The Tribune, Chandigarh, India

	SAIL plans 60,000-cr unit in Jharkhand New Delhi, May 16 State-owned SAIL is mulling over setting up a steel project, at an estimated cost of Rs 60,000 crore, in Jharkhand. The plant, which is expected to be built on the space belonging to a closed fertiliser mill in Sindri, Dhanbad district, would help the company raise its annual steel production to 60 million tonnes by 2020. The steelmaker recently applied to the Ministry of Chemical and Fertilisers for setting up the 12 million-tonne/per annum plant, government officials told PTI. "The integrated steel project would come up in two phases," one of the officials said. As per the proposal, the PSU would also set up a 1.15 million-tonne coal or gas-based urea plant at the site. The loss-making fertiliser mill in Sindri had been lying shut since March 2002. The plan to utilise the land bank of closed fertiliser and cement mills for setting up steel mills is in line with a strategy outlined by Steel Secretary Atul Chaturvedi. Former fertiliser secretary Chaturvedi said in order to avoid problems relating to land acquisition, public as well as private sector firms should seek land belonging to closed mills, especially ones located in the mineral-rich states of Jharkhand, Orissa and Chhattisgarh. Meanwhile, the government set up a high-level committee of state industry ministers to prepare guidelines on the creation of industrial sites, comprising waste and fallow land. SAIL is currently in talks with South Korean steelmaker Posco to jointly set up two steel plants, entailing an estimated investment of Rs 15,000 crore, in the country. It has also been approached by global firms like ArcelorMittal and Kobe Steel for possible business ventures. SAIL already runs a 3.5 MTPA steel plant in Jharkhand and is expanding its capacity to a little over 7 MTPA at an estimated investment of Rs 10,000 crore. The global steel major is also eyeing SAIL's huge iron ore reserves in the state, besides the land bank. — PTI
	Big firms-truck unions ‘pact’ hits SMEs in HP Ruchika M. Khanna Tribune News Service Chandigarh, May 16 Holding trade and industry to ransom, truck unions in Himachal Pradesh have been known to use arm-twisting tactics. But now, big companies in the hill state have started using these unions to their advantage by having maximum trucks at their disposal, thereby ensuring that small and medium enterprises (SMEs) face a shortage of trucks for ferrying their goods. Industry sources informed TNS that a number of big companies, which have recently expanded their manufacturing capacities in the hill state, have now tied up with these unions to ensure that the maximum trucks are at their disposal. By offering incentives to truck union leaders and giving loading preference to those who remain affiliated with them, these companies are getting as many trucks at their disposal as required. On the other hand, the SMEs here are forced to wait endlessly to get trucks for transportation of their goods. These big companies have also asked the truck unions to carry their goods to the plains and ferry back raw material to their plants in HP. These trucks have been ‘instructed’ not to bring back other goods to the hill state (like essential commodities, food items et al), as was the practice earlier. Since the Himachal-based truck unions also do not “allow” trucks from the plains for transportation of goods in Himachal Pradesh, traders in the plains, too, are feeling the pinch. It may be mentioned that around 3,500 trucks are available with the Darlaghat and Barmana truck unions, while 1,500 trucks are available with the other small truck unions in the hill state. At present, there is a shortage of around 1,500 trucks in the state. The problem has reportedly become more severe after the cement manufacturing companies expanded their operations in the hill state. “Two cement manufacturers have added capacities to their plants, while another manufacturer has set up two new plants in Solan. Since they require more trucks at their disposal, they have been using the trucks to their advantage,” alleged Kamal Kishore Talwar, senior general manager, Shree Cements. He said their business interests in Himachal had been severely hit because of this problem. “Because of the shortage of transportation facilities, we are able to supply just 60,000 bags of cement, as against our normal supply of 2 lakh bags a day for the Parbati Hydel Project. In order to ensure that our supplies reach on time, we are forced to pay more carriage to the truck unions than the market rate,” he rued.
	Special trading held for gold ETFs Mumbai, May 16 Country's leading bourses the Bombay Stock Exchange and the National Stock Exchange today conducted special trading sessions in gold Exchange Traded Funds (ETF) on Akshya Tritiya. The NSE platform generated volumes worth over Rs 172.39 crore and the BSE worth Rs 24.87 crore. "The special trading session was a big success as reflected in the volume," an NSE official said. Seven Gold ETFs, including Benchmark Goldbees, Kotak Gold ETF, Quantum Gold Fund, Reliance Gold ETF, Religare Gold ETF, SBI MF-SBI Gold ETS-Go and UTI Gold ETF were available for trading. Both the Exchanges kept the market open from 9 am to 3.30 pm today for the special trading session in Gold ETFs that are traded on the Exchanges' equity trading platform. Gold ETFs have been doing well in Indian markets. Compared to other geographies where ETFs are popular, India is unique in the sense that the ETF market till date has been driven by gold ETFs, both in terms of number of instruments and AUM (assets under management). — PTI
	Market Update Negative sentiment to continue by Lalit Batra Despite the weakness towards the end of the last week, the Indian markets ended with smart gains after the European Union announced a multi-billion-euro bailout for the troubled euro zone nations. On the macro front, the latest economic data showed industrial output rose lower than expected 13.5 per cent in March 2010. The growth was also slower than February’s 15.1 per cent expansion. Telecom stocks tumbled last week after TRAI (Telecom Regulatory Authority of India) said the telecom operators will have to pay up to Rs 30,000 crore in fees for holding excess 2 G spectrum. Investors are concerned as TRAI’s recommendations will have negative impact on the industry. After soaring 3G auction rates, which is to be followed by broadband auctions, telecom companies may now have to pay extra for 2G. This coupled with uncertainties in the sector and one paise per second taifffs could continue to weigh on telecom stocks. The overall market trend continues to remain negative as the upswing on last Monday was only due to sharp short covering. The global market scenario continues to remain bleak and the domestic market also remains trigger less. The negative mood will continue for some time as the market has closed below the psychological 5,100 mark. Axis Bank Banking sector has evolved in the past 10 years in terms of service offering and technical capabilities coupled with Eighter regulatory norms have ensured cleaner balance sheets. This has, in turn, improved the valuations that investors have accorded to the sector. This is more so true for banks that have stood out with good and dynamic management, cleaner balance sheets and ability to change with changing market scenarios. Axis bank is one such bank which fits into the above category. The bank has grown its branches and deposits at an average annual rate of 30 per cent and 40 per cent respectively, in the past five years. Additionally, it grew its net profits at an average annual rate of 51 per cent during this period. This has delivered above average shareholder’s return over the past five years. The bank continued to substitute interest revenues with higher fee income generation. A large share of the bank’s fee income is being derived from its cash management service, e-payment of taxes, and e-governance businesses. The higher fee income contribution also insulates the bank’s bottomline against the interest rate cycle and muted performance on the treasury side. The bank has maintained provision coverage ratio well in excess of 70 per cent (as per RBI’s mandate) over the past 4 years and will not have any pressure on its profitability due to this compliance. In the nut shell, Axis Bank’s balanced growth, superior margin profile and consistency in fee income bring its growth trajectory closest to some of the most successful banks in the India (HDFC Bank) and globally. A high provision coverage ratio also makes it a safe play in a poor credit appetite and volatile interest rate scenario. Further, the bank is amply capitalised to sustain its growth rate in the medium term. The bank’s conservative provision for risks and potential of improving return ratios make it very attractive for the longer term. This is particularly so because the bank can also prove to be a very attractive candidate once the consolidation activity kicks off in the Indian banking sector.
	Tax Advice No sales tax on rental income by SC Vasudeva Q. In the column dated 01.05.2010, R.K. Gupta submitted the facts as under: 1. Already rented property to four tenants @ 5000/- = Rs 20,000 p.m. 2. Wants to rent another two floors @ 1,00,000/- p.m. (Excluding sales tax) 3. Now he has apprehension that the service tax is leviable. Your reply:- Finance Bill,2010, proposes to amend the definition in retrospective from June 1, 2007 by expressly providing that the activity of renting is a taxable service. Accordingly, service tax would be payable on the aggregate amount of rent. But my C.A has different view." There is "Laxman Rekha" at Rs 10 lakh. In case you cross this line of Rs 10 lakh in your receipt of rent then service tax is to be paid not otherwise. I had been filing my return of around 2 lakhs rent income for the last so many years with no liability of service tax. Please advise: 1) Whether I should get myself registered for service tax, through online service. 2) All my family members who have some rental income should get a separate registration done. Or they can pay the service tax through my registration number. 3) Is sales tax also involved in renting out a premises? — Nripander Parkash Khanna A. Your queries are replied hereunder: (i) The threshold limit for payment of service tax is Rs 10,00,000. However, every provider of a taxable service whose aggregate value of taxable services in a financial year exceeds Rs 9,00,000 has to mandatorily obtain registration. (ii) The registration, if applicable, will have to be in the name of the service provider. (iii) Sales tax is leviable on sale of goods. No sales tax would be leviable on renting of premises for commercial purposes. It may be added that the reply to Mr. Gupta's query was based on facts of his case as his rental income exceeded Rs 10 lakh. Senior Citizen Q. Kindly advise whether for senior citizen exemption limit of income tax for assessment year 2010-2011 is Rs 2,50,000 or Rs 2,40,000. — S. Chand A. The exemption limit in the case of senior citizen for assessment year 2010-11 is Rs 2,40,000. Rebate on royalty Q. My queries are as under: (i) How much income received from the royalty of books is tax-free when writing is not the sole profession of the writer. (ii) I am working as a lecturer in a Govt. College. My income for the assessment year 2010-11 is as under. Kindly compute the income tax payable by me. No expenditure has been incurred on the house owned by me. — Sudesh Kumar Verma A. The deduction in respect of income from royalty by an author or a co-author is allowable to a taxpayer who is individual resident in India. The amount of deduction allowable is Rs 3,00,000 or income from royalty whichever of the two is lower. It may be added that where income from royalty or copyright fee is not a lump sum in lieu of all rights in the book, so much of the income (before allowing expenses attributable to such income) as is in excess of 15% of the value of such books sold during the previous year shall be ignored. In effect it means that rate of royalty in such a case should not exceed 15%. The deduction is allowable in respect of a book which is work of literary, artistic or scientific nature. However, the term book shall not include brochures, commentaries, diaries, guides, journal, magazines, newspapers, pamphlets, text books, tracts and other publications of similar nature, by whatever name called. The taxpayer has to make a claim in respect of the deduction from royalty income. He is also required to obtain a certificate in Form 10CCD from the person responsible for paying such income. Section 80QQB of the Act which deals with these provisions also requires the said form to be attached to the tax return. However, these days on account of electronic filing it is not possible to attach any certificate with the return. Such form should therefore be obtained and kept by the taxpayer so as to produce the same as and when required by the Assessing Officer. The royalty income earned by you includes royalty earned on general books. Royalty from such books is not to be considered for allowing deduction under Section 80QQB of the Act. Please provide the necessary details without which the tax on your total income cannot be computed. PPF account Q. I have a PPF account which has matured in March 2010. My queries are: 1) I have got permanent residency for Canada from June 2009. I am planning to move to Canada from June 2011 and just visit India for short time from time to time. 2) I want to opt for post-maturity extension of my PPF account with no contribution. 3) My PPF will continue to earn interest. I want to know if this interest will be taxable or not. Further, please let me know how often I can withdraw from PPF and how much at one time. Please advise. — A.M. Singh A. The Public Provident Fund Scheme 1968 as amended w.e.f. 25.07.2003 provides that in case of a resident who subsequently becomes non-resident Indian during the currency of the maturity period, may continue to subscribe to the fund till its maturity on a non-repatriation basis. The amount of fund lying in your account therefore is to be kept upto the date of maturity period only. It would therefore, be advisable to withdraw the amount after the maturity period.
	Ratan Tata honoured Toronto, May 16 Tata Group chairman Ratan N Tata received the 2010 CIF Chanchlani Global Indian Award on Saturday for his outstanding global leadership, vision and professional excellence. The award carries Rs 1 crore cash prize and citation and was presented at the Annual Award Gala of the Canada India Foundation held in Vancouver, Gala Chair and Co-Chair of Canada India Foundation Barj Dhahan said. Tata joined the Tata Group in 1962 and in 1991, replaced his predecessor, JRD Tata, as chairman of Tata Sons. Since then, the group's revenues have increased 12-fold. Recent acquisitions under Tata's guidance include Jaguar & Land Rover from Ford Motor Company and Corus Group, an Anglo-Dutch steel producer. — PTI
	J&K Bank earns record profit Tribune News Service Srinagar, May 16 The Jammu and Kashmir Bank has earned a “remarkable” profit in the last fiscal year. Addressing a press conference here today, bank’s chairman Haseeb A Drabu said, “In the year 2009-10 the net profit of the bank stands at Rs 512 crore, which is the highest profit ever of the bank. The gross profit stands at Rs 958 crore, which is again the highest-ever.” He said the business of the bank in the same period has gone up by 12 per cent and stood at Rs 60,294 crore and the total assets of the bank went up by 13 per cent at Rs 42,547 crore whereas the total advances by the bank were up by 10 per cent at Rs 23,057 crore.