The Tribune, Chandigarh, India

	Hotel industry seeks infrastructure status Ruchika M. Khanna/TNS Chandigarh, May 21 The hotel business in India needs a PPP (public-private partnership) push and the status of infrastructure industry, if it has to grow the way hotel industry is booming in other countries of Asia. It is only with the growth of hotel industry that the government can give a fillip to its sagging tourism industry as well. It is only because of a severe shortage of hotel rooms and high tariffs in the country that the number of tourists to India have been dwindling. Last year, the number of tourists visiting India was just 5.5 million, as compared to 55.98 million tourists visiting China, 24.6 million visiting Malaysia, 15.8 million visiting Thailand and 11.6 million visiting Singapore. Even Sri Lanka attracted more tourists than India, with 6.5 million tourists visiting the island nation. Talking to The Tribune here today, SM Shervani, president of the Hotel and Restaurant Association of Northern India, said the hotel industry had expanded during the Commonwealth Games, mainly in Delhi and NCR, after being granted concessions by the government for increasing room capacities. “Over 30,000 rooms were added across the country, with 15,000 being in Delhi and NCR alone. But even then, there is a shortfall of rooms and we need to add more rooms. Land is prohibitively expensive, which makes a new hotel project financially unviable. Thus we are seeking the government’s intervention to launch new hotels in PPP mode, where land can be made available at reasonable rates,” he said. Shervani also said with the hotel industry not being granted the status of infrastructure industry and thus getting access to cheaper finance, finance for expansion becomes prohibitively expensive. “This is the reason that we are pleading with the government to grant infrastructure status to this industry. The government should recognise hotel industry as the industry of future and give some tax concessions,” he said. If the tax structure is rationalised, it will help in reducing the room tariffs and also bring down the cost of food and beverages, he said.
	Inflationary pressures to stay: FM Shiv Kumar/TNS Mumbai, May 21 Soaring prices of commodities, including crude oil, will continue to be a major stumbling block to India's efforts to tame inflation, Union Finance Minister Pranab Mukherjee said here today. Speaking at a function organised by the Indian Banks' Association, Mukherjee warned that volatility in global prices made it difficult for Indian regulators to predict the impact of inflation on the economy. "Inflationary pressures have no predictability or a certain direction. Like in 2008 when oil and commodity prices shot up and then declined drastically, commodity prices remain unpredictable today.... nobody can comment on how these will behave," Mukherjee told reporters after the event. The minister, however, pointed out that the authorities like the RBI were trying to contain inflation even while working to achieve higher growth. "By constantly adjusting the policy, both from the supply and demand side and by taking appropriate fiscal policies in tandem with the RBI, we are trying to achieve high growth and acceptable levels of inflation," he added. Mukherjee went on to say that the government was committed to bringing about reforms in the financial sector by enacting the Pension Regulatory Bill and Insurance Bill. In addition to these bills which were introduced in the Budget session of Parliament, more reform measures are due to be introduced in the monsoon session, he added. Mukherjee also warned banks to monitor the quality of assets. The minister warned of deteriorating quality of assets by nationalised banks. "Banks have to bring down their NPA levels......which have gone up in the last year considerably," he said.
	Infosys logs into Shanghai New Delhi, May 21 The country's second largest software exporter, Infosys Technologies, today said it plans to invest between $125 and $150 million in its new campus in Shanghai, China. The company today laid the foundation stone for the new campus, which will be spread over 15 acres and will be developed over a period of three years. It will be the largest overseas software development centre of Infosys adhering to the highest environmental standards, it said. Infosys (China) CEO Rangarajan Vellamore said, "When this campus is completed we expect to have over 10,000 employees in Shanghai alone." — PTI
	Aviation Notes No relief on airport development fee by KR Wadhwaney Regardless of constraints and varying expenses incurred on upgrading international airports, the development fee at four centres -Hyderabad, Bangalore, Mumbai and Delhi - varies enormously. The fee at the Indira Gandhi International Airport (IGIA) is the highest. It levies Rs 200 on each passenger flying on domestic routes and Rs 1,300 on international destinations. In a sharp contrast, Chhatrapathi Shivaji International Airport (Mumbai) charges Rs 100 from domestic passengers and Rs 600 from international flyers. What is cause for concern is why such steep variation in fee from two different cities of the same country. A Bench of Justice R.V.Raveendran and A.K.Patnaik said: “We hold that development fee could not be levied and collected by the lessees of the two major airports , namely DIAL and MIAL, on the authority of the two letters of February 9, 2009, and February 27, 2009, of the Central Government from the embarking passengers under the provisions of Section 22A of the Airports Authority of India (AAI) Act, 1994”. The irony of the vex issue is that despite Supreme Court’s favourable judgment of quashing airport development fee (ADF) on April 26, the passengers continue to suffer. They have to pay if they wish to travel. “The Supreme Court verdict is a ‘please-all’ judgment”, said three regular flyers, adding: “Every involved agency from developers to regulatory authority to passengers has got a relief”. An in-depth study shows that “status quo is being maintained in the matter pertaining to the airport development fee.” While quashing the development fee, the Supreme Court says that: “Citizens are free to challenge fee”. In simple words, it means that the flyers are free to file another petition for relief.” In the same judgment, the court said: “The Delhi International Airport Limited (DIAL) would credit the development fee to the Airports Authority of India (AAI) and only this authority could utilise the amount. The judgment did not say when the ‘collected amount’ by the DIAL should be transferred to the AAI. It was not clear who would be the beneficiary of the interest on the amount. On May 8, 2011, it was learnt that the Airports Economic Regulatory Authority (AERA) may allow DIAL to continue charge development fee for 51 months instead of earlier stipulated 36 months. The period for payment will now end in June 2013 instead of March 2012. The end result is that despite ‘successful litigation’, the passengers have got no relief.
	Investor Guidance Now, you are a senior citizen at 60 by AN Shanbhag Q. A person has completed 65 years of age as on 14th March 2011. My query is can he enjoy tax-free limit of Rs 2,40,000 for AY 2011-12? — Vivek Musale A. A senior citizen is one who completes 65 years of age anytime during the financial year. So yes, if he has completed 65 in March 2011, he can avail of the higher exemption limit of Rs 2,40,000. Note that for the current tax year (FY 11-12, AY 12-13), the age limit to qualify as a senior citizen has been lowered to 60 years. PF withdrawals Q: I have quite a large accumulated balance in my provident fund. I understand that I can avail it on my retirement. However, if I want to withdraw from the fund and use the money for my personal purposes, is there any tax incidence? — Shrikant Joshi A: The withdrawal from accumulated balance due and becoming payable to an employee participating in a recognised provident fund will not be taxable only in the following specific situations: 1. If he has rendered continuous service with his employer for a period of 5 years or more. If accumulated balance includes any amount transferred from his individual account in any other recognised provident fund(s) maintained by his former employer(s), then, in computing the period of 5 years, the period(s) for which the employee rendered continuous service to his former employer(s) is also to be included. 2. If the employee is not able to fulfil the conditions of such continuous service due to his service having been terminated by reason of his ill-health or by reason of the contraction or discontinuance of the employer’s business or due to some other reason beyond the control of the employee. 3. If, on the occasion of his retirement, the employee obtains employment with any other employer, to the extent the accumulated balance due and becoming payable to him is transferred to his individual account in any recognised provident fund maintained by such other employer. Dividend from MFs Q. How should dividend income from equity mutual funds be treated? 2) How is the dividend on debt funds treated in computation of income tax? What about long-term capital gain (LTCG) and STCG in debt schemes of mutual funds? What about dividend distribution tax on such debt schemes? — Vikas A. Equity-based MF schemes are governed differently from the debt-based schemes. In both the cases, dividend is tax-free in the hands of investor. However, there is a dividend distribution tax @12.5% payable by the MF directly to the exchequer in the case of debt-based whereas the equity-based are exempt from this tax. Equity-based schemes are also exempt from long-term capital gains tax. The short-term capital gains are taxed @15% only. In the case of debt-based schemes, short-term gains are treated as normal income of the assessee and taxed at the rates applicable to the assessee. The long-term gains will attract tax @10% without indexation or @20% with indexation, whichever is more beneficial to the assessee.