The Tribune, Chandigarh, India

	Strengthening laws to curb outflow of funds, says FM Govt negotiating terms of tax information exchange with other countries Sanjeev Sharma Tribune News Service New Delhi, June 13 Finance Minister Pranab Mukherjee today said tax havens were being used for parking undisclosedincome, including by Indians, and attacked abusive transfer pricing regimes for illicit outflows from developing countries. Mukherjee has called for strong measures to reverse the ongoing trend of illicit outflows from developing countries and exploitation of natural resources through abusive transfer pricing schemes. Inaugurating a seminar, the Finance Minister said that transfer pricing continued to be an important tax issue due to high increase in cross border trade taking place within multinational companies located in developed, developing and undeveloped countries. India is strengthening transfer pricing provisions to check misuse of the provisions and efforts to shift profits to another country. FM said that the variety of inter-company transactions, increased global business restructuring and location of companies in various tax jurisdictions have made it more challenging. On tax havens, Mukherjee said that tax competition driven by the presence of tax havens had created a situation that had helped individuals park substantial undisclosed income outside their countries. He said that this was also true in case of some Indian citizens and residents, in the process denying legitimate tax revenues to the country. He said the government was coordinating with other countries and was in the process of negotiation of exchange of information agreements with tax, no tax or low-tax countries. India has also initiated process of re-negotiation with 65 countries to broaden the scope of provisions governing exchange of banking information and information without domestic interest. He added India has finalised 14 Tax Exchange Information Agreements (TEIAs) and completed negotiations and renegotiations of Double Taxation Avoidance Agreements (DTAAs) with 36 countries. The FM pointed out that that there was a considered view that the tax havens and low tax jurisdictions were important actors in the global financial crisis. The opaque system in these jurisdictions and restrictions on exchange of information and their non-compliant behavior were a matter of serious concern, the minister added. The concerns were not only on account of protecting revenue base but also linked to financing of activities which are detrimental to national security interest. While countries have accepted to end bank secrecy in general, some countries have agreed to do so only from prospective date and are not willing to exchange past banking information. Earnings from bribe may be made criminal offence under IT Act To tackle tax evasion and check generation of illicit money, the government is considering classifying earnings from illegitimate sources like bribery and corruption as criminal offences under the income tax laws. “The income earned from illegitimate means could be classified as a criminal offence in the Income Tax Act,” said a senior Finance Ministry official. Generally, tax avoidance on income earned through legitimate sources is treated as a civil offence.— PTI
	India to give $100 mn loan each to neighbours New Delhi, Jun 13 India today commited $100 million soft loan for each of its neighbouring countries to help them in developing infrastructure projects such as roads, drinking water and power. Addressing a meeting of the South Asia Free Trade Area Ministerial Council at Male (Maldives), Commerce and Industry Minister Anand Sharma said that India has evolved a new 'Buyer Credit Cover' for the SAARC region. Essentially, this would be a development loan. "We would be happy to extend such development loan through our Exim bank, interest rates close to LIBOR (London Inter Bank Offer Rate)," he said. Sharma said that the countries in South Asia need to rapidly break down barriers in key sectors like textiles, pharmaceuticals, infrastructure, electronic goods, automobiles and agriculture. He said that foreign direct investment (FDI) and trade within the SAARC region has been much below the potential.— PTI
	CAG targets inflated oilfield expenditure New Delhi, June 13 The oil ministry will reply within two weeks to criticism from the state auditor that it had allowed some explorers to overstate costs of field developments and explore beyond their contracted areas, a source at the ministry said on Monday. The Comptroller and Auditor General’s (CAG) report said energy major Reliance Industries had inflated development costs on its D6 block in the Krishna-Godavari basin, two newspapers reported on Monday. The CAG also cited a joint venture of Reliance with BG and ONGC for hiking development costs in the Panna-Mukta and Tapti gas fields, the newspapers added. The CAG report also said Cairn India Ltd had been allowed to explore additional areas not stipulated in its contract for the RJ-ON-90/1 block, the Hindustan Times said. The CAG report is a draft which has been sent to the oil ministry for comments, the newspapers said. A oil ministry source said they had two weeks to reply to the CAG report. “(The) companies concerned, accused of so many things, will also reply. It will culminate in an exit conference,” the source said on condition of anonymity given the sensitivity of the issue. In a statement issued late Monday, the oil ministry said it was examining the draft report, received on June 8, and would prepare a reply to the audit observations after obtaining details from relevant agencies. While no immediate comment was available from Cairn India on the reports, Reliance said in a statement that it had complied with the requirements under the contract with the government. "Reliance Industries strongly affirms that as a responsible operator, it has fully complied with the requirements in the (production sharing contract) at all times in conducting petroleum operations, and refutes any suggestion to the contrary," the statement said, adding it had not yet received a copy of the CAG report. — Reuters
	DEPB scheme extended by 3 months till September New Delhi, Jun 13 The government today said it had extended the popular exports scheme - DEPB - for three more months till September. The DEPB scheme was due to end on June 30. “...we have extended Duty Entitlement Pass Book (DEPB) till September,” Finance Secretary Sunil Mitra told reporters at the sidelines of a seminar organised by Ministry of Finance and OECD. However, he said that the scheme will be phased out and replaced by duty drawback. “It (DEPB) will be phased out (and) duty drawback will take its place. We have appointed a committee which we think will take a couple of months to decide all India drawback rates for items currently under DEPB,” Mitra said. Exporters can also ask for brand rate fixation, he added. The government spends annually about Rs 8,000 crore re-imbursing exporters on the taxes paid on import content of export products. The 14-year old scheme is the most popular among exporters, especially in the engineering including automobiles sector.— PTI
	Titan approves stock split New Delhi, June 13 Watch, eyewear and jewellery- maker Titan Industries today said its shareholders have approved a sub-division of existing equity shares of Rs 10 face value into ten shares of Rs 1 each. The company will also issue bonus shares in the ratio of one equity share for every single equity share held. The members have passed a resolution through a postal ballot to make changes in the Articles of Association and MoA of the company to increase authorised share capital.— PTI
	Idea consolidated net at Rs 274.5 crore New Delhi, June 13 Aditya Birla group telecom company Idea Cellular today reported consolidated net profit of Rs 274.52 crore for the quarter ended on March 31, 2011 in its unaudited results. The company had reported a net profit of Rs 266.61 crore in the fourth quarter of 2009-10. The company said figures of the current period are not comparable with that of the corresponding period due to the merger of Spice Communications effective from March 1, 2010, prior to which it was a joint venture. The unaudited total revenue of the company for reported quarter stood at Rs 4,234.72 crore. For the year ended March 31, 2011, Idea Cellular unaudited consolidated net profit stood at Rs 898.71 crore. The company for same quarter in previous financial year posted net profit (audited) of Rs 953.94 crore. The company reported total revenue of Rs 15,503.22 crore for 2010-11. According to audited financial results, Idea Cellular had consolidated total revenue of Rs 12,447.08 crore in 2009-10. The company in a statement mentioned its legal battle with the DoT on Spectrum allocation and merger of Spice Communications with it.— PTI
	Oil companies agree to give Air India fuel for 3 months New Delhi, Jun 13 Air India today got a breather on payment of dues to state-run oil companies, which have restricted fuel supply to it, following the intervention of Civil Aviation Minister Vayalar Ravi who met Petroleum Minister S Jaipal Reddy to sort out the issue. Ravi asked Reddy to direct the oil marketing companies to provide aviation turbine fuel to Air India so that the national carrier can restore its cancelled or curtailed flights, sources said. Following the meeting, in which CMDs of oil companies and Air India and secretaries from both the ministries were present, it was decided that oil companies would provide Air India additional fuel for next three months to allow it to operate all its flights.— PTI
	Paid Rs 533 crore as interconnection fee to BSNL, says RCom Tribune News Service New Delhi, June 13 State-owned telecom operator BSNL's move to pull the plug on interconnections with Reliance Communications (RCom) in Punjab and Haryana last month has not gone down well with the Anil Ambani-owned company. It has protested the move saying that it has paid the amount due to the state-owned telecom operator and that the move had impacted about four million of its customers in this region. RCom today said that it had paid Rs 533 crore as full and final settlement towards interconnection charges to BSNL. It termed its disconnection by BSNL from its network as a ‘breach of agreement’. RCom added that BSNL had disconnected Point of Interconnection (POI) between the networks of both companies on 23 and 31 May in Haryana and 4, May in Punjab, regarding a financial dispute that stretched back to 2004. It added that BSNL could not unilaterally act on this issue as the matter was sub-judice. The issue relates to a fee known as Access Deficit Charge, a levy that private operators used to pay earlier to compensate BSNL's unviable and subsidised rural operations. BSNL had disconnected the point of interconnection (PoI) of Reliance Communications (RCom) on May 23 and May 31 in Haryana and on May 4 in Punjab claiming non-payment of pending dues by private telecom company. PoI is a system in which a telecom operator provides its network to other telecom operators for routing of calls for a fee. “RCom has made a payment of Rs 533 crore towards full and final settlement towards interconnection with BSNL. Payment of Rs 55 crore has also been made under protest,” RCom said. The payment has been made against 'arbitrary threats of PoI disconnection' at various times for various circles to protect the interests of the mobile customers across the country, it added.
	75,000 acres acquired for city south of Ahmedabad New Delhi, June 13 At a time when farmers are agitating against land acquisition in different states, 75,000 acres have been acquired at Dholera, 110 km south of Ahmedabad, for one of the biggest urban development projects in the world. Spread over 940 sq km ,a new city would be developed at Dholera by the Delhi-Mumbai Industrial Corridor DevelopmentCorporation (DMICDC) as part of its $90-billion project spread across Delhi, Haryana, UP, Madhya Pradesh,Rajasthan and Gujarat. The DMICDC, a public-private-partnership venture, has acquired 80,000 acres, its and Chief Executive Officer and Managing Director Amitabh Kant said today at a FICCI function.— PTI
	Farm credit disbursal exceeds target by 14% New Delhi, June 13 Farm credit flow surpassed the target by about 14 per cent to Rs 4,26,531 crore during 2010-11. The government had set the target of farm credit disbursal at Rs 3,75,000 crore during the year, said an official statement, highlighting the quantum jump. Agency wise, commercial Banks with disbursal of Rs 3.14 lakh crore were at the top, followed by Cooperative Banks with 69,000 crore and Regional Rural Banks with 43,000 crore, the statement added. The credit flow target for the current financial year (2011-12) has been fixed at Rs 4.75 lakh crore. Banks have been asked to step up direct lending, especially to small and marginal farmers. The government has been providing crop loans at concessional interest rates since 2006-07. In the current financial year (2011-12), the government is providing interest subvention by 3 per cent, thus bringing down the effective rate of interest to 4 per cent per annum. This interest subvention is provided to the farmers who repay their short term crop loans on time. In 2009-10 the subvention rate for timely repayment of crop loans was 1 per cent, which was raised to 2 per cent in 2010-11 and further to 3 per cent this year. Over the years, agriculture credit flow has registered a significant jump. It has gone up from Rs 86,981 crore in 2003-04 to Rs 4,26,531 crore in 2010-11.— PTI