Finance ministry effects sweeping changes in Service Tax rules
New Delhi: In what is the largest-ever revision of service tax rules and procedures by the government, the finance ministry on Tuesday issued two omnibus circulars aimed at simplifying procedural and technical service tax rules. The fresh draft will supersede all existing circulars and notifications issued since 1994, when service tax rules came into effect.

Finance ministry officials said the new circulars could result in increased tax collection and was also likely to widen the service tax net. These circulars are expected to plug loopholes in the existing ones that are being used by many service providers to escape the tax net.

The Centre has now made it mandatory for companies seeking service tax exemption to register with the tax department after their annual turnovers cross Rs7 lakh, even though tax exemptions are applicable till the Rs8-lakh- turnover mark.

All the existing 200-odd circulars issued by the Central Board of Excise and Customs (CBEC) stand superseded by the two new ones.

The new circulars take on board the recommendations of the TR Rustagi Committee, formed last year to suggest ways to simplify service tax rules.
Back to News Review index page  

PM asks BHEL to increase number of shifts to meet power equipment targets
Mejia: Prime Minister Manmohan Singh has suggested that domestic power equipment giant, BHEL, enhance production capacity by commencing an additional third shift at its plants. This, he has said, may be necessary to ensure that the targeted 78,000 MW power supply addition is met during the 11th plan period, according to power minister, Sushil Kumar Shinde, who revealed this information to reporters.

Currently, BHEL produces 7,000 MW of equipment a year by operating two shifts. An additional shift would capacity to an annual rate of 10,500 MW, which will add up to 52,500 MW over the next five years, the minister said.

BHEL is investing Rs3,200 crore in the 11th plan period to augment capacity to 15,000 MW annually. However, the government may not depend entirely on BHEL to meet the shortfall and will seek investments in power equipment manufacture to meet the gap, Shinde said.

Meanwhile, the foundation stones for a 1,000 MW (2x500 MW) expansion programme of the Mejia thermal power station and 1,200 MW (2x600 MW) Raghunathpur thermal power station in Bankura and Purulia districts respectively have been laid. These projects are expected to supply bulk power to Delhi during the Commonwealth Games in 2010.
Back to News Review index page  

CII, Canadian chief executives to study FTA feasibility between the two countries
New Delhi: The Confederation of Indian Industry (CII) and Canadian Council of Chief Executives have agreed to study the feasibility of an India-Canada Free Trade Agreement (FTA) at a meeting of the India-Canada CEOs Forum held in Montreal.

The Foreign Investment Protection Agreement (FIFA), which is being negotiated between India and Canada, is the first step towards FTA between the two countries. The two sides have set a target of $20 billion bilateral trade and $5 billion bilateral investment flow, according to a release by the CII.
Back to News Review index page  

42 new SEZ proposals up for approval on Friday meet
New Delhi: The Board of Approval will take up a total of 46 proposals for SEZs when it meets on June 22, under the chairmanship of commerce secretary, Gopal K. Pillai.

According to official sources, the Board might also consider grant to RIL's Navi Mumbai multi-product SEZ plan if the clarifications sought from the State Government and promoters are satisfactory and sufficient.

Of the 46 proposals, as many as 42 are new, they added.

The four other proposals are pending ones, including DLF's proposed SEZ at Sonapet, Haryana for electronics hardware and IT/ITES, spread over 10.06 hectares, for which it has already acquired land. A multi-product SEZ over 5,000 hectares (the maximum ceiling) in Karnataka proposed by Skill Infrastructure Ltd will also come up for approval.

SIPCOT's SEZ for leather products over 105.26 hectares at Ranipet Phase-III is among the 13 new proposals put forth by Tamil Nadu developers.

The sources said that till the first week of this month, the number of notified SEZs currently functioning in the country has gone up to 123.

The expected investment from them by the end of 2009 is likely to be Rs 1,48,440 crore. The additional employment generation would be 15.46 lakh.

The sources added that considering the fact that 180 approvals are pending notification, the aggregate investment would be Rs3,00,000 crore and additional employment, four million.

Officials also estimate that exports from new-generation SEZs amounted to Rs34,787 crore in 2006-07, posting a growth of 52 per cent over Rs22,840 crore in 2005-06.
Back to News Review index page  

Net direct tax collections up 57.5%
New Delhi: The Centre's net direct tax collections, up to June 18 this fiscal, stood at Rs37,444 crore, registering a 57.5 per cent increase over the collections recorded in the corresponding period in the previous year.

The collection level so far includes advance tax of Rs13,796 crore, representing a 28.6 per cent increase on a year-on-year basis.
Back to News Review index page