There are three conditions under which retrospectively can be envisaged. One is to clarify, one is to correct for mistakes and the third one is to really address very egregious tax structure, but not to use it as a revenue generation — Parthasarathi Shome, Finance Minister’s adviser

New Delhi, October 21
With several cases pending, Finance Minister’s adviser Parthasarathi Shome today said the government should not go in for retrospective amendment of tax laws to raise revenue.

“There are three conditions under which retrospectively can be envisaged. One is to clarify, one is to correct for mistakes and the third one is to really address very egregious tax structure, but not to use it as a revenue generation,” Shome said on the sidelines of International Tax Conference organised by industry body Assocham.

He was replying to a question whether retrospective amendment in the tax laws has vitiated business environment in the country, particularly the one related to the tax dispute with the UK-based telecom giant Vodafone Group.

However, Shome said the government cannot be blamed for retrospectivity and a balanced view is required in any such matter.

He said, “In terms of taxpayers also, certain things need to be looked in how the whole thing built up. One has to take cognisance of the whole thing. One cannot always, you know say, blame government for retrospectivity. So if you really look at and examine, you have to take a balanced view.”

A committee under Shome was set up to recommend measures to deal with retrospective amendment of income tax laws and suggest ways of treating taxation cases which involve indirect transfer of Indian assets, of the likes of the Vodafone-Hutchison deal.

The committee had recommended last year that either the retrospective tax amendment should be withdrawn or penalty/interest, if covered under taxes, should be waived off.

As a matter of policy, the government should best avoid introducing fundamental changes in tax provisions without consultations and thus not be anticipated by the taxpayer, he said.

“These measures seem to be slowly bringing back the confidence of the taxpayers and investors and the final outcome is yet to be seen as a series of changes of which some are still anticipated are yet to unfold,” he said.

A panel headed by Shome, which has been constituted to look at tax administration reforms, held its first meeting today. It will submit its report in six months’ time.

New Delhi, October 21
IT services major TCS has bagged a multi-million dollar deal from leading rail vehicles maker Bombardier Transportation for managing IT infrastructure of its newly commissioned data centres.

"The multi-year, multi-million deal, is the first that TCS has signed with a rail-transportation technology provider," TCS said. It did not reveal financial details of the deal.

Bombardier Transportation is a world leader in rail transportation with operations in over 60 countries.

As part of the contract, TCS will provide remote infrastructure management (RIM) of Bombardier Transportation’s recently established data centres in Germany.

The new data centres will establish a technology platform for Bombardier, through introduction of private cloud services paired with a high level of virtualisation, the company said.

TCS will also provide SAP Basis support to Bombardier Transportation.

"India is central to Bombardier's Information Services strategy - our relationship with TCS offers operational excellence in markets around the world," Bombardier Transportation vice-president Thomas Leidenbach said.

Sapthagiri Chapalapalli, Head of Central Europe at TCS, said: "This is a strategic step forward for TCS as it establishes us as a partner of choice for infrastructure services in the German market." TCS' Central Europe operations comprise over 4,000 professionals, servicing more than 80 leading companies. — PTI

New Delhi, October 21
Following the verdict in the closure of a group entity's factory in Karnal, Liberty Shoes today said bail had been granted in the case and recourse allowed for appeal in the sessions court.

As per reports, the Chief Judicial Magistrate, Karnal, had sentenced Adarsh Gupta, owner of Liberty Enterprises, to six months imprisonment for unfair labour practices. The case dates back to 2006 when the company shut down a unit near Karnal and retrenched 1,500 workers.

Responding to queries from The Tribune, Liberty Shoes said it is a law abiding entity and believes in adhering to the statutory compliance.

The statement said the matter was related to old disputes relating to Liberty Enterprises with respect to their labour transfer in 2006 and since then it was under litigation to be decided by the appropriate court.

Maintaining that due process has been followed, it said, "On our enquiry from Liberty Enterprises, it is confirmed that the due compliance of the requisite labour legislations and standing orders, as approved by the authorities concerned, has duly been done".

Clarifying that the CJM had granted bail and allowed appeal in a higher court, the company said, "There was neither any involvement of LSL nor its directors in this matter. As per the information available, the Chief Judicial Magistrate of Karnal gave his verdict against Liberty Enterprises for which immediately thereafter the same judge granted the bail on the same day with recourse of filing an appeal to the sessions court".

Liberty Shoes has sought to draw a distinction between the two entities. "Liberty Enterprises is nowhere connected to the business of Liberty Shoes Limited (LSL) and neither is its subsidiary and it is not at all concerned with the affairs of Liberty Enterprises which is a separate entity in the eyes of law. Therefore, there has not been any direct or indirect connection of LSL with the disputes of Liberty Enterprises."

New Delhi, October 21
BHP Billiton Ltd, the world's largest miner, today said it has exited nine out of its 10 oil and gas explorations projects in India as it could not start operations for want of defence approval.

The company said it has relinquished nine exploration blocks awarded between 2008 and 2010 under the New Exploration and Licensing Policy (NELP) after it failed to secure clearance from the Defence Ministry.

"The decision to relinquish these blocks is the result of an exploration portfolio review and the inability to carry out exploration operations in these blocks," BHP said.

The company said it has exited the six Mumbai basin blocks it was awarded with GVK in the seventh round of NELP in 2008 and three blocks areas it had won in NELP-VIII round.

"BHP Billiton will preserve its 50% interest in its NELP IX block, which is operated by BG Group. We are currently awaiting the results of the seismic survey," it said.

BHP held 26% interest in the NELP-VII blocks while Hyderabad-based infrastructure and energy-focused conglomerate GVK the rest 74%. The Melbourne-based mining company with operations in more than 100 locations worldwide, held 100% interest in the NELP-VIII blocks. — PTI

New Delhi, October 21
Spending by Indian banking and securities companies on IT is set to increase in the coming year on the back of fast growth being witnessed in the sector.

According to the latest assessment made by the research firm Gartner, Indian banking and securities companies will spend Rs 462 billion on IT products and services in 2014. This would represent an increase of nearly 9.8% over 2013 revenue of Rs 421 billion.

This forecast includes spending by financial institutions on internal IT services (including personnel), IT services, software, data centre technologies, devices and telecom services.

IT services will be the largest segment in overall spending in the banking and securities market at Rs 149 billion in 2014, due to the continuous focus on the financial services sector by IT services providers, and it forecast to grow at the second fastest growth rate at 14.5% compared to 2013.

Software is expected to be the fastest growing segment, with 15.2% growth in 2014. In the software segment, enterprise resource planning (ERP)/supply chain management (SCM)/customer relationship management (CRM) will exceed the 20% growth landmark at 21.5%, while desktop software follows at 19.3%.

Internal services (that includes IT personnel) is projected to be the third fastest growing segment at 14.3% in 2014, largely due to the expansion strategies of banks across the country, especially in the rural areas.

“The expansion of the bank’s network, and increasing market share focus, remains a top priority for banks in India. In practice, across all emerging markets, banks tend to exploit the front office over the back office in their investments.” said Vittorio D’Orazio, research director at Gartner.

“However, this strategy - triggered by their expansion over a large unbanked territory - creates a gap which already starts to attract investments on back-office areas. In particular, we continue to see a number of requests from Indian banks regarding the modernisation and legacy replacement of core banking systems, while IT spending for tablets, although very tiny, is on pace to grow 351% this year and will double in the next two,” D’Orazio said.

Bangalore, October 21
Mahindra Aerospace, a subsidiary of Mahindra group, will start producing the first eight-seater aircraft in India in the next two years.

"You can expect that within a time-frame of two years, we will have a full-fledged eight-seater aircraft being manufactured in India," said Hemant Luthra, president of Mahindra Systech — of which Mahindra Aerospace is a part, at the inauguration of its new manufacturing facility here.

It presently makes eight-seater aircraft in its Australia-based companies Aerostaff and GrippsAero which it acquired in 2010 to get into the aviation sector. — PTI

Mumbai, October 21
Shares of engineering giant Larsen & Toubro today gained over 6% after the company posted quarterly results that were ahead of street expectation.

L&T shares ended the day at Rs 925.15, up 6.05% from its previous close on the BSE. During the day, the stock gained 6.47% to Rs 928.80.

The scrip was the top gainer among the 30-bluechip Sensex stocks. At the NSE, the stock soared 6.20% to close at Rs 926.10.

On the volume front, 10.63 lakh shares of the company changed hands on the BSE, while over 68 lakh shares were traded on the NSE. — PTI

BRIEFLY

Rupee loses 25 paise vs dollar
Mumbai: The rupee fell for the second day amid volatility in the stock markets, dropping 25 paise to 61.52 against the dollar on Monday on persistent demand from importers and banks as the US currency strengthened overseas. The rupee opened at 61.35/$ at the forex market. It dropped further to 61.58 before ending at 61.52, a loss of 25 paise. — PTI

HDFC net up 10%
Mumbai: Mortgage firm HDFC on Monday reported a 10% increase in net profit at Rs 1,266.33 crore for the second quarter ended September 30. Total income on a standalone basis increased to Rs 5,945.94 crore from Rs 5,269.45 crore in the corresponding period last fiscal. — PTI

L&T bags DLF contract
New Delhi: DLF on Monday said it has given a Rs 1,337 crore contract to L&T for construction of its luxury residential project in Gurgaon. The company is developing a high-end housing project 'The Crest' in Gurgaon, comprising 765 units, of which about 250 flats have already been launched and sold. — PTI

Dabur promoters enter healthcare
New Delhi: The promoter of FMCG major Dabur India, the Burman family, is foraying into healthcare space in the country and has formed a joint venture with founders of UK-based 'Healthcare At Home' with plans to invest around Rs 200 crore. The Burmans will hold 65% stake in the JV - Health Care At Home India - and the rest will be with Gareth Jones and Charles Walsh, the founders of Healthcare At Home (HAH), UK. — PTI

Mahindra group to sell pre-owned luxury cars
New Delhi: Mahindra group is foraying into the business of selling pre-owned luxury cars like BMW, Audi and Mercs through its used car vertical First Choice. Mahindra First Choice Wheels Ltd will open up to three 'First Choice Highline' showrooms in the next 12 months to sell old luxury cars. — PTI