The Tribune, Chandigarh, India

	Essential Goods No service tax on transportation New Delhi, September 2 The government today exempted transportation of essential goods like foodgrains, fertilisers and petro products from service tax (ST), a move that could help in keeping prices of these items from rising further. The exemptions are in effect from September 1, the day from which service tax on transportation through rail and waterways, as announced by the Finance Minister Pranab Mukherjee in the Union Budget in July, was to take effect. “It is necessary in the public interest so the government exempts the taxable service provided to any person in relation to the transport of goods,” the Central Board of Excise and Customs in two separate notifications for transport by rail and waterways said. The list of exempted goods include edible oil seeds and edible oils; food grains and flour, petroleum and petroleum products and defence and military equipments. Transport of parcels containing newspapers (registered with the Registrar of Newspapers) has also been exempted from the levy. The transport services through rail and waterways were included in the ambit of service tax in the budget 2009-10. The decision on exemption was taken after representations from various quarters, including the Agriculture and the Commerce ministries. The exemption has also been extended to include raw jute and jute textile, seeds for food crops and fruits and vegetables, seeds for cattle feed, jute seeds, medicine/ pharmaceutical products, relief materials meant for victims of natural or other disasters. Also luggage of travellers by train or ship, whether carried as personal luggage or booked separately in the luggage van, will be out of the service tax purview. At present service tax is at 10 per cent following a 2 per cent rebate in the stimulus packages for the economy announced earlier. — PTI
	Meltdown Fallout: Corporate houses float own NBFCs Ruchika M. Khanna Tribune News Service Chandigarh, September 2 The Punjabi entrepreneur knows best how to find a way out of any distress. Bogged by the financial meltdown and slow cash inflow from banks, major corporate houses in Punjab have floated their own non-banking finance companies (NBFCs) to see them out of the present situation. A large number of top regional business houses like Nahar Group, Vardhman Group and Hero Group, mostly from Ludhiana, have floated these NBFCs with a capital base of over Rs 100 crore and transferred their shares to these companies to borrow finance from them. Since the parent companies pay interest to these NBFCs, they get income tax exemption on them. With the economic slowdown hitting their expansion plans, the business houses are relying on the NBFCs more so for the expansion of their retail plans. Nahar Group launched its NBFC, Nahar Capital and Finance Services, to fund its own group companies two years ago, but now it is relying on this NBFC for the expansion of its Monte Carlo and Cotton County retail outlets. Hero Industries has floated two NBFCs, Bahadur Chand Investment Pvt Ltd and Hero Investments, while Vardhman Group and Alchemist Group have also launched their NBFCs. Officials in the regional office of RBI informed TNS that as of date there were 399 category B NBFCs (that cannot accept deposits from public) in Punjab, Himachal Pradesh and Chandigarh. Of these, nearly 10 have a capital base of over Rs 100 crore and are being run by top regional industrial houses. While seven of these are located in Ludhiana, one is Chandigarh based. The RBI officials said while 308 of these category B companies are located in Punjab, 16 are located in Himachal Pradesh and 75 in Chandigarh. A majority of these companies (202) are loan companies, while only 59 are the asset finance companies. “The corporate houses can float NBFCs to fund their expansion plans, but they cannot accept public deposits from them. These are run by the seed money invested by the promoters only, who use this capital to finance their own companies. However, we issue a licence to the companies and they have to submit their reports to RBI for monitoring,” said an RBI official. Interestingly, while these category B NBFCs are increasing in number, category A NBFCs (which can accept public deposits) are on the decline in the region.
	Pre-Doha talks begin Bhagyashree Pande Tribune News Service New Delhi, September 2 World economy is giving signs of recovery from the recessionary spiral brightening the skies for the talks of 39 country trade ministers in New Delhi today. This mini meet is expected to reenergise the beleaguered Doha round of negotiations that broke last July. Besides, it also gives the world a signal that New Delhi is serious about concluding the talks, which it had broken last year due to disagreement on some issues. On the table are two most prickly issues, one that of giving market access to developed countries in agriculture. Two, discussions relating to eliminating tariffs in certain identified industrial sectors. What really is contentious is that some developed countries are faced with a growing domestic demand for protectionism while they seek higher openings in the developing country markets of India, China and Brazil. What will happen with this meeting is that it will bring out the more substantive discussions on contentious issues among the different groups within the WTO. There would be no hard negotiations, but the discussions will pave way for the Doha round of talks to be held in 2010, say Commerce Ministry officials. While speaking at the CII organised conference Nelson Fernandez, vice minister of Foreign Affairs, Uruguay expressed the need for countries to continue to resist protectionist tendencies. He said the WTO member countries must continue to engage and not allow the negotiations to collapse. The importance of paving the way for these trade talks towards conclusion is that trade is an economic stimulus in recessionary time. Besides, a strengthened rule based system will ensure that there is no protectionism and that each country gets to trade with safeguards in place. What is crucial to the new political will for concluding Doha is the engagement of two key players - India and the United States said the Australian Minister for Trade Simon Crean while speaking at the CII organised function. Historically, studies have shown that world trade has grown three times faster than world output. After the successful conclusion of a trade liberalisation round there has been a lift in world output. With the world economic climate still looking a bit hazy the world leaders see conclusion of Doha trade talks as crucial to the global economic stimulus agenda.
	South Africa backs Bharti-MTN deal Girja Shankar Kaura Tribune News Service New Delhi, September 2 The signs for an early deal between country’s largest telecom operator Bharti-Airtel and South African telecom giant MTN have started emerging with reports suggesting that the agreement has the backing of the South African government. In the event of the deal coming through, both Bharti-Airtel and MTN would have to seek clearance from their respective governments. While Bharti, would need a go-ahead from the Department of Telecom (DoT) as well as the Foreign Investment Promotion Board (FIPB), MTN would have to seek the clearance not only from the government but also the country’s telecom operator. South African laws clarify that the government must be notified of any deal on mergers before the proposed transaction is implemented. Then, if the deal creates equity, whose combined annual turnover or assets are more than 560 million rand ($67.97 million), the competition authorities and the country’s telecom regulator - Independent Communications Authority of South Africa would investigate it. The two companies, which had been working on a complex $23 billion cash and share swap since May 25, have extended the talks twice. They have now extended the exclusive talks till September 30, after extending discussions by a month to August 31.
	Another e-bike ‘Zooms’ in Sanjay Khurana Tribune News Service Chandigarh, September 2 Dehrandun-based Doon Scooter India today launched electric bike, Zoom, here today. Powered by a 48-volt and 250W motor, the bike can drive up to 60-70 km on a single charge at a speed of 25 km per hour. Ranjan Chawla, chairman of Doon Scooter India while talking to The Tribune, said: “We have done extensive research for about two years on the product and these e-bikes have been tested rigorously on the roads for six months before their commercial launch.” The company has invested Rs 5 crore at its assembling plant in Uttarakhand and is targeting to manufacture 100 e-bikes per day. The bike, priced at Rs 30,900, comes with a one-year warranty and six-month battery warranty. Chawla further informed that Zoom is environment-friendly and pollution-free vehicle and they are targeting school students between the age group of 14-18 years and senior citizens as potential customers. “We will gradually launch Zoom all over the country and aiming at selling about 100 vehicles in the very first month of its launch from Chandigarh only.” The company is in the process of appointing distributors and dealerships for the same throughout the country. He further informed that the price of the two-wheeler could be brought down if the government provides subsidy on the sale of e-bikes. He gave the example of Uttarakhand, where the government does not levy VAT on electric vehicles, whereas in Chandigarh and other states, VAT @ 12.5% is charged. He suggested that in order to promote the sale of e-bikes and make the environment pollution-free, the Central government should devise a policy and all states should exempt e-bikes from the ambit of VAT. The company intends to organise road shows in schools in the coming weeks so as to create awareness about e-bikes. The e-bike does not require any licence/registration or helmet to drive. So, just drive in and “Zoom” out.
	Airtel’s 3G services by Oct ’10 New Delhi, September 2 Within a weak of the government announcing plans to auction spectrum for 3G mobile services, India's largest private cellular operator Bharti Airtel today said it will launch the service by October next year. "If everything goes well on time with regard to spectrum auction, by February or March we will have spectrum allocation. By next Diwali (2010), we will have commercial launch of 3G services in India," Bharti Airtel CEO Manoj Kohli said on the sidelines of a function organised by Qualcom here. The government has fixed Rs 3,500 crore as the base price for pan-India 3G spectrum and the auction for the same is expected to be completed by November. Bharti has already announced its decision to participate in the 3G process. Asked about the development on Bharti's proposed $23 billion deal with MTN, Kohli said the process is on and declined to answer.Asked if Airtel anticipates by September 30 the entire issue will be resolved, he said "let's wait". Airtel and MTN are exploring an alliance and are in exclusive talks to work out for deal. As per the original scheme of arrangement, Bharti will acquire 49 per cent in MTN whereas MTN and its shareholders will get 36 per cent economic interest in Airtel. — PTI
	Govt to end oil licensing system by 2011 New Delhi, September 2 The government aims to allow firms to identify oil exploration areas they want to drill from 2011, ending the current regime of licensing rounds, the upstream regulator said on Tuesday. The country currently auctions specific blocks under its exploration licensing rounds which are open for a fixed period, unlike the open acreage system where a company can delineate the area it wants to drill and bid for it any time of the year. For the shift to an open acreage system India would set up a National Data Repository by March 2010, V K Sibal, DG hydrocarbons told reporters at an international conference on a National Data Repository. "The first phase of the National Data Repository will be set up by March 2010 and in 2011 we hope to shift to open acreage system," Sibal said, adding there could be a maximum of two licensing rounds before a complete switch over to the new system. — Reuters