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Outsourcing units can’t be clubbed under EPF Act: HC
Bank Account
Aviation Notes |
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Suzlon buys Belgian firm
Sovereign tie-up with Thai firm
Investor Guidance
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Outsourcing units can’t be clubbed under EPF Act: HC
New Delhi, October 28 Holding that inter-dependence between them could not be a ground for clubbing under the EPF Act, Mr Justice S.N. Dhingra said, "two independent establishments cannot be clubbed together to show a unity of functions only because they are inter-dependent on each other at a particular time". Taking into account that outsourcing was one of the mode of doing business where several ancillary units would be exclusively doing work for big companies, the court said such small units perform independent business for big automobiles companies and engineering companies. "These ancillary units (outsourcing units) are independent business entities despite the fact that they are dependent on automobile company or engineering firm. These units cannot be clubbed with each other or with main company for purpose of the EPF Act on the ground of inter-dependence," the court said. While outlining the condition, in which the two companies could be clubbed together for getting benefits under the EPF Act, the Bench said this could be done under the circumstance when an establishment was bifurcated to deprive the workmen of the benefits of labour law. "Where two establishments are in fact one, but they have been artificially bifurcated only to deprive the workmen of the benefits of labour laws, then only the two establishments can be clubbed together and their joint employees strength can be counted for purpose of Section 7A of the Act." The verdict was delivered on a petition filed by Regional Provident Fund Commissioner challenging the order of the EPF Appellate Tribunal's treating two companies as a separate entity. The Commissioner had covered Golden Masala Company under the EPF Act by clubbing six employees of the firm Molu Ram Suraj Mal on the ground that both were inter-dependent on each other and in absence of one, the other will not exist. Molu Ram Suraj Mal was doing grinding of spices exclusively for Golden Masala Company. The Commissioner held that Molu Ram Suraj Mal was nothing but contractor of Golden Masala Company and hence employees of Molu Ram must be treated as employees of the latter. However, the Appellate Tribunal held both companies as two different identities, which was also upheld by the high court. The high court in its order said the Fund Commissioner had covered both the companies on the ground of inter-dependency but it failed to provide the basis as to how this conclusion had been arrived at. — PTI |
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SBI Q2 net dips 2.53 pc
Mumbai, October 28 The total income increased by 9.69 per cent to Rs 10,811.23 crore during the July-September quarter from Rs 9,856.04 crore for the corresponding quarter a year ago, SBI informed the BSE. The SBI Group posted a net profit of Rs 1,734.45 crore for the second quarter this fiscal as compared to Rs 1,590.75 crore for the same quarter last fiscal. The total income of the group increased to Rs 16,255.36 crore for the quarter ended September 30 from Rs 13,974.28 crore for the corresponding quarter a year ago. Bank of Baroda
Bank of Baroda has posted an 11.30 per cent increase in net profit at Rs 288.36 crore for the quarter ended September 30 as compared to Rs 259.07 crore for the same quarter last year. The total income grew by 25.15 per cent to Rs 2,507.66 crore for the second quarter ended September 30 from Rs 2,003.59 crore for the corresponding quarter last year. Bank of India net up
Bank of India has posted a 60.48 per cent increase in net profit at Rs 212.13 crore for the quarter ended September 30 as compared to Rs 132.18 crore for the same quarter last year. The total income increased by 32.92 per cent to Rs 2,611.42 crore for the quarter ended September 30 from Rs 1,964.51 crore for the corresponding quarter a year ago. SBoP net up
The State Bank of Patiala has reported quantum jump in profit in quarter ending September 30 as compared to corresponding quarter of last year. The bank made net profit of Rs 70.05 crore during the second quarter of the current year, which was 96 per cent higher than the profit in the corresponding quarter last year. The bank also registered a growth of 32 per cent in total income during the second quarter of the current year.
— PTI, TNS |
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AI-Indian proposed merger: job cut possible despite assurance
by K.R. Wadhwaney
Will third attempt of merger of Air-India and Indian become a reality? Many senior officials of the two national carriers have apprehensions, although consultants have gone on record as saying that the government does not intend ‘rationalisation of employees’.
The Minister of State for Civil Aviation, Mr Praful Patel, is reported to have said that he sees no problem in the merger coming through. The proposal will be examined by a Group of Ministers before it is sent to the Cabinet for clearance. The officials view this ‘assurance’ of ‘no retrenchment’ with a pinch of salt as single entity will not be able to bear the burden of 36,000 employees of varying grades. Some other thorny issues, according to officials, are the weight of awarding annual free and concessional air passages on international routes to 36,000 employees will be enormous for one airline to bear; fitness of seniority and salaries and perks of cockpit and cabin crews will cause heart-burnings; postings of staff abroad and huge expenditure on change of uniform/dress of cabin crew and changes in interior and exterior decor of aircraft. According to employees’ unions, they are yet to see the proposal. “We have our reservations,” said a union leader. Strange are, however, doings of the aviation authorities. While minister has been announcing merger of the two airlines, a private construction company and the Airports Authority of India have been talking about common terminal for AI and Indian. This clearly indicates that there is utter lack of rapport between the agencies concerned or even the AAI is doubtful about the merger coming about. Another strange development is that while incidents of near-miss in domestic skies are on the increase, the authorities are contemplating to reduce the longitudinal separation corridor from 50 nautical miles to 15 NM. The analysts feel it is a dangerous proposal. What is the need of compromising safety norms in the bid to accommodate more aircraft? Indiscipline in Air-India has reached such a low level that its scheduled flight did not land at the Amritsar International airport the other day although more than 200 passengers had to disembark there. As the flight landed at the Delhi airport, the Amritsar-bound passengers started protesting. The airline officials said that ‘operational difficulties’ compelled us not to land at Amritsar, adding: “We had informed passengers about it”. The passengers disputed this claim. Since attempts of terrorism at airports, new security procedures have been in operation causing insurmountable problems to passengers. However, the security standards are lowered for VIPs. Recently, a team of International Civil Aviation Organisation (ICAO) has checked airport security norms. The guidelines from the ICAO are expected shortly. |
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Suzlon buys Belgian firm
New Delhi, October 28 The company yesterday said by virtue of the acquisition of Eve Holding by AE-Rotor, the company has 100 per cent ownership of Hansen Transmissions International NV, Belgium along with its subsidiaries, which are engaged in the business of design, development, manufacturing and supply of industrial and wind gear boxes. It is the second largest wind energy gearbox manufacturer in the world having about 33 per cent global market share.
— UNI |
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Sovereign tie-up with Thai firm
Ludhiana, October 28 The company will also launch e-bikes in the coming months. E-bikes are low-cost bikes which run on battery. The initial paid-up capital of LA Sovereign is Rs 50 million and the company is targeting sales of Rs 400 million in the first year. |
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No tax on long-term capital gains
by A.N. Shanbhag Q: I have a query about tax rate for short-term capital gains and tax rate for total income. Say, I have a long-term capital gains (LTCG) of Rs 60,000 and short-term capital gains of Rs 3,00,000. I have no other income. Now what should be income tax I should pay? Should it be 10 per cent of Rs 3,00,000 i.e. Rs 30,000? Or should I use the slab rates as applicable to me? Please clarify how income tax should be calculated for this case. — K. Prabu A: The LTCG of Rs 60,000 is tax-free. As regards short-term gains. For a Resident individual or an HUF, where the total income as reduced by short-term or long-term capital Gains on which tax is exigible falls below the tax threshold of Rs 1,00,000, the gains would be reduced by the amount by which the total income so reduced falls short of Rs 1,00,000 and the balance of the gains would be taxed at the rates applicable. In short, where the tax liability arises only because of inclusion of such capital gains in the total income, tax is levied on the excess over the minimum taxable limit. In your case, since you have no other income, you will have be liable to pay tax @ 10 per cent on Rs 2,00,000 (=Rs 3,00,000-Rs 1,00,000). Foreign exchange Q: My son is working in the USA for the past five years. He will be coming to India in December for a family visit. Our question is whether there is any limit on the funds (money) that he can carry into India and out when he goes again? What are the legal formalities in this regard? — Clayton D’souza A: Any person, whether NRI or PIO or a foreign citizen can bring into India foreign exchange without any limit. However, if the aggregate value of the foreign exchange in the form of currency notes, bank notes or traveller’s cheques brought in by such person at one time exceeds the equivalent of $ 10,000 or the aggregate value of foreign currency notes brought in by such person at any one time exceeds the equivalent of $ 5,000, such person has to make, on arrival in India, a declaration to the Custom authorities in Currency Declaration Form (CDF). The CDF is provided by the custom authorities, if needed. And as far as taking back is concerned, it follows that such sum cannot exceed what has been brought in, in terms of the CDF. Repatriation of funds Q: My mother (US citizen) bought a place of land in India in 2003. The entire payment was made through her bank account in dollars. She now wants to sell it and will be paid in rupees. With that money she wants to buy a house in the US. Will she be permitted to convert the entire proceeds received in rupees to dollars? — Om Purang A: Yes, she can. The following is the law in this regard: "In the event of sale of immovable property other than agricultural land/farm house/plantation property in India by a person resident outside India who is a citizen of India or a person of Indian origin, repatriation of the sale proceeds outside India is allowed, provided i) the immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations; ii) the amount to be repatriated does not exceed (a) the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels or out of funds held in Foreign Currency Non-Resident Account, or (b) the foreign currency equivalent, as on the date of payment, of the amount paid where such payment was made from the funds held is Non-Resident External account for acquisition of the property; and iii) in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties." The Indian assets are non-repatriable but the current income therefrom like interest, dividend, rent, capital gains, pension, etc., can be. The income less tax payable can be repatriated. Before effecting repatriation of income of the account holder, the ADs are required to ensure that he has paid or made provisions to pay income tax thereon, if any. ADMA Circular 28 dt. 26.7.97 required NRIs to obtain a ‘No-objection or Tax-clearance Certificate’ from the Department and submit it to his AD to enable it allow repatriation. Until the receipt of the same, the AD was required to hold the related amount either in a suspense account or in the NRO accounts of the NRI. This was inconvenient to all concerned and also time consuming. As per AP (DIR) Circular 27 dt. 28.9.02 ADs may also allow remittance abroad of the income by accepting an undertaking (in duplicate) addressed to the Assessing Officer and signed by the person making the remittance. This should be accompanied by a Certificate of a Chartered Account who is not in employment of the NRI, stating that tax has been deducted at the rates in force, or is provided for or is not payable. In the case of NRIs/PIOs who do not maintain NRO account and have no taxable income in India, ADs can allow remittances after obtaining a simple declaration from them. ADs should, after making the remittance, immediately forward a copy of the certificate together with a copy of undertaking to the concerned ITO. The Internal Auditors of the AD/Inspecting Officers of the RBI should keep one copy of the undertaking and certificate on record for verification. At this juncture, the NRI can follow any of the two methods depicted above. Capital gain calculation Q: I am new to stock market. I have done lots of trading for the FY 2006-07. In this period I have made lots of short-term capital gains and lots of short-term capital losses. The calculation of this will really be cumbersome or almost impossible for me. Is the DP (depository account) internally keeping track of this so that end of financial year net capital gain can be calculated? Please advise. Also if a person is having capital loss for a financial year and he has no other income in that case also he has to file taxes or not? — Pramod Kumar Talesara A: Since the number of your share transactions is ‘lots’ the income arising from this activity may be construed as business profit/loss. If you were dealing in day-trading (squaring off the transactions within the same day without taking or giving the delivery), it would be treated as speculative income charged to tax @30.6 per cent plus surcharge if applicable. The record of profit and/or loss has to be maintained by the investor only. The DP maintains only the record of debit and credit of the quantity of the shares. Unless you file the return declaring the net short-term capital loss, the same will not be allowed to be carried forward for future setoffs against short-term capital gains. The authors may be contacted at wonderlandconsultants@yahoo.com
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