Taxation
Final guidelines on GAAR by month end: Finance minister

The guidelines on GAAR will be based on the suggestions of the committee headed by tax expert Parthasarthi Shome who submitted the final report to the finance minister earlier in the day

 
New Delhi: The Income Tax department will come out with final guidelines by the end of this month on implementation of General Anti Avoidance Rules (GAAR), reports PTI quoting finance minister P Chidambaram.
 
The guidelines will be based on the suggestions of the committee headed by tax expert Parthasarthi Shome who submitted the final report to the minister earlier in the day.
 
“I expect Stage 1-finalisation of our views on the final report (by Shome Committee) to take place in the next 10 days.
 
Stage 2-the final GAAR rules would take another 10 days because that would require vetting by the ministry of law.
 
“So at the moment, I would like to complete Stage 1 and Stage 2... that would be (done) by the end of this month,” Mr Chidambaram told reporters here.
 
The ministry, Mr Chidambaram said, would first finalise its report on GAAR and then consider if there was a necessity to amend the Income Tax Act.
 
“...And the 3rd Stage if it is necessary to amend the IT Act, I am afraid it will certainly take longer because that has to go to Cabinet and the Act has to be amended,” he said.
 
The Shome Committee had in its draft report recommended postponement of the controversial tax provision by three years to 1 April 2016, and abolition of capital gains tax on transfer of securities.
 
It had suggested that GAAR provisions should not be invoked to examine the genuineness of the residency of entities in Mauritius.
 
Mr Chidambaram said the other report by the Shome Committee on indirect transfer of assets by non-resident Indians would be put up on the ministry's website for comments.
 
“As soon as I read it and my department reads it, we will put it on website, invite comments and give about 15 days for feedback and then we will examine... We will have to read it carefully. We will put in on website as early as possible,” he said.
 

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GAIL signs gas purchase pact with Gazprom

Under the terms of the agreement, GAIL will receive 2.5 million tonnes of LNG per annum (equivalent to about 130 million British thermal unit or 3.5 billion cubic metres or 122 billion cubic feet per annum) over a period of 20 years beginning 2018-19.

 
New Delhi: State-owned gas utility GAIL India said it has signed an agreement with Russia’s Gazprom to buy 2.5 million tonnes per annum of gas for 20 years, reports PTI.
 
GAIL “has signed a legally binding 20-year liquefied natural gas (LNG) sales and purchase agreement (SPA) with Gazprom Marketing and Trading Singapore (GM&TS), a 100% wholly-owned subsidiary of Gazprom Marketing & Trading,” the company said in a press statement.
 
Under the terms of the agreement, GAIL will receive 2.5 million tonnes of LNG per annum (equivalent to about 130 million British thermal unit or 3.5 billion cubic metres or 122 billion cubic feet per annum) over a period of 20 years beginning 2018-19.
 
LNG will come from Gazprom’s Shtokman production facilities which have 130 trillion cubic feet of inplace reserves. This would be “optimised and supplemented by GM&T's global trading portfolio and capabilities,” it said.
 
“Under the contract, LNG will be sustainably priced with an oil-indexed formula and delivered to Dahej, Dabhol and Kochi terminals in India,” GAIL said without giving price details.
 
Commenting on the development, GAIL chairman and managing director B C Tripathi said, “This long-term LNG supply agreement with Gazprom, which holds the world’s largest gas reserves, is another milestone in Indian’s Russian Energy cooperation.”
 
“The deal with Gazprom reinforces GAIL's commitment to facilitate the development of the Indian market for which US$6 billion investments are being made by GAIL in creating natural gas infrastructure,” he said.
 
Speaking on the partnership, Gazprom Marketing & Trading CEO Vitaly Vasiliev said, “We are delighted to have signed this agreement with GAIL, during a period of rising demand for LNG in India. We are looking forward to working together with GAIL to help meet India’s expanding gas demand whilst securing a long-term market for Russian gas.”
 

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Global airline industry may record modest profits next year

The global airlines’ body estimated that Asia-Pacific airlines were set to post a $2.3 billion profit for 2012, which was $0.3 billion better than previously forecast

 
New Delhi: The crisis-hit global airline industry may stem its growing losses and even record modest profits next year, with air carriers in Asia-Pacific estimated to post profits this year, reports PTI quoting IATA.
 
A major reason for this upward revision by the International Air Transport Association (IATA) was better performance by the airlines through better matching of capacity to demand and various cost-cutting measures, IATA estimated in its latest financial forecast titled “Downward Pressure Starting to Ease”.
 
Noting that the European sovereign debt crisis continued and China was experiencing moderate growth, IATA director general and CEO Tony Tyler said, “While some of these risks have diminished slightly over recent months, they continue to take their toll on business confidence. The outlook improvement is due to airlines performing better in a difficult environment.”
 
The global airlines’ body estimated that Asia-Pacific airlines were set to post a $2.3 billion profit for 2012, which was $ 0.3 billion better than previously forecast.
 
But these carriers, which catered to 40% of the global cargo market, were “the most exposed to weak cargo demand”.
 
While European airlines were expected to post the largest loss of any region at $ 1.2 billion, worse than previously forecast, those from North America were estimated to post profits of $1.9 billion in 2012, up $0.5 billion from the previous forecast, IATA predicted.
 
In its first look at 2013, IATA estimated a rise in industry profits to $7.5 billion, as forecasts pointed to “slightly stronger economic growth and lower oil prices”.
 

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