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Wednesday,
March 5, 2003, Chandigarh, India  
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New RBI
scheme for state govts Haryana
government to bring dhabas under VAT
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Safety
awards for firms, workers De-monopolise
liquor trade Budget
good for senior citizens US nod
to Orchid’s antibiotic Foreign
banks prefer business through agents
VAT in
J&K by October
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New RBI scheme for state govts New Delhi, March 4 Under the revised scheme, effective from March 3, 2003, the WMA limits have been computed by taking into account the average of revenue receipts for the three fiscal years 1999-2000, 2000-01 and 2001-02 and then applying to this average, multiplication factor of 3.18 per cent for the non-special category states and 3.84 per cent for the special category states. The decision to revise the WMA structure follows the recommendations of a specially constituted committee which looked into the details of the WMA system. The committee noted that due to an increasing resource gap arising out of structural problems,
persistent use of higher amount of WMA on a near permanent basis and frequent resort to overdraft had become a regular feature for many states. The committee considered continuing the existing liberal disposition for some more time because of the fiscal stress at present being faced by the states. It, however, observed that the state governments should initiate necessary corrective measures urgently and revert to the use of WMA facilities only for meeting the temporary liquidity mismatches rather than as a regular budgetary resource and to resort to overdraft only under exceptional circumstances. The RBI provides WMA to the states to help them tide over the temporary mismatches in the cash flow of their receipts and payments. There are two types of WMA - normal and special. While normal WMA are clean advances, special WMA are secured advances provided against the pledge of Government of India securities. Any amount drawn in excess of WMA limits is called overdraft. As per the overdraft regulations scheme, no state is allowed to run an overdraft with the RBI for more than 12 consecutive working days. In case a state government
remains in overdraft beyond 12 working days, the RBI and its agencies stop payment in respect of that state.
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Haryana government to bring dhabas under VAT Chandigarh, March 4 According to a senior official of the department, all dhabas and restaurants, which were so far exempted from sales tax, would have to pay 12.5 per cent tax under VAT. The official disclosed that the department had already conducted a survey of dhabas and restaurants and would soon ask them to get registered with the department. As per the survey there were over 2,000 hotels, running under the name of dhabas, which would have to pay tax under VAT. These included over 500 dhabas on the national and state highways alone. Jaswant Singh has also proposed to impose 8 per cent service tax on them. Elaborating the department’s preparedness, official spokes-person said, ‘‘though most of the dhaba owners might not be willing to issue bills to customers yet department officials would make an assessment of the tax through rate lists, number of tables, persons employed and the number of ovens used.’’ He said since Haryana Tourism restaurants were already paying tax to the state government, there was no reason why these hoteliers who were doing good business in the name of dhabas, should be exempted from tax. Some of them are already making payments up to Rs 20 lakh annually to the state government, after taking space at the Haryana Roadways bus stands through auction, he said. The dhabas owners were told to get registered with the department and pay the tax voluntarily. The customers should also ask for the receipts to help government collect the taxes. He claimed that the price of soft drinks, minerals and molasses in the state were expected to come down as dealers would have to pay 12.5 per cent tax under VAT instead of 20 per cent. However, in case of consumer durable goods like CTVs, washing machines, air conditioners and refrigerators, the tax would be marginally increased from 12 to 12.5 per cent.
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Safety awards for firms, workers Jalandhar, March 4 The Principal Secretary, Labour and Employment Department, Dr Barjindera Singh also gave away safety awards to those firms that witnessed maximum reduction in the frequency of accidents as compared to last year. In the technical industries group, Amritsar Swadeshi Woolen Mills, Amritsar and Malwa Cotton Spinning Mills, Barnala, were given awards. Masco Cycle Industries, Ludhiana and Kalsi Metal Works, Jalandhar, Amrit Enterprises Limited, Abohar and Amritsar District Cooperative Milk Producers Union Limited, Amritsar, Punjab Chemical Pharmaceuticals Limited, Patiala and JCT Limited, Hoshiarpur, Navyug India Limited, Jalandhar and ABC Papers, Hoshiarpur (Miscellaneous Industries group) were selected for the safety awards. Similarly, Mr Jagdish Singh and Diryodhan of Ranbaxy Laboratories, Mr Damodar Singh of JCT Limited, Phagwara and Mr Piara Singh of Nestle India, Moga, were given Krit Shiromani awards while Mr Gurcharan Dass of the PSEB, Mr Rakesh Sharma of Swaraj Tractors and Mr Sanjeev Jaswal of NFL, Nangal, were given Krit Vir awards.
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De-monopolise liquor trade Jalandhar, March 4 During a meeting between wine contractors, hailing from Jalandhar, Kapurthala, Hoshiarpur, Nawanshehr, Amritsar and Gurdaspur and the senior Excise and Taxation officials here, it was urged to
demonologies the liquor trade to ensure sale of cheaper liquor in the state even as officials concerned maintained that competitive bidding would be the solo criteria during the auction. Gurpreet Singh of Amritsar, who is in liquor business for the past 70 years, said that it was unfortunate that most of liquor trade was allowed to go in the hands of UP based contractors last year, whereas, the Punjabi contractors managed to fetch some liquor vends throughout the state due to sale of big groups ranging 10 to 15 crores. The wine contractors also expressed their concern over provision of Union Budget pertaining to Tax Collection at source (TCS) at a rate of 10 per cent in case of IMFL, which according to them, would burden the Punjab liquor trade by an additional Rs 40 to 45 crore per annum. This would also result in hefty increase in sale price of liquor. The Excise and Taxation Commissioner, Mr Suresh Kumar, said that he would take up the matter with the Punjab Chief Minister Capt Amarinder Singh tomorrow at Chandigarh. Elaborating about the steps taken to curb illegal smuggling of liquor from other states into Punjab, Mr Kumar said that it was decided that police officials on deputation with the Excise Department would follow their directions instead of their parent department. “It was also decided to impose penalty to the tune of Rs 50,000 to an offender for first attempt, who will be found smuggling liquor from other state, while Rs one lakh will be charged as penalty for subsequent attempt,” he added.
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Budget good for senior citizens The budget 2003-04 has been termed as constructive and growth-oriented taking care of the industry, health, social infrastructure, and salaried persons. Senior citizens, retired or retiring persons stand to benefit from the proposals. The income tax rebate to senior citizens has been proposed in the Budget at Rs 20,000 instead of the present Rs 15,000. Consequently, income of a senior citizen will be exempt from the existing Rs 1.30 lakh to 1.53 lakh. In the case of pensioners the exempted income will be Rs 1.83 lakh i.e. Rs 30,000 on account of eligible standard deduction. Besides surcharge of 5 per cent on income tax has been withdrawn. Further relief of tax rebate of 20 per cent is also available on account of investment in saving
schemes like PPF, LIC and other eligible tax saving schemes. In addition to this, filing of self-declaration for non deduction of tax at source has been simplified. Earlier, the declaration of non-deduction of tax at source could only be filed in a case where the total estimated income before deductions, allowances and rebates is Rs 50,000 or less. This had created a lot of problems for this class besides irritant. Another proposal is a special pension policy assuring an annual return of 9 per cent in the form of monthly pension. The LIC has been entrusted with the job of making detailed outlines shortly. Moreover, dividend, interest or income from the UTI other mutual funds is tax free in the hands of unit holders. Last year’s Budget proposals had imposed tax on this. A large number of senior citizen have invested most of their hard earned life savings in these funds for a regular income. The total investment has now grow to a huge sum. This income will now be exempt from income tax, though the MFs will pay tax on the income distributed. The Budget has a dark side too. The interest rate on small savings has been reduced by 1 per cent thus a decline in the regular income. At least for senior citizens, the interest rates should not be reduced if not increased. Overall the proposals in the Budget gives relief to senior citizens, retired and retiring for which the Finance Minister should be complimented.
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US nod to Orchid’s antibiotic
Chennai, March 4 Orchid Chemicals & Pharmaceuticals Ltd. has received a formal approval from the U.S. Federal Drug Authority (USFDA) to make Cephalexine. The product has also been granted the certificate of suitability (CoS) by the European Directorate for Quality of Medicines (EDQM). The company has been granted CoS for Ceftriaxone sodium. "We are extremely happy about these developments. Both these milestones will definitely enable a stronger entry into the USA and European markets," K. Raghavendra Rao, Managing Director of Orchid Chemicals, said here. Orchid is India's largest cephalosporin-based drug manufacturer.
IANS
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Foreign banks prefer business through agents Multinational banks work in their own way. The methodology and system of working differs from the nationalised banks. They prefer to deal through agents rather than direct with the customers. And the agents are successful in getting banks’ services to the customers much fast. They have a close rapport with the officers of the bank. For the services rendered they charge a small commission which they justify by calling it a “service charge”. The multinational banks thus avoid rush at the counters. They claim to have started a single window service and find it difficult to meet the varying demands of the client by a single operator. It keeps the window occupied for a long time if all his requirements are met with. Multinational banks these days look to be enthusiastic for advancing home and car loans. They have launched special publicity campaigns to attract customers. Not only that they have also made special arrangements with the suppliers of products targeting business. Recently a few clients approached the Standard Chartered (Bank) at its 17, Sansad Marg, New Delhi branch for a car loan. They were told by the bank officers that a loan of Rs 2 lakh will entitle them to get a special discount of Rs 12000 on the Zen LXi model car. The discount goes up to Rs 15000 if the loan is raised to Rs 3 lakh. An old client of the bank from Punjab completed all documents for the Rs 2 lakh loan. He was promised delivery of the car on the following day after making the down payment. When he called in the bank next day he felt the bank had started ignoring him. Sensing bank’s negative attitude he readily offered his fixed deposit receipts as a collateral. Now the bank’s interests were fully safe. He hoped he would get the car to meet his urgent need. But he was soon told the bank had declined the proposal. Probably it wanted him to come through an agent. A few more customers who put in their request direct also met the same fate. And yet it is perhaps the most liberal bank, said the agents at the gate of the bank. They promised prompt loans. But the above client would not deal through them. He wanted his papers back. His request was not entertained. After a great struggle the aggrieved could see a senior officer to tell him that he had decided to buy the car on cash payment. The officer wrongly advised him that no Maruti Udyog dealer could sell the car direct to a resident of Punjab as the temporary registrations were stopped by the Delhi Motor Licensing Authority. Simultaneously, such customers who operated through the agents were successful in getting the loan and the car the same day. The bank advances car loans through agents at 10.5 per cent per annum rate of interest. It quotes 12.5 per cent to customers who come to the bank direct. The bank seemed to have more faith in agents rather than in the credit-worthiness of the borrowers. The multinational bank is also charging Rs 100 for issuing debit cards to the customers. This levy is recovered even if a depositor has not asked for the service. Nor has he availed of it.
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