Companies & Sectors
Cairn India gets Rs20,495 crore demand notice from I-T dept
Cairn India, the unit of Vedanta, said it received a demand notice of Rs20,495 crore from income tax department for alleged failing to deduct withholding tax on alleged capital gains arising during 2006-07 in the hands of its parent Cairn UK Holdings
 
The Income Tax (I-T) department has issued a Rs20,495 crore tax demand on Cairn India Ltd for failing to deduct withholding tax on alleged capital gains made by Cairn Energy Plc, which holds around 10% stake in the company.
 
In a regulatory filing, the company, the unit of Vedanta Resources Plc said, "We would like to inform you that Cairn India has received an order from the Income Tax Department on Friday, for an alleged failure to deduct withholding tax on alleged capital gains arising during 2006-07 in the hands of Cairn UK Holdings Ltd (CUHL), our erstwhile parent company, a subsidiary of Cairn Energy Plc."
 
The Rs20,495 crore demand notice from I-T department includes a tax of about Rs10,248 crore and interest of around Rs10,247 crore. 
 
"Income tax assessments including transfer pricing assessment were duly completed for FY 2006-07, earlier. As was communicated Thursday, from the media reports we understand that tax demand has also been made by the Income Tax Department on CUHL on this matter," Cairn India said in the filing.
 
In a statement, Cairn Energy said it has received "a draft assessment order from the Indian Income Tax Department."
 
Cairn Energy, which had in 2011 sold majority stake in its Indian unit to mining group Vedanta for $8.67 billion, still holds 9.8% stake in Cairn India.
 
It has filed a dispute against the I-T Department "under the terms of the UK-India Investment Treaty, meaning the government and Cairn will now start negotiations to find a resolution to the dispute," a report from Reuters said.
 
At 11.04am, Cairn India was trading marginally down at Rs232 on the BSE, while the 30-share Senses was 140 points down at 28,790.
 

 

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Will mini-micro solar remain a toy for the middle-class and rich in India?

Cheap locally fabricated solar cookers are stolen and seized in rural India, where the long arms of mis-governance reaches out and does anything to see that rural people do not emerge from their centuries old subjugations

 

I am one of the few persons I know who use a solar cooker regularly for cooking rice, lentils, vegetables and some meats. In addition, making marmalade as well as re-heating food in addition to bakery products and egg variations, come naturally. The most natural default usage is thawing frozen foods. We get sun from sunrise till about two-three hours before sunset on our balcony.
 
Within Delhi conditions, I estimate that we are able to use the solar cooker for about 250- 280 days a year. At a very modest estimate of saving Rs15-20 per day in energy costs, the solar cooker that we purchased for a bit below Rs5,000 bought online and delivered at home, has paid for itself in a year. In addition, I have become famous for presenting people with homemade marmalades using orange cuts, orange peel, jaggery, lime, splash of cheap gin and random fruits, including bananas that may be going over-ripe. Sometimes I also add the "heads" of vegetables, which have been cut and would otherwise be thrown away to add "body" to the preserves. My raw material cost per bottle of 500 grams is between Rs12 to Rs15, solar energy free.
 
The solar cooker is also very useful for quick drying wet clothes and sneakers.
 
Locally manufactured micro-mini solar cooker variants cost about Rs2,500 to Rs3,000 all across India now. What we own is a branded option, which can be left out in all weather conditions, and has some good technology used in terms of double glazed glass as well as a better quality rubber for making the vacuum tighter. The solar cooker we use was initially designed for the export market, to work as a portable solar cooker for people in America who wanted something for reheating foods and minor barbeques in public spaces, where open flames and pollution were not permitted. The Indian Armed Forces subsequently picked this up as it could also be used on high altitudes, modified with a back-up electrical connection.
 
A variant of this product is now used by friends in remote parts of India, where a third option is incorporated by fitting a metal stand below the solar cooker - when there is no sun and no electricity, they can heat the base using twigs, wood or coal. When I asked for photographs, they said "no", and that got me thinking, why?
 
The sociological feedback I get from users of a solar cooker presented to a family in what is called "Maoist India", where they have successfully replicated it using local materials salvaged from scrap, is as follows - most rural families do not have the wherewithal to save up for more than a day or two of fresh produce. When they do, a lot of it goes bad, and has to be wasted because nothing can be done with it. The solar cooker permits them to use the skin of fresh produce as well as over-ripe fresh produce with free solar energy to convert food going bad into jams, marmalades, or other preserves which can be used as foods they can carry out into the fields and jungles.
 
In addition, they buy the fresh produce last thing in the evening, when prices are lowest. Then they cut the vegetables, "set" the cooking dish for next morning (cooking medium, masalas, spices, salt at the bottom, then the water and then the chopped vegetables on top), put it inside the cooker "oven" so that the food is ready to start cooking with the first rays of sun. Goes without saying, amount of cooking medium used is also down to 20%-25% of what is used in conventional open flame cooking.
 
This is for the solar cooker at home, where they are worried that it will be stolen, or seized. Why seized, I ask, and they look at me as though I am daft.
 
Cheap locally fabricated solar cookers secured in deep forests help them re-heat or cook food without giving away location as there is no smoke. In addition, certain jungle berries and leaves, which cannot be eaten raw but are extremely nutritious when cooked for 2-3 days along with certain jungle insects and other high-protein easy to cook animal meats, can also be left to slow cook in the solar heaters and recovered later when cooked.
 
Why do they have to hide the solar cookers is the next obvious question? Why would anybody seize their solar cookers, is the question again? This is met with a laugh and an answer that insinuates that I know nothing about rural India, where the long arms of mis-governance will reach out and do anything to see that rural people do not emerge from their centuries old subjugations. Incidentally, the location where these mini-micro locally made solar cookers are used, is less than 24 hours by a combination of foot, cycle, bus and then train to New Delhi.
 
The scrap material they use includes metal sheets from old automobiles, headlamp reflectors for focused heat if beverages have to also be heated, mirrors from all over and a reflective paint that can be applied on almost any surface - the insides of old suitcases lined with tin sheets are a favourite.
 
Mini-micro locally fabricated solar cookers are revolutionising life in the deep jungles of India, to pun on words, and in an ultimate tribute to how consumerism impacts them, are also used to make instant noodles.
 

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Nifty, Sensex may rally. Bank Nifty lacks momentum – Thursday closing report

If Nifty manages to stay above the day’s high, it may target 8,900

 

We had mentioned in Wednesday’s closing report that NSE’s CNX Nifty may rally from here, if it manages to sustain above previous two day’s low. The 50-share index opened Thursday with an upward gap and then slipped marginally. This was followed by the benchmark moving in a range till 3pm, after which it broke the day’s range to hit the day’s high and closed near to it. Today’s gain covers up all the losses of the past two trading sessions.

S&P BSE Sensex opened at 28,799 and moved from low of 28,773 to the high of 28,971 and closed at 28,930 (up 271 points or 0.95%). Nifty opened at 8,741 and hit a low at 8,733. From there it moved to the high of 8,787 and closed at 8,776 (up 76 points or 0.87%). Bank Nifty too opened higher at 19,201 but it witnessed a declining trend. It moved from the high of 19,256 to the low of 19,095 and closed at 19,142 (up 98 points or 0.51%). NSE recorded a volume of 94.78 crore shares. India VIX fell 2.51% to close at 14.7500.
 
The Indian government unveiled industrial production data (IIP) for January 2015 and combined consumer price index (CPI) data (rural/urban) for February 2015 today. The IIP for January was reported at 2.6% versus 1.7% in December. CPI inflation for the month of February rose to 5.37%.
 
In an annual report, the IMF forecast that India would grow by 7.5% in the fiscal year ending 31 March 2016, up from 7.2% in the year now ending.
 
Prime Minister Narendra Modi, who is on a visit to Mauritius, said that both countries have decided to continue discussion on revision of Double Taxation Avoidance Convention between them.
 
The Reserve Bank of India (RBI) in a notification issued on Wednesday said that it has now been decided to permit banks to reverse the excess provision on NPAs sold prior to 26 February 2014 to securitisation or reconstruction company to their profit and loss account, provided the sale is for a value higher than the net book value.
 
"India will be looking to encourage electronic payment as opposed to cash payment. Both because it is desirable, (and) also to tackle the problem of black money and things like that," Chief Economic Adviser Arvind Subramanian said.
 
There is news that the government may establish a separate Ministry for the pharmaceuticals sector.
 
Government plans to hike import duty on rubber to 25% while a slew of other steps are under way to protect the interest of rubber growers, hit hard by declining prices, Commerce and Industry Minister Nirmala Sitharaman said.
 
Coming back to stock markets, Natco Pharma (14.78%) was today again the top gainer in ‘A’ group on the BSE. The stock hit its new 52-week high today. It announced that it is the first company in India to get approval for generic sofosbuvir tablets, 400mg, from Drugs Controller General (India). Sofosbuvir is a medicine used for chronic hepatitis C infection and sold globally by Gilead Sciences, Inc., under its brand Sovaldi. 
 
PMC Fincorp (9.80%) continued to be the top loser in ‘A’ group on the BSE.
 
Sesa Sterlite (3.63%) was the top gainer in the Sensex 30 pack while Coal India (1.23%) was the top loser in the pack.
 
On Wednesday, US indices closed flat with a negative bias. Except for Straits Times (0.15%) and Seoul Composite (0.52%) all the other Asian indices closed in the green. Shanghai Composite (1.78%) was the top gainer.
 
The Bank of Korea's monetary policy committee cut its base rate by 25 basis points to a record low of 1.75%, its first cut in five months.
 
In Japan the business survey index of sentiment at large manufacturers stood at plus 2.4 in January-March, compared with plus 8.1 in the prior three months, according to the joint survey by the Ministry of Finance and the Cabinet Office.
 
European indices were showing mixed trading. US Futures too were showing mixed performance.
 
European Central Bank (ECB) executive board member was said that the ECB bought bonds worth euro 9.8 billion during the first three days after ECB on 9 March 2015 started its first round of bond buying to stop deflation taking hold in the euro area. The central bank had decided to buy bonds aggregating 60 billion euros ($63.74 billion) a month to stop deflation taking hold in the euro area.
 
In Germany, inflation for February was confirmed at 0.1% year-over-year, in line with expectations. In France, data showed consumer prices in February fell 0.3% compared with a year earlier.
 
The International Monetary Fund today approved a $17.5 billion aid plan for crisis-wracked Ukraine.
 

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