The Tribune, Chandigarh, India

	GST rollout: Centre to compensate states New Delhi, July 24 Finance Minister Pranab Mukherjee today assured the states that the Centre will fully compensate them on possible losses arising from implementation of the goods and services tax (GST) regime. "No state would be allowed to suffer any loss and would be fully compensated by the Central government," he said at a meeting of the National Development Council here today, attended by most of the state chief ministers. Mukherjee, earlier this week, had proposed a three-tier structure for the new indirect tax regime - 20 per cent for goods, 16 per cent for services and 12 per cent for essential items. As per the formula, the Centre and the states will equally share the revenue. The Centre had already discussed the draft constitutional amendment bill with the state finance ministers. "The Centre alone can't get it implemented as it requires constitutional amendment for which a large political consensus is required among major political parties," he said. The 13th Finance Commission it its recommendations had asked the Centre to set aside Rs 50,000 crore to compensate the states for the possible revenue loss from GST rollout. As part of the tax reform, the government proposes to introduce GST, which will subsume levies like excise, service tax, VAT and local levies like octroi etc from April 1, 2011. GST was earlier scheduled to be implemented from April 2010, but could not do so because the Centre and the states failed to arrive at a consensus primarily on the tax rate and the quantum of compensation to the states for any possible revenue loss on account of this new indirect tax regime. Mukherjee solicited support from all political parties for evolving a consensus on the various issues concerning the GST proposals. Meanwhile, the chief ministers of BJP-ruled states today raised concerns about autonomy saying the new tax regime should not curtail their power to levy taxes. "The GST rate (proposed by the Centre) should be treated as the floor rate without limiting the autonomy of the states," Karnataka chief minister BS Yeddyurappa said while addressing the NDC meeting. — PTI
	Maruti Q1 profit falls 20 pc New Delhi, July 24 Higher input costs and increase in competition has seen the country’s largest car maker Maruti Suzuki’s (MSIL) profits fall for the first quarter of the financial year. The company today reported a 20.25 per cent fall in its net profit for the quarter ended June 30 at Rs 465.36 crore. It had posted a net profit of Rs 583.54 crore during the corresponding period last fiscal, MSIL said. The total income from operations in the first quarter, however, increased by 26.78 per cent to Rs 8,231.53 crore from Rs 6,493 crore in the year-ago period. The company said the drop in net profit was due to higher commodity prices, increase in royalty and lower ‘other income’. IOC posts loss State-owned Indian Oil Corporation (IOC) today reported a net loss of Rs 3,388.39 crore in the first quarter, ended June 30 on account of selling fuel below cost. Net sales rose 23 per cent to Rs 71,275.07 crore in April-June. Indian Bank net up 11 pc Indian Bank today reported a growth of 11 per cent at Rs 368.15 crore in net profit for the first quarter, ended June 30. The bank also reported a 11.07 per cent increase in its total income for the first quarter at Rs 2,477.25 crore, as against Rs 2,230.39 crore, it added. — TNS/PTI
	Aviation Notes New norms to curb flight delays by KR Wadhwaney Discipline is the key to the on-time-performance of flights on domestic and international routes. This is the theme song of the recent circular of the Director-General of Civil Aviation (DGCA) to the airlines, Air Traffic Controllers (ATCs), airport authorities and all other concerned operators. The circular, a piece of bureaucratic craftsmanship, highlights that all involved actors are required to work in unison so that take-offs and landings are on the 'scheduled time'. The underlying purpose of the letter is that the on-time-performance means saving of fuel and convenience to passengers. Most of the flights from Mumbai in particular and Delhi have been operating on time as the DGCA circular has had a desired effect on operators. According to reports, six of eight airlines operating domestic flights from Mumbai airport had 100 per cent on-time departure on July 21. The on-time performance brought to memory Air India's operation between India and London (Heathrow airport). The flights were invariably monitored by JRD Tata himself. He invariably announced on PA (public address) system: "Friends, synchronise your watches, Air India flight is landing at Heathrow airport dot on time". Similarly, the DGCA, Dr Nasim Zaidi, has gone on record saying: "I should give credit to all the people involved in the chain of events - passengers, ground staff, air traffic controllers and pilots - for making this possible". He added: "This record of punctual operations can become a regular feature if all involved actors work with same enthusiasm and willingness". Airlines have been directed to adhere to new guidelines. They have been told to direct cockpit and cabin crews their revised duty and time limits rules and also impress upon passengers that check-in will stop 40 minutes before flight. The analysts are of the view that however good this rule may be for passengers, it will be difficult for airlines to 'discipline' VVIP politicians' who have the habit of reaching a few minutes before take-off time. Some private airlines have started rigidly adhering to new set of rules. Commanders and hostesses have expressed their happiness at the development. "But punctual operations become feature of Indian civil aviation is difficult to predict at this juncture because violators will be high and mighty", said three senior retired commanders. ATCs are the nerve centres for punctual operations. The Mumbai ATC has categorically impressed upon airlines that they should adhere to rules. They should take off on time and, if they fail, they will have to miss their slot. "It will take you a long time to get fresh time for take-off for a missed take-off", the airlines have been warned.
	Investor Guidance Resident’s global income taxable in India by AN Shanbhag Q: I am a dentist in India. I am also a consulting orthodontist in Muscat (capital city of Oman). I am having a resident card of that country. I go about 3-4 days in a month to Muscat and then I come back to India. I have two queries regarding this. First of all whether the amount earned in Oman taxable in India — in Muscat the income is tax free. Secondly, can I open an NRI account in India? — Dr Ashish A: If you spend 182 days or more in India in any financial year (Apr-Mar), you qualify to be a resident of India. By going 3-4 days in a month to Oman, at most you would end up being out of India for 48 days in a year. This will not qualify you to be an NRI. Since the global income of an Indian resident is taxable in India, the income earned in Oman will indeed be taxable in India. Also, since you are not an NRI, you will not be eligible to open an NRE or NRO account in India. Setting of losses Q: I have recently sold a painting of S. H. Raza in the current financial year, with long-term capital gain (LTCG) of Rs 10 lakh. Kindly advise whether losses incurred / likely to be incurred from the following transactions will qualify for adjusting against the aforesaid LTCG. Long-term capital loss (LTCL) from car purchased by me eight years ago for personal use, to be sold during the current financial year. LTCL from my eight years old desktop personal computer, to be sold during the current financial year. STCL from shares to be purchased on cum bonus basis and then sold ex-bonus during the current year. Bonus shares with nil cost to be retained, thereby deferring the relative tax liability until sale of these bonus shares in subsequent years. STCL from sale of shares, brought forward from the previous financial year. — Jagjeet Singh A: LTCL from the car and from the desktop is not available for set-off since these are personal effects and not subject to tax. However, the STCL from shares sold in the current financial year as well as the STCL brought forward may most certainly be set-off against the taxable LTCG from sale of the painting. NRI and savings account Q: My daughter who was a student in India, went to the USA and is still a student pursuing her studies. She had a PPF account in her name and I used to contribute in that account every year varying amounts, basically gifts from me and the family. She also has a joint demat account with me but she being the first holder for four or five scrips giving her some dividends every year. On completion of the 15 years term of the PPF account, her account has been closed and the money transferred to her saving accounts jointly operated by two of us with she being the first holder. The queries are: 1. Can she take this money to the USA for her studies? 2. Can she continue to operate the same account whenever she comes to India? 3. Does she have to change her saving account and demat accounts to different accounts? 4. If she has to change to new accounts, can she have joint account with me as the second account holder (Indian resident)? 5. What should she do for her PAN card which was issued while she was a resident Indian? 6. If she becomes USA national in the mean time would this mean differently for the above mentioned queries? I may mention here that she is unlikely to become Indian citizen for 5 - 10 years. — Anil Narang A: First and foremost, your daughter is an NRI. Therefore, she cannot continue to maintain a resident savings account. She may open a fresh NRO with she has the first holder and you as the second. The funds in the existing savings account may be transferred to the newly opened NRO account. From this account, she may remit abroad up to $1 million per financial year for any bona fide purpose. Also, as an NRI, she is not allowed to maintain and operate a resident demat account. For any stock market related transactions, the bank will have to be instructed to obtain the PINS permission for her. A new demat account under PINS will have to be opened and the existing holding transferred to such a newly opened demat account. As regards PAN, there is form available which is meant to be used for communicating any correction in the PAN data which can be duly filled and submitted to the tax department. Her becoming a US citizen does not alter the above suggestions in any way. The authors may be contacted at wonderlandconsultants@yahoo.com