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States not to lower sales tax on ATF
Investor Guidance
Aviation Notes
Deora: Not protecting RIL’s interest
BSNL strike called off
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States not to lower sales tax on ATF
New Delhi, August 22 West Bengal Finance Minister and VAT panel chairman Asim Dasgupta also said states were opposed to bringing ATF under the declared goods category, as demanded by airlines. If ATF brought under declared goods category, no state would be able to impose more than four per cent sales tax on jet fuel. Sales tax rates, which vary from state to state, range from a mere four per cent in Andhra Pradesh to over 30 per cent in several other states. “The mood of states is not to review the (sales tax) rates of ATF now, because we asked some hard data on policy of fixation of pricing of petroleum products. We have not got the response," Dasgupta told reporters after the panel met on Goods and Services Tax. States' stand on sales tax rate on ATF comes nearly 10 days after a ministerial group has been set up to study the impact of ATF prices on the aviation industry and recommend steps to bring down the operational cost of airlines. The VAT panel had earlier asked the Centre a host of questions like how ATF prices are fixed, what is the share of ATF in total costs of running an airline and so on, but has not got any response so far. ATF price per kilolitre averaged between Rs 24,000 and Rs 26,000 from the entire East and Southeast Asia to Dubai, London and New York. Its price in Andhra Pradesh, which has the lowest sales tax rate of four per cent, ranges between Rs 34,000 and Rs 35,000. The sales tax on ATF was zero in Andaman and Nicobar Islands, while it was four per cent in AP, Rajasthan and Maharashtra barring the cities of Mumbai and Pune. On the higher side, the sales tax rate on jet fuel was 28-30 per cent in Karnataka, Bihar, Madhya Pradesh, Tamil Nadu and Gujarat, while it was 25 per cent in Maharashtra, West Bengal and Himachal Pradesh.
— PTI |
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Basic exemption limit includes only taxable income
by A.N. Shanbhag Q I understand that a tax return needs to be filed if income earned exceeds basic exemption limit. Please clarify if dividend, short term and long-term capital gains are to be included in this calculation of income — Thariyan George A To arrive at the basic exemption limit only taxable incomes need to be considered. Hence, dividends or long-term capital gains from equity or equity mutual funds will not be considered. However, short-term capital gains and taxable long-term capital gains (from say property or debt mutual funds) will have to be considered. NRO account
Q I bought a house in India from my foreign earnings and paid the amount through my NRE account. I am intending to rent my house. According to FAQs on Reserve Bank of India website, an NRI/PIO can rent out his property and the rent received can be credited to NRO/NRE account or remitted abroad. However, my banker tells me that the rent income has to be credited to the NRO account only and not to the NRE account. Is this correct? — Pravin A
The rent income can be credited to the NRO account directly. The rent income may be credited to the NRE account only when taxes due are paid or provided for. Before effecting repatriation of income of the account holder or credit to the NRE account, banks are required to ensure that the NRI has paid or made provisions to pay income tax thereon, if any. Banks may allow remittance abroad of the income by accepting an undertaking (in duplicate) addressed to the assessing officer and signed by the person making the remittance. This should be accompanied by a certificate of a chartered account who is not in employment of the NRI, stating that the amount proposed to be remitted is eligible for remittance and tax has been deducted at the rates in force, or is provided for or is not payable Since the funds in the NRE account are directly repatriable, it becomes almost impossible for a bank to ensure that tax on the rental income that is credited to NRO account has been paid before repatriating it. Since the procedure for repatriation is the same for the rental income, whether it is in the NRE or NRO account, banks as a measure of exercising control and ensuring compliance with the law, may allow the account holder to credit the rental income only to the NRO account. Short-term gain
Q I purchased a flat in December 2005 and sold it in June 2009. In this transaction I made a Rs 7 lakh profit that will be treated as long-term capital gain. Can I offset the above gain with short-term capital loss that I had incurred in this financial year by sale of shares? I also had some short-term capital gain that I had incurred by selling shares. Which one will be first offset? — Chintamani A
Short-term loss can be off set against long-term gain or short-term gain whereas long-term loss can only be set-off against taxable long-term gain. Since you are free to set off both long-term gain as well as short-term gain against short-term loss, you should set off the amount of gain on which the tax payable would be higher thereby optimising set-off facility. The authors may be contacted at
wonderlandconsultants@yahoo.com |
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Side effects of merger
by K.R. Wadhwaney Indian Airlines (IA), which once enjoyed monopoly in Indian skies, has lost its identity after its merger with Air India (AI) and AI, once a successful international ambassador in civil aviation, will soon be “homeless”. Some offices at prestigious Nariman Point (AI-Mumbai), Airline House (IA-Delhi), Vasant Vihar Colony-Delhi and other cities will shortly be leased out. All these measures are being envisaged to raise cash. While virtually “throwing out” staff of different grades and categories from offices and houses is surprising. Where will they be housed? If they are taken to already cramped rented offices, there will be further unrest and uncertainty. While the fate of the staff is in doldrums, what is shocking is that the life-style of politicians concerned and bureaucrats continue to improve. They continue to travel first class while directors and other chief operators travel in economy class. Civil Aviation Minister Praful Patel has gone on record as saying: “Air India will not privatise, may off-load equity”. Does this mean the national carrier would become an “orphan”? About a month ago, CMD Arvind Jadav had categorically stated that “within a month, signs of restructuring in the carrier would be visible”. The situation is far from that. What is visible is anarchy, mismanagement and all-round demoralisation. On one hand the authorities claim “the situation will improve”, on the other hand analysts scream that the scenario is sliding from murky to murkier. At Nariman Point, the airline has eight of the 22 floors in the building built in early 1970s. According to sources, the airline is likely to retain ticket-reservation section in addition to the CMD's office. Analysts say all this will be yet another futile exercise.
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Deora: Not protecting RIL’s interest
Mumbai, August 22 “How do you say that... Don't we have any other work," Deora shot back when asked about Anil Ambani group's ad-campaigns in newspapers alleging that the ministry was favouring RIL. The government will protect the interests of state-owned NTPC, he said, adding that its revenues from the RIL's KG-D6 fields was estimated at about Rs 84,000-crore and not Rs 500 crore as claimed by ADAG in the advertisement campaign. Deora said the Ambani brothers' fight had impacted investor confidence in the oil and gas sector, but the response so far to the country's latest offering of oil and gas blocks was "very good".
— PTI |
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BSNL strike called off
New Delhi: Over 10,000 engineers of BSNL, who were on an indefinite strike demanding absorption of officers on deputation, today called off their agitation after Telecom Minster A Raja assured them to "fairly" resolve the issue.
Siloh Rao, president of the association of engineers, had met Raja yesterday. “The minister has assured that the issue will be resolved fairly by arranging a tripartite meeting at the earliest with the management," a representative of the engineers association said. The meeting is likely to take place next week, he said.
— PTI |
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