Sunday, December 5, 1999
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B U S I N E S S | Sunday, December 5, 1999 |
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‘Encourage FDI in
textile sector’ Stringent measures needed for
better state finances Bill to amend Companies Act soon
Move to impose entry tax opposed Canam ventures into IT education Hindustan Zinc logs 3.6 per cent
growth |
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‘Encourage
FDI in textile sector’ CHANDIGARH, Dec 4 — The three-day Texcon ‘99 concluded here this afternoon with Mr S.P. Oswal, CII Conference Chairman, presenting a 21-point action plan before Mr B.C. Khatua, Textile Commissioner. Later, addressing a press conference, Mr Oswal said the composite character of the textile industry should be strengthened through policy initiatives like rationalisation of tax structure and de-reservation of knitting and garment industry. The drivers of growth of the industry will be garments, home textiles and technical textiles. The industry, he said, should be taken out of the Essential Commodities Act. Labour legislation is required to be suitably modified for increasing employment, narrowing the disparity between the organised and unorganised labour and for better harmony in the management-labour relationship. Non-viable enterprises, Mr Oswal said, should be permitted to close down without acting as a drag on the healthier segments of the industry. There is a need to encourage FDI in the textile industry, including knitting and garmenting, for creating employment and value-addition. The CII will take the initiative to constitute an apex body to provide a forum to represent a holistic view of the textile industry. More design centres are required to increase design consciousness in the industry. The conference suggested that the textile and clothing industry must promote an “India” brand in the global market. The industry also requires a separate brand equity fund. Consolidation through mergers and acquisitions is imminent under the present circumstances. Financial institutions should play a vital role in this direction. The textile industry needs to adopt IT as an integral part of management in order to sustain competitiveness and accelerate growth. The other recommendations were: (a) all players in the value chain must cooperate in a spirit of partnership; (b) upgrade human skills; (c) the industry should strive to become knowledge-oriented and (d) come out of its domestic groove to go multinational by developing and acquiring brands and distribution channels. Lakshmi Machine Works (LMW) of Coimbatore got the first prize for the best stall Textech ’99. Mr Oswal presented the award to Mr M. Shankar, Senior Manager Sales. Mr Oswal also mentioned
that business queries worth Rs 100 crore had been
generated at Textech ‘99. Over 10,000 business
visitors attended the fair during the first two days. |
Stringent measures needed for
better state finances NEW DELHI, Dec 4 — A cash starved Punjab Government should abolish all populist measures and take a leaf out of the Andhra Pradesh Government in turning around its economy, the President of PHD Chamber of Commerce and Industry, Mr Ashok Khanna has said. Populist measures like free electricity and other electoral gimmicks are no more convincing as people want “real benefits”, Mr Khanna told the TNS. The convincing victory of the Telugu Desam Party in Andhra Pradesh is a case in point as the State Chief Minister, Mr Chandra Babu Naidu had done away with electoral gimmicks and taken mature economic decisions to make the state a hotspot for investors, Mr Khanna said. He said that in Punjab, interest payments alone account for Rs 1,828 crore during 1997-98 and surprisingly the plan size is only Rs 2,100 crore. Moreover, the management of many State Government undertakings is alarming as five among them operating in agricultural sector i.e. Punjab Poultry Development Corporation, Punjab Seeds Corporation, Punjab Agro, Markfed and State Tubewell Corporation incurred losses in excess of Rs 100 crore during 1995-96. Referring to the passing of the Insurance Regulatory Development and Authority (IRDA) Bill, Mr Khanna said that it was a very healthy sign. The opening up of the insurance sector, he said, would generate employment apart from channelising funds for the vital infrastructure sector. On the legislations for protecting the small investor and bringing plantation schemes under the supervision of SEBI, Mr Khanna said that it was a welcome move but investor need to maintain caution in choosing their portfolio. As regards the
developments in Information Technology sector in India,
the PHDCCI President said that it has revolutionised the
entire administrative process by reducing the cumbersome
file work. |
Bill to amend Companies Act soon NEW DELHI, Dec 4 (UNI) — Parliament is likely to take up the Short Amendment Bill to amend the Companies Act, 1956, within the next 10 days which will ensure good corporate governance in India.Mr T.S. Krishnamurthy, Secretary, Department of Company Affairs, today said, “The Cabinet approval for the Bill is expected very soon”. There might be some additions and omissions from the 16 amendments indicated recently by Ram Jethmalani, the Secretary said. The planned changes include compulsory issue of securities in dematerialised form for initial public offerings (IPOs) exceeding Rs 10 crore, redefining public offer to define it as an offer to more than 50 persons, mandatory reporting within 60 days to the Company Law Board about default in repayment to small depositors. Krishnamurthy said the insolvency committee, consisting of 10 members and headed by retired Justice K.S. Paripoonan, will be reconstituted soon. It will submit the final report after six months from the date of its first meeting. The committee is
expected to recommend changes in existing laws relating
to winding up of companies to avoid delays in liquidation
and to suggest mechanisms for the management of the
companies after the issuance of winding up orders. |
Need to
develop India brand CHANDIGARH, Dec 4 — Different economic, insurance and WTO-related issues cropped up at a seminar organised by the management students of University Business School, Punjab University, yesterday. Mr R.V.S Minhas, Director and CEO of Synset Global Technologies in his inaugural address stressed importance of information management in the coming years if the corporate sector has to compete with MNCs. Dr Manoj K. Sharma said economic reform should percolate down to the State level. Prof M.A. Zahir of PAU stressed the importance of developing India brand and more linkage between big corporate houses and small vendors. Manisha Sahni and Santhi said Indian saving rate is still low as compared to other Asian countries and hence the Government must announce new schemes/policies to encourage higher saving. Ashish Kumar said Indian middle class is increasing at a faster pace. Rahul Sehgal called for taxes on agricultural income to augment depleting revenues. Chetan Khanna and C.V.S. Sehgal highlighted the problem of the fiscal deficit and advised the Government to quickly undertake second generation reforms for making Indian industry more competitive. Arun and Sachin called for better cost management on the part of Indian corporate world. Preeti Mahaseth, HRD student, stressed that ninties was an era of political instability and it led to non-passage of crucial Bills by the Government and it created a scare on the mind of emerging corporate houses. Prof J.R. Gupta highlighted the increased interest burden and its serious consequences on capital expenditure. Dr K.S. Chahal, Director Medilink the USA, stressed the importance of health insurance which is crucial for the prosperity of the nation. B.B. Rudra, Vice-President, ICICI stressed on the concept of Universal Banking, for the survival of Indian banks. Sunidhi Bhatia, student, stressed the opening of insurance sector to private companies, but also opined that LIC should gear up in new millennium as a lot a of potential exists, as it has very high network in India, while the private or the foreign sector cannot dream of it in coming years. Pratibha Anand and Rahul Puri stressed on further reforms in banking sector and control of non developmental expenditure for attaining the high growth rate. Shefali Pall predicted India may fall in debt trap if the current trend of increased expenditure continues. Anuj Munjal, Director Hero Cycle, stressed the Indian corporate sector must study the likely consequences of Seattle rounds talk of the WTO if they have to compete in world market. Dr P.K. Vasudeva, Member, consumer Commission, highlighted the serious consequences of labour standard and environmental issues which Seattle round plans to include in WTO negotiation. Prof Satish Kapoor, stressed on exploring markets in Africa and South America for boosting our exports. Anjali predicted India has comparative advantage over China in attracting FDI. Prof R.S. Bawa of GNDU, Amritsar, highlighted the operational efficiency and stressed better human relations in Indian companies will make Indian companies more efficient. Prof M.R. Aggarwal of
Economics Deptt and Prof B.S. Ghuman of Public Admn
cautioned Indian industries to improve their efficiency
level. |
Move to
impose entry tax opposed LUDHIANA, Dec 4 — The Industry and Trade Forum, Punjab and the Ludhiana Small-Scale manufacturers Association have condemned the proposal of the State Government to impose entry tax on 15 items from December 6 and hike in the sales tax rate on motor vehicles from 3-3.5 per cent to 5 per cent. In a statement issued to the Press, Mr Harish Khanna, President of the forum, said at a conference of the northern region Chief Ministers, it was decided to implement value added tax system (VAT system) from 2000 to bring about uniformity in the sales tax rates. Instead of working in that direction the State Government is resorting to multiple tax system. He further alleged that
under the garb of sales tax rationalisation, more
financial burden is being put on the trade and industry.
In view of the higher sales tax tariff in Punjab,
end-costs of the finished goods produced in the State are
becoming prohibitive and making these uncompetitive in
both domestic and international market. |
Canam
ventures into IT education CHANDIGARH, Dec 4 — Study Abroad Foundation, a subsidiary of Canam organised an education fair in collaboration with colleges of Australia, Switzerland and Cyprus. The students who attended the fair got the opportunity to have career guidance from the visiting faculty of the various colleges. Mr S. Grewal, Director Canam said the launching of its another subsidiary ‘Canam Technologies’ will establish state-of-the-art Information Technology education centres all over India with a curriculum designed for domestic and International Career opportunities for students. Mr Bruce Sellick,
Director, Sydney International College, Sydney said that
the college is exploring the possibilities to setup their
institution in India in a joint venture with Canam
Consultants Ltd and are looking forward to bring
international level education to India. |
Hindustan Zinc logs 3.6 per cent
growth NEW DELHI, Dec 4 — Hindustan Zinc Limited has posted a 3.6 per cent growth in sales in 1998-99 over the previous year. The sales turnover for the year was registered at Rs 1,309 crore and profit before tax standing at Rs 151 crore. Dividend payment (inclusive of tax) for the year stood at Rs 19.75 crore as against Rs 16.27 crore for the preceding year. In terms of volumes zinc
metal sale stood at 1,35,245 tonnes showing a growth of
17 per cent of the previous year. The production of zinc
lead concentrate from captive mines stood at 4,12,617
tonnes. |
YOU buy a food processor, but it’s performance is not to your satisfaction and you feel that it falls short of the promises made by the dealer. You purchase a saree and after the first wash, the colour runs. You place an order for furniture and when it arrives you find that it is not made to the specifications given by you. In all or any of these cases, suppose you do not get redress from the dealer and would like to file a complaint before the consumer court, you would naturally wonder whether such a complaint would fall under the jurisdiction of the court and whether it fits in with the definition of a defective product in the Consumer Protection Act. Well, the definition of “defect” in the Act is quite comprehensive and covers any fault, or imperfection or shortcoming in the quality, quantity, potency, purity or standard, which is required to be maintained under any law, or under any contract express or implied, or as claimed by the trader or manufacturer. Let me quote a few decided cases to explain this better. In the case of Hajarimal Moonat vs Kumar Iron Works, for example, the complaint was that certain hardware items meant for fixing steel doors and hinges supplied by Kumar Iron Works did not conform to the size or the specifications given by the complainant. As a result, they could not be used at all. Here, the National Consumer Disputes Redressal Commission held that the goods were defective and therefore unsuitable for the intended purpose. This is a very important judgement from the point of view of consumers. Suppose you order a set of curtains for your windows and what is stitched and delivered fails to conform to the measurements that you have given, then the curtains are defective and you have every right to get your money back or get a replacement, besides compensation for any inconvenience or suffering undergone. Suppose you ask for a pullover made of pure new wool and trader sells you a garment made of acrylic, claiming that it is made of pure new wool, then even if the acrylic garment is of good quality, it is still a defective product. In the case of S.Elhence vs Raghomal Nahar Singh, for example, the consumer asked for ordinary portland cement and paid for it too, but was actually supplied inferior quality slag cement, which he realised only after using it. The consumer court awarded compensation to the consumer on the ground that the product was not of the quality claimed by the trader and was therefore defective. In the case of Maharashtra Hybrid Seeds vs Alavalpati Chandra Reddy, for example, the Supreme Court upheld the decision of the State Commission to award compensation at the rate of Rs 2,000 per acre to farmers who had suffered on account of the failure of the sunflower seeds to germinate. Here the case was decided on the basis of evidence placed before the court. In the case Jalaluddin Yusuflali vs the Manager, however, the Maharashtra State Commission awarded compensation only after test reports confirmed that the axle of the scooter was defective. Here, the complainant’s son had died as a result of a road accident caused by a defective axle. In the case of Anjaleem Enterprises vs A. Lakshmanan on the other hand, the court appointed, with the consent of both parties, an Advocate Commissioner to determine whether Intellitrac STD/PCO with programming software and booth display sold to the complainant was defective and ordered relief only after the defect was confirmed by the commissioner. So remember, whenever
you come across a defective product, you can ask for
either rectification of the defect, replacement of the
defective product or refund and compensation, depending
on the nature of the defect and the loss or suffering
caused by it. |
Q: We are registered as a dealer under the provisions of the Punjab General Sales Tax Act, 1948 and the Central Sales Tax Act, 1956. During the assessment year 1995-96 we had sold, inter alia, goods worth Rs 50,000 in the course of inter-State trade or commerce to a Delhi based registered dealer and entries to this effect was duly made in the account books as well as the periodical sales tax returns. Central Sales Tax that became payable on this transaction was also deposited. However, subsequently the buyer returned the consignment within a period of two months on the ground that the goods were not acceptable to him. The price of the goods as well as the amount of CST collected by us was refunded to the buyer immediately and necessary entries were made in the account books. In the sales tax returns we could not erroneously claim the deductions from the gross turnover. Now in the assessment proceedings we have claimed refund of the amount of CST to which the assessing authority does not agree on the ground that this claim ought to have been made in the relevant sales tax returns. Kindly advise if the assessing authority is right in its approach? — V.K. Sood Ans: Section 8A of the Central Sales Tax Act, 1956 lays down in plain terms, inter alia, in determining the turnover of a dealer for the purpose of this Act, the sale price of the goods returned to the dealer by the buyer of such goods within a period of six months from the date of delivery of the goods shall be deducted from the gross turnover. What the dealer claiming deductions under these provisions is required to do is to produce before the assessing authority satisfactory evidence of such return of goods and of refund or adjustment in accounts of the sale price thereof. This statutory provision does not restrict a dealer from claiming deductions from the gross turnover simply because he has not made such a claim in the periodical sales tax returns. The dealer is at liberty to claim the benefit of refund of tax even after filing of the returns when the turnover is proposed to be determined by the assessing authority. Q: We are engaged in the business of manufacture and sale of machinery, its parts and other related equipments in Haryana being a registered dealer both under the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956. During the year 1997-98 we contracted to supply certain machinery parts to a U.P. based registered dealer and we agreed to send the goods to Uttar Pradesh for approval of the buyer. In fact these goods were to be used for the maintenance of the plant and machinery of the buyer. On approval, the buyer remitted the price of the aforesaid goods when 2 per cent amount of the total price was deducted on account of “Tax deduction at source” under the provisions of the UP Trade Tax Act, 1948. Kindly advice as to how the amount deducted by the buyer can be got refunded from the sales tax authorities of UP? — Anil Chopra Ans:
From the facts stated by the queriest it cannot be
disputed the transaction involving supply of goods from
Haryana barely constituted a sale in the course of
inter-State trade or commerce within the meaning of
section 3 (a) of the Central Sales Tax Act, 1956 on which
tax liability under sub-section (1) of section 9 could
only be imposed in Haryana. This transaction did not give
rise to any liability either under the provisions of the
UP Trade Tax Act, 1948 or the Central Sales Tax Act, 1956
in the state of Uttar Pradesh. Therefore the deduction of
2 per cent ‘tax deduction at source’ is not
legally justified. You can therefore claim refund of this
amount either from the buyer if he has not so far paid
over this amount to the State Government. If the amount
stands already deposited by the buyer with the sales tax
authorities of UP you can make an application for refund
of this amount explaining these facts in detail to the
effect that no tax liability on the supply of machinery
parts from Haryana could legally fastened in that State.
In support of this claim the queriest is advised to get a
certificate of deduction from the buyer. |
Q: When the Government servant was appointed on temporary basis for three months whether his termination is in order? Ans: The Supreme Court in State of U.P. v Ram Krishna (1999-II-LLJ.950) had this to say: The question was whether the services of the respondent could be terminated as he did not make any improvement in work and further, he was found absent from work. The SC noted from the second appointment order that the respondent was appointed as Tubewell Operator purely on temporary basis with the condition that his services could be terminated without any prior intimation. A copy of the letter was sent to the Assistant Engineer asking him to submit a progress report on working capacity of the respondent to enable the Executive Engineer to take decision regarding future course of action. in view of the above expressed condition directing the Assistant Engineer to report regarding performance of the work of the respondent, it was not a regular appointment on a clear vacancy, but it was a temporary appointment for a period of three months and was made conditional upon his showing progress during that period. In the second order of termination it was recorded that having made no improvement in work as being irresponsible, the services of the respondent was not needed and therefore, terminated with immediate effect. The SC held that since the respondent was appointed only for three months and that too temporarily, he was not in a regular Government service. His position was like a probationer. As during the period of service of the respondent, the authority found that the services of the respondent were not satisfactory and accordingly terminated, it cannot be said that the termination order was bad in law. The SC held that the order of termination is an order of termination simpliciter of Government Servant and therefore, the provisions of Art. 311 will not be attracted. In that way, the present
appeal was allowed and the order of the HC was set aside. |
Q: With respect I have following queries as under:- (1) I am an Assistant Engineer (E) in HPSEB and nowadays I am on study leave w.e.f. 12.7.98 to 11.1.2000 for ME course at University of Roorkee. (2) My total Income for the year 1998-99 is as under:- (1) Total income — 1,49,053 (2) Savings:- 1998-99 LIC self premium — 16,402 LIC Wife-premium — 16,811 PPF - - — 7,935 GIS - - — 1,440 GPF - - — 28,780 Total - - — 71,320 Can I claim the benefit of LIC premium paid by me for my wife’s policies, as she is also a government servant but not claiming the benefits of these policies? As I am on study leave, kindly suggest me am there any benefit in case of Tax during study leave? I have also two pension policies one on my name amounting to Rs 10,000 premium per year. Another on my wife’s name amounting to Rs 5,000 premium per year. Kindly intimate me about my Tax calculations. — Er. Suresh Kumar Patial, Roorkee (UP) Ans: You can claim the benefit of LIC policy premium paid by you on behalf of your wife specially when she is not claiming the benefit of tax rebate on the policy premium and that the payment is made by you. In respect of study leave there is no tax benefit or tax deduction permissible to you. Out of the pension policy, the tax deduction that would be permissible would be on a sum of Rs 10,000 premium in respect of the pension policy which is taken by you for yourself. However, in respect of another pension policy taken by you for your wife the payment should be made by your wife then she will be eligible to get the tax deduction in respect of the payments. Q: I am a Punjab Government employee and availed benefit of interest accrued for 5 years of NSCs. On March 15, 2000, the payment of Rs 20,000 NSCs (face value) will be received. Kindly clarify (i) whether the interest accrued benefit will be admissible during the financial year 1999-2000. — R.K. Gupta, Mohali Ans: The accrued interest benefit will not be available to you because during the Accounting Year ending on March 31, 2000, the NSC has matured. Q: My income from pension for the financial year 1998-99 (From 1 April ‘98 to March 31, 1999) is about Rs 70,000. In case, income from other sources (i.e. Bank interest and UTI) is added, it exceeds Rs one lakh by a few hundred rupees. Please let me know if the standard deduction would be Rs 25,000 or Rs 20,000. — Balalwant Singh, Major (Retd) Yamuna Nagar. Ans: For salaried employees including pensioners, the standard deduction is 331/3rd subject to a maximum of Rs 25,000 in case the salary/pension income is upto Rs 1 lakh. In your case you will be eligible to standard deduction @ 25 per cent on Rs 70,000 i.e. Rs 23,333. The income from home pension which is actually income from “other sources” is not to be added to the salary income to restrict the standard deduction. Q: This is with reference to your answer regarding leasing out of agricultural land in Tribune dated 18.4.99. As we receive entire payment of our crops from Aarthi (commission agents) in cash, is it necessary to pay lease money by cheque or can it be paid in cash even if payment is more than 20,000 — per year? 2. Family members had given loans by cheque to my son for construction of house. He had been giving interest and an amount upto 30,000 per year was being claimed by him as deduction from his salary income. He has now gifted that house to his mother w.e.f. March, 99. Interest arrears to the tune of Rs 1 lakh prior to this date are still to be paid by him. Can he pay this now during 1999-2000 and subsequent years and claim deduction upto 75,000 from his salary? — K.S. Gupta, Pehawa Ans: If
you receive cash payment in respect of agricultural
income from the commission agent you will have no problem
at all. However, it is in the interest of the commission
agent to pay the amount to you by A/C payee cheque or
bank draft. As your son has gifted the house to his
mother, the question of tax deduction in respect of loan
for house property would not be there specially because
now there is no property and there remains only the loan
amount. |
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CALCUTTA, Dec 4 (PTI)
— The All India Bank Employees Association (AIBEA)
has called a nation-wide bank strike on December 17 to
press for immediate finalisation of 7th bipartite wage
settlement on the same parameters as officers. |
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