capital
gains. Strictly speaking, within the framework of Section
88 a taxpayer is not entitled to tax rebate u/s 88 in
respect of long-term capital gain.
Q: Earlier when restoration application was dismissed, can the tenant file another application for restoration?
Ans: The Madras H.C. in R.N.Prakash v Smt. Saraswati 1999 (2) R.C.J. 378 expressed the view thus:
The application of the tenant for restoration of the appeal was dismissed. Tenant made another application for restoration on the earlier application dismissed for default. The question was, whether it is maintainable?
Rule 12 (3) applies to the rent control application which is dismissed for default or where ex-parte order is passed and restoration application to set aside the order of eviction by the Rent Controller or restoring an application which was dismissed for default is alone contemplated under Rule 12 (3). Rule16 (3) applies to appeals which are dismissed for default or decided ex-parte.
The H.C. observed that it is clear that every Tribunal is having inherent or residuary power and when the Tribunal is constituted for the purpose of deciding the dispute between landlord and tenant, it also must have the same powers unless the same is restricted or excluded by the statute when the Tribunals are also constituted for the administration of justice, for the said purpose, Tribunal must also have inherent residuary powers.
The H.C. added, naturally the Rent Controller or the appellate authority which are trappings of Court and which administer justice also must have that power unless that is specifically excluded. There is no exclusion under any provision of Rent Control Act or Rules. When there is no provision as in the case of CPC (before 1976) the inherent powers alone can be invoked in such cases.
The question, the H.C.
pointed out, whether the application is liable to be
restored or not is a matter which is to be decided by the
appellate authority on merits. But it should not return
the application on the ground that the same is not
maintainable, the H.C. held. Consequently the H.C.
directed the appellate authority to number the
application and decide the same on merits.
With the marketing whiz-kid Kabir Mulchandani rewriting the rules in its segment, Philips in finding the going really tough as is evident from look at its latest quarterly results where it is more than evident that the price wars have eaten into its margins. How will Philips respond?
This shipping company whose share price was languishing at Rs 14 less than a year ago is now perched around the Rs 150 mark, and whats more, it is tipped to touch Rs 1000 within a year. Pray why? The grapevine has it that this company is on the verge of being taken over by a Dutch MNC shipping company whose plans include listing of the NYSE. Any takers?
A Calcutta based operator has begun accumulating the shares of this company at this counter predicting a sharp upswing in the share price of this company whose activities have now been geared to service the higher end segment. Watch this counter.
Gold Std. Rs 4630
Gold 22-Ct Rs 4480
Silver Ready Rs 7900
Silver delivery Rs 7910
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