The Budget proposal to impose a 5% service tax on healthcare services evoked sharp reaction from the medical community which described the tax as "misery tax". Finance minister Pranab Mukherjee today said that he would respond to the representations on tax issues next week
New Delhi: Amid concerns by the medical community on the proposed service tax on healthcare, finance minister Pranab Mukherjee today said in the Rajya Sabha that he would respond to the representations on tax issues next week, reports PTI.
Following the reply of Mr Mukherjee on general discussion on the Budget, the Rajya Sabha returned the Appropriations Bills, completing the first phase of the three-stage exercise for passage of the Budget.
The Lok Sabha had earlier approved the Supplementary demands for grants for 2010-11 and relevant Appropriation Bills.
"That can be announced or decided only at the time of Finance Bill. Therefore I will request those who are agitating to wait till the Finance Bill is being approved by Parliament," he said while referring to his proposal to impose 5% service tax on high-end health care.
The Finance Bill is likely to be considered by Parliament next week. The budget session of Parliament would conclude on 25th March.
Mr Mukherjee in the budget for 2011-12 proposed to impose a service tax of 5% on all services, including diagnostic services provided by centrally air-conditioned clinical establishments having more than 25 beds for in-patient treatment.
The proposal evoked sharp reaction from the medical community which described the service tax on healthcare as "misery tax". They have also submitted representation against the proposal to the finance minister.
SEBI website describes open offer application "under process", after inadvertently stating earlier in the day that it was cleared
New Delhi: Market regulator Securities and Exchange Board of India (SEBI) has clarified that it has not yet cleared the Vedanta group's open offer for Cairn India that is mandatory for the conclusion of the London-based mining group's $9.6 billion acquisition to foray into the oil sector, reports PTI.
The SEBI website this evening listed as "under process" the Vedanta group's Rs13,610 crore open offer to acquire a 20% stake in Cairn India. This is a change from earlier in the day when the market regulator said that it had been cleared.
When contacted, a SEBI official said that it was "an inadvertent error" when the website showed "final observations issued" by SEBI for the proposed transaction. The official said that the open offer was yet to be cleared. SEBI's "final observations" are a go-ahead for an open offer.
London-listed Vedanta had in August last year agreed to buy up to 51% stake in Cairn India from Cairn Energy Plc. Following the acquisition, its group firm Sesa Goa was to make an open offer for buying an additional 20% in the company which owns India's largest onland oil field.
But the company could not make the open offer, following an oil ministry intervention with SEBI. The ministry said that the deal was contingent upon government approval, which is still under process.
SEBI is holding back the approval for the open offer as the government is yet to give its go ahead.
Some in Cairn/Vedanta had wanted to delink the government approval and the open offer saying even if the state consent did not come, Vedanta could become a minority shareholder in Cairn India.
But SEBI has refused to delink the issue, as the Rs355 per share open offer price is part of the $9.6 billion transaction, and the open offer could only be made if the original deal had been concluded.
The Rs13,631 crore open offer was first scheduled to open on 11 October 2010 and close on 30 October 2010, but following the oil ministry letter, SEBI refused to give approval to the issue.
Industry says it is already burdened by high input costs on account of increasing cotton prices and would have to pass on the hikes to customers
Days after garment retailers kept their outlets closed to protest against a new 10% excise duty on branded garments, garment manufacturers across the country have shut down for two days demanding that the hefty duty proposal be scrapped altogether.
An estimated two lakh apparel units are closed today and tomorrow, to pressure the Union government not to implement the excise duty that Union finance minister Pranab Mukherjee proposed in the Budget. It is estimated that the two-day shutdown would result in a loss of Rs 500 crore a day, and daily wage workers in the factories would be hurt particularly hard.
Retailers held their protest strike on 4th March and the business has earned sympathy in some quarters as it is already burdened by higher cotton prices. "Branded apparels form a very important sector in retail business," said an analyst from Elara Securities. "Naturally, if excise duty is imposed on garments, they would be worried. They will resort to raising prices, as they are already suffering from higher input costs due to an increase in the price of cotton."
Some popular brands have already increased prices. Pantaloons has hiked its prices by 18% and Pankaj Tibrewal, chief operating officer, indicated at a store launch in New Delhi today that prices could go up further. "In case the government does not roll back the proposed excise duty imposed on branded garments, we will have no option but to pass it on to customers," he said. Shoppers Stop is also considering hiking prices if excise duty is imposed.
Cotton prices have surged nearly 30% in two months in the domestic market. Prices which were at around Rs42,000 per candy in January, went up to Rs51,000 in February. Earlier this month, the Cotton Advisory Board (CAB) also reduced crop estimates for the cotton year (October-September) by 5% to 31.2 million bales (a bale is 170 kg). The CAB pegged mill consumption this year at 23.2 million bales, compared to 20.7 million bales last year.
Exporters globally are facing low production outputs which have resulted in considerable shortage of cotton supply. Consequently, cotton prices have soared and along with this the prices of apparels have gone up too.
The 10% excise duty proposal is "a double whammy" for apparel retailers, said Kishore Biyani, CEO, Future Group, which owns Pantaloons, one of the biggest retail apparel businesses in the country. The effect has been worse on businesses that market their own brands, while franchising for other brands.
Is this situation hopeless? "There are some things to consider," said the Elara Securities analyst. "The attraction of branded apparels is enormous among young shoppers, who have been undeterred by price rises so far. So it would be rash to say that buying will fall dramatically."
"This could also be an opportunity for promoting small, but quality brands," the analyst point out. "If good products are offered to customers, I don't see why they wouldn't go for these products, especially if they are priced right."