Service Tax Norms To Be Simplified By Mid-June

New Delhi: The revenue department is hoped to release two circulars mentioning details of all 100 services under the service tax net and related procedures in a simplified manner by mid-June. The comprehensive circulars will replace all the present circulars and will enable tax-payers to access required information in a detailed and simplified manner, Central Board of Excise and Customs (CBEC) said. One circular will describe the scope of services while the other will explain the procedures. The new circulars are in final stages and will be issued by mid-June after clearance by Finance Minister P Chidambaram. The CBEC has already withdrawn 48 circulars that have no relevance. Despite this, there are 120-130 circulars. Seven new services admitted in the service tax net from June 1 this year were expected to fetch Rs 8,000-9,000 crore this fiscal.

Re Ends Higher At 40.52/$

Mumbai: The rupee strengthened by about 7 paise against the greenback to close at 40.51/52 on May 28, down from the previous close of 40.5850/5950. The domestic currency jumped intra-day to a nine-year high of 40.28 driven by strong FII inflows in the market. It opened at 40.53/55 and witnessed a high of 40.28 but quickly declined from the position due to suspected RBI intervention in the market. In forwards, the six-month premia closed at 3.18 per cent (4.23 per cent) while the 12-month closed at 3.09 per cent (3.7 per cent).

India Needs To Scale Up Infrastructure Investment

New Delhi: India requires to scale up investment on infrastructure to 9 per cent of gross domestic product (GDP) from the current level of below 5 per cent, in order to meet the economic growth target of 9 per cent during the 11th Plan, the Planning Commission said. Investment necessity in infrastructure will be higher than thought earlier. To get a 9 per cent growth, India need to scale up its investment in the infrastructure sector during the terminal year of the Plan from the current 4.5 per cent, the Planning Commission''s Deputy Chairman, Mr Montek Singh Ahluwalia, said. It will be incorrect to perceive that the public sector alone should fund highways development programmes and the private sector too, would have to play a crucial role in it through public private partnership (PPP).

Rupee Depreciates By 3-4 Paise Against Dollar

The rupee depreciated by around three to four paise on the RBI intervention in the forex market on May 24. The home currency opened at 40.53/55, traded in a range of 40.53-40.61 and finally closed at 40.60/61 against the previous close of 40.57/58 on May 23. Dealers said the rupee is likely to trade in the 40.55-40.75 range in the next 10 days. In forwards, the six-month premia closed at 4.28 per cent (4.41 per cent) and the 12-month ended at 3.7 per cent (3.8 per cent).

New I-T Code Before Year-End, Says Chidambaram

The Finance Minister, Mr P. Chidambaram, has told the first batch of income-tax return preparers to stay up-to-date with tax laws and occasionally go in for refresher courses to be in tune with changes in tax laws. He also wanted them to walk the straight path and refrain from advising clients on how to evade taxes. Stating that tax avoidance (involving some form of financial engineering) was lawful, he highlighted that tax evasion was unlawful. The Minister also promised to introduce a new simplified income-tax code before the end of calendar 2007. More than 90,000 people applied for the training as tax return preparers, of whom 47,227 were shortlisted by NIIT for entrance examination. Some 4,517 candidates joined training, of which 3,737 qualified for certification.

Pay Hike Of Rs. 700 To Rs. 4,000 For Six Lakh Government Employees

The nearly six lakh government employees in the State can now look forward to getting a bigger pay packet, with the State''s Fifth Pay Commission recommending an increase in salary ranging from Rs. 700 to Rs. 4,000 a month. The commission, headed by retired official M.B. Prakash, submitted the second volume of its report to Chief Minister H.D. Kumaraswamy here on Tuesday.

The pay revision will place an additional burden of Rs. 1,350 crore on the exchequer. The notification revising the pay has already been issued. The benefits will be notionally effective from April 1, 2005 and the monetary benefits applicable from April 1, 2006.

Rupee Appreciates Around 3 Paise Against Dollar

Mumbai: The rupee appreciated on May 21 by around three paise on strengthening of non-dollar currencies against the dollar. The domestic currency opened at 40.75/77, touched an intra-day high of 40.53, a fresh nine-year high and finally closed at 40.67/68. On May 18, the rupee ended at 40.71/72. China''s central bank has widened the daily trading band of yuan against the dollar by 0.5 per cent (against 0.3 per cent). The rupee also gained due to strong FII inflows into the domestic equities. In forwards, the six-month premia closed at 4.08 per cent (4.51 per cent) and the 12-month ended at 3.66 per cent (3.97 per cent)

India Inc''s ECBs crosses govt''s $22-b internal cap

The government''s fears on excessive inflows of foreign funds are not baseless. Debt mobilized by Indian companies through external commercial borrowings (ECBs) is now estimated to have totalled $24 billion in the previous fiscal. This is almost 10% higher than the government''s internal cap of $22 billion, fixed for the previous fiscal. Given that the cap is not really enforceable since majority of the capital raised overseas comes through the automatic route, the ceiling only indicates the government''s comfort level for foreign fund inflows in a particular year. Though, RBI has not formally released the figures yet, sources said that gross foreign fund inflows through the ECB window in the last fiscal were at $24 billion. The central bank has, so far, released figures for capital raised through ECBs up to February 2007. According to these figures, about 812 companies have raised about $20.24 billion through ECBs in the April 2006-February 2007 period. In a bid to check excessive inflows, the government on May 18 shut the ECB window for the real estate sector while lowering the cap on interest rates at which companies can raise loans abroad, thereby weeding out smaller players that are unable to tap cheap credit on account of low credit ratings.

FM Tips At More Fiscal Measures To Check Inflation

New Delhi: The Finance Minister, Mr P. Chidambaram, on May 17, said that he was willing to take more fiscal measures to check price increase in the economy and bring inflation below the five per cent mark. The average inflation in 2006-07 was 5.4 per cent. The Government wants to bring inflation between 4-4.5 per cent, which is the range acceptable to the Reserve Bank of India. The Finance Minister highlighted that the Government has already taken various fiscal steps, comprising cut in customs duties on edible oil, ban on export of pulses and milk powder.

Mr Chidambaram attributed the high price situation in the economy to high global prices of crude oil and metals besides stagnation in agricultural production. Moreover, increasing remittances from NRIs and foreign direct investment, government spending for rural employment, education and health sectors have also contributed to high inflation. Parliament has approved a Bill that would pave the way for listing and trading of securitised debt instruments or certificates in the country''s stock exchanges.

Organised Sector Increases At 11Pc

New Delhi: The share of the organised business sector in net domestic product (NDP) of the country has grew from 39.6 per cent in 2000-01 to 42 per cent in 2004-05 and the average annual growth rate of organised sector between 2000-01 and 2004-05 stood at 11.2 per cent. Simultaneously, the share of operating excess (consisting of rent, interest and profits) in the NDP grew from 37.4 per cent in 2000-01 to 46.2 per cent in 2004-05.

Centre''s Net Direct Tax Collection Grows 128% In April

New Delhi: The Centre''s net direct tax collections registrered a robust growth of 128.42 per cent in April 2007 to Rs 5,441 crore as against net collections of Rs 2,382 crore achieved in the same month last year. The gross direct tax collections for the period under review declined to Rs 7,935 crore as compared to Rs 9,940 crore collected in April 2006. While gross corporate tax collections for April 2007 stood at Rs 3,392 crore (Rs 5,584 crore), the gross personal income tax collections in the same month stood at Rs 4,540 crore (Rs 4,352 crore). Net corporate tax collections stood at Rs 1,602 crore in April 2007 as against net outflow of Rs 1,418 crore in the same month last year. Net personal income tax collections in April 2007 stood at Rs 3,836 crore as compared to collections of Rs 3,796 crore in April 2006.

Japan''s Steps To Forge Strong Economic Ties With India

Bangalore: An Indian fashion show to be held in Osaka in July that will showcase India''s fast emerging designing capability and a novel pilot scheme called the One-Village-One-Product (OVOP) that was unveiled in Tamil Nadu last year would underline Japan''s efforts to promote better understanding at grassroots levels to strengthen bilateral trade and investments. The OVOP, which targets at helping identifying suitable products and creating awareness about Japanese market situations, envisages promoting products like bed spreads and furnishing materials from Thanjavur.

Finance Ministry Fixes Late Fee On Service Tax Returns

New Delhi: The Finance Ministry has specified the late fee that will be applicable for delayed filing of service tax returns. This late fee has been linked to the period of delay for filing of returns after the due date. The move to quantify the late fees came a day after the President, Mr A.P.J. Abdul Kalam, gave his nod for the Finance Bill 2007. The late fee would be Rs 500 for the first fifteen days and Rs 1,000 for delay of more than 15 days but less than 30 days. For delay beyond 30 days, the Government has estimated the late fee at Rs 1,000 plus Rs 100 per day, but not more than Rs 2,000. For 2007-08, the Government has estimated the service tax collections target at Rs 50,200 crore.

Inflation Eases To 5.66%

Inflation fell for the second week in a row to 5.66 per cent during the week ended April 28 as higher production of agri products like wheat pulled down prices of essential food products.It is expected to ease pressure from the Reserve Bank to take further measures to tighten money supply. Although inflation fell from 5.77 per cent from the week ago, but was way above the year ago period when it stood at 3.90 per cent.While prices of most items in broad categories of food products declined, those in manufactured rose a bit.Prices of cereals declined by 0.2 per cent. Within cereals, wheat was cheaper by one per cent. Wheat production is estimated at 73.7 million tonne in 2006-07 as against 69.35 million tonne in the previous year.Sugar prices declined by one per cent as the country is all set to achieve a record production of about 26.5 million tonne in 2006-07 season ending September 2007 compared to 19.3 million tonne last year.

External Commercial Borrowings Cross $3 B In February

Indian companies mopped up a over $3 billion, about Rs 13,000 crore, through external commercial borrowings (ECBs) in February 2007, according to figures provided by the Reserve Bank of India. As many as 86 firms mobilised money abroad during the month. In January 2007, 81 companies raised about $1.29 billion. The figures for March 2007 are not available yet. All together, about 812 companies have raised about $20.24 billion through ECBs in the April 2006-February 2007 period. That would be equivalent to about Rs 88,000 crore. Domestic loans given by banks during fiscal 2007 were about Rs 4,15,000 crore. There have been reports that the Government plans to hike the cap on ECB currently fixed at $18 billion to about $22 billion. The top fundraiser in February was Reliance Industries, which raised $700 million, followed by Reliance Communication, which raised $500 million.

Rupee Slips 7 Paise Against Dollar

Rupee depreciated by around 7 paise against the greenback to close at 40.92/93 on Wednesday against the previous close of 40.85/86. The domestic currency opened at 40.93/95, saw an intra-day high of 40.87 and an intra-day low of 41.02. According to the source, the rupee to trade in the 40.75-41.15 range in the coming week. In forwards, the six-month premia closed at 5.39 per cent (5.52 per cent) and the 12-month ended at 4.55 per cent (4.73 per cent).

India Inc Borrows Around $4.5b During Jan-Feb Period

Taking advantage of lower interest rates in the global money market, India Inc borrowed close to $4.5 billion to fund domestic business between January and February this year. This is 18% higher than the year-ago period. Total borrowings from April 2006 to February 2007 was $18.5 billion. With the government allowing a greater access to foreign borrowings, more and more corporates have been availing the ''automatic route'' to raise cheaper money. A local firm is permitted to borrow up to $500 million a year through the automatic route without any prior approval from authorities. Debt funds to corporate India have come in as foreign loans (better known as external commercial borrowings) and foreign currency convertible bonds (FCCB) that can be converted into shares. Companies raised $1.3 billion and $3.2 billion, respectively, in January and February, according to the latest figures released by the Reserve Bank of India. Successive rate hikes and money supply squeeze by RBI have deepened the trend. Bulk of the money in February was raised through FCCBs by Reliance Communications, which raised $1 billion. FCCBs, which fetch a premium, are preferred to plain vanilla loans when the stock market is on a roll.

Domestic Currency Ends A Tad

The rupee ended almost tad on May 7 against the Friday''s close but touched an intra-day high of 40.53/54, a fresh nine-year high. The rupee opened strong at around 40.65/70, moved in the range of 40.53-40.60 but finally dipped sharply by around 25 paise to close at 40.87. The rupee closed at 40.85/87 on May 4. The rupee also tracked the movement of overseas currencies against the dollar. Dollar weakened against the yen on weak non-farm payroll data. The rupee''s appreciation is certainly expected to hurt exporters even more. According to a report by Credit Suisse, software and service exporters are the losers from the rupee gains. Recently, TCS admitted to hedging its dollar earnings for $1 billion at 43.50.

I-T Dept Does Away With 742,000 Duplicate PAN Cards

The Income Tax (I-T) Department removed more than half of the duplicate PAN (Permanent Account Number) cards that had been detected last fiscal. Of the 1.31 million duplicate cards that were being used by wily individuals to avoid taxes, the department had cancelled about 742,000 cards as of March this year, against around 10,000 PANs cancelled in the previous year, the source said. Many assesses got duplicate PANs by submitting multiple applications, each giving different particulars. The department decided to undertake an exercise for de-duplication of PANs to clean the database.

Parliament Amends Finance Bill

New Delhi: Parliament on May 4, passed the Finance Bill 2007, with the Rajya Sabha approving the Bill via a voice vote. The Lok Sabha had passed the Bill on May 3, after incorporating 37 amendments moved by the Government. The Finance Minister, Mr P. Chidambaram, told the Rajya Sabha on May 4, that he would table the income-tax code during the Monsoon Session. Mr Chidambaram highlighted that investment rate will not have been so high if he was a high tax Finance Minister. High investment came from high savings, which were due to high disposable income of the people. Mr Chidambaram assured the members that he will revisit the Fringe Benefit Tax if effective corporate tax rate moved toward 30 per cent from the current level of 19.26 per cent.

India''s Market Will Be World''s Fifth Largest By 2025

Mumbai: India will pole-vault into the premier league of the world''s consumer markets by 2025. From the current 12th rank, the study anticipates that India''s market will be the world''s fifth largest, surpassing Germany. Over 23 million Indians more than the population of Australia today will number among the country''s wealthiest citizens. At the same time, overall economic growth will benefit India''s poorest people, with the deprived segment falling from 54 per cent of the population in 2005 to 22 per cent by 2025.

The combination of rapidly rising household incomes and a robustly growing population will lead to a striking increase in overall consumer spending. The study forecasts that aggregate consumption in India will grow fourfold in real terms, from Rs 17 trillion at present to Rs 70 trillion by 2025. The study is predicated on India''s real GDP growth ranging between 6 per cent and 9 per cent a year over the next two decades. This optimism is justified because of the substantial scope for continued productivity increases in Indian businesses, the growing openness and competitiveness of the Indian economy, and favourable demographic trends. If India achieves this growth path over the next two decades, Indian income levels will almost triple. Interestingly, communications, which accounts for only 2 per cent of spending today, will be one of the fastest expanding categories with growth of over 13 per cent a year.

WTO Groups Meet To Negotiate Agriculture

GENEVA: Different WTO talks groupings G-20, G-33, the African group, LDCs, etc have been conferencing since May 1, and to discuss the challenge paper circulated by chairperson of agriculture negotiations on market access and subsidies. Senior officials of G4, Brazil, EU, India and the US, have been meeting in London from May 1 until the 3rd with focus on agriculture and Falconer''s paper. Officials will concentrate on cutting domestic subsidies and tariffs and on designating and treating sensitive and special products.

India Reaches Trillion Dollar Economy

India has joined the elite club of 12 countries with a trillion dollar economy, thanks to the continuing rally in rupee against the US dollar as the country''s GDP crossed the trillion-dollar mark for the first time in history.The country''s GDP crossed the trillion-dollar when rupee appreciated to below 41-level against the US greenback on Wednesday, Swiss investment bank Credit Suisse said in a report published on Thursday.Countries like the US, Japan, Germany, China, UK, France, Italy, Spain, Canada, Brazil and Russia have all breached trillion-dollar GDP level in the past.The bank put the country''s GDP at around Rs 41,00,000 crore, which translates to slightly more than one trillion dollar at the current currency level of Rs 40.76 per USD.