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Public Power Issue listing likely in Feb

Mumbai, Jan 19 Reliance Power IPO’s issue price has been fixed at the top end of the price band at Rs 450 per equity share of Rs 10; the issue is likely to get listed some time in February after the allotment of shares to applicants.

On the prospects of retail investors getting allotment of shares, Mr Anil Ambani, Chairman, Reliance Anil Dhirubhai Ambani Group , said, “It will be ensured that each and every applicant is allotted a bare minimum number of shares.”

Retail individual investors bid 14.4 times the 6.84 crore shares offered under the retail quota. Price for retail investors has been fixed at Rs 430 per share, a discount of Rs 20 per share.

“The issue received a record 50 lakh retail applications and the retail investors made a commitment of Rs 44,000 crore, which was enough for the issue to have been fully subscribed by the retail investors itself,” Mr Ambani, told newspersons during a press conference in Mumbai on Saturday.

In terms of total application money deposited in banks, again the Reliance Power IPO set a record by mobilising Rs 1.15 lakh crore, it was stated during a media briefing on the highlights of the public issue.

The largest IPO in terms of money being raised, at Rs 11,700 crore, drew a phenomenal response from both institutional and retail investors by taking the subscription count to 73 times the 22.8 crore shares on offer, as per the final composite data after the closure of the issue on January 18.

Retail investors also had the option of depositing Rs 115 per share at the time of application.

Corporates’ and the high net worth individuals’ bids reached 190 times for 2.28 crore shares on offer. The portion reserved (13.68 crore shares) for qualified institutional buyers including FIIs got subscribed 82 times.

Source: The Hindu Business Line

Mumbai (PTI): The benchmark Sensex recovered a major part of its initial losses, but was still in the negative terrain on selling at higher levels amid weak global cues.

The Bombay Stock Exchange (BSE) 30-share barometer fell to a low of 19,768.98 immediately after resumption of dealings, down by over 160 points over Tuesday’s close of 19,929.06.

However, it recovered partly to 19,870.74 at 10.30 am, still showing a fall of 58.32 points.

The index had surged by a record 893.58 points or 4.69 per cent on Tuesday.

The broader S&P CNX Nifty of the National Stock Exchange (NSE) was quoted at 5,948.20, a rise of 10.30 points over the previous close of 5,937.90.

Besides Nikkei, all other Asian indices were trading in the red on Thursday morning on the back of overnight fall on Wall Street.

Dealers attributed the loss on the Sensex to selling at higher levels and expected consolidation in a range of 18,000 and 21,000 level.

Foreign Institutional Investors (FIIs) bought shares worth Rs 163 crore (provisional) on November 14 and reportedly they were net sellers to the tune of Rs 1,951 crore during this month so far.

Bharti Airtel, Grasim, Hindalco, Maruti, NTPC, ONGC, REL, SBI, Tata Motors and Tata Steel were quoted firm, while RIL, BHEL, HDFC, HDFC Bank, ICICI Bank, Infosys Tech, Satyam Computer, TCS and Wipro showed losses.

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The Fed cut rates, and India appears to have responded by raising the limit on MSS issuance by RBI. Let’s chalk out the rough fiscal costs –

• Each month with over $10 billion of MSS issuance uses up Rs.40,000 crore of bond issuance. Roughly speaking, assuming a net cost of 4%, a stock of MSS of Rs.250,000 crore runs up a tidy cost of Rs.10,000 crore a year.
• In addition, assuming India has roughly $125 billion in USD assets, each 1% depreciation of the USD is a cost of roughly $1.25 billion or roughly Rs.5,000 crore on account of depreciation of the reserves portfolio.

Mumbai: The benchmark Sensex today set a new milestone by crossing the 18,000-point mark, spending nine sessions to take the last 1,000-points stride on the Bombay Stock Exchange.

The journey was the second-shortest. The 30-share BSE index crossed 17K on September 26, taking just six trading sessions to travel from 16K.

The Sensex reached the high of 18,002.30 points, surging 510.91 points from yesterday’s close. The National Stock Exchange’s Nifty rose 154.20 to 5,239.30.

The major support for the market came in from the IT and oil refinery stocks on expectations of rise in quarter earnings for these sector companies.

Technology shares rose for the second consecutive day on expectations of robust quarter earnings.

The feel good factor created by the responses to my earlier column on Service Tax liability went on an upward curve when a circular was issued last week by the Ministry of Finance to consolidate procedural issues relating to service tax in availing CENVAT credit, in view of significant changes in law. The circular clarifies the person providing taxable services, except for specific instances where the liability to pay the tax is on the receiver, is the person liable to deposit the tax and register with the department as assessee.

The circular further elaborates that for compliance with CENVAT Credit Rules, in availing and utilisation of credit by recipient of the taxable service, invoices issued under Rules 4A & 4B should reflect the cesses separately leviable, as though implying that the tax is indeed collectible.

The concept of service tax input and output credits in relation to taxable services was introduced well after the 1998 amendment, which shifted the tax burden on the provider. The Service Tax Credit Rules 2002, permitted a service provider to take credit of the service tax paid by him on services provided, i.e. the output services, if his input service, which is received and consumed in relation to providing the output service is in the same category of taxable service. In 2004, the Finance Act extended the scope of service tax credit to goods and services to enable both manufacturers and service providers to utilise the entire gamut of eligible inputs. A move towards a unified goods and services tax regime, the outcome was the CENVAT Credit Rules, 2004 which brought in its ambit capital goods used for manufacture of final products or for providing an output service. The definition of input services was widened to include any service used by a provider to provide his output service or by a manufacturer in relation to establishment costs – which could range from renovation to sales promotion. The restriction on availability of credit for the same taxable service was removed. This combination of a dual regime with a dual role for the assessee created considerable confusion as while the output service provider could now avail credit on input/capital goods, the manufacturer’s capital goods were not necessarily the same for the provider.

To dispel such confusion the circular provides an example of a manufacturer of steel sheets procuring duty paid steel ingots as input, and availing CENVAT Credit of the excise duty thereon. The finished goods or output steel sheets are cleared on the payment of excise duty and despatched to the customer, for which the manufacturer engages the service of a goods transport agency, and as consignor pays service tax on the transport service for the transportation of the goods, but the input credit taken on the ingots cannot be utilised for the service tax charges and tax paid, though statutorily the liability to pay tax for this taxable service is the recipient’s, the transport service is provided by the agency. A bare reading of this would imply that the manufacture consignor though liable to pay tax on his output service, cannot avail the credit because he doesn’t provide the service. Therefore, subject to exceptions, if the provider is the one to avail credit and cannot pass it on, then he also has to pay the tax.

Having said this much, Clause 10.1 of the circular rounds it up stating that any amount collected by a person as service tax from any other person, even if “not permissible in terms of the service tax law”, is required to be deposited with the central government, as obviously retention of such amount would be regarded as unjust enrichment. This reinforces the position that service tax may be recovered from the recipient under a contractual provision. It is another matter that the CENVAT Credit Rules offer a tax advantageous option for the recipient to voluntarily pay service tax in order that he may avail credit against his output service and manufacture. While this is workable in business arrangements, that there is no legal sanction for recovery of service tax from the customer though recognised in the circular, does not address the remedy of an adhoc consumer having no business relatable activity with output services or goods to avail credit against the tax which he pays regularly in addition to all other taxes – direct and indirect. Clearly the government is not ready to take this point head on, as long as the tax collections are met.

Kumkum Sen is a Partner at Rajinder Narain & Co, and can be reached at kumkumsen AT rnclegal.com

3rd Sept 2007

Press Trust of India / New Delhi July 17, 2007

All the new income tax payers in the country will soon begin to get biometric permanent account number (PAN) cards with enhanced security features like fingerprints or retinal scans, aimed at checking duplicate cards and better tax compliance.

“The process of eliminating about 13 lakh duplicate PAN cards is in last mile. Once that process is completed, which will happen shortly, we will set a date, after which all new PAN cards will only be biometric,” Finance Minister P Chidambaram said after inaugurating a Chief Income Tax Commissioners conference.

When asked whether the date of launching biometric PANs could be October, he said, “it could be.”

Referring to the fate of current PAN card holders, Chidambaram said, “they will be persuaded to switch over to biometric PAN cards in their own interest. The earlier PAN cards will, of course, remain valid.”

Finance Ministry had set up an internal group to finalise the norms for introduction of biometric PANs.

The ministry is hoping to introduce iris-based biometric PAN cards to all new applicants once the present PAN data is updated.

Chidambaram also said it has been decided in the meeting that there will be “integrated 360-degree profiling of individual tax payers,” declining to give details.

Sources , however, said it will involve collaboration of tax payers’ information regarding bank accounts, credit cards, mutual fund investment, purchase of property and shares to investigate tax evasion.

Source : Business Standard

NEW DELHI, JUL 4:  The profession of company secretaries is in for an image makeover with the Institute of Company Secretaries of India (ICSI) planning a series of measures, including renaming the intermediate and final papers as ‘executive’ and ‘professional’ programs, prefixing the word ‘CS’ before a professional’s name and even searching for a new name for itself.“For many years, ICSI has been receiving suggestions from members for changing the name of the Institute. The matter had also been taken up with the government on several occasions. Our council has now formally taken a decision to look into this and we have come out with a list of proposed names that can replace the existing one,” ICSI president Preeti Malhotra told FE.

At its meeting last month, the ICSI council had sought views and suggestions of members to a list of options that include either maintaining its current nomenclature or adopting a new one from among ‘Institute of Chartered Secretaries of India’, ‘Institute of Chartered Secretaries and Advisors of India’, ‘Institute of Corporate Secretaries of India’, ‘Institute of Corporate Secretaries and Advisors of India’ and ‘Institute of Chartered Secretaries and Administrators of India’. “It is an effort at international benchmarking,” Malhotra said, also pointing out to the recent name change of the ministry of company affairs (that governs the professional institutes in India) to ministry of corporate affairs.

Interestingly, the apex body governing the company secretarial profession in the UK is called ‘Institute of Chartered Secretaries and Administrators (ICSA), a name that also figures in ICSI’s new plans.

Malhotra said that there was a lot of demand for company secretary students who were in demand even after completing their intermediate exams. “A CS intermediate is technically very sound and has knowledge of company and other corporate laws. A new branding would always help these professionals who for various reasons cannot complete their course,” she said.

Source

MUMBAI, JULY 6:  India’s benchmark share index rose above 15,000 points for the first time on Friday, led by gains in Infosys Technologies and Bharti Airtel Ltd.At 1:23 p.m. (0753 GMT), the 30-issue BSE index was up 0.75 percent, or 111.04 points, at 14,971.14, after rising as high as 15,007.22.

Will have to pay 12% tax besides 3% education cess.

Service tax of 12 per cent (plus the education cess of 3 per cent) will soon be levied on fees charged by schools, doctors and hospitals.

A decision to this effect was taken by the Empowered Committee of State Finance Ministers on Value-Added Tax (VAT) at a meeting in Srinagar on June 15.

The committee decided that private schools and hospitals, amusement parks, coin-operated amusement machine services and other recreation and amusement services will be brought under the tax net from the current financial year. The government will now amend the Service Tax Rules, 1994 to impose the tax.

Consequently, service tax at the rate of 12.36 per cent will be levied on all institutions providing pre-school education, secondary education as well as technical and vocational educational services in case the fees charged is more than Rs 1,000 per month.

Similarly, service tax will be levied on all private hospitals, including those providing primary healthcare, though services provided to families living below the poverty line will be exempt.

Healthcare companies said the tax would make their services more expensive. ?Healthcare players will have no option but to pass on the additional tax burden to the patients,? said Daljit Singh, president (operations), Escorts Heart Institute and Research Centre Ltd.

Added Max Healthcare Ltd Executive Director Mukesh Shivdasani: ?A cardiac surgery that costs Rs 2,00,000 now will become more expensive by Rs 25,000.?

The Centre had agreed to give the entire tax collection from 33 services to compensate states for the phasing out of the central sales tax from the current fiscal.

It was also agreed that another 44 services would be brought under the tax net ? the new services identified at the Srinagar meeting are the first five of the lot. The tax collection from the 33 services is likely to fetch states about Rs 4,000 crore this year.

June, 28th 2007

Source : CAinIndia

Click to read / download Master circulars released by RBI (Reserve Bank of India) in the month of July 2007.

Master circulars 

RBI Governor announces Annual Policy Statement for the year 2007-08.
Highlights

 Source and details

The Central Board of Direct Taxes has allowed the deductors, at their option, in respect of the tax to be deducted at source from income under the head Salaries to use their digital signatures to authenticate the certificates of deduction of tax at source in Form No.16. More…