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Compensate loss or hike CST to 4%, states tell Centre
Investor Guidance
Aviation Notes |
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CPI-IW up 1 point
Chandigarh, March 3 The All India Consumer Price Index for Industrial Workers (CPI-IW) on base 2001=100 for the month of January, 2012, increased by 1 point and stood at 198.
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Compensate loss or hike CST to 4%, states tell Centre
New Delhi, March 3 The state Finance Ministers, during their meeting here, also finalised a negative list of 35 services which would not be taxed under proposed Goods and Services Tax (GST) regime. "If the government does not release compensation then Centre should revert to the CST levy of 4 per cent from the present 2 per cent level," Bihar Deputy CM and Finance Minister Sushil Kumar Modi told reporters after the meeting of the Empowered Committee of the State Finance Ministers. "99 per cent of the states were of the opinion that either they should be compensated or the Centre should revert to 4 per cent rate, he added. At present, CST is payable on inter-state sales at 2 per cent. Although CST is levied by the Centre, the revenue goes to the state government and the state from which movement of goods commences gets revenue. The Centre is trying to phase out the CST and has promised to compensate the states for loss of revenue due to reduction in the CST rate to 2 per cent, from 4 per cent earlier. CST phase-out is part of the introduction of the new GST regime under which various levies like excise, service tax and states tax, like value-added tax, entry tax and purchase tax would be subsumed in a single tax. States expressed their resentment in the meeting after the Finance Ministry refused to compensate them for loss of revenue on account of reduction in CST from 2010-11 onwards. While the states have demanded a compensation of Rs 19,060 crore for 2010-11, the Centre said it has released Rs 6,393 crore and no more funds will be provided. The rate of CST was reduced to 2 per cent to pave way for introduction of GST with effect from April 1, 2010. However, its implementation has now been postponed to April 1, 2013. On the Centre's move to stop further CST compensation from this fiscal onwards, Modi said it has taken a unilateral decision without consulting the states.
— PTI Making way for GST
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Form 15-H not for NRIs
by A.N. Shanbhag
Q. I am 73 years old retired and an NRI. I have no income in India (much below Rs 1,80,000 annually). I do have a PAN.
I understand that I need to submit Form-15G form for TDS exemption. How do I get 15G form from? Do I need to inform (RBI) regarding income tax exemption as well? — Shantu Kalwani A. Form 15-G (or 15-H for senior citizens) is not available for NRIs. Tax threshold for resident senior citizens is Rs 2,50,000 but for NRIs, it is Rs 1,80,000. You will do well by filing tax returns to claim the tax deducted at source. Even if there were no TDS applied on your income, it would be a prudent policy to file the returns to protect yourself against inconvenience when the income becomes taxable. There is no need to inform RBI. RD account
Q. I want to invest Rs 5,000 per month in a bank recurring deposit for 7 years. Please tell me whether interest earned on it should be shown in annual income tax return every year or after 7 years in that year's (7th year’s) return. Which is legally correct? If I invested the above said amount (RD) in my minor child's name, who will become adult after 7 years, then can entire interest earned will go to child's a/c as she/he will be major on that occasion. — Anuraag Bharadwaj A.
The interest earned should be declared in the annual income tax return every year. Even if the deposit is a cumulative deposit (income is not received in the bank each year), tax is required to be paid on accrual basis. Even so, there are many taxpayers who adopt the second method i.e. they pay tax on a cumulative basis on interest received but the correct method is the former one. In the case of a minor child, the interest on accrual basis is required to be clubbed in the hands of his parent who earns more until the child attains majority. Home loan
Q. My friend has taken a residential house in his wife’s name. Both of them are working in government departments. Now, they have taken a home loan in which my friend and his wife are co-borrowers. My friend is paying the full EMI from his account. My query is whether my friend can take full housing loan principal and interest rebate. If not, then in what ratio he can take the rebate? — Ravi A.
Purchasing a house in the name of wife by applying your own funds means that you are using her as a name-lender and this is a ‘benami transaction’. This is illegal. The transaction can be made legal by gifting the money to the wife to enable her purchase the property in her name. Moreover, if you take a housing loan in your name, you would not be entitled to claim any tax benefits associated with the loan because the house belongs to your wife. The author may be
contacted at wonderlandconsultants@yahoo.com |
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Bailout for loss-making airline will set wrong precedent by K.R. Wadhwaney Politicians do not have fixed opinion based on reality, facts and figures. They procrastinate; they waver and even dither. They decry 'no bailout' to 'crisis-ridden airlines' one day and support it the next day not realising that this leads to further uncertainty in the civil aviation sector. Minister of State for Civil Aviation Ajit Singh on Wednesday categorically stated: "One cannot close down an airline just because it is running in losses…as long as passenger safety is not jeopardised, as long as it keeps its schedule, why should we close down any airline. The closure of an airline would impact passengers greatly". The aviation minister’s latest observation is supportive of the opinion of Minister for Corporate Affairs M.Veerappa Moily, who, two days ago, advocated for saving the 'beleaguered' private airline. If the government, regarding the politicians' somersault, decides to bail out one private carrier, it will set a very dangerous precedent, which will cause further turbulence in the already messy and murky affairs of the Indian civil aviation. Where is the need to save one particular airline when it has plunged into a pit of despair by its own 'affluent style of living and unnecessary excessive overhead expenses'. It is suffering because of its own 'hype'. If the financial cushion, directly or indirectly, is offered to one carrier, every private airline will, then, 'manipulate’ balance sheets, show enormous losses and seek government 'patronage'. If the government starts helping out loss-making airlines, the losers will be taxpayers and the small investors who have bought shares of banks. The main losers will be passengers, who are already being burdened with heavy fares and inconveniences at national and international airports. Complaints are rising against the indifferent functioning of different agencies, particularly of immigration unit. Analysts say some of the private carriers are in league to hasten Air India's 'demise' as, they feel, in the 'closure' of the national carrier, lies their success in national and international skies. The process of 'creative destruction' must not be allowed to grow; infighting must be reduced with stricter laws and rules by the DGCA. A study shows that private carriers cannot be equated with the national airline, which is the only 'life savior' of people and property in the event of an emergency. When evacuation has to be done, it is the only national carrier which stands by the side of the government and people. But while 'bailing out' the National Aviation Company (AI), it should be made clear to the airline bosses and staff that it would be last and final round of assistance. It should conduct its affairs professionally and commercially. Analysts say the government should return to the original position i.e. Indian Airlines flies on domestic routes and Air India on international sectors.
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CPI-IW up 1 point
Chandigarh, March 3 During the month, the index recorded maximum increase of 9 points each in Haldia and Bhilai centres, 7 in Jamshedpur, 6 each in Tiruchirapally and Srinagar, 5 in 2 centres, 4 in 7 centres, 3 in 7 centres, 2 in 11 centres and 1 point in 18 centres.
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