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Sunday, February
17, 2002,
Chandigarh, India  
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Wall
Street banks face legal action Demand to
eliminate multiplicity of taxes
Overseas flight from
Guwahati in April |
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Flour
mills face bleak future Software exports grow
at 34 pc Markfed
to help Lanka in potato farming $ 1.4 m
deal for book on Enron
Effect
of resignation Spare senior citizens
Sleight
of hand
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Wall Street banks face legal action London, February 16 A lawsuit is set to be filed shortly in the US accusing analysts from Goldman Sachs, Salomon Smith Barney and JP Morgan Chase of recommending Enron shares in order to help their employers obtain lucrative work from the Texan group. Lehman Brothers, Merrill Lynch and others could also be targeted. All deny wrongdoing, but the action is a further threat to the credibility of New York’s banks. Many already face multimillion-dollar claims over the ‘buy’ recommendations their analysts made during the dotcom boom. Banks were also recently forced by the New York Stock Exchange to take extra steps to safeguard analysts’ independence. The news comes as a separate law suit alleges that Enron’s former President and Chief Executive, Jeffrey Skilling, misled concerned investors about the actions of two companies set up by Enron’s former chief financial officer, Andrew Fastow. In a conference call on July 12 last year Skilling — who last week was accused of lying under oath before a US congressional committee — was asked about Enron’s dealings with two Cayman Island firms, LJM and LJM2. According to a class action lawsuit filed before Houston’s Southern District Court, Skilling said the two firms had done only ‘a couple of real minor things’. The revelation raises further questions about Skilling’s part in trying to hide Enron’s problems and Wall Street’s tacit acceptance of the company line. More than a dozen American analysts continued to issue positive notes on Enron until the eve of its spectacular crash last December. Many have since claimed they were duped by the company. Lawyers acting for Enron’s victims are focusing on analysts at Goldman, Salomon and JP Morgan because these banks were either lending money to Enron, advising it, or pitching for work as the company teetered on the brink of collapse. Damon Silvers, legal officer of the main US trade union organisation AFL-CIO, which represents thousands of Enron employees, said yesterday: "This lawsuit is coming. These banks stood to make a lot of money from Enron, and that made it impossible for them to produce independent analysis. Propping up the share price was more important." Milberg Weiss, the New York law firm that is suing Enron and its auditor Andersen on behalf of shareholders, said its claim will shortly be redrafted and ‘there is a pretty good chance certain banks will be added to the list of defendants’. By arrangement with The Observer, London. |
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Demand to eliminate multiplicity of taxes New Delhi, February 16 The Association said in view of increasing competition it was necessary to remove taxes like sales tax, octroi, entry tax, and service tax which were counter productive and saddled Indian companies with unnecessary burden. In its suggestions for the Union Budget 2002-03, the Association said the impact of direct and indirect taxation had a grave bearing, especially in the difficult times and steps should be taken to make taxation friendly and purposeful. It said rationalisation, simplification and flexibility were the key to make taxation acceptable. Lower taxation also has a positive impact leading to decline in evasion and rise in revenue. In view of the global recession and the economic slowdown in the country, the Association said second generation reforms must be initiated immediately to kick-start the economy. Quoting the Raja Chelliah committee finding, it said while India did well to comply with the World Trade Organisation rules, nothing was done to rationalise the excise structure. "The pertinent question therefore is that do we want to continue as a manufacturing country or emerge merely as a trading country in the years ahead?" It pointed out that every country growing out of poverty had done so on the back of manufacturing and it was a keylink in the circle of growth,
employment, poverty alleviation and fiscal sustainability. In order to provide more employment, the Association said it was necessary to encourage and revitalise labour oriented industries. Labour laws also need to be revamped and the exit policy clearly defined for restructuring, modernisation and upgradation of Indian industries. On the direct taxes front, the Association suggested that individual income tax must be brought down to 20 per cent from 30 per cent to generate larger revenues and eliminate evasion. Individual earnings including perks should be exempted from taxation upto the limit of Rs 3 lakh for salaried people. It said corporate tax should be scaled down to 30 per cent from 40 per cent. This would encourage corporate houses to undertake productive investments. Abolition of surcharge on income tax and minimum alternative Tax are the other suggestions made by the industry body. |
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Flour mills face bleak future THE recent decision on the Punjab Government granting exemption on wheat from payment of purchase tax under the Punjab General Sales Tax Act, 1948 to the Roller Flours Mills having the capacity of five or more installed roll turns out to be a source of immense hardships to the Flour-Mills operating in Haryana because of brunt of taxation on wheat and its various products under the Haryana General Sales Tax Act, 1973, the Punjab Agricultural Produce Markets Act, 1961 and the Haryana Rural Development Act, 1986. What is happening now-a-days in Haryana that the mills engaged in the processing of wheat are required not only to pay 4 per cent in the form of “Market fee” and “Cess” under the provisions of the Punjab Agricultural Produce (Markets) Act, 1961 at the time of buying wheat from the market but 4 per cent purchase tax is also realised from them being the statutory liability under the existing provisions of the Haryana General Sales Tax Act, 1973. In addition to this, “Mandi expenses” to the extent of 3 per cent to 3.5 per cent of the value of the wheat so bought also become payable to the commission agents on account of commission etc. The statutory liability on account of these imposts does not stop here as 4 per cent tax (with the facility of input tax credit against payment of purchase tax) again becomes leviable on wheat products excluding wheat bran under the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956 when sold inside the State or in the course of inter-State trade or commerce. On the other hand, departing from its decades-old policy of levying tax on wheat under the Public General Sales Tax Act, 1948, the State Government recently came out with a notification No. S.O. 59/P.A. 46/ 48/ S.6/Amd./2001 dated November 12, 2001 laying down that no purchase tax would be chargeable on wheat when purchased for processing by the Roller Flour Mills with five or more installed Roll bodies. Also, neither purchase and nor sale of wheat products attracts any tax liability under the general provisions of the Punjab General Sales Tax Act, 1948. Not only this, in yet another notification that too came to be issued in the recent past under the provisions of the Punjab Infrastructure Development Act, 1948, the Punjab Government exempted completely wheat and maize from “market fee” and “cess” when purchased by the wheat and maize processing industries directly from the farmers for the manufacture of wheat and maize flour and for all other secondary/tertiary products of wheat and maize in the State of Punjab. In Delhi also, similarly situated mills are not required to pay any tax on wheat or its products under the Delhi Sales Tax Act, 1975 nor any levy in the form of “market fee” or “cess” becomes payable while buying wheat from the market. Lamenting over this situation, Mr Vinod Kapoor, Past-President of the All-India Roller Flour Mills Federation of India and Mr Ajay Gupta of Sanjay Agro Industries Ltd., Ambala Cantt told this writer that how the mills operating in Haryana that are statutorily burdened with 8 per cent liability considering tax, market fee and cess can be expected to compete with their counter-parts of Delhi and Punjab? Explaining further the plight of the mills in Haryana they explained “another disturbing feature is that the Punjab Government has permitted direct purchase of wheat and maize in that State by the Flour Mills from the farmers for the manufacture of wheat flour, maize flour and other related products without paying market fee and cess while in Haryana no such facility is available to the mills.” More than thirty units out of around sixty flour mills are lying closed and many more are on the verge of closure because of heavy tax burden in Haryana, disclosed another flour mill owner. The significant question that arises in this context is how the principles of uniform tax policy could be flouted. However, the State Government seems to be totally insensitive to this sensitive situation. |
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Software exports grow at 34 pc New Delhi, February 16 "Although there will be some impact on the software exports on account of the global economic slowdown, the current buoyancy in exports has put to rest the widespread apprehension that software exports will nosedive due to the combined
effect of economic slowdown and the events have unfolded in the aftermath September 11," said Mr D.K. Sareen, Executive Director of ESC. In absolute terms, export of electronics and computer software increased from Rs 22,250 crore in the period April to December 2000 to Rs 29,680 crore in the same period during 2001. If telecom services are included to total export of services, the export turnover surges to Rs 33,429 crore during April to December 2001. |
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Markfed to help Lanka in potato farming Chandigarh, February 16 The financial investment in this project would be borne by Markfed, while the National Land Development Bank of Sri Lanka would promote the project. Markfed has extended an invitation to Mr S.R. Dissanayeke, the Agriculture Minister of Sri Lanka, to visit Punjab to study the agricultural practices being followed in the state. The Government of Sri Lanka will import seeds and agricultural implements from Punjab and will pay a royalty on the investment made. It may be recalled that Markfed had exported its own brand of potatoes (Goldy) to Sri Lanka last year and they were sold on premium in comparison to Pakistani potatoes which were being imported earlier. This year, too, Markfed has proposed the utilisation of the Agricultural Export Promotion Zone at Singhpura, Zirakpur, Patiala district to promote the export of potatoes to Sri Lanka. In another significant decision, the Board approved of the proposal for Markfed to participate in the request for qualification for development of bulk foodgrain handling, storage and transport facilities issued by the Ministry of Food. To overcome the shortage of covered godwons for storage of rice, the Board of Directors of Markfed approved of the proposal to build 4.40 lakh tonne capacity through private parties under the 10-year guarantee scheme. Markfed will also start warehousing of rice to expedite rice milling in the state. It will offer an average rent of Rs 2.40 per sq ft for the rural areas and Rs 2.50 per sq ft for the urban areas per month for the godown capacity created. The Board also approved guidelines for giving benefit of average moisture loss in the paddy stocks of crop in 1997-98 shifted on actual weight basis to complete paddy milling. |
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$ 1.4 m deal for
book on Enron San Francisco, February 16 Just when it seemed as if Enron executives were the only people who had made big money out of financial chicanery, the journalist credited with asking the first sceptical questions about the energy company's dealings has signed a seven-figure book deal to write her version of the scandal. Bethany McLean, 31, a reporter with Fortune magazine, has been paid a $ 1.4 million advance by Penguin Books in New York for her account of the scandal, which has dominated front pages around the world for the last month but which she broke with an article in Fortune last March. Headlined ‘Is Enron Over-priced?', McLean's piece revealed glaring gaps in the company's financial records and posed a question that the company's ex-employees and stockholders are only now in a position to answer: just how did Enron make its money? At the time, her story attracted little attention outside the Enron boardroom. Before it was even published, the company's former chief executive, Jeffrey
Skilling, accused her of being unethical and of not doing her research properly. Three Enron executives turned up at the magazine's offices in an unsuccessful attempt to get her sacked.
By arrangement with The Observer, London |
Effect of resignation Q: Having once resigned from the post, can the petitioner now plead that they had not resigned and thus demand quashing of the award? Ans:
This question was posed before the P&H, High Court in the case of Balak Ram V Presiding Officer, Labour Court. Union Territory. Chandigarh [2002-I-LLJ-64]. The petitioner has filed this writ petition seeking a writ of certiorari for quashing the order of the Labour Court. The petitioner has averred that in his claim petition before the Labour Court, he has categorically stated that he had never resigned, rather his services were terminated without any notice or payment of retrenched compensation and as such the provision of S.25.F of I.D. Act have been violated. It was further averred that respondent No.2 took the signatures of the workers on blank papers so that it could escape from procuration under the Minimum Wages Act for not paying the wages according to the Act. No account was ever settled between him and the management rather his
services were arbitrarily terminated. On going through the records the
H. C. noticed that a settlement was arrived at between the management and the workers and the workers who had come before the Asst. Labour Commissioner through the Union. From the settlement it is clear, noted the
H. C. that those workers had either resigned or whose services had been terminated and who have settled their accounts were not to join duty while the rest as per the settlement were to join. The resignation of petitioner is Exhibit M1 on the file of the Labour Court. These workers now cannot turn round and say that they had never submitted their resignations. If their resignations have been taken under coercion or fraudulent means by the management, this should have been brought to the notice of the Asst. Labour Commissioner, who had reconciled the matter between both the parties vide the settlement Exhibit 10. This settlement states: “There was strike from 25-2-91. After going through the detailed discussion and number of conciliation meetings held by the undersigned, you are suggested to advice your member worker. ..... except who have resigned or whose services stand terminated and have settled their accounts to call off the strike and report for duty immediately”. The
H. C. held that those workers who came before the Labour Court did not deny the signatures on the resignation letters but only said that these were taken on blank pieces of papers. This stand of theirs cannot be believed at such a belated stage. Consequently, the aforesaid writ petition of the petitioner was dismissed by the
H. C. |
Spare senior citizens IN the Budget 2001-02, the senior citizens were
altogether ignored and were not given any benefit. On post-Budget representations, Finance Minister Yashwant Sinha had raised the TDS limit and granted the special rate of interest for the senior citizens on their bank deposits. We urge upon him to consider the following suggestions for the Budget 2002-03. * The senior citizens may not be adversely affected by any further reduction in the rate of interest on bank deposits/P.O. deposits. * The limit of TDS on bank deposits may be enhanced to at least Rs 15,000 for the senior citizens who are not to pay income tax up to an income of about 1,30,000. * The rebate of Rs 15,000 U/S 88-B of the IT Act may be increased to at least 25,000, keeping in view the soaring, prices of essential commodities and the decreasing rate of bank interest. * The senior citizens holding PPF accounts may be allowed to extend the 15 years term by one year or two years each time instead of five years, as they are in the last leg of their life and they may need to use their savings anytime after the initial 15 years term. * Under the NSS-87 scheme of the post office (stopped in 1992), the balance lying in deposit is payable to the deposit holder after deduction of income tax @ 20 per cent during his life time, but after his death, the entire balance amount is payable to the nominee or heir free of tax. We suggest to fix cut-off age of 65 years, after which the old-aged persons holding NSS-87 deposit accounts may be able to withdraw their deposit without TDS @ 20 per cent. * If and when there is a cut in the interest rate of PPF accounts, such cut is wrongly applied on deposits previously made at an agreed rate of interest, as they are in the nature of long term fixed deposits. This anomaly may be removed and any cut in the interest rate of PPF accounts may be applied to the future deposits only, as is done for bank P.O./fixed deposits. R.
K. JAIN, President, Senior Citizens Council, Jagadhri |
Sleight of hand THE government has once again displayed its propensity for a sleight of hand by divesting IBP’s stake to IOC. Like a former Finance Minister remarked — Yet another slieght of hand! Nevertheless, the stock market seems very excited by this development indicating to what levels they had been reduced as far as divestment hopes were concerned. Exit route We were the first to whisper this earlier too. The grapevine has it that a group of influential brokers who had warehoused PSU stocks as long ago as half a year are now playing up to the media frenzy and making huge pro-noises. Why? They need a clear exit route with their profits, you see! Insider trading The grapevine has it that the next head on SEBI’s block be that of a telecom operator who made an IPO recently. Just like a media content company that is now in the dock for making strategy announcement just before its listing, it seems that this telecom operator too is following suit. Watch this space! |
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Yellow
Pages Chandigarh, February 16 |
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