Accusing the Centre of trying to 'bulldoze' the Constitution (115th Amendment) Bill, 2011 through Parliament, TN chief minister Jayalalithaa said in a letter to the prime minister that this piece of legislation "encroaches upon the powers vested with the states by the Constitution"
Chennai: Tamil Nadu chief minister Jayalalithaa today voiced her opposition to the proposed Goods and Services Tax (GST) Bill to prime minister Manmohan Singh, asserting it encroached on state powers and was like entering an 'unknown territory' fraught with risk and uncertainty, reports PTI.
She also appealed to non-Congress chief ministers to oppose the 'clandestine and sinister' attempt, as the states would be 'trapped in a bottomless pit'.
Accusing the Centre of trying to 'bulldoze' the Constitution (115th Amendment) Bill, 2011, now before the Parliamentary Standing Committee on Finance, through Parliament, she said in a letter to Mr Singh that this piece of legislation "encroaches upon the powers vested with the states by the Constitution".
Noting that sales tax was the only major buoyant source of revenue on which the states could depend, she said any tax reform measure driven by the Centre should neither reduce the revenue flow from this source, nor should it adversely affect the fiscal autonomy of the states.
"Approval of this Amendment Bill by any of the states will amount to entering into an unknown territory fraught with risk and uncertainty," she said.
Ms Jayalalithaa said before the Centre pushes through the Bill in the Parliament, it is necessary that the consultative process among all states and the Centre is taken forward to come to a broad understanding on the framework of the proposed GST.
Expressing concern over the proposed GST Council and the GST Dispute Settlement Authority, Ms Jayalalithaa said, "This means the states virtually lose their authority to fix tax rates, which is unconstitutional and not acceptable in a federal set-up."
She said implementing GST with two rates initially and converging them to a single rate later is not workable.
"In states like Tamil Nadu, where the tax neutral rate is as high as 17%, this will lead to a huge loss, i.e., more than Rs5,000 crore per annum. Any proposal of GST structure will have to address these concerns," she said.
"The manner in which the government of India is undertaking the implementation of GST amounts to interfering with the fiscal autonomy of the states, thereby having the potential to jeopardise the federal framework of distribution of fiscal powers between the states and the Union," she said.
She asked the prime minister to continue the consultative process to arrive at a broad consensus on the issue.
In separate letters to all non-Congress chief ministers, Ms Jayalalithaa reminded that the sales tax/VAT was the only major source of revenue for the states, while the Centre has many sources of income.
"The government of India is attempting to stealthily encroach upon even this single buoyant source of revenue for the state governments in the name of indirect tax reforms," she said.
Troubled by higher cost of funds and increased construction and labour costs, developers are still hoping for higher prices
Recent reports suggest that the downtrend in the Mumbai realty sector continues. In July, sales registrations were down 31% y-o-y to 5,047 levels. However, prices have not shown any significant decline as builders seem to be holding the rates up in the hope of further price appreciation.
"Some local or small realtors may consider giving discounts, because they don't have holding power," said an analyst, "but big builders either freeze or raise their prices as a response to the situation."
Apart from Oberoi Realty's new project at Goregaon, all big players have seen less than enthusiastic response for new launches and are recording lower sales, according to the brokerage house Prabhudas Lilladher.
Adding to the woes has been the repeated rate hikes by the Reserve Bank of India (RBI). "The double whammy for developers continues with borrowing costs on the rise, along with worsening buyer affordability," the brokerage has said in a report. On the other hand, lease registrations have continued to climb upwards by 19% y-o-y to 9,645, and rates have come down from an all-time high in the previous month.
Liases Foras, the realty research firm, says prices in Mumbai have increased by around 5% from the preceding quarter, compared to a large 17% increase in the National Capital Region (NCR). Mumbai has about 108 million square feet of unsold stock that could take up to 40 months to sell.
In the beginning of August, it was reported that property sales in the city had hit a 30-month low. Over the past two years sales in the Mumbai Metropolitan Region (MMR) have dropped by a huge 60%.
The realty sector has been facing difficulties in sourcing funds and is now paying extraordinarily high rates to borrow money. Added to this are higher construction and labour costs that have made it even more difficult for developers.
"The problem arises when investors/brokers hoard units," said a representative of a realty firm who requested anonymity. "By the time the property is purchased by the end-user the price has been inflated considerably."
In contrast, Hyderabad and Pune have performed well, according to data by Liases Foras. Both cities have shown healthy sales. While Hyderabad saw some price corrections, prices have gone up 7% in Pune.
In May, this year, TRAI recommended that consequent to the merger of licences in a service area, the total spectrum held by the resultant entity post-merger shall not exceed 12.4 MHz for GSM technology, or 10 MHz in case of CDMA technology
New Delhi: The telecom ministry has asked the Telecom Regulatory Authority of India (TRAI) to review its recommendations on the timeframe for service providers to surrender excess spectrum in their possession and the rationale behind a spectrum transfer charge in case of the merger of two entities, reports PTI.
"The Department of Telecom (DoT) has asked TRAI to review its recommendations on the timeframe for surrendering excess spectrum and the rationale behind a spectrum transfer charge during the merger of two companies," the DoT said in a communication to TRAI.
In May, TRAI had gave its recommendations on a 'Spectrum Management and Licensing Framework', in which it had said that consequent to the merger of licences in a service area, the total spectrum held by the resultant entity post-merger shall not exceed 12.4 MHz for GSM technology, or 10 MHz in case of CDMA technology.
The authority had separately recommended that excess spectrum beyond 6.2 MHz/5 MHz being held by the resultant entity, pursuant to merger/acquisition, would be liable to be charged at current market price.
Furthermore, TRAI had suggested that if, as a result of the merger, the total spectrum held by the resultant entity was beyond the prescribed limits, the excess spectrum must be surrendered.
The resultant entity from a merger or acquisition would have the discretion to choose the band to surrender spectrum beyond the ceiling level.
Consequent to the merger of licences in service areas, the resultant entity will be entitled to the total amount of spectrum held by the merged entities. However, this is subject to the condition that the licencee will surrender any excess spectrum held by it, as per the allocation cap stipulated for GSM and CDMA technologies, within a period of three months.
In case of a failure to meet the spectrum allocation criterion within three months, the post-merger licencee shall surrender the excess spectrum, if any, failing which it may be treated as violation of terms and conditions of the licence agreement and appropriate action will be taken.
Furthermore, TRAI had recommended that a spectrum transfer charge, at 5% of the difference between the transaction price and the total spectrum price, will be payable by the merged licencee within a period of three months after the merger is approved by the DoT.
TRAI made the recommendation on the premise that service providers were given contracted spectrum at a price less than the market rate.