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Brazil may emerge major trade partner for India
Ambani family may hold parleys today
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Pak expands import list from India
Iran to renovate Indian gas pipeline
Truckers threaten stir again
G20 calls for flexible exchange rate practices
Dabhol plant may restart by 2006 end
Market
update
Tax advice
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Brazil may emerge major trade partner for India
New Delhi, November 21 A large number of Brazilian firms are exploring the opportunity to enter into joint ventures with the counterparts in India especially in the field of food processing, leather and pharma sector, besides IT sector. Brazil is the focus country in the 24th India International Trade Fair currently organised at Pragati Maidan here from November 14 to 27, in which 323 companies from 28 countries are participating. China is the partner country. Talking to The Tribune here today, Mr Amandeep Singh Narang, Deputy Manager, India Trade Promotion Organisation, said: “It is for the first time that 87 companies from Brazil are participating the trade fair. We are sure that it would help both the countries to come close to each other and expand trade in food processing, leather, and pharma sector.” “Since like India, Brazil is also an agro-based economy and a large country. It will be natural partner of India in manufacturing sector,” he said adding that large number Indian companies especially from North India were taking keen interest in Brazil products and technologies. Incidentally, Brazil is the largest producer of ethanol in the world and India is showing keen interest to develop this sector in view of the growing energy crisis. A recent report of the FICCI has also claimed that engineering goods is one such area offering big opportunity as Brazil sources them from high-cost economies while India has well formed capital goods base. Companies like Bajaj, Elgi and Thermax are already active in Brazil. Brazil also imports cotton and electric equipment from India whereas it exports soya, poultry, sugar and alcohol to India. Earlier, Governor of State of Goias, Brazil Marconi Ferreira Perillo Junior said, pharmaceuticals, food processing and agro-business are the areas of interest between the two countries. “India with lower import duties and liberalised trade policies is becoming an important trading destination. Brazil would like to take the commercial interest between India and Brazil to greater heights,” Mr Marconi, who is heading a 70-member Brazilian delegation to the 24th India International Trade Fair, said. Brazilian Ambassador to India Vera Barrouin Machado said this was the first concrete effort being made by the two countries to develop the trade relations.
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Ambani family may hold parleys today
New Delhi, November 21 The meeting is being called by Kokila Ben, widow of Dhirubhai Ambani, who has now decided to take an active part after two years of silence to resolve the family matters of the India’s largest corporate house — Reliance Industries Limited. The two sisters of Ambani brothers — Dipti
Salgaonkar, and Neena Kothari — have already reached Mumbai for the family gathering that would take place within days Mukesh going public that there were ownership issue in
Reliance. Kokila Ben, who has a strong influence on Ambani siblings, is striving to work out a settlement.
— PTI
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Pak expands import list from India
Islamabad, November 21 “Most of the new items now being included in the positive list are in the nature of raw material required by the local industry,” the Ministry of Commerce announced in a statement. The statement did not say what the new tariff would be for the 81 goods, which range from walnuts, to raw material for medicines to meat. Pakistan and India agreed to give concessions to certain imports from each country after negotiations last year under the South Asian Preferential Trade Agreement, which aims to promote trade among members of a regional block. — AP
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Iran to renovate Indian gas pipeline
Dubai, November 21 The director of the project, Mr Mehrdad Sabbaghi, told Iran’s Petroenergy Information Network that the operations would include 33 pieces of pipes measuring from 4 to 16 inches. He said the project would be implemented in two stages with the first phase seeing installation of 24 pieces. Mr Sabbaghi said building the platforms would be carried out in two phases due to monsoon storms. “During the first phase 26 platforms will be built while during the second seven platforms will be improved.” Mr Nasser Saghafi-Ameri, a senior fellow in the Department of Foreign Policy and International Relations at Tehran’s Centre for Strategic Research, said the proposed Indo-Iranian gas pipeline project through Pakistan would bring economic benefits essential for peace and security of the region, says a prominent Iranian expert. The pipeline project envisioned 15 years ago would hasten the thaw in India-Pakistan ties, he said. Pointing to the promising developments in Indo-Iranian relations, Nasser was quoted by Tehran Times as saying that India is also eyeing to develop good ties with European countries.
— UNI
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Truckers threaten stir again
New Delhi, November 21 They have accused the government of sidestepping a whole host of issues concerning the transport sector, including scrapping of old vehicles, toll tax and security on highways. Lamenting on the government’s attitude, All-India Motor Transport Congress (AIMTC) chairman O.P. Agarwal said transporters and the government had signed an agreement on October 27, stipulating that the 10.2 per cent service tax would not be collected from truck operators till January next year, while freight charges up to Rs 1,500 were exempted from its ambit. The Finance Ministry had accepted these recommendations of a high-powered 13-member committee constituted in July following a week-long strike by transport operators in protest against the imposition of service tax in the Union Budget. Mr Agarwal
said, "we were assured that the issue of TDS deduction would be looked into sympathetically and since the notional income of a truck is only Rs 42,000 per annum, its recovery should be stopped straightaway.” “But we regret to say that the government till date has not taken any steps to resolve these issues. On top of that, the recent price hike in petroleum products has dealt a blow to the transport trade,” he said, adding that prices of petrol were reduced after the downturn in the global crude oil rates, but the diesel price had been left untouched. Mr Agarwal also expressed concern over the spate of robberies on the national highways. “We have demanded that the government raise a special force to ensure safety on the highways, but it has not been forthcoming on this demand.”
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G20 calls for flexible exchange rate practices
Berlin, November 21 The statement from the annual conference of finance ministers and central bank governors also called on the United States to work toward cutting Budget deficits, seen as one factor in the fall of the dollar against the euro and other currencies. Economists say the habit among Asian countries of pegging their currencies to the US dollar has helped push the euro to recent record highs against the US dollar, hurting European exports.
— AP
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Dabhol plant may restart by 2006 end
New Delhi, November 21 Enron had contracted 1.6 million tonne LNG from Oman and 0.5 million tonne from Abu Dhabi, but the supplies never commenced as the US major shut the Dabhol plant following a payment dispute with its sole customer, Maharashtra State Electricity Board. “We are looking at restarting the power plant by 2006 end for which we need LNG. The best course to get the fuel in the present tight supply scenario is to reclaim the LNG Dabhol Power Company had contracted,” a top government official said. — PTI
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by Lalit Batra
Caution advised as market may turn volatile
Last Friday’s crash erased the gains, which the market had accrued during the whole of the last week. As a result, the Sensex, which had scaled to a high of 6044,55 in intra-day, trades on Friday, ended the week at 5961.71, netting a minor loss of 2.30 points. Nifty shed 0.60 points last week.
The sharp fall on Friday was triggered by index heavyweight Reliance Industries, which fell more than 3.35 per cent due to selling pressure, following Mukesh Ambani admitting to differences with his brother Anil over ownership issues. The volatile movement of the indices also displayed signs of apprehension and lack of investor confidence at the high index levels. Near-term concerns in the form of rise in interest rates and strong commodity prices also seemed to have played on investor’s minds. The market may see some volatility in the coming weeks and November series derivatives contracts expire on Thursday, which will also be the last day of trading for the week as the market will remain closed on Friday on account of Guru Nanak Jayanti. Investors should be cautious as the market is showing apprehensions at higher levels and investor should keep booking profits on every rise.
Gillette
Gillette India is the 52 per cent subsidiary of US shaving major — Gillette USA. The company’s promoter group together holds 88.8 per cent in the company. A look into the last quarter results reveal that though the sales have grown by a robust 16 per cent but the operating margins have taken a hit to the tune of nearly 800 basis points. The growth in sales has mainly come from the growth in oral care business and “Vector Plus”. The key reason for erosion in margins was a sharp increase in the company’s ad spends. The company’s advertising expenses as a percentage of sales almost doubled (18 per cent) as compared to the same quarter last year. It indicates the push the company is trying to give its products, especially Vector Plus. This push has reflected in the company’s topline growth, but has impacted profitability. It indicates the push the company is trying to give its products, especially Vector Plus. We believe that increased ad spent will accrue to the company’s topline in future. The company’s stock is trading at Rs 630, discounting the earning by 28 times. Gillette lost its glitter due to the company’s merger with loss-making group companies, Wilknson Sword India Ltd and Duracell India Ltd.
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by S.C. Vasudeva
No HRA for those residing in govt accommodation
Q. I have been occupying the PSEB’s accommodation, as a result of which I am not being given 15 pc as is being given to other employees. Apart from the above, 5 pc of my basic pay +D.P. is also being deducted out of my salary. Please clarify.
— G.S. Sethi,
Patiala
A. From your query the nature of “the 15pc amount” as mentioned by you is not clear. I presume that this 15pc represents the amount of House Rent Allowance (HRA) paid to other employees who are not occupying house provided by the Board. The reply is based on this presumption. An employee, who has been provided a residential accommodation is not entitled to the HRA. This seems to be the reason for non-payment of 15 pc of your salary. As regards determination of perquisite value for the residential accommodation provided to you is concerned, the law applicable is that in respect of unfurnished accommodation, the license fee determined by the state government in accordance with the rules framed as reduced by the rent actually paid by the employee is to be added to the salary of the employee. You are, therefore, advised to check up the rules framed by the Board in consultation with the state government to ascertain the amount of perquisite value. Risk Allowance Q. I am a civil defence employee and have got a Risk Allowance for the year 2004. I have a government accommodation also. Kindly advise whether Risk Allowance is exempted from income tax or not and whether licence fee for government accommodation is also taxable? — R. Walia, Chandigarh A. (i) Rule 2BB of the Income Tax Rules, 1962 read with Section 10(14) of the Act does not provide any exemption for an allowance by the name of Risk Allowance. However, if you could elaborate upon the reason for which this allowance is given, there might be a possibility that the same may be covered under Rule 2BB by any other name. For your benefit the allowance which are exempt upto a specified limit for defence employees are given as under: (a) Any special allowance in the nature of counter insurgency allowance granted to the members of armed forces operating in the areas away from their permanent location for a period of more than 30 days (b) Any special allowance in the nature of high altitude allowance (c) Any special allowance in the nature of special compensatory highly active field areas allowance. (d) Any special allowance in the nature of Island duty allowance (ii) The licence fee due for the government accommodation will be treated as a perquisite and will be added to your salary income. However, any amount paid by you, will be reduced from the aforesaid amount. Rebate on interest Q.
I have purchased a residential house in society’s flats through General Power of Attorney (GPA) duly registered with the Sub-Registrar, UT, Chandigarh. Now I have applied for a housing loan from a private housing finance company namely M/s Dwarka Housing Finance Ltd. — Chandigarh, for which monthly instalments would be deducted to repay the loan. I want to seek your advice whether I am eligible to claim rebate on the deductions of interest repayments as well as principal repayments every year on the basis of above and under which sections of Income Tax Act. If so, under which Sections of Income Tax Act, an employer can consider the above for the purpose of issuing Form-16? — Rakesh K. Sharma, Chandigarh A. You can claim the interest paid as a deduction u/s 24(1) of the Act provided the lender company issues a certificate specifying the amount of interest payable by you for the purchase of property. Regarding the allowance of rebate on repayment of principal amount, the same shall be available only if the lender is a public company formed and registered in India with the main object of carrying out the business of providing long-term finance for construction or purchase of houses in India for residential purposes. You can send/ give a statement of income chargeable under any other head of income other than “salaries” (not being loss under any such head other than “Income from house property”) and of any tax deducted on such income on a plain piece of paper in accordance with the provisions of Rule 26B to your employer, who would take such income into consideration for the purpose of computing your total income and deducting tax at source. A verification in the following form has to be annexed to the statement: VERIFICATION I ____(name)___________, do declare that what is stated above is true to the best of my information and belief. Signature
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