CAduniya.com : CA India Blog

The government on Thursday approved refund of value added tax (VAT) it had collected from ndustries in two union territories — Daman and Diu, and Dadar and Nagar Haveli, which enjoy tax holiday.

“The Union Cabinet gave its approval to the promulgation of the Daman and Diu VAT (Amendment) Regulation 2007 and the Dadra and Nagar Haveli VAT (Amendment) Regulation, 2007 by the President under article 240 of the Constitution,” Information and Broadcasting Minister Priyaranjan Dasmunsi said.

He said the measure will enable the government to refund the net negative tax to the assesses faster and also simplify the procedure.

The industrial units in these UTs already enjoy tax holiday under the government’s scheme to encourage new investment in industrially underdevelopment regions.

“After the implementation of VAT in 2003, the units were forced to pay 4-12.5 per cent tax on raw material bought from the market, but they could not recover the same as they sold their goods at zero duty rate,” said a Finance Ministry official.

He said after the Cabinet decision will enable the companies to get refund of these taxes. A large number of electronic and FMCG manufacturing units have been set up in these tax havens.

The West Bengal Government may review the existing luxury tax rates in the State after discussions with the State finance department, according to the Chief Minister, Mr Buddhadeb Bhattacharjee.

“The luxury tax on hotels and restaurants is creating problems for hoteliers and restaurant owners in the State. We have to take a balanced view since the hospitality industry creates enormous job opportunities. I need to talk with my Finance Minister (Mr Asim Dasgupta) about this,” Mr Bhattacharjee said, while speaking at the inaugural session of the 43rd Annual Convention of Federation of Hotel and Restaurant Associations of India (FHRAI) here on Friday.

Mr Rajesh Mishra, President of FHRAI, in his presidential address had proposed that the State Government withdraw luxury tax to boost development of hotels and restaurants.

“Earlier luxury tax was restricted to Kolkata only. But it is now applicable across all the districts of West Bengal. Currently, luxury tax is charged at the rate of 10 per cent on (room) tariff exceeding Rs 500,” Mr Mishra said.

According to Mr Bhattacharjee, the Central Government should take initiatives for developing tourism infrastructure across the country. “The Government should spend more on tourism infrastructure projects since tourism and hospitality industry create maximum job opportunities,” he said.

In West Bengal, the State has identified new areas for growth of tourism.

“We have identified certain areas, including development of tea tourism in Jalpaiguri and Darjeeling districts, and eco-tourism in the Sundarbans,” Mr Bhattacharjee said.

India’s Sensitive Index topped 20,000 for the first time, buoyed by record inflows from U.S. and European investors that have caused the benchmark to double in less than two years. The stock market has risen about 39 percent since it became the third emerging market after China and Russia to surpass $1 trillion in May, helped by the fastest economic growth in 60 years and a strengthening currency.

“Liquidity has played an important role in this rally,” said Chakri Lokapriya, who manages $850 million of stocks in India, Brazil, Russia and China at BNP Paribas Asset Management U.K. Ltd. in London. “Investors have reduced exposure to western markets and as a result increased flows to emerging economies like India and China.”

Investors based outside India bought a record $17 billion of equities this year, according to the Securities and Exchange Board of India, the nation’s regulator.

The Bombay Stock Exchange’s Sensex index gained as much as 4.1 percent to 20,024.87 as the world’s second-fastest pace of economic growth lifted profits at Larsen & Toubro Ltd. and Maruti Suzuki India Ltd. The index closed 3.8 percent, or 734.5 points higher, at 19,977.67 at 3:30 p.m. local time.

The Sensex had its biggest advance in 6 1/2 years last week after the regulator allowed more funds to buy stocks. The index took eight days to recover from a one-minute almost 10 percent slump on Oct. 17 triggered by proposed curbs on overseas buying.

Sensex hits a new high past 20000, ends 735 pts up

Strong global markets, impressive results from some top notch companies and expectations of a cut in bank rates triggered a massive rally on the major Indian bourses today. As stocks cutting across sectors surged higher on sustained buying support, the benchmark BSE index Sensex created yet another record when it vaulted past the 20,000 mark for the first ever time in history.

The benchmark, which needed no more than five sessions to vault from 18,000 to 19,000 took a comparatively longer period for its next 1,000 points jump. However, considering the fact that it had plunged to as low as 17,171.45 on 22 October 2007, a week after scaling the 19k peak, its feat is simply incredible, to say the least. From that low on 22 October 2007, the Sensex has spurted over 2800 points in a short span of six sessions.

The market regulator’s restrictions on investments through Participatory Notes notwithstanding, stock prices have been moving up quite sharply over the past few sessions.

After opening on a buoyant note at 19,621.39, a positive gap of over 375 points, the Sensex sailed past 19,900 around noon thanks to strong buying in capital goods, oil, bank and telecom stocks. Auto and information technology stocks joined the rally a little later. Hectic buying was seen in several midcap and smallcap stocks as well.