Chandigarh, December 27
In a crucial decision, Punjab Council of Ministers, at its meeting today, slashed the rate of value- added tax (VAT) on several items and exempted some from VAT, thus extending a benefit of Rs 100 crore to the traders.

The government also decided to start refunding the outstanding dues accruing on account of pending claims of VAT. The government is also considering to slash tax rates on certain more items.

The following items have been exempted from VAT: karas, wooden kangas and gatras, agricultural implements like sickle, khurpa, spade, plough and animal shoe nail, reori, gajak, misri candy or cooza golies, boora, marunda, elaichi dana, murmure and rice layee.

Disclosing this here today, a spokesperson of the state Excise and Taxation Department said the rate of VAT on hand tools, cutting tools, threading tools, power tools, grinding wheels and abrasives, diesel engines up to 10 bhp and parts thereof, man-made of jute and sarkanda, baggar, teelan, kahi sarkanda, chikkus, tokray, dallan, joori kuchi, tractor tyres and tubes, valves used in industry, handcrafted footwear, doona, pattal, baskets, tiloo grass and sirki has also been reduced from 12.5 per cent to 4 percent

Likewise, the rate of VAT on paper, paper board and newsprint, including ammonia paper, blotting paper, carbon paper, cellophane, PVC coated paper, tissue paper, art boards, card boards, corrugated box, duplex board, pulp board, straw board file cover, other than plastic file covers and file boards, excluding photographic paper, waste paper, writing instruments, geometry boxes, colour boxes, brushes for colour boxes, crayons, pencil, pencil sharpeners and erasers, kerosene pressure stoves and its parts, stones, bajri, crusher sand and stone dust, multilayer polyethylene film used for packing milk, plastic crockery, tub, mug, water jug, school tiffins/ bottles, chapatti boxes, tea glass/ cups except for tea glass/porcelain cups, enameled and plated aldrops, latches, handles, hinges, door springs and door stoppers, saag cutter machines locally known as mini toka has also been reduced from 12.5 per cent to 4 per cent.

Further, pre-sensitised aluminium plates, printing rubber blankets and lith films would now be included in the list of industrial inputs to be taxed at the rate of 4 per cent instead of 12.5 per cent. Also, nose-pins manufactured by gold smiths have been exempted from VAT.

The taxable quantum for registration of hotels and restaurants under VAT has been increased to Rs 5 lakh as against the present limit of Rs 1 lakh. Similarly, the taxable quantum for registration of bakers under VAT has been raised from Rs 1 lakh to Rs 10 lakh.

Mumbai, December 27
Looking to raise $429 million as loans towards advance payment for 22 of the 68 aircraft it proposes to buy from Boeing, Air-India (A-I) today floated two tenders inviting bids from banks for the purpose.

“We have invited tenders and January 6, 2006, is the last date for submitting bids. By the end of January, we will finalise the bank from where we will take the loan,” A-I General Manager S. Venkat said here today.

One tender is for raising $306 million for A-I, while another seeks to raise $123 million for its low-cost subsidiary, Air-India Express.

“We have to make an advance payment for the first 22 aircraft, which will be delivered between 2006 and 2008. This includes, 12 Boeing 737-800s for A-I Express and five Boeing 777-200LR and 11 B777-300ERs for A-I,” he said.

The loans will have a six-month tenor, which may be raised in national or foreign currency or a mix of both, he added.

This loan would meet about 15 per cent of the total cost of the fleet acquisition, while the remaining would be on the bank guarantee from the Exim Bank, Mr Venkat said. The airline is also planning to tap the capital market with an initial public offer next year to fund the expansion plans.

An empowered Group of Ministers (eGoM) last week had cleared the A-I’s aircraft acquisition plan from the US aerospace firm Boeing Co. in a deal valued at nearly Rs 35,000 crore.

A-I will be buying 68 Boeing aircraft including 27 Boeing 787, eight B 777-200 LR and 15 B777-300 ER aircraft for A-I and 18 Boeing 737-800 aircraft A-I Express. — PTI

Kolkata, December 27
MCC PTA India Pvt Ltd, a subsidiary of Japan’s Mitsubishi Corporation, would set up its second plant in Haldia in West Bengal at an investment of Rs 1,665 crore.

Stating this, West Bengal Chief Minister Buddhadeb Bhattacharjee said today that he had received a letter from Tokyo stating the Board of Mitsubishi Corporation had approved the project.

Speaking at the annual general meeting of Bengal Chamber of Commerce & Industry here, Mr Bhattacharjee said that the second purified terepthalic acid (PTA) plant would be set up with a capacity of eight lakh tonnes per annum. The first plant, which was set up at an investment of Rs 1,475 crore, has a capacity of 4.7 lakh tonnes.

Bhattacharjee said that Mitsubishi chairman would be arriving in February to meet him and hold further discussions in this regard.

A formal announcement would be made by the company officials, he said. The Mitsubishi plant in Haldia is the largest Japanese FDI in India. — PTI

New Delhi, December 27
South Korean steel giant Pohang Steel Company (Posco) today asserted that it would develop a captive port near state-owned Paradip port for handling its cargo, contrary to the wishes of the central government.

“You need to realise that ours is a 12 million tonne mega steel plant to be built at a whopping Rs 52,000 crore. So we do need a dedicated port facility and there is nothing wrong about it,” Posco India’s Chief representative Sang Moo Doh said.

The assertion comes within days of the Shipping Ministry asking the Orissa government to discourage the world’s fourth largest steel maker from developing a separate port at Jatadhari, 12 km from Paradip, saying it would cause enormous soil erosion in upstream Paradip and render it useless besides upsetting the eco-system.

However, Posco seems to be in no mood to oblige, as Doh pointed out that “in course of our (EIA) study we found that the capacity of Paradip Port is already over-stretched and it is not in a condition to handle our cargo dedicatedly. So, there should be no doubt that we definitely need a separate facility.

He said his company’s top brass had detailed discussions with senior Orissa government officials and had impressed upon them the need for a separate port. After prolonged parleys, finally, the state government relented and allowed it to build a separate port at Jatadhari.

He pointed out that besides being located away from the proposed site, the facilities at the southern tip of the Paradip Port were being utilised in a big way by the IndianOil Corporation, “then how do you expect us to use the same facilities, which have lost their relevance.”

“The Government of India as well as the Paradip Port Trust have impressed upon the Government of Orissa that the Paradip Port after deepening of its channels will be in a position to develop its deep draft dock system and the facility can be made available on captive basis to Posco,” Shipping Minister T R Baalu told the Lok Sabha in reply to a question on December 20.

The Orissa government has been asked to undertake intensive and detailed studies regarding erosion in the event of a minor port being developed for the Korean steel giant.

Shipping Ministry sources said the Ministry was not against the world’s fourth largest steel maker opting for a captive port, but given the sensitivity of the proposed port at Jatadhari, barely 12 km from the Paradip Port, the government was compelled to advice caution. — PTI

New Delhi, December 27
Reliance Industries Ltd (RIL) has reiterated its commitment to supply gas to NTPC’s Kawas and Gandhar projects in Gujarat at the price quoted but made it clear that it would not bear unlimited liability as stipulated in the draft Gas Sale and Purchase Agreement (GSPA) given by the public sector company.

“We will arrange alternate supplies in case of a disruption, but the difference in price of the alternate gas will have to be borne by NTPC,” Reliance officials told UNI.

In other words, if the price of gas goes beyond $2.86 per MMBTU quoted by Reliance, NTPC will have to bear the difference, the officials said.

NTPC, the country’s largest power generator, had moved Mumbai High Court on December 20 after RIL refused to sign the draft GSPA for the deal.

The public sector company has demanded “blocking of RIL’s gas stocks” for its two power projects and has urged the court to direct RIL not to enter into any gas supply contract with any other party.

RIL had said its contract with any other party would not hurt the prospects of NTPCs projects. Besides, NTPC would have the option of using the gas generated from its other gas projects in the country.

According to Reliance, the draft GSPA imposes an unlimited liability on the company which it is not willing to bear. On December 14, RIL had signed the draft GSPA after making changes incorporating its concerns and sent it to NTPC for its signature.

“In the executed GSPA, we have reiterated our commitment to the quantity, the price and the start date for supply of gas to NTPC, all of which are strictly in accordance with our bid,” RIL said in a letter dated December 21 to NTPC, a day after the power major went to court on the issue.

This was in response to a letter from NTPC to RIL, which said: “You have erroneously and unilaterally made some changes between the GSPA as per the agreed terms and as finalised and therefore the signed GSPA as sent by you does not correctly reflect the agreed terms.” — UNI

New Delhi, December 27
Concerned with the growing difficulties of the industry over the payment of fringe benefit tax (FBT), the industrial chamber CII has proposed that firms should be offered an alternative to opt for 1 per cent additional corporate tax and get rid of the FBT regime.

In its pre-budget memorandum to the Ministry of Finance, the industrial chamber Confederation of Indian Industry (CII) has urged to introduce reforms in the FBT besides reforms in infrastructure, labour laws, credit and technology, to boost the growth in the manufacturing sector.

In the five-point agenda, it has stressed that 12 per cent plus growth in manufacturing is necessary, if the GDP has to grow at the rate of 8-9 per cent or higher on a sustainable basis. A high growth in manufacturing is also necessary to generate greater employment opportunities.

“Going by historical experience, the major chunk of investment in infrastructure will have to come from the government. In view of the already high-levels of public debt servicing and fiscal deficit, ” CII submitted that the privatisation of public sector would be the best option for finding the necessary resources for infrastructure investment.

An annual target for gross capital formation in infrastructure, should be announced publicly to help monitor progress and achieve real results, it said.

For boosting private investment in the infrastructure sector, the CII reiterated the importance of establishing robust and autonomous regulatory mechanisms and creating an Infrastructure Development Board with branches in states.

On labour reforms, CII has urged the need for a total dismantling of the inspector raj and taking this step urgently and independently of any other labour reform measure.

Jerusalem, December 27
An Israeli firm, Elbit Hadmaya, is planning to invest billions of dollars in India to build shopping malls, a media report here said today.

Moti Ziser, the head of the company, sees a huge untapped potential in this area given very few shopping malls for such a large population in that country, daily Yediot Ahronoth reported.

The firm plans to build shopping malls in several cities across the country.

Elbit is trying to take advantage of its vast experience gathered in this field in East Europe where it has built some 26 malls so far starting from one in Budapest a few years back, the report said. The company invested over a billion dollars in East Europe. — PTI