|Sunday, January 9, 2000,
EU move for dragging India to WTO
Humour Bill Gates
2-pronged strategy for textile
Seminar on engine oil
Confusion over ST hits trade
Mazda unveils Tribute
Scotch Guard by
BRUSSELS, Jan 8 The European Union (EU) is set to move afresh against India by demanding the institution of dispute settlement panels at the World Trade Organisation (WTO) in Geneva on several counts of alleged failure by India to honour its commitments under the trade body.
The E.U. moves, which have long been in the pipeline, are finally expected to take shape in the middle of January, as the European Commission (E.C.), the Unions executive arm, gives finishing touches to its complaints against India.
The EC actions are set to create additional strain in bilateral trade relations, already soured by the failure of the E.U. to grant exceptional flexibilities to Indian textile exporters.
As soon as the WTO reopens after the new year holidays, the E.C. is expected to initiate action against India on at least four counts that India make its trade regulations WTO compliant by removing the ban on exports of raw hides and skins, reduce the import tariff on liquor, reduce import tariffs across the board and open up the automobile market.
Over the past couple of years the Europeans have been asking India to remove these trade barriers, but India has refused citing various reasons, including religious feelings.
India is one of the worlds biggest producers of raw hides and skins, raw material for the leather goods industry. However, there is a virtual ban on the export of raw hides and skins. With supplies from countries like Argentina and Egypt under pressure, the European leather goods industry has been scouting for new sources of raw material and has so far been frustrated in its effort to trade with India.
E.C. officials say that the export ban is in violation of Indias commitments to the WTO and can be successfully challenged. They also say the ban means that Indian producers of raw hides cannot get a fair price for their goods as the bar on exports keeps the domestic prices artificially low.
India has repeatedly told the Europeans that lifting the ban would mean an increase in the slaughter of cattle to meet the demand for raw hides and skins. The Government says this is not acceptable as it will hurt the religious sentiments of the Hindus, who revere the cow.
On the liquor import tariffs, the E.C. is unhappy with the high rates as liquor is the single largest export item for the E.U. and the Union views India as a huge potential market. But the Europeans say the high import tariffs prove a barrier and the E.C. is under increasing pressure from liquor manufacturing companies to initiate action against India.
The failure of the E.C. to push through a new round could harden the attitude of E.U. member states, admits Karl Friedrich Falkenberg, head of the unit of trade negotiations at the E.C.
The failure of the Seattle conference will generally not be helpful for a softer trade policy and it leaves all the countries totally on their own to defend their trade interests. And India may also feel some effects of the failure of Seattle, he told IANS here.
Falkenberg said the main
issue brought up by developing countries the
implementation of the Uruguay Round and the lack of
adequate benefits for them from that round will
remain unresolved unless there is a fresh round.
These issues cannot be dealt with outside the new
round and there cannot be a package for the developing
countries, he said. IANS
LUDHIANA, Jan 8 How does it feel to be a crorepati overnight?
Great, says Bhai Satbir Singh, winner of the first prize in the Bajaj crorepati hungama scheme launched by the popular two-wheeler company, Bajaj Auto Limited. Satbir, who is a pathi in a gurdwara in Bhai Daya Singh Nagar of Ludhiana, was formally presented to mediamen today by Mr R.M. Prajapati, Regional Sales Manager of Bajaj, Mr Nitin Dada of Dada Motors and officials of the company at a press conference.
A cheque for Rs 56 lakh has already been presented to Satbir Singh at a function held in New Delhi. The remaining Rs 44 lakh has gone to the income-tax. Satbir Singh ascribes his good fortune to his constant interaction with God.
His father, Harcharan
Singh, says that Satbir was born on October 2, 1969,
This is also the birthday of Mahatama Gandhi and
Lal Bahadur Shastri. So I have always felt that Satbir
too will become a big man. My prayers have been
answered, he said with a broad smile on his face.
LAS VEGAS, Jan 8 (Reuters) Bill Gates may be busy trying to defend Microsoft from anti-trust charges, but he apparently hasnt lost his mojo.
In a speech at an electronics trade show yesterday, the billionaire head of the worlds largest software company took a light-hearted detour, starring in a video spoof of the hit Austin Powers comedy movies.
Clad in a purple velvet suit and surrounded by young women, Gates, or rather, Austin Gates, International Man of Technology, growled, I put the sin in syntax, baby, drawing roars of laughter from a crowd of several thousand.
Microsoft President Steve Ballmer played his fictional evil twin brother who plots to bring down world financial markets by posing as Ballmer and publicly thrashing technology stocks.
Ballmer in fact spooked stock markets around the globe last summer when he said that shares of many technology companies, including his own, were over-valued.
And in a send-up of MTVs Real World, a show based on actual footage of young roommates coping with each other, Michael Dell, chief executive of Dell Computer Corp., threatened Jeff Bezos, head of Amazon.com, saying, Im going to take him out back and kick his butt.
And Leslie Nielsen, star of the Naked Gun comedy films, appeared in a dead-pan take-off of impotence drug commercials, gravely warning of the embarrassment of hard-drive dysfunction.
reduces price of urea
CHANDIGARH, Jan 8 Punjab Markfed has reduced the urea price by Rs 10.50 per bag of 50kg which is to be supplied to the Primary Agricultural Cooperative Societies. Mr D.S. Bains, Managing Director, Markfed said the urea would also be available on cash at reduced price at all the branches of Markfed in the State with immediate effect.
Mr Bains said that urea
would now be available to the cooperative societies at
the rate of Rs 175.75 against the present price of Rs
186.25. Similarly on cash, of 50 kg bag would be
available for Rs 180 against the present price of Rs 190.
Mr Bains pointed out that there was no shortage of urea
for rabi sowing as Markfed has stored sufficient quantity
of urea well in advance.
strategy for textile industry
LUDHIANA, Jan 8 The Union Minister of Textile has devised a two pronged strategy to use the opportunities provided by the dismantling of quotas from 2005 under the World Trade Organisation to the advantage of Indian textile industry.
In a statement at a WTO seminar organised here today by the Wool and Woollens Export Promotion Council, the Union Minister of Textiles, Mr Kanshiram Rana, said while on one side, the industry was focussing to upgrade the technology through initative like technology upgradation fund, creation of designs banks etc., on the otherside it was aiming at creating awareness about WTO laws so that trade policies of the exporters had a rule-bound WTO orientation.
Mr Rana also said the Governemnt had recently streamlined it quota policy to make it user-friendly in its operations. The Government was of the view that any policy should observe the interests of the users and, towards that end, would welcome use-ful inputs.
The seminar was inaugurated by the local BJP MP, Lala Lajpat Rai.
CHANDIGARH, Jan 8 Caltex Lubricants India ltd. yesterday organised a seminar on high Speed Diesel engine oils here in which diesel engine oil Delo 500 API CG-4 of higher grade performance was also launched.
Discussion were held on basic lubrication fundamentals, trends in heavy duty diesel engine oil service requirement, in service oil monitoring and extended life coolant. The benefits of the upgraded technology products being made available to the consumers was also discussed.
over ST hits trade
THE decision arrived at in the recent past by the standing committee of State Finance Ministers to bring about uniformity in the sales tax rates in the country has not only generated a great deal of controversy as to the application of the recommendations made to the States and the Union Territories but it has also evoked resentment from the trade and industry.
One of the main reasons is the rashness displayed by the standing committee calling for introduction of common floor rates by January 1, 2000 and re-classification of the commodities.
Before taking recourse to the large scale modifications in the existing sales tax provisions, it becomes essential to ensure proper deliberation over the issues involved therein. However the seriouseness of the matter involving extensive changes in the tax structure concerning all States and the Union Territories which is bound to affect the people at large has been completely overlooked by the standing committee.
What is more disturbing is that the State Governments have shown no serious attempt so far in clarifying the legal position of the taxability of the commodities which will statedly come into operation from January 1, 2000. What items will be exempt from taxation and to which the concessional rates of sales tax will apply? What are the commodities which are now proposed to be placed in the category relating to higher rates from January 1, 2000? One does not really find any answers to these important questions from the authorities of the State Government. The silence the most of the State Governments are maintaining over the issues has indisputably led to confusion throughout the country.
As far as Haryana is concerned, the State Government has no plans to effect any change in the existing provisions of the Haryana General Sales Tax Act, 1973 from January 1, 2000. Talking to this columnist, Mr M. Shanker, Secretary to the Excise Taxation Department, Haryana Government, Chandigarh ruled out the possibility of carrying out large scale amendments in the prevailing sales tax rates from Januaty 1, 2000. He said the provisions of the Haryana General Sales Tax Act, 1973 and the corresponding notifications and relevant schedules, as they stand today, will continue to be in operation as such even after December 31,1999.
Another important question that arises in this context is the constitutional propriety of the decision of the standing committee as to whether it has a right to ask the States and the Union Territories to carry out drastic changes in the existing sales tax laws without discussion at the level of the respective State Assemblies mere in the name of Uniformity in sales tax rates. By virtue of Entry 54 in List II of Seventh Schedule to the Constitution of India every State has independent powers to provide for taxes on local sale or purchase in any manner it thinks fit having regarding to the prevailing circumstances.
While making law in this respect the State legislature takes into consideration the relevant situation which is bound to differ from the nature of things from state to state. Every state has its own problem, as for instance, where particular goods constitute necessities for the poorer classes of people or where the goods in question are of such a nature as are required to be exempted from tax or taxed at a lower rate but it may not be so in other State or the Union territory.
Had uniformity in sales
tax laws concerning local sale or purchase been possible,
the constitution-makers would have certainly placed the
powers to taxation in the Union List (List I in the
seventh schedule to the Constitution of India). Instead
of placing them in the State List II. This is why the
powers relating to tax on inter-state sales or purchases
have been specifically assigned to the Union of India as
is evident from List I of Seventh Schedule.
LOS ANGELES, Jan 8 (AP) Mazda Corp. unveiled the Tribute, a trim sport utility vehicle that marks the companys first serious effort to crack the growing SUV market.The Tributes success is considered important to the continued turnaround of the Japanese carmaker that is controlled by Ford Motor Co.
The addition of the new Tribute to the Mazda lineup marks the companys resurgence as a full-line manufacturer, said Richar Beattie, President and Chief Executive Officer of Mazda North American Operations yesterday.
From 1990-93, Mazda sold a version of the Ford Explorer, but dropped it and has not had a replacement since. SUVs have dominated North American auto sales in recent years, and grew 15 per cent in 1999.
The introduction of the Tribute is something thats actually going to ensure their existence. They havent had an SUV and its something thats urgently needed, said George Peterson, an analyst with Auto Pacific Inc.
Mazda expects to build
20,000 Tributes in 2000 and up to 40,000 in 2001.
Versions intended for the US market will be built at a
Ford plant near Kansas city, Missouri, and should appear
in showrooms by July, Beattie said. A Ford version of the
Tribute will be introduced next week at the North
American International Auto Show in Detroit.
Guard by Amartex
CHANDIGARH, Jan 8 Panchkula-based Amartex Industries Ltd., a textile manufacturer of northern region has introduced a new range of Scotch Guard cloth material. Grasim was the first to introduce this brand in India. This variety of the cloth solves the problem of stains once for all. In this fabric liquid cannot enter, however, the cloth permits the natural air to go in like a normal fabric said Mr Arun Grover, Managing Director of Amartex Industries.
The cloth is blend of 65 per cent cotton and 35 per cent polyester and has a peculiar coating which prevents the liquid from staining. It has a wide range of colours and shades.
by Pushpa Girimaji
A consumer who battled hard & long for justice
HOPE and despair are two sides of the same coin. This time, as we step into the new year I would like to write about a consumer who battled long and hard to covert a defeat into a victory. His case, fought before the consumer courts, offers hope, but only to those consumers who have the stamina to cope with difficult circumstances and the determination to win their battles.
Mr Shankar Prasads ten-year struggle for justice has its origin in the rejection of his insurance claim by the National Insurance Company in 1989. Mr Prasads father, Mr Sita Ram Lal, had taken a Welfare Endowment Certificate for Rs 10,000 from the Peerless General Finance and Investment Company. Accordingly, he was entitled to accidental death benefit introduced by the Company in collaboration with National Insurance. In April 1986, Mr Lal fell from the stairs in his house and received head injuries, resulting eventually in his death at the Barh Sub-Divisional Hospital. Following his fathers death, Mr Prasad, who was the nominee, lodged a claim with the insurance company, which, however, rejected it after nearly three years.
So in 1989, Mr Prasad sought redress of his grievance through the District Consumer Disputes Redressal Forum. The Forum, however, dismissed Mr Prasads complaint on the ground that he failed to establish by oral or documentary evidence that his father died as a result of a fall from the stairs. Photocopies of the police and hospital records filed by the consumer were not considered as evidence in the absence of an affidavit or any other proof. This view was upheld by the State Commission too.
Mr Prasad, however, refused to give up and filed a revision petition before the National Commission. The highest consumer court in the country finally came to his rescue. In its order of 1995, the National Commission came down heavily on the lower consumer courts for being hyper technical. The redressal fora are certainly quasi-judicial bodies and have to base their orders on acceptable evidence which may be either direct or circumstantial, but the proceedings under the CP Act should be tilted against hypertechnicalities, the Commission commented. It pointed out that the complainant had filed a number of documents, but unfortunately either being illiterate or being unaware of the procedure before the consumer courts, had only filed photocopies of the documents. They were not accompanied by affidavits as required. Nor had he tried to prove the authenticity of the documents by summoning the officials who had issued the certificates.
But the consumer courts should have pointed out the lacunae and given the consumer an opportunity to substantiate his claim. Failure of the consumer courts to do so had resulted in manifest injustice to the consumer, the National Commission said. It therefore referred the case back to the District Forum, Patna, with a direction to give the parties an opportunity to produce evidence (Shankar Prasad vs The Peerless General Finance Investment, decided on May 15, 1995).
The District Forum, Patna, therefore heard the case again and this time asked the insurance company to pay the insured amount of Rs 10,000 with interest at the rate of 18 per cent calculated from December 19, 1989, being the date of filing the complaint, till the date of payment. It also directed the insurance company as well as Peerless Finance to pay Rs 15,000 as costs and awarded Rs 20,000 as compensation.
But the matter did not rest there. Peerless filed an appeal before the Bihar State Commission, which reduced the rate of interest to 12 per cent and said only the insurance company was liable to pay the cost of litigation, fixed at Rs 15,000. Since the insurance company had been directed to pay interest on the insured amount, there was no justification for awarding Rs 20,000 as compensation, the State Commission said.
The consumer courts set up under the Consumer Protection Act are supposed to provide quick and inexpensive redress through a simple procedure. Yet, Mr Shankar Prasad had to wait for a decade to get justice. If only the District Forum or the State Commission had asked him to produce the required affidavit or witnesses to support his claim, Mr Prasad could have won the case in less than half the time that he spent knocking at the doors of consumer courts at various levels. Mr Prasad certainly deserved better treatment before the consumer courts. So do many other consumers like him.
But what is to be
admired is his reluctance to give up and fortunately for
him, the National Commission came to his help and
eventually he won his case. But yet again, the
compensation that he has got is not commensurate with the
suffering that he underwent as a result of rejection of
his claim by the insurance company. Hopefully, the new
year will bring about a transformation in the way the
consumer justice system works in the country.
by Ashok Kumar
The party has just begun
THE year 1999 had begun on a fairly low key note and those who applied for the early software IPOs benefited significantly. Our biggest success of the year has undoubtedly been Hughes Software and those who made applications for 1,000 shares through the financing route would have ended up with a minimum of 100 shares per application or two. My initial interaction with its management at the time of its IPO made me confident that this was a surefire winner although I must confess that the years closing price of Rs 4200 plus amounts to a windfall of sorts especially considering that this companys shares were recently listed. I am happy to note that several of our clients enjoyed the benefit of this advise and have at least 200 shares of this company which translates into a wealth creation of Rs 7 lakh plus. Our other exceptional success stories on the IPO front include Polaris Software Labs and VSNL. I would place my bets on TV 18 and HCL-Tech. being tomorrows success stories.
On the secondary market front, our biggest success story has been Zee Telefilms which we had recommended to our subscribers as the pick of 1999 in the first week of January. Our other substantial winners include HLL, German Remedies, Rhone-Poulenc and Wipro, all of which we had recommended in the first quarter of the calendar year.
Among our dark horses, the real winner was SRG Infotech which we recommended at Re. 0.80. Like any other fund manager and advisor, I must confess to having made certain recommendations that fizzled out after promising a lot initially.
However, each of these recommendations were based on sound research and it would surprise me if these stocks do not pick up sooner rather than later. In this category, the scrips we recommended were Castrol, Goodlass Nerolac, Agrevo and BASF.
Yet, as I never tired of reiterating right through 1999, especially the second half of the calendar year, the big bucks lie in the primary market and considering the number of issues lined up therein for January and February, a party lies ahead.
Of course, one can expect the riff-raff too to join the party and this is where one needs to be discerning and seek expert advise while investing in an IPO. Remember, the last time the rot set in, its origins could be traced back to the primary market.
The markets have begun
on a sensational note on the first trading day of the
millennium with the BSE sensex soaring by a record 250
odd points within half an hour of commencement of
trading. This obviously, is a sign of pent-up demand
among investors and of course, aggressive buying by
operators keen to not only ramp up the sensex but also to
warehouse pivotal infotech stocks in anticipation of big
FII bucks coming in search thereof. Well, the party has
begunbut do not get carried away enjoy
the party by all means, but remember, no party lasts
forever. Hence, do plan when you should exit from the
by Praful R. Desai
Q: Whether challenging validity of order after failing to deposit rent, can be treated as sufficient cause?
Ans: In Kondur Raj Kumar v B. Sekhar (1999 (2) R.C.J. 346) the Andhra Pradesh HC took the view thus:
The plea taken by the respondant-tenant that he need not deposit the amount in spite of the directions of the Rent Controller cannot be accepted to be a sufficient cause for not depositing the amount, even though there is a dispute raised by the respondant-tenant with regard to the relationship of landlord and tenant, observed the HC.
The HC added, such a plea is not available to the tenant. It cannot simply be taken as a sufficient cause. The tenant, in fact, the HC said, is required to show sufficient cause as to why the amounts could not be deposited by him. In a given case such sufficient cause may be inferred from variety of factors. But challenging the validity of the order, after failing to deposit the amounts as directed, cannot be treated as a sufficient cause.
Bona fides is wanting on the part of the tenant in taking such a plea. The whole plea, in the opinion of the HC is misconceived. In fact, the reasons recorded by the lower court while dismissing the application filed by the respondant-tenant purporting to be u/s. 148 of the CPC for extension of time by a fortnight itself would show that he has not been able to show any sufficient cause.
In the opinion of the HC, Rent Controller rightly observed that even as on the date of passing the order, there has been no attempt whatsoever on the part of the tenant to deposit rents as directed by Rent Controller.
The HC held that the Rent Controller rightly stopped all further proceedings declaring that the tenant is not entitled to contest the main case and passed the order directing the respondant/tenant to put the landlord in possession of the building immediately. The order passed by the Rent Controller is restored and the order passed by the First Appellate Court is set aside.
by R.N. Lakhotia
Q: I have a PPF a/c in SBI and having a minor sons in Post Office. I want to shift the P.O. A/C i.e. if I go on depositing Rs 100 annually to continue it, as I think I cannot close, Can I open the sons PPF a/c in SBI. Of course it is understood that:
1. Not more than Rs 60,000 would be deposited annually including the Rs 100 annually in P.O. in his a/c.
2. I.T. rebate will be claimed only upto Rs 60,000 on my PPF a/c only.
I am a widow and the income is self earned from service and property
Ans: On the facts stated by you, you will be eligible to tax rebate in respect of PPF contribution on maximum amount of Rs 60,000 per annum only. You will not be eligible to claim a separate tax rebate or deduction on investment in PPF a/c in the name of your minor son.
Q: I am a Haryana Government employee. I have taken House Building Advance (HBA) from Government of Haryana. I need clarification regarding following points:-
1. I have claimed rebate for interest on HBA on accrual basis under section 24 of Income Tax Act, though the interest on HBA was not being actually repayed. Now I am repaying the interest, could I claim rebate on this repayment of interest. If yes, kindly mention the section under which the rebate could be claimed.
V.S. Yadav, Panchkula.
Ans: The total tax deduction which can be claimed in respect of loan for house building is to be tune of Rs 30,000 for you. This deduction is permissible whether you have paid the loan interest or not paid. However, please remember, you cannot claim interest on loan in one year on accrued basis and in some subsequent year on the basis of actual payment of interest for the earlier year. Thus, for one interest amount you cannot claim tax deduction in two different years. The correct system is that the interest due for the year will, however, be tax deductible irrespective of the fact whether the interest has been actually paid in the year or not.
Q: I have constituted a (private) Trust duly executed in writing for the maintenance and welfare of my mentally retarded daughter. The only interest income of this Trust is to be used wholly and solely for the maintenance and welfare of the beneficiary through out her life and the Trust can be dissolved only after her death. At present the interest income is not being spent but placed in fixed deposit of a bank so as to increase the corpus of the Trust and the beneficiary is being maintained by her parents. I request you kindly to clarify the following points:
1. Whether this Trust has the status of an individual for the purpose of Income-tax as decided in CIT vs. Sadra Devi (1957) 32 ITR 615 (SC), CIT vs. Shri Krishna Bhandar Trust (1993) 201 ITR 989 (Calcutta).
2. If so, is the Trust entitled to have all the benefits of an individual, like basic exemptions of Rs 50,000 rebate of Rs 12,000 under section 80-L on bank interest and further rebate of Rs 40,000 allowed to a handicapped person as the beneficiary of the Trust (individual) is medically declared mentally retarded person.
3. If not, what is the Income-tax liability of this trust.
M.R. Chawla, Panchkula
Ans: On the facts stated by you, the trust constituted by you for the welfare and maintenance of your mentally retarded daughter would be liable to Income-tax at the normal rates applicable to an individual. There will be no Income-tax upto Rs 50,000 income during the year. Likewise, in view of the decision in the case of Shri Krishna Bhandar Trust the tax benefit u/s 80L will be permissible to your Trust so also the tax deduction for handicapped person would be available to you. However, please file one consolidated Income-tax return of your daughter as well as this Trust. It is presumed that the sole beneficiary in the Trust created by you is your daughter only.
Q: A friend of mine has sent a bank draft in foreign exchange as gift to me. Please advise what my tax liabilities are?
M.P. Singhania, Ludhiana
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