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26 states agree on Vat bills
UK tycoon Hanson dead
Confusion over service tax prevails
IOC to invest in Iran gas field
Mittal set to go wi-fi in North
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Oracle unveils e-business suite
SMS in Hindi, courtesy Nokia
Su-Kam ties up with GE Power
Graphic: State of the Indian
economy
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26 states agree on Vat bills
New Delhi, November 2 Under the compensation package agreed upon today, the Centre will compensate the states up to 100 per cent of the revenue loss in the first year, 75 per cent in the second year and 50 per cent in the third year. “I am very happy to report that the Empowered Committee on Vat has taken some major decisions, including compensation package for states for any loss of revenue (after introduction of Vat)”, Finance Minister P. Chidambaram told newspersons after a meeting with state finance ministers. Vat is expected to come into force in the country on April 1, 2005. The 4 per cent Central Sales Tax (CST), a thorny issue, will remain at least for the first year (2005-06), even though it was decided today to phase out the CST. The time frame for the CST will be decided later. Mr Chidambaram exuded optimism that the net outgo from the Centre to the states on account of Vat compensation would be negligible, particularly as Haryana has shown that there is unlikely to be much revenue loss to the states. “There may be nothing (revenue loss), going by the Haryana experience,” the Finance Minister said. Mr Chidambaram said the states might in fact end up with surplus revenue and “there may not be any requirement for compensation.” Moreover, 26 states have so far finalised the required legislation on Vat and only three states have not done so, including Uttar Pradesh, he said. Neither the Finance Minister, nor the Empowered Committee Chief Minister Asim Dasgupta (West Bengal Finance Minister) named the other two states which were not ready with the Vat legislation. It is learnt that these two states are from the north-eastern region. Mr Dasgupta said that he would visit Lucknow shortly and take up the issue with Uttar Pradesh Chief Minister Mulayam Singh Yadav. For the purpose of computation of compensation to be paid by the Centre, the states have agreed that it would be based on the collection figures represented by the Accountant-General of India and also on the basis of the three best revenue years prior to 2004-05. The rates of Vat, as has been agreed upon, will be depend on the category of products with the states finalising a list of about 500 items. About 250 essential commodities, including agricultural products and medicine, will attract a rate of 4 per cent and another 217 items will be charged at the rate of 12.5 per cent. Another 41 items, including petrol, diesel, aviation turbine fuel and newspapers, would be exempt from Vat, while precious metal will attract a rate of 1 per cent only. There are also certain items such as sugar and tobacco which would be Vat-exempt but would be levied a Special Additional Duty (SAD). A few thorny issues, especially the one pertaining to the service tax Bill, remained unaddressed. Mr Chidambaram said an empowered committee would be constituted for identifying services to be taxed separately by the Centre and the states. “Service tax is a different issue. It would be handled by a separate committee”, the Finance Minister said. The committee will have the same members as in the empowered committee on VAT headed by West Bengal Finance Minister Asim Dasgupta. The 95th Constitutional Amendment Bill allows the Union Government to levy service tax, but no decision has been taken on how to distribute the bill among the states and the Central Government. Some state governments have pointed out that while there were certain services for which states were already charging sales tax, but with the introduction of the service tax these fall under the Central list. This would adversely affect the revenue of the states. The introduction of Vat has missed several deadlines, the last one being April 1, 2003, ostensibly on political considerations.
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UK tycoon Hanson dead
London, November 2 The founder of Hanson Plc, who was worth an estimated £ 100 million ($ 180 million, E 140 million) and ran one of the world’s largest conglomerates, died of cancer at his home in Berkshire, southern England yesterday. Hanson made his fortune in a mix of transport and television companies, and ran his holding company Hanson PLC until his retirement in 1997. During its heyday, his company made everything from bricks to batteries and was valued at around £ 10 billion with a workforce of more than 90,000. Hanson’s name was synonymous with British business for much of the 1980s and 1990s, and The Times called him “Europe’s most potent capitalist”. The industrialist, who in later years lived part-time in Palm Springs, California, also brushed with Hollywood stardom when he was briefly engaged to actress legend Audrey Hepburn. He became a Tory peer of the parliament’s upper chamber, the House of Lords, in 1983, where he was a staunch supporter of Thatcherite politics. A euroskeptic, Hanson opposed Britain joining the euro. He was also a supporter of the Bruges Group, which supports London’s exit from the 25-member European Union. Hanson’s wife Geraldine died of leukemia in February. He is survived by two sons and a step-daughter.
— AFP
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Confusion over service tax prevails
Ludhiana, November 2 "We are expecting that the confusion over the issues like inclusion of job work will be cleared within this month," said, Mr Inderjit Singh Navyug, vice-president, Chamber of Industrial and Commercial Undertakings. Confusion had been prevailing among industrialists who were demanding that manufacturing processes should not be included under the purview of service tax. "We had apprised Chief Commissioner S.S. Bedi of the situation in a meeting last week. He had assured us that the department would not take any precipitated action till the issue was resolved," said Mr P.D.Sharma, president, Apex Chamber of Commerce and Industry. "While we had tried to clarify the issue from our end it is likely that the confusion would be cleared," said Mr V.M.Verma, Assistant Commissioner, Central Excise Division 3 and 4, Ludhiana. He said the department had clarified that there would be no double taxation, which means that if any process had already attracted excise duty, service tax would not be imposed on that, but if it had not attracted any duty, then one would have to pay service tax, he added. Meanwhile, from November 1 onwards, with the excise ranges having been reorganised, service tax
assesses, presently registered with Central Excise Divisions 1, 2, 3 and 4, will become part of Division 3, Ludhiana. " He informed that while earlier, employees handling central excise were given additional charge of service tax, now the department has separate ranges for service tax only.
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IOC to invest in Iran gas field
New Delhi, November 2 Company CMD M.S. Ramachandran said IOC’s investment in the project will only be decided after preparation of a detailed feasibility report in this regard. “IOC has only signed a memorandum of understanding (MoU) with Petropars of Iran for a joint proposal to be submitted to National Iranian Oil Company (NIOC) for the purpose of an integrated project to develop the gas fields and set up an LNG liquefaction facility,” he said in a statement here. The MoU has been executed in pursuance of the discussion held between the Indian and Iranian Ministers of Petroleum and Natural Gas at Vienna on September 16.
— UNI
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Mittal set to go wi-fi in North
Mumbai, November 2 Talking to TNS on the sidelines of the Oracle Open World Conference here today, Mr Mittal said Blackberry has generated enterprise data in a big way. “By March 2005, we plan to reach the five-digit mark,” he said. About the prospects of launching a full-fledged wi-fi (wireless fidelity) centre in Chandigarh or other North Indian city, he said, “We have not set a deadline. It’s a technology-platform dependent product and the number generation in a (telecom) circle would decide the setting up of a wi-fi centre.” Wi-fi technology uses a small base station which enables laptops to automatically connect to the Internet on a wireless mode when brought in the hot spot area. The hot spots work on 802.11b wireless technology and support a peak download speed of 11 Mbps. In Mumbai, Bharti has launched wi-fi in eight hot spots and identified another 12 spots. The wireless fidelity services are benefiting roaming customers of Punjab and Haryana. The service will soon be available in Delhi and other parts of the country. Talking to TNS from Chandigarh about the Blackberry launch in the Punjab region, Mr Vinod Sawhney, CEO and Director (Mobility), Bharti Mobile Limited, said they expect 10 per cent Blackberry penetration in all segments and 20 per cent at the corporate level. “The target segment would be youth and SMEs,” he said. The launch of Blackberry in India is a result of the tie-up between Bharti Tele-Ventures and a US-firm, Research in Motion. Blackberry integrates e-mail, Internet and mobile phones. The price of the product ranges from Rs 18,990 to Rs 32,990 with Rs 1,800 to Rs 2,800 service charges per month, depending upon usage.
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Oracle unveils e-business suite
The two-day Oracle Open World Conference opened here today. The conference is being organised by Oracle, the $ 10- billion software company. Over 1,600 customers and company partners gathered here to exchange ideas and gain knowledge of how latest technology and business software can help Indian businesses drive greater efficiencies.
On the opening day of the conference, Mr Derek Williams, Executive Vice-President for Oracle Asia-Pacific outlined the company's growth that had seen 11 per cent increase in revenue and 25 per cent in the grant of new licences. He said the focus of the company was on industries like communications, media and manufacturing and added that 50 per cent of the customer base was from the Small and Medium Enterprises (SME) segments. "One of the biggest challenges for the Indian private and public sector today is the ability to scale and cope with the diverse needs of this country. This includes requirements to address an extremely large user base, taking into account geographical spread, language diversity and variations in business processes, tax systems and connectivity. Having worked with the government, partners and customers in India for more than 12 years, we see huge opportunities to help India meet these challenges with the company's latest offerings from applications to core technology," he said and added that Oracle's largest R&D presence outside the USA was in India. A major highlight of today's event was the launch of the Oracle e-Business Suite 11i.10 in India by Mr Ronald A. Wohl, Executive Vice-President (Application Development). Another key speaker, Mr Sunil Bharti Mittal, group Chairman and Managing Director, Bharti Enterprises, outlined the growth areas for his company. He said his company had plans to set up 5,000 additional base stations by March 2005. Citing foraying into the Jammu and Kashmir telecom market as an emotional experience, he said his company was now planning to focus in Assam and the North-East. He said his company was eyeing growth opportunities in airport privatisation, farm sector and setting up telecom units in developing countries. "We have a tie-up with Changi for airport privatisation, with a UK-based firm for agro-sector and we are already operational internationally in Seychelles," he added. Others who addressed the delegates included Mr Stephen Lyle, Vice-President, Oracle Global Alliance, and Mr K.V. Kamath, MD and CEO, ICICI Bank. Meanwhile, Oracle also confirmed today that Shekhar Dasgupta, Managing Director, Oracle India, will be leaving the company at the end of May 2005 to pursue other interests. As per a company press note, Shekhar will pursue a career in academia and the new MD’s appointment will be announced shortly.
— TNS
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SMS in Hindi, courtesy Nokia
New Delhi, November 2 "The Hindi belt comprising 10 states offers tremendous opportunity for growth and are critical markets for Nokia. There is also a great opportunity to create content services market in Hindi," Nokia Mobile Phones India Marketing Head Sanjay Behl said here today. The company also announced the launch of its Hindi content portal Mera Nokia - from which users can download news, astrology, ringtones, jokes and wallpapers beginning next week. The service will be available on Nokia's GSM as well as CDMA handsets. The software for the initiative - Saral Mobile Sandesh - was developed at the Nokia centre in Denmark.
— UNI
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Su-Kam ties up with GE Power
Chandigarh, November 2 GE Power System is one of the leading global manufacturers of hi-end UPS systems. Under the agreement, Su-Kam will source and sale UPS systems from GE, besides offering after sale service. According to Mr Kunwar Sachdev, CEO of Su-Kam Communications Ltd, this tie-up would help in strengthening the marketing base and would double its market share to 6,00,000 units of inverters and UPS.
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Lord James Hanson, one of Britain’s biggest business tycoons and a Conservative peer, died aged 82, his spokeswoman said.
