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| Sunday, July 9, 2000, Chandigarh, India   
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G-7 gets tough on money laundering
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| Government
clarification on records GURGAON, July 8 — The Union Finance Ministry today clarified that its liberalised policy decision to dispense with the statutory records maintained by the industry should not give liberty to the industry to do away with the ethical practice of keeping the records straight. ‘Government role should be confined to policy’ Ban on oil movement justified Money laundering Bill
to undergo changes UN launches ambitious global IT plan Union Bank
business up 6,
500 crore
FUKUOKA, Japan, July 8 (Reuters) — The G-7 industrialised nations said today that they will take tough new measures against international money laundering and may cut off some bank dealings with countries that do not halt hot money flows.
“We’ve named, we’ve shamed and we’re taking measures to fight it,” said French Finance Minister Laurent Fabius at the end of a one-day meeting of Finance Ministers from the Group of Seven. “I think it’s a necessary trilogy if we want to rid ourselves gradually of this gangrene.” The G-7 said it was endorsing a “hit list” of nations compiled by the financial action task force (FATF), which was established by the G-7 to investigate the international flow of money obtained through illegal activities, often drug running. The measures were a “landmark step” in showing a renewed commitment to curb money laundering around the world, said the statement issued by the Finance Ministers from the USA, Japan, Germany, France, Britain, Italy and Canada. Ironically, the day’s talks had included one of the potential target nations — Russia — for at least part of the discussions. The FATF last month named 15 havens that it said were not doing enough to prevent the recycling of hundreds of billions of dollars in hot money. Some $ 600 billion from drug cartels, mafia barons or other criminal outfits is believed to pass through banks each year — a sum close to the value of the entire Canadian economy, which is the world’s seventh biggest. The rich world’s Finance Ministers had on Saturday reviewed 29 nations and pared their list of offenders down to 15. The G-7 will announce “the issuance of advisories to their domestic financial institutions informing them of the FATF action and calling on these financial institutions to apply enhanced scrutiny with regard to transactions involving the identified jurisdictions”, the statement said. Potentially more ominous for these countries was a warning in the statement from the Group of Seven Finance Ministers at the end of a one-day meeting that those who do not clean up their act could find their international finance activities restricted. “With regard to jurisdictions that fail to fully join the international fight against money laundering, the ministers will also begin to consider additional counter-measures, including the possibility to condition or restrict financial transactions with those jurisdictions and to condition or restrict support from international financial institutions to them,” it said. Speaking to reporters about the money laundering issue later, Kudrin said: “We are now working on a new law to be adopted by the end of this year.” In June, the G7’s anti-money laundering agency set Liechtenstein, Russia, Israel and several offshore banking Meccas on a blacklist of financial centres deemed “uncooperative” in the fight against hot money. It named the Bahamas, Cayman Islands, Cook Islands, Dominica, Israel, Lebanon, Liechtenstein, the Marshall Islands, Nauru, Niue, Panama, the Philippines, Russia, St Kitts and Nevis and Saint Vincent and the Grenadines. Switzerland was listed too — albeit in the lowest rank of the three-tier league table — along with other major financial centres such as Luxembourg, Hong Kong, Singapore, Dublin and the British-controlled Isle of Man, Guernsey and Jersey Islands. The top of that offender list comprised mainly exotic places such as Belize, the Virgin Islands and the Seychelles, along with Liechtenstein.
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Government
clarification on records GURGAON, July 8 — The Union Finance Ministry today clarified that its liberalised policy decision to dispense with the statutory records maintained by the industry should not give liberty to the industry to do away with the ethical practice of keeping the records straight. The Joint Secretary of the Union Finance Ministry, Mr J.R. Rustagi, while interacting with the industrialists of Gurgaon during a workshop here clarified that the government acted with presumption that the industry will act according to the norms while it dispensed with the statutory records, especially the details of the account
book. This does not give the industry excuse to be shoddy and irregular in maintaining the records on its own. The problems start when vested interests take advantage of the rules by interpreting the provisions to suit their own ulterior motives. He said that the rules on maintaining the records had been relaxed with the view to making the system less burdensome and also to keep the industry free from needless bother from the tax authorities. In response to clarifications sought from the participants in the workshop, he further said that the Centre had brought changes in the Central Excise Tax by doing away with the about 15 -year old practice of determining excise duty on the goods sold at the factory gates. As per the revised amendment to the Act it is being levied at the depots at the time of selling the goods to the consumers. According to him, the amendment will help the consumers as well as streamline the tax administration. Also, it would save the industrial units of avoidable litigation cases. He further clarified that under the new provisions relating to manner of paying Central Excise duty on fortnightly basis, it has since been provided that for the second fortnight, the duty can be discharged by the fifth day of the succeeding month. The
assesses were finding it difficult to furnish actual duty payment details in the RT-12 returns which was also required to be submitted within five days of the succeeding month. Similar situation existed in case of returns filed under Rule 100
F (for 100 per cent export-oriented undertakings/units in free trade zones) and under Rule 57AE (return prescribed containing details of Central Value Added Taxation (CENVAT). To obviate this difficulty, the date of furnishing of the returns under these rules have had been extended up to the tenth day of the succeeding month, he added.
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‘Government role should be confined to policy’ NEW DELHI, July 8 (PTI) — Minister of Disinvestment Arun Jaitley said today that the government should confine its role to being a facilitator of economic policies rather than controlling the entire system. “Role of the government should be confined to policy while Parliament should do legislative functions and hold accountable various institutions in the system,” Jaitley said addressing a seminar on “Dreams for India 2025” organised by the NCE Bengal and Jadavpur university here. There is a need to make a conscious choice as to what the targets should be. Expanding of government machinery and making them larger in size would not prove to be of any advantage to the country. Jaitley said the agenda for the future should be growth and development, and the government at all levels should become facilitators of growth that allows
unshackling of energies of each individual. “We had earlier decided that the government should get into everything, and this did not allow the individuals to grow on their own. The government should not control the entire system but play the role of only a policy maker that facilitates growth,” he said. India had failed to take advantage of industrial revolution which other countries had fully exploited. The quality of governance needs to be improved radically so that the country can achieve a 7 to 8 per cent economic growth on a sustained basis. Jaitley said irrespective of ideological perceptions there is a need to improve efficiency and competition in the system to check growing corruption and red-tapism in the country. “Development of infrastructure in India, especially in the areas like roads, airports, telecom and power are essential for providing a comfortable living to every citizen of India,” he said adding that this could be achieved only if necessary efforts are made in this direction. Infrastructure building contributes towards development of the country and would provide quality life to all the people, Jaitley said. To ensure quality life there is a need to improve the quality of political governance, improve accountability from the top so that it percolates down to every individual. Stating that information technology, telecom and knowledge-based sectors were showing good signs of growth, Jaitley said to lay an agenda for the future the yardsticks of growth targets need to be kept very high.
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Ban on oil movement justified Furnace Oil, LDO and HPS are the basic fuels used by industry. These are also used for captive power generation. Petroleum Minister passed orders to ban the inter-state movement of these oils along with other oils. This came as a one shot without any prior inkling. Entire industry of the country found itself in dire straits. When if one traces bad economic decisions for the past few decades this decision is the worst. Petroleum Minister
justified the decision on the ground that there has been sales tax evasion. Industry fails to understand this logic. Our 50 per cent economy is estimated to be informal. Should we stop the economy? There are ticketless travellers in a train. Should the trains be stopped? Power theft in the country is estimated to be above Rs 20,000 crore. Should SEB’s stop giving power? Our Central Ministers are not naive as to pass such order which have wider economic repercussion. It is rumoured and alleged that one big private refinery is behind this unusual ban. Black oil of Reliance refinery is said to be exempted from this ban. Industry has posed this and other questions to Petroleum Minister but he has preferred to remain silent. Punjab’s sales tax on these oils is 22 per cent while industry was earlier paying 4 per cent as
CST. There are two options before the government. Since these oils are basic inputs they may be included in the list of dozen inputs where tax incidence is 4 per cent. In respect of tractor parts government has already exempted them from the levy of Fist stage. Transaction takes place through Form XXII-D. So logically these oils should also be treated the same way. Taxation Department has found a way out to reduce the incidence of sales tax on these oils. The matter shall finally be cleared in the next weekly Cabinet Meeting. Indian Oil Corporation has also been requested to
set up supply of Furnace oil at Jalandhar depot. This depot may not be able to meet the full requirement. Indian Oil Corporation officials have assured that the supply will be increased and our full rake has already been placed at the depot. Efforts are also continuing to persuade Petroleum Minister to lift the ban. |
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Money laundering Bill to undergo changes NEW DELHI, July 8 (PTI) — The Money laundering Bill, now before a Rajya Sabha Select Committee, is likely to undergo major changes to remove some of the draconian provisions besides proposing a threshold limit of Rs 1 crore for reporting financial transactions. There were also proposals to drop the word “prevention” from the title of the Bill and constrict the offences to those related to terrorism, drug trafficking and gun-running. Indicating the possibility of these changes, the select committee headed by Shiv Sena Leader Adhik Shirodhkar said the committee’s report, which is being given finishing touches, is likely to be submitted to the Rajya Sabha soon. The Rajya Sabha, in turn, will refer it to the Finance Ministry for its consideration and incorporation of the recommendations of the committee. The Prevention of Money Laundering Bill was introduced in the Rajya Sabha in the winter session and subsequently referred to the select committee. The Prevention of Money Laundering Bill along with FEMA were to replace the draconian
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UN launches ambitious global IT plan UNITED NATIONS, July 8 (PTI) — The UN has launched an ambitious global plan to spread Information Technology after India called for transfer of technology from industrialised nations to developing countries. An agreement to create a task force to promote cooperation between the UN, governments and private sector for better access to new technology particularly Internet in the developing world was delayed at a UN session of Economic and Social Council
(ECOSOC) after some developing nations clashed the US over the transfer of technology issue with India insisting that the poor people must gain access to IT so as to uplift their lot. Speaking at the session yesterday, Indian Ambassador to UN Kamalesh Sharma emphasised that if IT has to be successful, it must be “pro-people and pro-development”. This can only happen if it reaches out to the masses in rural areas and if its use in local language is promoted, he said. Reaffirming India’s commitment to use the new technology to uplift the masses, Sharma called for concerted action to combat the misuse of IT. “We have also entered into many MoUs in the IT sector with many developing nations and several developed nations and propose to further enlarge our cooperative action with all other countries of the world,” he told the delegates. Sharma said knowledge is the only resource whose potential impact on human development is constrained not by its scarcity but inability to use it adequately. “We firmly believe that knowledge in order to be beneficial, must be meaningful or usable knowledge — a type which does not flow easily from the developed to the developing nations,” he added. It would be, therefore, necessary for the United Nations to rethink ways and means to facilitate the transfer of the social dimension, he said IT would advance development only if related efforts and
programmes are integrated in a coherent national development strategy. “A harmonious blend has to be maintained between the “brick” and “click” economies within societies, recognising the creative and progressive requirements of both,” he added. In this context, Sharma called for chalking out strategies to bridge the social gap created by the digital divide and to ensure that IT is used as a beneficial instrument for diverse purposes, adding value and potential to economic and social aspirations. This challenge has to be tackled both internally within countries and externally between state, he told the meeting. |
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Union Bank
business up 6,
500 crore CHANDIGARH, July 8 — Union Bank of India crossed the business mark of Rs 46,000 crore which is up by Rs 6500 crore. The deposits increased by 10.55 per cent to touch Rs 31,105 crore level, NRI deposits posted a 27.4 per cent rise and attained Rs 2,988 crore level. The bank’s advances touched Rs 15,330 crore, up 30.06 per cent, the priority sector credit accounted for 40.39 per cent of net bank credit. The bank’s export turnover improved from Rs 6858 crore to Rs 8049 crore ie 17.4 per cent during 1999-2000. The CD ratio also improved from 43.87 per cent to 47.03 per cent during the same period.
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by Praful R. Desai Belated contribution Q: It is correct to say that damages for default in payment of contribution payable is only to the extent of loss incurred by beneficiaries? A: Kerala H.C. was examining this angle in Ernakulam Dist. Co. Op. Bank v Regional P.F. Commor. (2000-I-LLJ-1662). While dealing with the scope of S. 14-B of the EPF Act re: fixation of quantum of damages, this court held in Bharat Plywood and Timber Products (P) Ltd. v EPF Commer, Trivendrum (1977) -I-LLJ 869 as under: S. 14.B. clearly indicates that an employer is liable to pay damages if he has made default in payment of the contribution. Merely, because of the amount had been paid earlier to the order, U/s. 14-B, it cannot be contended that there was no default in payment on the due date if the amount was paid only subsequent to the due date. Any delay in paying the amount U/s. 6. causes loss to the beneficiaries of the scheme, such as loss of interest and the like. This is the loss that is sought to be recovered from the defaulter for the purpose of indemnifying the beneficiaries of the scheme — namely the employees, to the extent of the loss suffered. The defaulter U/s. 14-B is therefore, liable to pay damages which represent the loss, but not anything more, as such recovery would amount to penalty, and that is not permitted under the scheme. Therefore, the HC allowed the original petition directing the respondents to fix the quantum of damages caused due to belated payment, after hearing the petitioner. The damages shall be equal to 12 per cent interest on the contribution to be remitted by the petitioner. The respondents may calculate the interest for the days of delay and issue notice to the petitioner. On receipt of the notice the petitioner shall remit the amount within one month from the date of receipt of the notice, failing which the respondents can realise the amount in a lumpsum. |
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by A.K. Sachdeva Q: We are registered as a dealer both under Punjab General Sales Tax Act, 1948 and the Central Sales Tax Act, 1956. We are engaged in the business of manufacture and sale of machinery, its parts and accessories. A party from Haryana places an order with us for the supply, erection and commissioning of machinery. The work of erection and commissioning will be carried out in Haryana. The question that arises is what will be the true nature of the transaction? The property in goods will be passed on to the buyer in Haryana after the completion of job of erection and commissioning. Kindly advise. — Rakesh Kumar Batra Ans: Section 3 of the Central Sales Tax Act, 1956, inter alia stipulates a sale or purchase of goods shall be deemed to take place in the course of inter-state trade or commerce if such sale or purchase occasions the movement of goods from one state to another. Having regard to the facts stated by the queriest, it is clear that the property in goods has to move from Punjab to Haryana as a result of sales. Simply because the work of erection and commissioning is to take place in Haryana, it does not affect the true nature of transaction. On somewhat identical facts, the Supreme Court of India held in the case of Indian Oil Corporation v. Union of India and others that a sale shall be an inter-state sale under Section 3 (a) of the Central Sales Tax Act, 1956, if there is a contract of sale proceeding the movement of goods from one state to another and the movement is the result of a covenant in the contract of sale or is an incident of that contract; in order that a sale may be regarded as an inter-state sale it is immaterial whether the property in the goods passes in one state to another. Q: We are engaged in the business of medicines and pharmaceutical preparations. Our assessment case was listed for hearing on several dates when we attended the proceedings before the assessing authority. However on the last date we could not put in appearance because of illness of one of the partners of the firm. The assessing authority has rejected the returns and enhanced the turnover by Rs 2,00,000. Kindly advise. — Anil Malhotra Ans: The account books cannot be rejected simply because these are not produced before the assessing authority. It is for the assessing authority to bring some material on record suggesting that they are wrong and unreliable and unless this burden is discharged the assessing authority cannot enhance the turnover. It has been consistently held by the courts that the account books maintained by a registered dealer cannot be discarded on surmises and conjectures. The assessing authority has brought no material on record except that the party did not attend the proceedings which does not constitute a basis for enhancement of the turnover. The queriest is advised to challenge the validity of the order of assessment in appeal before the appellate authority. |
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by Pushpa Girimaji Transport companies need independent regulators I do not know how many of you remember the case of a consumer who went to court against the Delhi Transport Corporation (DTC) and got a compensation of Rs 10! The commuter had sought to recover the amount that he had spent on travelling to work in an autorickshaw when the DTC bus in which he was travelling had broken down. At that time there were no consumer courts and given the cost of litigation and the time taken for adjudication of a complaint, very few consumers ever dared to approach a civil court. And certainly not for a sum of Rs 10! So this case was symbolic of the Indian consumer’s desire to assert his or
her rights and the case received lot of attention in the media. That was nearly 16 years ago. Let us look at what is happening now. Today a consumer need not fight a case in a civil court. He or she can file a complaint before a consumer disputes redressal forum set up under the Consumer Protection Act. And consumers have certainly taken advantage of the consumer justice system to air their grievances against public transport companies. But in so far as the attitude of the service providers to consumers is concerned, nothing seems to have changed In most of these complaints, the consumers are not asking for huge amounts of compensation. Nor are they seeking a major change in the transport system. All that they are pleading for are very small improvements in the service, which any service provider should have put in place long ago. And it costs the transport companies
practically nothing to effect these changes. Yet, they do not respond to commuter complaints, thereby forcing them to go to the court. Take the case fought by Mr Sunil Garga, a resident of Pataudi, before the District Consumer Disputes Redressal Forum in Gurgaon, Haryana, some time ago. His grievance was that the buses on certain routes were
not parked in their fixed places at the bus terminus and the destination boards were displayed only minutes before the departure of the bus. As a result, a
passenger found it really difficult to identify the bus in which he had to travel. He wanted these to be corrected and he also wanted an assurance from the roadways that they would display arrival and departure timings of all buses promptly and correctly on the display board at the bus terminus. He says when his complaints to the concerned authorities did not bring forth any results he was forced to file a complaint before
the consumer court seeking its intervention. Similarly there are complaints pertaining to poor public address systems at bus termini, absence of an effective system of providing the travelling public accurate information about the departure and arrival time of buses and their routes at the bus termini, change of bus stop without informing the public, buses leaving late or much earlier than scheduled, thereby leaving the passengers stranded at the bus stop, buses stopping at places other than the bus stops, or buses not stopping to pick up passengers, overloading of buses, refusal to provide protection against rain to baggage kept on the roof the bus, etc. Many of the complaints pertain to interstate and inter-city transport services. In the case filed by Mr Jagmohan Sharma against the Rajasthan State Transport Corporation for example, the District Forum awarded the complainant Rs 15 that he had spent on a cycle rickshaw to reach home. Apparently, instead of taking the bus to the last stop, the driver had terminated the trip at some other place of his choice and forced the passenger to get down there. You and I may think that Rs 15 was too meagre a compensation to pay, but the Corporation thought otherwise. It decided to contest the award and filed an appeal. While upholding the order of the District Forum, the State Commission regretted that the Corporation had wasted public money in filing the
appeal. Another interesting case is that of a professor, who suffered undue hardship because the Rourkela-Bhubaneswar non-stop night bus in which he was to travel did not stop to pick him up at Kansbahal as promised and he was stranded at the bus stop in the middle of the night. All these cases not only focus on the poor service rendered, but also the absence of an effective system of passenger grievance redressal at the service provider’s level. They also reflect the growing impatience of the travelling public with the shoddy service being provided by road transport corporations. The earlier the transport companies realise this and mend their ways and improve the service, the better it is for them. What is needed today is not just competition in the public transport sector, but independent regulators who will formulate stringent performance standards that would also provide for in-built compensation in case of negligent service and enforce them. |
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Kodak contest Coal mines GSFC MD |
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