Axis Bank is the first private sector bank to make income-tax payment facility available for its large tax-paying customer base
Axis Bank has launched the facility to pay income-tax at ATMs. This facility, initially, will be available at select ATMs in the major centres and will shortly be made available at all 5,600 plus ATMs across the country. Axis Bank customers holding ATM/debit cards can use this facility to pay income-tax/other direct taxes using Axis Bank ATMs.
The Central Board of Direct Taxes (CBDT), as a part of its e-governance initiative to provide more convenience to the taxpayers had advised authorised banks to roll out the facility to pay tax using ATMs. Axis Bank is the first private sector bank to make this facility available for its large tax-paying customer base.
The facility will provide individual tax payers the convenience of making the payment 24 hours a day and 365 days a year.
If the Union Budget is ordinary, expect a further fall
Concerns about the implications of the rise in crude prices for the Indian economy, and interest rates in particular, pulled the market down sharply during the week. While the indices ended in the green on the first and the last trading day of the week, they were in the red for three days in between.
The market declined 3% for the week ended 25th February with the Sensex and Nifty falling 510.61 points and 155.40 points, respectively.
The major gainers on the Sensex were Reliance Infrastructure (up 5%), Reliance Industries, Hero Honda (up 3% each) and TCS (up 2%). The weekly losers were Mahindra & Mahindra, DLF (down 9% each), Tata Motors, Larsen & Toubro (down 8% each) and Tata Power (down 7%).
The BSE Oil & Gas index (up 1%) was the lone sectoral gainer while BSE Capital Goods (down 6%) and BSE Auto (down 5%) were the losers.
The market started the week in the green, but was choppy due to concern over the widening political turmoil in West Asia and northern Africa. The market touched the day's low in post-noon trade, but bounced back to the day's highs and closed near those levels. However, the broader indices were left behind in the recovery.
On Tuesday, the market opened sharply lower and remained choppy during the entire trading session. However, good gains in Reliance Industries following the announcement that British energy major BP Plc has agreed to buy a 30% stake in 23 oil blocks for a payment of $7.2 billion, limited the losses. Feeble attempts at a recovery were cut short by profit-booking. There was a marginal bounce-back in the last half hour, but the markets closed in the red.
The market witnessed a flat opening on Wednesday, tracking weak trends in the global arena. Select buying in post-noon trade pushed the market to a higher trajectory, but the gain was temporary and the indices again slipped southwards in the late session, closing marginally off the day's low and in the red for the second straight day.
On Thursday the market opened weak on worries that rising crude prices might lead to a harsh Union Budget. A marginal rise in the weekly food inflation numbers for mid-February dragged the key indices further down. The Sensex dipped below the psychological 18,000 points level in late morning trade, pulled down by rate-sensitive sectors like capital goods, banking, auto and metal. The market traded in a narrow range for a brief period post-noon, then plunged subsequently to close 3% down for the day.
On Friday, The Sensex and the Nifty hit an intra-day low of 17,470 and 5,233, respectively. The intra-day high for the Sensex was 17,812 and for the Nifty it was at 5,338. The Sensex closed 69 points up at 17,701, while the Nifty gained 41 points at 5,304.
Although the market ended positive on Friday, the indicators have started finding some direction. The manner in which the market has lost in the past few days shows that the gains are very slow. This means that the bears are still in control of the market.
While endorsing the Economic Survey's emphasis on the need for higher investments in the farm and infrastructure sectors to achieve higher growth, finance minister Pranab Mukherjee said inflation and the widening current account deficit were major areas of concern.
"Inflation is a matter of great concern, no doubt. Just one year ago, in February 2010, food inflation was as high as 20.2%. Though it is high it has come down in January... Still it is an area of concern and we shall have to work on it, particularly in the context of the global economic crisis," Mr Mukherjee said.
The Survey expects inflation to be higher due to pressure on commodity prices on account of the ongoing turmoil in West Asia. Wholesale price index based inflation stood at a high 8.23% in January. On the other hand, after touching a high of 18.23% in December, food inflation has come down to 11.49% in mid-February.
Rail commuters and freight users have been spared any hikes in the Railway Budget presented by Mamata Banerjee on Friday, only a couple of months before the Assembly elections in her home state of West Bengal.
The railway minister's status quo on tariffs found support from prime minister Manmohan Singh, who has in the past voiced concern over the deteriorating finances of the Railways.
However, with no mention of any credible rail projects that related infrastructure companies could benefit from, stocks in the sector fell sharply.
Food inflation rose marginally to 11.49% for the week ended 12th February from 11.05% in the previous week, driven by rising prices of milk, eggs, meat and vegetables. The marginal rise snapped a fortnight of consecutive declines during the weeks ended 29th January and 5th February. Planning Commission deputy chairman Montek Singh Ahluwalia has expressed confidence that food inflation will come down to single digits by March-end.
On the international front, world oil prices rose further on Friday, as supply worries persisted due to the escalating unrest in the oil-rich West Asian states and North Africa.
Brent North Sea crude for April delivery rose 76 cents to $112.12 per barrel, having shot up the previous day to $119.79-the highest level since 22 August 2008-before sliding lower as many traders took profits.
New York's light sweet crude for April, known as West Texas Intermediate (WTI), also gained 76 cents to $97.47 a barrel. On Friday it briefly touched $103.41, a level last seen in late September 2008.
The market will get a clear direction after the close of trade on Monday, when the Union Budget is to be presented. However, all rallies are likely to be short-lived. With crude prices spiralling to two-year highs, finance minister Pranab Mukherjee will have a difficult balancing act to perform.
A uniform, simplified taxation system will benefit TV and newspaper businesses that have been growing fast through the launch of regional channels and editions
When Union finance minister Pranab Mukherjee presents the Budget on Monday, media companies will be hoping that he will give them a uniform and simplified tax system that will help to ensure growth and reduce their losses. The implementation of GST tops their wish-list.
After the annus horibilus (Latin for a 'horrible year') 2009, the media sector made a turnaround in 2010, in terms of advertising revenues and growth. Media analysts and company representatives say that in order for this performance to continue, it is imperative that the government reduces the tax burden on the sector and implements the Goods and Service Tax (GST).
"Entertainment tax in India is among the highest in the world-in some cases as high as 25%-and it differs from state to state," said an analyst from Pinc Money. "If a seamless, uniform structure is put in place, it benefits the sector tremendously." This view is supported by nearly all broadcasters and media houses. Jawahar Goel, managing director, DishTV India, remarked in a television interview recently that the media sector's main expectation from the Budget is rationalisation of taxes.
No wonder they are hoping that the GST is implemented, for the sake of uniform and single-point taxation across categories all over India. Last year, many new channels were launched, and this trend has continued this year. So, lowering of taxes and reforming distribution norms is something they are very eager about.
"GST becomes especially important now, when most of the brands are looking for regional expansion," the analyst said. Last year, almost all the newspapers diversified into new local editions and television companies launched local language channels. This is why a simplified pan-Indian model of taxation will be a huge benefit.
Another important issue is raising the FDI cap in all segments. Joy Chakraborty, chief revenue officer of Zee Entertainment Enterprises, said in a statement, "Raising the FDI limit can be a big boost for international media distributors to enter the country with controlling stakes. They could play a catalytic role in the corporatisation of this industry, which would result in greater transparency and increased subscription revenues."
With the roll-out of Phase-III radio reforms and the conditional access system (CAS), radio channels too, are looking forward to GST implementation and raising the FDI cap. Recently, Prashant Pandey, chief executive officer, Entertainment Network India, said that the FDI cap for radio must be raised beyond the 26% limit. However, the music industry wants the government to revert to the old royalty fee structure for radio broadcasts.
The new rules by the Copyright Board say that radio stations have to pay 2% of their net advertising revenues as royalty to the music industry. Earlier, stations had to pay a fixed amount per hour as royalty. Savio D'Souza, secretary-general of the Indian Music Industry, said, "Already, the industry is crippled by piracy. Reduced royalty fees will lead to our death."
The cable and DTH industry, which has to go for complete digitisation as per TRAI instructions, is particularly eager about the abolishing of customs duties on imported set-top boxes and the reduction of license fees. Therefore, they will be looking at the Direct Tax Code (DTC) announcements closely.
Dual taxation on copyright, that is both service tax and VAT, is another issue. MK Anand, chief executive officer, UTV Interactive, said, "Dual taxation (that is, service tax and VAT) on transfer of copyright in relation to cinematographic films is affecting the industry at large, and lack of clarity from the government on the applicability of service tax and VAT on the same transaction is fuelling speculation." He said that the industry is eagerly awaiting implementation of GST, which will ensure clarity and end double taxation.