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LTC, car allowance, phone bills to attract FBT, Esops exempted
SBI keen to acquire banks abroad
OVL to acquire stake in Nigeria
BMW mulls plant in Chennai
Indian potato under attack in Pakistan
India-EU trade to touch $ 35 b this year
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Crude price may dampen textile exports: Assocham
KPMG settles tax shelter case with $ 456 m fine
Himachal nod to 24 units worth Rs 290 cr
Corporate News
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LTC, car allowance, phone bills to attract FBT,
New Delhi, August 30 In a detailed circular, the Finance Ministry said the reimbursement in respect of car expenses on the basis of bills submitted and driver’s salary on the basis of declaration provided fall outside the scope of ‘salary’ within the meaning of Clause (1) of Section 17 of the Income Tax Act. Therefore, any expenditure towards such reimbursement is effectively expenditure incurred by the employer for the purposes of conveyance, tour and travel. Since the expenditure for such reimbursement is related to conveyance, tour and travel, and is liable to FBT. Housing perquisites like leased or rented accommodation would, however, be exempted from the FBT, the circular said. On leave travel concession (LTC), a major perquisite offered by most employers to their employees, the Finance Ministry said that the value of any travel concession or assistance received by an employee normally fall within the meaning of ‘salary’. These benefits are taxable under the head ‘Salaries’, subject to the exemption under Clause (5) of Section 10 of the Income Tax Act. Accordingly, it would not be liable to FBT. However, if the leave travel concession/assistance were not included in ‘salary’, it would be liable to FBT, it said. Moreover, expenditure incurred on ‘brand’ or ‘brand ambassador’ or ‘celebrity endorsement’, would be liable to FBT. On the employees stock option scheme, the circular said that, it has been left out of the ambit of FBT because of computational reasons, even though it acknowledged that the “value of any benefit provided by the employer to its employees by way of allotment of shares, debentures, or warrants directly or indirectly under any Employees Stock Option Plan or scheme of the company is a fringe benefit. However, in the absence of a computation provision in respect of such benefits, the charging section fails. Therefore, the value of such benefits is not liable to FBT,” it said. The circular makes it clear that non-transferable food vouchers used in eating joints, discounts and rebates to wholesale dealers and customers, incentives to distributors for achieving sales targets and medical reimbursement up to Rs 15,000 by the employees would be exempt from the tax. Failure to pay advance tax for any quarter or payment of less than 30 per cent of the value of fringe benefits in that quarter would attract one per cent interest on the shortfall for each month or part of the month for which such shortfall continues. The circular also said that running and maintenance of motor cars will attract FBT and so would the interest paid on loans taken for purchase of cars, it said, adding that the salary paid to a driver of a motor car or a pilot of an aircraft too would attract FBT. It said expenditure incurred on the use of telephones including mobile installed in the office was liable to fringe benefit tax. This is so irrespective of whether the telephone is in the name of the company or not and also whether payment for its use is made directly or indirectly by the company.
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SBI keen to acquire banks abroad
New Delhi, August 30 “While competition has already come whether one likes it or not, consolidation cannot be put off for long,” Mr Chidambaram said while speaking at a function to mark the 100 per cent networking of the State Bank of
Patiala. At the same time, he said the government did not have any intention to privatise public sector banks and was in favour of granting autonomy to them. He said while the SBI was the largest bank of India, the government was not happy that it was not among the largest banks of the world or in Asia. The government also does not intend to dilute its stake in public sector banks to below 51 per cent at any point of time. Meanwhile, speaking at a meeting organised by Assocham and the Indian Institute of Foreign Trade (IIFT), SBI Chairman A. K. Purwar said the SBI was aggressively looking for bank acquisitions overseas for which a detailed announcement was expected within eight weeks. Mr. Purwar said the overseas acquisitions would be on the lines of the buyout of a bank in Mauritius. The banking sector was witnessing growth on account of acceleration in manufacturing, services, exports and agriculture as well as the rural economy which supported the enthusiasm of banks like the SBI to go for overseas acquisitions, said Mr Purwar.
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OVL to acquire stake in Nigeria
New Delhi, August 30 OVL was the highest bidder for exploration Blocks 323 and 321 in the Gulf of Guinea but had to contend with 25 per cent due to pre-emption rights exercised by Korea National Petroleum Corp. Sources said OVL offered $ 310 million signature bonus to Nigeria and a promised investment of $ 525 million for Block 323 and $ 175 million signature bonus for Block 321. The two blocks are estimated to hold reserves of two billion barrels of oil. “Though OVL was the highest bidder, the Korean firm exercised the special right to acquire 65 per cent of the blocks, matching winning bids for them from OVL,” a source said. OVL will now hold 25 per cent of the two blocks, while a Nigerian partner holds the remaining 10 per cent. ONGC is also likely to sign an MoU with Norsk Hydro on Thursday to work closely in the deep-sea exploration and drilling activities in India and third countries, including Russia, the Gulf and African region. “We are close to sign a few MoUs with Norwegian companies and organisations for cooperation in the hydro-carbon sector, including ONGC with Norsk Hydro,” Additional Secretary Talmiz Ahmed told reporters from Oslo, Norway, where Petroleum Minister Mani Shankar Aiyar is currently visiting at the invitation of his counterpart. Mr Ahmed said the Director General of Hydrocarbons (DGH) would also sign a MoU with the Norwegian Petroleum Directorate to help Indian personnel in research and development, training and safety areas.
— Agencies
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BMW mulls plant in Chennai
Chennai, August 30 This was conveyed to Tamil Nadu Chief Minister J. Jayalalithaa by an eight-member high-level team led by Dr Norbert Reithofer, Board Member, BMW group, which called on her at the Secretariat here today. The team said after getting certain approvals from the Indian government, the project construction would begin and commercial operations would commence in the third quarter of 2006. The delegation indicated that its long-term investment in the plant would be up to $ 40 million (about Rs 180 crore). — UNI
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Indian potato under attack in Pakistan
Chandigarh, August 30 The sources said big landlords were engaged in the sowing of potato in Pakistan, especially in the Punjab province. Over the years, these landlords have established a cartel that regulates the supply of potato in the market to keep its price above a certain level in Pakistan. Before the arrival of Indian potatoes in Lahore a few weeks ago, the prevailing price of potatoes in Lahore was above Rs 15. And when the Indian potatoes landed in Lahore via Wagah border, Pakistani cartel blocked the release of local potatoes in the market to create a crisis on demand and supply front. However, importers of Indian potatoes released the stocks at Rs 7 per kg in the retail market. Obviously, low-end consumers immediately lapped up the potatoes at this price. After waiting for some days, the cartel also released its potato stocks. The price of fresh stocks of potato, released by the cartel, has come down to Rs 10 to Rs 12 per kg. It sells at a high price because of its fresh look whereas Indian potatoes take about one week to reach Lahore’s retail market after its release from Indian cold stores. The sources said that cartel gives a lot of negative spin to the quality of Indian potatoes for obvious reasons. Indian potato growers said that the Indian government should ensure the export of best-quality potato to the neighbouring country and also in quickest possible time to maintain freshness. In fact, there should be joint inspection teams of both countries, which should check the stocks at a mutually decided place and clear or reject the consignment on the spot. According to experts, Indian farmers can supply potato seed to Pakistan at a far cheaper price than what is charged by Holland-based exporters. Pakistani farmers import seed from Holland by paying Rs 6,000 for 100 kg while Indian potato seeds are available for Rs 2,100 per quintal.
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India-EU trade to touch $ 35 b this year
New Delhi, August 30 Mr Gatto said the sixth India-EU business summit would be held in New Delhi on September 7. The summit, which is jointly organised by CII,
FICCI, the Ministry of Commerce, besides the EU, will focus on examining new vistas for boosting trade and investment, and recommending regulatory reforms to enhance business climate both in India and the EU. Over 50 delegates from the EU, he said, were expected to participate in the summit. Various issues like non-trade barriers, elimination of export subsidies, anti-dumping, tariffs etc were likely to figure during the summit.
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Crude price may dampen textile exports: Assocham
New Delhi, August 30 Assocham has claimed that the total textile exports from India may fall to $ 35 billion by 2010 as the crude prices are expected to touch $ 80 per barrel by that time. It would be so because the trend would add to the already rising input costs to make the global export trade virtually uncompetitive, stated a paper brought out by the industry chamber. Titled ‘’Rising crude oil prices and its possible impact on India’s global export trade’’, the study said the global crude prices were estimated to go up beyond $ 80 a barrel to further propel the already-high input cost of the textile industry. It said textile exports had already witnessed a 20 per cent decline in the first five months of the current fiscal.
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KPMG settles tax shelter case with $ 456 m fine
New York, August 30 While KPMG, the smallest of the major US accounting houses, itself escaped an indictment of the kind that destroyed Arthur Andersen when it was convicted of destroying documents, eight former partners, including its former Deputy Chairman, and a KPMG lawyer, were indicted for selling the tax shelters to wealthy clients. An outside monitor, Richard Breeden, a former Securities and Exchange Commission (SEC) chairman, was appointed to oversee the firm’s compliance with the settlement, which includes an agreement to shut down its tax practice for high net worth individuals within six months.
— Reuters
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Himachal nod to 24 units worth Rs 290 cr
Shimla, August 30 Mr Virbhadra Singh, the Chief Minister, presided over the meeting of the authority. The new units have the potential of providing employment to 5,320 persons. The CM said that over the past two year 5,598 small and large industrial units, with an investment of Rs 13,856 crore, had been cleared by the authority. On completion these units would generate employment for 1,94,353 persons. He said the state government had made it mandatory for entrepreneurs to give at least 70 per cent employment to the local persons. The CM said that the state would be manufacturing about 60 per cent of the total national pharmaceutical products as almost all major pharmaceutical companies proposed to set up their units in the state. The CM said a plan for rainwater harvesting system had to be put in place in all industrial areas and suitable provisions for storage of rainwater had to be made, besides constructing dams over the seasonal nullahs.
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NDTV inks pact for SE Asia presence
Mumbai, August 30 NDTV will have a minority stake of up to 20 per cent in the venture, which will conduct its business operations initially in Indonesia and Malaysia, NDTV informed the NSE today. Astro Broadcast corporation is a 100 per cent subsidiary of Kuala Lumpur-based Astro All Asia Networks Plc, one of the largest media organisations in Asia with a market capitalisation of about $ 3 billion. NDTV is one of India’s leading television media organisations, which runs three 24-hour channels — NDTV 24x7, NDTV India and NDTV Profit. Trent bags stake
in Landmark
Tata group’s retail venture Trent today acquired 76 per cent strategic stake in the books and music retailer Landmark and its subsidiary firms for a consideration of Rs 103.6 crore. “This partnership would help to achieve expansion targets over the next few years” said Hemu Ramiah, CEO, Landmark. Hemu Ramiah would continue to hold the balance of 24 per cent in Landmark, a company statement said.
IOC gives 100 pc
final dividend
The state-owned Indian Oil Corporation Ltd (IOC Ltd) has informed the NSE that the final dividend @ 100 per cent has been recommended by the board for 2004-05. Further, it informed that if the final dividend is approved at the forthcoming AGM, to be held on September 22, it would be paid to the shareholders by September 30.
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PC to lead price talks with Airbus Rupee weaker Lloyd in India Stake in sugar mill BILT net up Third VIP unit Hutchison Essar Jindals-Lason pact for BPO in Bellary Onida targets 40 per cent growth Hindustan Const bags J&K contract Mahavir Spinning |
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