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Government to establish National Tax Tribunals
Telecom snippets
India to take part in Defence Expo
IA to gain from fare war
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Service tax applicable on commission agents
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Government to establish National Tax Tribunals
New Delhi, September 18 Addressing a conference of Chief Justices and Chief Ministers at Vigyan Bhavan, he said the government would ensure that disputes between the Centre and public sector undertakings and among PSUs are resolved amicably without burdening the courts. “We have decided to establish a National Tax Tribunals which will reduce tax-related litigation in the courts,” he said. Outlining the efforts of the Centre to reduce incidence of litigation, the PM said a great deal of litigation was the product of inefficient and non-transparent laws, for instance the tax laws in the country. “A harmonised and rationalised tax structure is on our reform agenda. Once this is done, the causes of adjudication will diminish,” he said. Citing a sample survey conducted in Karnataka, the Prime Minister said government litigation accounted for 65 per cent of the civil litigation in the form of appeals and that 95 per cent of the appeals failed, as they should not have been filed. Dr Manmohan Singh promised to enforce a 1994 resolution taken by the then Congress government to the effect that “disputes between the government and the
PSUs, and one PSU and another do not go to courts or tribunals, and that such disputes be settled between the parties amicably.” Dr Manmohan Singh today also launched the website of the National Advisory Council, saying the council was an important link between the state and thinking elements of society. The website, www.nac.nic.in, was launched at a brief function here. Dr Manmohan Singh expressed his gratitude to NAC Chairperson Sonia Gandhi and to its members for the “wealth of ideas generated in such a short period of time.” In the past planning has suffered from the weakness of having adopted a ‘top-to-bottom’ approach, Dr Manmohan Singh said. The Prime Minister said the NAC has enabled the government to reach out to non-government organisations, social activists and intellectuals. “The NAC is an effort to fill that gap. The government takes the advice of the NAC seriously. It has provided us with a lot of food for thought,” Dr Manmohan Singh said.
— Agencies
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Telecom snippets From Tribune Reporters Chandigarh, September 18 In fact, the one-month scheme, which will get underway on September 20, is basically aimed at recovering the outstanding amount from the defaulters as only the rental will be waived off and not the last unpaid bill, officials said. However, Mr G.S. Bhatia, Chief General Manager, refuted allegations that the scheme is aimed at “rewarding” the defaulters and might push up the number of defaulters in future. Last year, a similar scheme had paid rich dividends and the number of BSNL connections and revenue had gone up, he claimed. On the other hand, concerned at its shrinking landline base in the wake of the mobile revolution in the Punjab circle, the BSNL today came with three more special schemes for the landline subscribers. Under the Plan-250, customers will have to shell Rs 250 and they will get 135 calls free. The calls will be charged at Rs 1.20 per unit (three minutes) beyond this limit. While under the Plan-499, an amount of Rs 499 will be charged and free calls up to 470 units could be availed off free of cost. Beyond this, charges will be Rs 1.10 per unit. Another scheme, Plan-999, comes with 1050 free calls with monthly charges of Rs 999.The call charges for using the telephone beyond this limit will be Re 1 per unit. The subscribers can enrol for these plans within six months and they will benefit from these plans up to one year, Mr Bhatia informed. Meanwhile, the BSNL is all set to provide broadband services — video on demand, high speed Internet, video conferencing — by the year-end. Similarly, the purchase order for additional nine lakh cellular phones in the Punjab Circle, intending to provide latest GPRS Edge and push-to-talk features, have been issued, he added. New Spice models
Punjab’s pioneer cellular provider, Spice Telecom has embarked upon an ambitious expansion plan to make handsets market a Rs 1,000 crore business in this region by the next year, Mr Navin Kaul, Chief Operating Officer (COO), said. The company, which is the first GSM operator to foray into the cellular handset business, said following a positive response to the newly launched handset Q 515 in Punjab, the company now plans to enter Haryana, Himachal Pradesh and Jammu and Kashmir with its handsets in October. Mr Kaul said as a part of the product range expansion, two new models would be launched by the year-end. Spice Q 550 handset with 64K colour LCD display and GPRS capability is ready for launch this month. Genessee, a high-end PDA model with one million-pixel camera and video-clipping features would be launched by the year-end, he added. “While the former would be priced around Rs 5,000, the latter would cost Rs 17,000 approx,” he added. He said at present the handsets were being imported from Chinese handset manufacturer, TCL, and sold under the brand name of Spice. Talking about removing the glitches in network, Mr Kaul said: “We have recently upgraded our services in the region and optimisation of the same would take nearly a month. The company had earlier announced its plans to set up a manufacturing unit at Baddi in Himachal Pradesh and feasibility study for the same is likely to be completed by the month end. The company’s team of technological experts was in China recently to evaluate the manufacturing facility of these handsets.
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India to take part in Defence Expo New Delhi, September 18 Having started the commercial production of the 300-km range, land, air and underwater launched missile, its display at the Pretoria show indicates that New Delhi is already looking at exporting it.
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by K.R. Wadhwaney IA to gain from fare war The Minister of State for Civil Aviation Praful Patel seems to be more open in his attitude, actions and functions as he has created a level playing-field for all operators — both government and private. As a result, all of them are functioning freely and endeavouring to create an
atmosphere of professionalism in the complex flying industry. This change has proved to be a healthier development than want existed before the change-over of the government when two national carriers were feeling ‘suffocated’. The tilt in favour of private operators was so much then that there was a suggestion from the minister to hand over the part of the building at Safdurjung to the private airlines. The fare war on domestic sectors has intensified with Indian Airlines asserting that it is an active player in the goings-on instead of being a mere participant. Its recent launch of ‘fly select fares’ on certain sectors and certain flights is so competitive and realistic that it will be a much greater hit than similar kinds of concessions offered by two private operators. Fare concessions All operators in the field of flying are aware that, regardless of the quantum of fares, the success of the game-plan depends upon the quantum of the load of passengers. The higher of occupancy of seat-ratio, the better will the profitability be because over-head expenses, in most cases, remain the same. With fuel prices rising, time has come when only the fittest will survive. “The IA’s latest fare concessions are more realistic and less cumbersome in concept.” This is the general feeling of the regular flyers who believe that no-frill airlines should have far more transparent rules and marketing environment than those that exist at present. Chopper service Helicopter service to Kedarnath has been relaunched. Pawan Hans, one of India’s leading helicopter companies, has signed a Mamorandum of Understanding (MoU) with the Garhwal Mandal Vikas Nigam Ltd, a Government of Uttranchal undertaking.
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by A.N. Shanbhag Service tax applicable on commission agents Q: With reference to the service tax applicable on brokerage for mutual fund distribution, we seek your advice on the matters mentioned below : a) The effective date from which service tax would be payable by distributors on their brokerage b) Whether this would be applicable to transactions done on or after the above date. c) Implication of the same on upfront and trail brokerage. Whether service tax would be applicable on trail brokerage received for transactions prior to the effective date. — Sameer Gupte A: The exemption from service tax for commission agents, other than those dealing in agricultural produce, under business auxiliary service is removed with immediate effect. There is some confusion as to what comes under business auxiliary service. We will have to wait for clarification, if any, incorporated while passing of the Bill. Yes, it will be applicable for transactions carried out as per the date specified by the official gazette in this regard. If a transaction has already taken place but the payment is received after the date from which the provisions became effective, this payment will not suffer service tax. Consequently, trail brokerage will not attract service tax on transactions that took place before the effective date of the provision. Voluntary body Q: For a voluntary charitable organisation (association) registered under the West Bengal Society’s Registration Act, 1961 on May 24, 2004, how would the association register itself under the Income Tax authorities (i.e what are the procedures involved) so that all donations/ subscriptions made to this organisation are entitled for exemption u/s 80 G of the IT Act. — Arindam Bose, Kolkata A: You may make an application for the required notification to the Ministry of Finance (Department of Revenue), Government of India. In specifying an association or institution for notification under Section 80G (2c) the Central Government shall satisfy that the association or institution follows various regulations in respect of application of income. Exemption is not available where a trust or legal obligation is not created on a property but only the income derived from such property or source is set apart for charitable or religious purpose. Salary arrears Q: I’m working in middle management level in a public limited company. In F.Y. 2003-04, I got Rs. 85,000 as arrears of the wage revision due for calendar years 1997-2000. The wage revision was done in 2001 effective from 1997. The income tax for the arrears amount was calculated as per the IT rates prevailing in the corresponding years from 1997 to 2000 and the benefit under Section 89 (1) of the Act has been given accordingly. Now my query is, due to the addition of Rs. 85000/- , my salary for F.Y. 2003-04 exceeded Rs 5,00,000 & I could not avail the rebate under Section 88, which I would have availed had the arrears been deducted from my salary of F.Y.2003-04, considering the amount had been paid in year 1997 to 2000. But it wasn’t done like that. Why? What are the provisions in I.T. Act for the calculation of arrears of the salary. Please advise. — Mukesh Gupta A: Section 89(1) dealing with arrears of salary does not address the situation that you have not received. Nothing can be done about this and you’ll have to suffer for no fault of yours. Capital gains Q: My queries arise after reading your column. 1. Am I correct to assume that long term capital gains from sale of debt -based Mutual Fund units will still be liable to be taxed, at the previous rates? May such gains continue to be offset against unabsorbed LT capital losses which were declared in the previous years’ returns? 2. With validity, you have recommended investment in Senior Citizens’ Savings Scheme. To me a constraint is that there appears to be no provision to credit the interests by the ECS. Am I correct, and have you any feeler whether that facility will soon be added? 3. Has the Index Value for 2004-05 (for calculating capital gains) been declared yet? If not, please announce it in your column when declared. — Naval Patel A: 1. Yes, you are correct. I would like to mention that carried forward long-term loss cannot be settled against short-term gains of the current year. 2. Yes, this is a big constraint, especially in view of the fact that the scheme is handled by the post offices. Most of the staff members are uncooperative and rent seekers. The authorities were considering issuing 20 post-dated cheques. They were also considering the ECS. I hope they don’t keep considering for a long time to come. 3. The cost inflation index for the year 2004-05 is 480.
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