The mutual fund industry has also demanded an increase in the expense ratio, which is mainly administrative expenditure, to 2.25% from 2.20%
New Delhi: The mutual fund industry wants the consumers to bear the burden of 12% service tax on purchase of schemes and has also pitched for higher administrative expenses during their meeting with the Finance Ministry officials, reports PTI.
"Service tax should be borne by consumers and should be kept out of the total expense ratio," HN Sinor , chief executive of Association of Mutual Funds of India (AMFI) told reporters after the meeting of the representatives of the mutual fund industry with the government officials.
The mutual fund industry has demanded an increase in the expense ratio, which is mainly administrative expenditure, to 2.25% from 2.20% -- of which 2% is administrative expense and 0.20% exit load.
"The meeting was called to discuss how to increase retail participation. We have asked them to increase the total expense ratio to 225 basis points and also allow them to credit the exit load directly to the schemes of the asset management companies so that the MFs do not have to pay it," Sinor said.
On the issue of re-introduction of commission for brokers, also known as entry load, he said, "we have not raised entry load issue. Only distributors mentioned it. It is a 3-year old matter and the MF industry did not believe in reviving the issue."
The entry load of 2.25% which was paid as commission to distributors of mutual funds, was banned in 2009 by the then SEBI chief CB Bhave, who felt that investors were being taken for a ride by distributors who encouraged investors to churn their portfolios. The ban, however, led to drying up of inflows into mutual funds.
The finance ministry, the officials said, is taking note of the short and medium term issues being faced by the industry in addition to their concerns on tax related matters.
"There are issues of short term and taxation nature. Those are to be fast tracked. We need to work out a balance so that the industry grows," DEA Secretary R Gopalan said.
The meeting comes close on the heels of Prime Minister Manmohan Singh?s statement last week that mutual fund industry was in problems and something was needed to be done to resolve their issues.
The issues like allowing mutual funds to float pension schemes, provision of tax relief on such products at par with other life insurance schemes and more benefits for those players who wish to provide services in smaller towns were also discussed during the meeting.
Service tax on railway passenger travel and freight has been kept on hold due to opposition from Mamata Banerjee. The exemption has been extended since then on quarterly basis
New Delhi: Passenger fares and freight charges will not go up immediately as the Finance Ministry on Monday issued a notification exempting the Indian railways from 12% service tax for three months till 30th September, reports PTI.
"Government has exempted the core services provided by the Indian Railways, namely transportation of goods and passengers, from the levy of service tax. The exemption will remain effective for a period of three months, up to 30 September 2012," said a finance ministry statement.
Last week, Railway Minister Mukul Roy had written to Prime Minister Manmohan Singh, who is now looking after the Finance portfolio, requesting him not to introduce service tax on passenger fare and freight traffic from 1st July.
The Finance Ministry has moved to a new regime of Service Tax based on negative list from 1st July, under which only 38 services are exempted from payment of the levy.
Service tax on railway passenger travel and freight was introduced in the Budget for 2009-10 but was kept on hold due to the then Railway Minister Mamata Banerjee's opposition. The exemption has been extended since then on quarterly basis.
Earlier, Roy had also requested former Finance Minister Pranab Mukherjee to exempt Railways from paying service tax.
Had the government imposed 12% service tax on railways, passenger fares in all AC classes and first class would have gone up by 3.6%.
As per the estimates, railways would have to bear a burden of Rs6,000 crore had it decided against passing on the service tax burden on the passengers.
The introduction of new Service Tax regime, based on negative list from 1st July, would bring into net a host of activities like speed post and express parcel service of the post office, earnings of TV and theatre artists.
Under the credit line, medium and long-term credit will be provided through the ICICI Bank to Indian importers purchasing renewable energy equipment manufactured in Japan
Mumbai: The Japan Bank for International Cooperation (JBIC) on Monday said it has entered into an agreement with ICICI Bank to extend a credit of over Rs275 crore or about $50 million to finance renewable energy product imports from the Far East nation, reports PTI.
"This will be the first credit line to be offered by JBIC that specialises in supporting export of renewable energy-related equipment," the Mumbai-based bank said in a statement.
The credit facility will be operational for two years, the JBIC country representative Shin Oya told PTI over phone, adding, however, importers will get a longer repayment period of up to 18 years.
The $50 million or around Rs275 crore credit line will be co-financed, with JBIC taking a $30 million share and the rest by the Japanese private financial institutions, it said.
Under the credit line, medium and long-term credit will be provided through the ICICI Bank to Indian importers purchasing renewable energy equipment manufactured in Japan.
The Japanese financial institutions, including JBIC, will extend the credit line to ICICI Bank which will on-lend to Indian importers of the above mentioned products.
The equipment may include products based on solar power, solar thermal energy, wind energy and geothermal energy, the statement said.