The Tribune, Chandigarh, India

	India for review of tax treaty with Mauritius New Delhi, June 20 India and Mauritius will soon review a three-decade-old taxation treaty, misused by many Indian and multinational companies to avoid paying tax or to route illicit funds, an Indian official and a Mauritius government source said on Monday. The Indian government has been under pressure from opposition parties to renegotiate a treaty blamed for huge revenue losses, as Indian investors ship their money to Mauritius and then funnel it back untaxed. The BSE Sensex fell as much as 3.1 per cent on Monday on market talk of such a review, triggering jitters that foreign inflows could take a hit. The issue of so-called "black money", or funds stashed illegally to avoid tax, has become a political hot potato as the government reels under a slew of corruption scandals that have dented investor confidence. In the decade to April, FDI flows into India from Mauritius totalled $55.2 billion, about 42 per cent of the total $133 billion during that period. "India and Mauritius are expected to review the existing Double Taxation Avoidance Agreement (DTAA) soon," said Shishir Jha, spokesman for Central Board of Direct Taxes. He declined to elaborate on the time frame or the areas in which India was looking to adjust the treaty. Mauritius had agreed to re-opening the treaty during a visit by Indian President Pratibha Patil earlier this year, he said. Indian officials have said the country was losing more than $600 million every year in revenue because of the tax treaty, besides incurring the risk of militant groups using it to route money into India. A large proportion of foreign investment in the stock market comes through companies registered in the Indian Ocean island nation and are exempted from tax in India under the treaty. Many Indian companies park illicit funds in Mauritius through shell companies as the standards for registering firms in the island are lax, analysts say. A meeting could be held in the next few weeks if both countries agree on dates, an Indian government source said. "Mauritius is willing to re-open tax treaty with India and we would like to address India's concerns, including round-tripping of funds by Indian companies," said a senior official of the Mauritius government, declining to be identified. "The next meeting of joint-working group of India and Mauritius could be held soon, probably in Mauritius," he said over the phone, adding that dates must still be finalised. The last meeting was held in New Delhi last year, he said. Capital gains are exempted from tax in Mauritius, and under the DTAA, a Mauritian company cannot be taxed in India, analysts said. — Reuters * Capital gains are exempted from tax in Mauritius, and under the DTAA, a Mauritian company can’t be taxed in India * India losing more than $600mn every year in revenue due to the treaty * The treaty is being misused by many Indian and MNCs to avoid paying tax or to route illicit fundsr
	Direct tax mop-up surges to Rs 1,01,600 cr in Q1 New Delhi, June 20 Belying fears of moderation in economic activities, the direct tax collection (personal income tax and corporate tax) grew by 23 per cent to Rs 101,600 crore in the first quarter of current financial year. The collection was Rs 82,300 crore in the same period last fiscal and Rs 77,500 crore in April-June 2009, showing consistent increase in revenue generation. According to a senior revenue official in the Ministry of Finance, total corporate tax collection increased by 23 per cent in the first quarter of the fiscal to Rs 67,100 crore from Rs 54,600 crore in the same period a year ago. It was Rs 49,200 crore in the comparative period of 2009-10. The revenue department had expressed concern that volatility in international commodity prices and domestic inflation could have adverse impact on revenue collection, both on the direct and indirect tax fronts. But the direct tax collection in the first quarter are more or less as per the estimates of the government. Of the total Rs 67,000 crore corporate taxes, Rs 31,300 crore came as advance taxes and Rs 23,500 in the form of TDS. Corporate advance taxes in the first quarter of last fiscal were Rs 26,500 crore and TDS was Rs 17,800 crore. The revenue official informed that gross personal income tax (PIT) till June 18 of the fiscal was up 26 per cent at Rs 33,400 crore from Rs 26,500 crore in the comparative period last year.— PTI
	Reply to CAG report on RIL in 8 weeks: Oil Min New Delhi, June 20 Oil Minister S Jaipal Reddy on Monday said the petroleum ministry will reply in eight weeks to the draft report of the Comptroller and Auditor General (CAG) regarding approval for increase in capital expenditure by RIL for developing gas fields in the Krishna Godavari basin. The minister also said that the report was only an interim one and nobody should jump to conclusions before a complete examination of the records. "The draft report is not a final report. The CAG would send draft reports to the ministries concerned with an open mind so that the government could give their replies with an open mind," Reddy told reporters here. The draft report of the CAG rapped the technical arm of the Directorate General of Hydrocarbons (DGH) for allowing an increase in estimated capital expenditure by RIL from $2.4 billion to $8.5 billion between May 2004 and October 2006. The official auditor, however, said it was difficult to comment on the reasonableness of the increase. "If there are valid criticism made in the final report, we will not hesitate to correct ourselves or take remedial steps. But that does not mean we should jump to conclusions," said Reddy. Parliamentary Public Accounts Committee (PAC) chairman and senior BJP leader Murli Manohar Joshi had attacked the government over the CAG report which allegedly accused RIL of inflating the price of developing oil and gas fields in the Krishna Godavari basin. "The CAG examined the accounts of only 2006-07 and 2007-08. They did not look at the accounts of 2008-09 and 2009-10. They said they would look at the accounts. They themselves said in their draft report that while increasing the price was suspect they were not in a position to quantify." The oil minister also said the DGH had taken into account the suggestions made by two consultants while agreeing to the increase in the capital expenditure and that the ministry's technical arm did not have the equipment or the expertise to calculate the figures associated with such complicated data. "This draft report does not make any reference to the pricing of gas," said Reddy. "The spectacle of an octogenarian parliamentarian hunting for headlines is not very edifying." - IANS
	Subrata Roy quits Sahara Housingfina Board New Delhi, June 20 Sahara Group firm Sahara Housingfina Corporation today said its Promoter-Director Subrata Roy has resigned from the Board of the company. The company, which is part of Roy-led Sahara Group and is engaged in the business of providing home loans, did not provide any reasons for the resignation. "Subrata Roy Sahara, Director (Promoter Director) has tendered his resignation from the directorship of the company vide his letter dated June 17, 2011," Sahara Housingfina Corporation Ltd (SHCL) said in a regulatory filing to the Bombay Stock Exchange, where the company's shares are listed. Roy's name has been listed as a promoter-director on the company's website, while previously he has also served as a Chairman. A group spokesperson could not be contacted over phone despite repeated attempts to get any further details about Roy's resignation and the reasons for the same. Three Sahara group firms - Sahara Prime City, Sahara India Corp Investment Ltd and Sahara India Finance and Investment Ltd - together hold 71.35 per cent stake as promoters of SHCL. The shares of SHCL today fell nearly 5 per cent at the BSE to close at Rs 77. As per the company's website, SHCL offers home loans ranging from Rs 1 lakh to Rs 1 crore. Sahara group is currently engaged in a legal battle with market regulator SEBI, which had charged two group companies of indulging in fund raising exercises that were not in compliance with certain regulatory norms.— PTI
	Apple under CCI scanner New Delhi, Jun 20 iPhone and iPad maker Apple Inc has come under the scanner of the Competition Commission of India for allegedly limiting availability of its products to a few service providers using its dominant market position. A customer has filed a complaint before the Commission under Section 4 of the Competition Act, 2002, that Apple is curbing the customer’s choice by limiting the availability of iPhones and iPads in India to a limited number of service providers, besides its signature stores. At present, the iPhone’s latest version is available in India through Aircel and Bharti airtel, while the iPads are sold through Apple store only. An Apple official when contacted declined to comment. “The complainant has also alleged that a user can only download software from the i-store and the others are not recognised by the device,” a senior CCI official told PTI. Besides, Apple phones could only be serviced in Apple centres, which in turn charge high rates for servicing. The Commission is due to take up the matter for consideration by the end of this week, sources said. iPhone, the touch screen handset that acquired a cult status in the US and other western countries, was launched for the first time in India in 2008. Following the launch, the new upgrades have also been introduced in the Indian market. Smartphones are cathcing up fast in the Indian market, especially at a time more companies roll out 3G services across the country. 3G services, which offer high-speed Internet access, have already been rolled out by various operators like Airtel, Vodafone and Aircel. According to a CyberMedia Research study, about 12 million smartphones are expected to be sold in India during 2011. The Commission, which became fully functional in 2009, with the appointment of a chairman and six members, has the power to check anti-competitive agreements and abuse of dominant position, drawn from Sections 3 and 4 of the Competition Act, 2002. Beginning June 2011, the Commission also received powers to check high-voltage mergers and acquisitions, with the notification of section 5 and 6 of the Act.— PTI
	Caparo Energy secures Rs 350 cr from India Infra Fund Mumbai, June 20 Caparo Energy today said it has secured the first tranche of Rs 350-crore fund from The India Infrastructure Fund managed by IDFC Project Equity Company. Morgan Stanley was the sole advisor to Capro Energy on this transaction and the deal would not dilute the shareholders stake, as it was done through allotment of preference shares, Caparo Energy said. "The second tranche of this funding, which is expected to be Rs 150-crore is at an advanced stage of discussion and a firm commitment in respect of this second tranche is expected to be finalised in the next few weeks," it said. The company expects to repay the preference shares from internal cash-flows, the issue of senior debt instruments, bonds or other debt refinancing, within a time period of 3-5 years, it said. The firm expects to develop around 700 MW of wind projects through the Rs 500-crore of funds along with its existing resources, it said. The company said it has agreed on the locations for the 750 MW of projects, with Suzlon Energy, which are to be delivered under the existing blanket purchase agreement, fully commissioned and connected to the grid in stages by March 2013, 400 MW of which are expected to be commissioned and connected to the grid by March 2012. — PTI
	FDI up after three months of decline New Delhi, June 20 Following three months of consecutive decline, foreign direct investment (FDI) flows into India grew by about 43 per cent to $3.12 billion in April, 2011. The country received $2.17 billion worth of FDI in April, 2010. "The figure is showing a recovery in the global markets, especially in European economies," an official said. In April, the maximum investment came from Singapore ($1.17 billion), followed by Mauritius ($976 million), Japan ($235 million), France ($220) and Cyprus ($170 million). The sectors that attracted the maximum FDI during the period include services ($658 million), construction activities ($311 million), power ($256 million), computers and hardware ($96 million) etc. — PTI
	Hero Honda is now Hero MotoCorp New Delhi, June 20 The shareholders of the country's largest two-wheeler maker Hero Honda has approved the changing of the name of the company to Hero MotoCorp Ltd, post the exit of Japan's Honda from the firm. At an extraordinary general meeting of the company held last Friday, the shareholders approved a proposal to change the name to Hero MotoCorp Ltd from Hero Honda Motors Ltd. Last December, the Hero Group and Honda had agreed to end their 26-year-old relationship, with the Indian partner agreeing to buy Honda’s 26% in Hero Honda for Rs 3,841.83 crore. The partners had, signed a new licencing agreement under which Hero Honda would pay Honda 45 billion yen till 2014.—PTI
	Swaraj unveils new tractor Tribune News Service Mohali, June 20 The Swaraj division of Mahindra & Mahindra Ltd. (M&M) launched Swaraj 843 XM, a new product catering to the fast-growing 40-45 HP tractor market, here today. The company also said its farm equipment sector had touched the 8-lakh mark in tractor sales. Total tractor sales (domestic and exports) for Swaraj in this financial year stood at 60,997 units, as against 49,422 units in the last financial year, a growth of 23 per cent year-on-year. Disclosing this during a visit to the tractor plant here, M&M Tractor division head B Mishra said the company had also achieved 120 per cent capacity utilisation without any further addition of capex. The Swaraj division has also completed the first phase of its foundry expansion.
	GTL, GTL Infrastructure stocks crash Mumbai, June 20 Shares of telecom infrastructure firms GTL and GTL Infrastructure came under heavy selling pressure, plunging by over 62 per cent and 43 per cent, respectively, amid rumours that their promoters have pledged more than 50 per cent stake. This has prompted the companies to lodge a complaint with market regulator SEBI for a probe. “The company would like to confirm that neither promoters nor entities relating to promoters have sold any shares, including the shares that have been pledged,” GTL said in a filing to the Bombay Stock Exchange. There were also rumours that one of the companies has failed to meet FCCB repayment obligations. The company, however, clarified that the repayment was due only in 2012.— PTI