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Cut excise duty
on aviation fuel, Patel to Chidambaram Costly power hits
spinning units: Oswal Branded UPS
equipment sales rising Punjab Tractors
profit jumps 100 per cent |
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Small units pin
hopes on Paswan for steel Forex reserves
slip
When the new government did not re-entrust responsibility of Civil Aviation to veteran ministers, Jagdish Tytler and Ghulam Nabi Azad, it did not come as a surprise. Their past tenure in the Civil Aviation Ministry was far from satisfactory.
1 pc charged on late
tax payment
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Cut excise duty on aviation fuel, Patel to Chidambaram New Delhi, May 29 In the meeting Mr Patel urged Mr Chidambaram to take steps to further bring down the excise duty on Aviation Turbine Fuel (ATF) which would help bring down the cost of air travel. The step would be of importance keeping in mind increase in oil prices in global markets. Excise duty on the ATF is amongst the highest being charged in India which puts the domestic airlines at a disadvantage in comparison to the international airlines. Airline companies have been struggling due to rising input costs as ATF accounts for 16 per cent of operating costs and the prices are 55 per cent higher than a year ago. The meeting assumes importance as the Congress-led UPA government is not very open to disinvestment and a step towards reducing the excise duty on ATF would help the domestic airliners to come out of the red. Several airlines worldwide, including Air-India (A-I), have already imposed a fuel
surcharge following increase in fuel prices. In January, the government had reduced the excise duty on ATF but it needs further consideration. Market leaders Indian Airlines and Jet Airways had reported losses for 02-03. The price of ATF in Mumbai was Rs 20,638 per kilolitre at the end of March last year, while it was Rs 20,340 per kilolitre in Delhi. The difference is due to the sales tax on ATF which stands at 25 per cent in Maharashtra and 20 per cent in Delhi. The price of ATF at Chennai was higher at Rs 22,391 per kilolitre on account of 29 per cent sales tax, while the cost in Kolkata was even higher at Rs 24,055 per kilolitre. All the prices will go up by nearly Rs 210 per kilolitre if public sector oil companies hike ATF prices.
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Costly power hits spinning units: Oswal Ludhiana, May 29 Mr S.P. Oswal, Chairman, National Textile Committee of the CII, told this correspondent here that the spinning industry was at crossroads in India as the overall installed capacity in the world was more than the required demand for the yarn. In China, spun yarn production had almost increased by 100 per cent in five years. In 1999-2000, China produced 5.3 million tonnes of yarns and it was expected to touch 10.5 million tonnes this year. The average demand was increasing at 2 per cent per annum. The excess production of three million tonne in China had shown that China not only had taken over the demand. According to Mr Oswal, the Indian spinning industry was suffering due to the high cost of power supply. Power supply was costing in most of the states from 9 to 10 cents per kwh and in China it was 5 to 5.5 cents per kwh. Power accounts 10 to 12 per cent of the total cost in the spinning industry. In India power cost was 50 per cent more than China and it would keep the competitiveness low, he argued. Moreover, the interests cost on capital in China was much below the cost of interest in India despite the fact that the rate of interest had been lowered. The rate of interest in the Indian industry was not less than 7 per cent whereas in China it was 2 or 3 per cent. He emphasised that yarn production and consumption must be increased and only then the spinning industry could witness reasonable growth and stability.
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Branded UPS equipment sales rising Chandigarh, May 29 “This is a good sign for us,” said Mr Pankaj Sharma, Country General Manager, American Power Conversion (APC), India, who was in the city today. “Besides small home-user segment, a huge market potential lies untapped in small, medium and large enterprises. Already we hold 35 per cent share by volume by far the largest in the country as per the latest IDC reports,” he added. He said West India ranked number one in UPS equipment sales followed by the North. APC has its manufacturing plant at Jigni, Bangalore, and operates through 2,500 channel partners across the country. Headquartered in West Kingston, Rhode Island, it is a Fortune 1,000, Nasdaq 100 and S&P 500 company and boasts of having reputed clients like Deloitte. Commenting on the unbranded players in the market, he said there had been a reverse flow of sales. “Currently there are more than 700 unbranded players in the market and branded UPS equipment manufacturers are eating into their share primarily because the target segment is so educated about the perils of using an unbranded product. Who would like to put his PC and other costly equipment at stake?” he asks. Mr Pankaj said the latest innovation that their company had done was of Network Critical Physical Infrastructure meant for large enterprises.
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Punjab Tractors profit jumps 100 per cent
Chandigarh, May 29 The fourth quarter operations have generated profit before tax of Rs 20.8 crore against Rs 10.4 crore posted for same period last year, a jump of 100 per cent. In terms of both sale volumes and profit
quantum, fourth quarter performance of fiscal 2003-04 stands out as the best in the last eight quarters.
Swaraj Mazda
Swaraj Mazda reported revenue growth of 45 per cent in the January-March fourth quarter operations. Net revenue for this quarter rose to Rs 162.8 crore representing sale of 3468 vehicles against Rs 112.4 crore on a sale of 2467 for same period last year. For the financial year ended 31.3.2004, total revenue rose 29 per cent from the 2002-03 level to reach Rs 478.5 crore. Profit before tax improved at a faster rate of 44 per cent to Rs 32.4 crore. Net profit of Rs 21.0 crore translates to an earning of Rs 20 per share (last year Rs 13.9).
Swaraj Engines
Swaraj Engines announced January-March fourth quarter net revenue of Rs 33.4 crore on a sale of 5,500 engines against Rs 23.1 crore on a sale of 4000 for same period last year. This period’s operations have generated profit before tax of Rs 6.6 crore against Rs 4.7 crore posted for same period last year, a jump of 41 per cent. The Directors have recommended a dividend of Rs 15 per share against 2002-03’s Rs 12.5 per share.
— TNS
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Small units pin hopes on Paswan for steel New Delhi, May 29 Mr Paswan today met steel producers and reportedly told them that he was concerned about an increase in the steel prices and his ministry would ensure that small-scale industry received adequate supply of steel at reasonable prices. Officials in the Ministry of Steel said Mr Paswan was concerned about the plight of the industry. “He is focusing on steel prices to earn the sympathy of small industry and millions of workers by cutting down steel prices,” said an official in the ministry. “The ministry will vigorously implement the SSI rebate scheme across the country. The National Small Industries Corporation will get steel on behalf of the SSI units and supply it to them,” he said. The scheme was currently operated under state small-scale industrial corporations. On the demand of small-scale units, the ministry has called a meeting of the National Steel Consumers’ Council on June 12 to discuss the problems of industry and work out necessary solutions. Officials said the government was likely to announce new steel policy. It would spell out a road map to enhance the country’s steel making capacity to 100 million tonnes by 2020 from the present level of about 36 million tonnes.
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Mumbai, May 29 According to the Reserve Bank of India’s weekly statistics, foreign currency assets which dropped by $ 74 million to $ 113.091 billion contributed to the negative trend in the forex reserves even as India’s Reserve Position in the International Monetary Fund rose by $ 18 million to $ 1.288 billion during the week.
— UNI
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by K.R. Wadhwaney Aviation policy to get priorityWhen the new government did not re-entrust responsibility of Civil Aviation to veteran ministers, Jagdish Tytler and Ghulam Nabi Azad, it did not come as a surprise. Their past tenure in the Civil Aviation Ministry was far from satisfactory. The new minister of State Praful Patel may not possess experience and expertise of the Civil Aviation but, from the initial statement he has issued, he appears to have ‘open mind’. This is the most satisfactory aspect because Civil Aviation needs a minister who functions without prejudices and partiality and without likes and dislikes. This is the most vital area that has been left uncared for by the powers that-be. Mr Patel has gone on record as saying that his efforts would be directed at strengthening the state-owned carriers, Air-India and Indian Airlines. If the government does not care for its own product, who would? Says Patel: “Indian Airlines should compete and grow. Indeed it is so. The airline is competing and also growing. But its growth will be quicker if the government provides it facilities and equal playing-field. He further says: “Selling every thing is not the answer. Actually, selling is the key to success provided the airline is run as a commercial venture. Indeed, both national carriers are ever prepared to discharge their ‘social responsibilities’ but they should not be subjected to performing these non-profitable functions more than commercial success. It is yet to be understood as to why Air-India should be saddled with the responsibility of transporting to and back Hajis for their annual Haj. Why can’t Hajis be left alone to travel by any carrier of their choice. When saddled with this operation, Air India does not only lose revenue, but its operations go haywire because certain aircraft are withdrawn from the scheduled routes. Mr Patel has said that the comprehensive civil aviation policy will be given top priority. Giving policy top priority is one thing but making policy ‘open’ in all aspects will lead to providing level field to all operations, Treat them equally instead of leaning towards private operations. Similarly, international airports are indeed ‘gateway to the country’. But cosmetic changes in already existing airports at Delhi and Mumbai will not serve purpose. What is needed is new terminal buildings and extended runways and the construction should be undertaken at war footing. Whatever the scenario, Indian airlines continues its upsurge in passenger load even in April and May, which are usually low-yield months. The Minister of Tourism Renuka Chaudhary has said that she will encourage domestic tourism, including pilgrimage tourism. Indeed both these areas have very high potential, but yields will result only when far-reaching measures are taken to promote tourism in real sense.
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by A.N. Shanbhag
1 pc charged on late tax payment
Q : My friend Bajpei retired from government service in July, 2003, and so received regular salary for four months (April – July, 2003) and pension for eight months (August, 2003 – March, 2004). An amount of 11,554 was deducted at source from his pension income but no deduction was made out of his salary income. Since his total tax came to 23,424 he paid self-assessment tax of 11,870 in June, 2004, and submitted the tax return in July, 2004. The assessing officer has sent a demand notice for payment of Rs. 1,226 explaining as follows: U/S 234 B 677 U/s 234 C 549 Are these for late payment of tax and how does one arrive at the figures? — Dr. V. Ramshesh, Navi Mumbai A :
Yes, these are for late payment of advance tax. Sec. 234B : Where an assessee who is liable to pay advance tax has failed to pay it or where the total advance tax paid is less than 90 per cent of the assessed tax, simple interest at 1 per cent for every month or part of a month comprised in the period from April 1 to the date of assessment on the assessed tax or on the amount by which the advance tax paid falls short of the assessed tax. The number of months shall be calculated from April 1 next following the FY during which the advance tax was payable to the date of final assessment. If the interest has been paid along with self-assessment tax, such interest shall be reduced from the interest chargeable up to the date of such payment. In this case, the interest will be charged on the income as assessed by the ITO. Sec. 234C : In case of shortfalls of the first two installments, simple interest at 1 per cent per month is charged for three months (when the next installment falls due) on the amount of shortfall of 30 per cent or 60 per cent, even if the delay is just by one single day. If the advance tax paid on or before March 15 is less than the tax due on the returned income, then the assessee
will be liable to pay simple interest at 1per cent on the amount of the shortfall.
Long-term gain
Q: One may buy share-cum-bonus, sell the original shares as short-term asset ex-bonus and book the ST loss against the S.T./L.T gain or carry it forward to next year. The bonus shares may be sold as long-term asset and pay tax at 10 per cent. In case of units, however, one may not necessarily sell the original units as short-term asset, but may wait for a suitable time and sell the original units Ex-bonus even as long-term asset and book the resultant LT loss with indexation benefit. The shares are exempt from LG Tax, but the units are not. Am I right? — Sharad Hatekar A : Since LT gains are subject to lower incidence of tax, setting off LT losses against ST gains is against the interest of the revenue. Therefore, LT losses can be set off only against LT gains. ST losses can be set off both against LT and ST gains. Unsettled LT and ST loss will be carried forward separately for eight years to be set off only against LT gains. You are perfectly right in all other cases. However, if by LG you mean long-term capital gains then tax is exempt only for BSE 500 shares if purchased between March 1, 2003, and February 29, 2004, only. However, while presenting the mini budget, the FM has said this concession will be extended for three years. This has not yet become long.
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