|Thursday, March 9, 2000,
No rollback of dividend
Government urged to withdraw
proposed tax on exports
Service tax reimposed
Leading Edge, Tata proposals
Apollo joins hands with Castrol,
Infy, Cephren tie-up
Rally against cess on generating
Workshop on Women Day by Canara
No rollback of dividend tax: Sinha
NEW DELHI, March 8 The Union Finance Minister, Mr Yashwant Sinha, today rejected the industrys demand to roll back dividend tax. He, however, stated that the Government could modify other measures which may not serve the purpose for which they were introduced.
Mr Sinha said he would not put any pressure on RBI to lower interest rates. I have done my best in the Budget and now the RBI Governor and the board should determine the direction the monetary policy should move in.
As far as the dividend tax is concerned, we feel it was necessary to impose this levy...please live with it as it cannot be rolled back, Mr Sinha said while addressing a meeting organised by the CII.
He said: Budget presentation is not the end of everything on the policy front. If there are some genuine concerns, we can have a relook...we are partners in progress and if the industry feels there are some real serious shortcomings, problems and irritants in the Budget, we are prepared to review them.
Major part of the burden of the Kargil war is falling on the 2000-01 Budget, he said. This coupled with the implementation of 11th Finance Commission recommendations would account for Rs 24,000 crore that was 1.2 per cent of GDP.
I am not a repository of wisdom and I am prepared to address the concerns that are genuine, he said, adding even the Finance Ministers of earlier governments had to undertake rollbacks.
The Finance Minister said the Government was committed to reducing non-plan expenditure in a phased manner as it could not be done overnight.
The employees stock option (ESOP) tax, Mr Sinha said is aimed at retaining the skilled labour force, who are likely to migrate as also to attract people to work here.
We felt ESOP needed to be taxed and have come with a proposal...but if you can suggest a better alternative we will be happy to review this, he said.
The Finance Minister, however, refused to comment on the alliance partners demand to roll back the 15 per cent hike in urea prices and subsidy cut on food.
Mr Sinha said though the government is likely to save about Rs 6,000 crore due to the marginal reduction in food and fertiliser subsidy, it had also taken care of the interest of the corporate sector.
He said the government had decided not to take any hasty step for increasing the surcharge on corporates.
He said the decision to gradually increase the tax cover on export earnings in a period of five years at the rate of 20 per cent each year was aimed at safeguarding the interest of the sector.
On public sector disinvestments, Mr Sinha said there was need to build a national consensus before undertaking large scale disinvestment in the public sector enterprises.
It is not going to be easy to go ahead with disinvestment in any manner, he said, adding we would have to tread cautiously while going in for the measure.
On the failure to mop up the targeted Rs 10,000 crore through disinvestment of PSUs during the current financial year, he said a few months were lost due to political factors.
The Finance Minister said the Government will not close down any banks but would recapitalise the ailing ones.
We cannot talk of
privatisation of banks now and there was no way to
prepare the country for closing down banks. So we decided
to recapitalise the banks...I shall get this done through
a parliamentary legislation and ensure that the public
sector character of these banks do not change.
NEW DELHI, March 8 (UNI) Exporters from the Capital today urged the Government to withdraw the tax on exports proposed in the Union Budget stating that levy of the tax should be postponed till Indias share of global exports reaches 5 per cent. At a meeting with Minister of State for Commerce Omer Abdullah, the Exporters, led by Delhi Exporters Association (DEA) President S.P. Agarwal, urged that a special Cabinet meeting should be called to review the proposal.
Indias total exports today amounted to a mere 1 per cent of global exports and has been witnessing negative growth in the past. Such a levy at this juncture has come as a hard blow from the government, Mr Agarwal said.
He further stated that Indias export cost calculates to up by 25 per cent, which includes 5 per cent service tax on 22 heads and higher interest rates ranging from 10 to 16 per cent as compared to 3 to 4 per cent in America and 0.25 per cent in Japan.
The DEA memorandum mentioned that Indias per capita income was below $ 1,000 per year and as such India was not covered for the restriction of export subsidies. Also when WTO guidelines allowed subsidies till 2003 what was the necessity for the Finance Minister to levy tax on exports from this year.
China is not a signatory of WTO but their exports are highly subsidised, allowing China to offer similar products 40 to 50 per cent cheaper.
Government can forgive the principal amount of loan of Rs
18,000 crore to Punjab farmers and Rs 15,000 crore to
Government employees and Rs 5,000 crore to SAIL, why are
the exporters being subject to this new tax?
LUDHIANA, March 8 The Union Finance Minister, Mr Yashwant Sinha, has reimposed service tax on goods transport through a sleight of hand in his Budget presented to Parliament on February 29, according to the Apex Chamber of Commerce and Industry.
The tax is payable by the service user rather than the service provider, said Mr P.D. Sharma, President of the chamber in a press release here today.
It may be recalled that such a provision was made in July 1997 but was modified following stiff opposition from goods operators. Service user was made liable to pay this tax vide subclause XVII to Rule 2 (1) of Service Tax Rules 1994. Again due to an agitation from trade and industry, trade and SSI sectors were excluded.
The matter then went to the Supreme Court which gave a ruling that service tax could not be charged from users of service and the Government could collect service tax from the provider only.
Following the Supreme Court judgement, the government ordered the refund of service tax already collected. But in reality, no refund was made.
Section 112 of the Finance Bill 2000 seeks to amend with retrospective effect provisions of Section 65 of the Finance Act 1994.
Now assessee for the
purpose of service tax shall include not only the
provider of the service but also the recipient. Further
vide Section 113 the Government has validated the levy of
service tax during the past period of controversy from
July 16, 1997 to August 1, 1998 any refund made by the
Government in this case will be recoverable from the
assessee within 30 days from the date of Finance Bill
when it gets assent of the President.
NEW DELHI, March 8 (PTI) The Government today approved 87 foreign direct investment (FDI) proposals worth Rs 1647.76 crore including a $ 75 million (about Rs 315 crore) global depository receipts issue of Tata Tea Ltd to part-finance its acquisition of British tea major Tetley.
The proposals have been cleared by Commerce and Industry Minister Murasoli Maran on the recommendations of the Foreign Direct Investment Promotion Board (FIPB).
Technologies Ltd has been allowed to bring FDI worth Rs
588 crore to provide turnkey software development
projects, while Timex BV has been permitted to hike its
stake in Timex Watches Ltd from 29.68 per cent to 58.46
per cent by bringing in Rs 44.03 crore.
plans foray into e-commerce
CHANDIGARH, March 8 Toubro Industries today unfolded plans to foray into e-commerce. The company has got approval from the Registrar of Companies.
Toubro Infotech and Industries Limited is in the process of setting up an Internet-related project. The company is working on a few innovative portals, said Mr Kanwar Deep Singh, Chairman & Managing Director of Toubro Infotech, here today.
Toubro Infotechs e-commerce service portal will help companies to save losses. Researchers indicate that online buying would hit $ 185 billion by 2004. This portal would play an important role in saving abandoned transactions. It would not only increase business for companies but also bring down their customer service costs.
Toubro, which already has a base in the USA for the last three years, will set up infrastructure both in the USA and India to execute this project.
About the capital
outlay, Mr Kanwar Deep Singh said that the initial
capital outlay for the project is around Rs 25 crore. The
company will raise about Rs 10 crore from internal
accruals and the balance will be contributed by the
NEW DELHI, March 8 (UNI) The Amit Burman promoted Angel Infotech, a part of the Dabur group, has identified four emerging dot com companies for acquiring close to 33 per cent stake in each.
The entire transaction is expected to be completed in three months, Mr Burman told UNI here today.
Angel has already picked up 30 per cent stake in Infinite E-Solutions Private Limited (IEPL). The remaining stake in the venture is held by Rohit Anand and Rajeev Gujral, besides beautician Vandana Luthra has been given token equity in the venture, which today launched a complete womans portal smartbahu.com.
NEW DELHI, March 8 (UNI) Apollo Tyres Limited has entered into a marketing collaboration with Castrol India Limited and Kotak Mahindra Finance Limited, to jointly target sales in the commercial vehicle category.
The alliance aims at enhancing brand loyalty for all the three brands services by offering superior value to the end-customer through shared network marketing.
BANGALORE, March 8 (PTI) Infosys Technologies Ltd, an IT consulting firm, and Cephren, provider of online collaboration and e-commerce services for the global construction industry, today announced a strategic partnership.
President and Chief Operating Officer for Infosys said
our knowledge of the latest technologies, combined
with the Infosys Global Delivery Model, provides rapid
time-to-market and other significant benefits for Cephren
against cess on generating sets
LUDHIANA, March 8 The Industry and Trade Forum, Punjab, and the Small Scale Manufacturers Association jointly organised a laghu udyog bachao rally here today in order to oppose the move of the State Government to levy cess on the power generating sets.
Mr Harish Khanna, President, said that the establishment of police stations of the electricity boards would only create problems for industrial consumers. He alleged that as a result of granting of free electricity to the agriculture sector, the inflated bills were sent to industrial consumers in the tiny and small scale sector. The flying squads of the board caused harassment, humiliation and inconvenience to the small scale units.
Mr Khanna complained that the electricity supply in the state was erratic during the peak hours. The submission of purchase return would only add to problems of the entrepreneurs.
Sales tax on packing material was adversely affecting the small scale industrial segment. The State Government was creating hurdles in the smooth running of industrial units. As many as 8,000 small scale units had been closed due to wrong policies of the state governments, Mr Khanna said.
on Women Day by Canara Bank
CHANDIGARH, March 8 The Centre for Entrepreneurship Development for Women (CED Cell) of Canara Bank, Chandigarh, today celebrated the International Womens Day at Majri village in Panchkula district.
A five-day workshop on making colourful embossed designs with chalk powder on ceramic tiles was inaugurated by Ms Vatsala Raghunath, wife of K. Raghunath, General Manager of the bank.
Ms Geeta Goyal, officer, CED for Women, addressed the participants. Twentyfive women have been identified for this unique training chalk powder embossing on tiles to be imparted by Ms Nagaveni Dinkar.
Officials from the Haryana AIDS Control Society, Panchkula, informed the gathering about the prevention of AIDS.
AMRITSAR, March 8
The excise duty on mink blankets has been raised from 8
to 16 per cent which may derail the nascent industry. The
patron of the All India Mink Blanket Manufactures
Association, Mr S.K. Khanna, talking to newsmen after the
meeting of its members today, said the association has
sent representations to the Finance Minister to review
the decision. The General Secretary of the Association Mr
Mohinder Singh Kochar felt that the industry was still
struggling to fully establish itself and has been
servicing the cost of finance incurred on setting up the
MUMBAI, March 8 (UNI) The directors of Prudential ICICI Trust Ltd today announced changes in the load structure of some schemes of the Prudential ICICI Mutual Fund in order to protect the interest of the long term investors in these funds.
The trustee declared the
introduction of exit loads for the Prudential ICICI
growth plan, balanced fund and the FMCG Fund. An exit
load of 2.5 per cent will be applicable to investors
investing in the said schemes under the dividend options
from March 8 to March 17,2000, both days inclusive if
these investors redeem their investment on or before May
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