Retrospective change in I-T Act may yield around Rs40,000 crore

“The Income Tax department has made an estimation that the total tax implication in consequences of retrospective amendments introduced in Finance Bill 2012 may be to the tune of Rs35,000-Rs40,000 crore,” minister of state for finance SS  Palanimanickam informed the Rajya Sabha

New Delhi: The controversial proposal to amend the Income Tax (I-T)Act with retrospective effect to bring into the tax net Vodafone-type deals is expected to yield to the exchequer Rs35,000 to Rs40,000 crore, reports PTI.

“The Income Tax department has made an estimation that the total tax implication in consequences of retrospective amendments introduced in Finance Bill 2012 may be to the tune of Rs35,000-Rs40,000 crore,” minister of state for finance SS Palanimanickam told the Rajya Sabha in a written reply.

Finance minister Pranab Mukherjee’s Budget proposal, aimed at taxing Vodafone-type merger and acquisition deals involving domestic assets has generated lot of debate, with various global bodies claiming that the move would hurt foreign investment.

Once the amendment is approved by Parliament, the British telecom giant would have to pay Rs11,000 crore as tax for its acquisition of the Hutchison's stake in Hutchison Essar in 2007.

On the overall implications of the proposed amendment, Mr Palanimanickam said, “The figure of Rs35,000-Rs40,000 crore is an estimate and the exact amount is determined only when assessing officer completes assessment proceedings. The proceeding before assessing officer is a quasi judicial proceeding and the name along with demand raised is determined only on completion of such proceedings.”
 
In a separate reply, minister of state for finance Namo Narain Meena said: “Foreign investors make their decisions taking into account all relevant factors and the investments are admitted into the country within the framework of the applicable laws, rules and regulations formulated to promote the country's interest.”

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COMMENTS

Java

5 years ago

This is a gross under estimate. When the government comes down to outright cheating, there ought to be no upper limit. This government seems to be bent on destroying the rule of law and natural justice in the country, to usher in an era of fiduciary arbitrariness and instability, harbinger of general anarchy. Hopefully, the courts will strike down the move as contrary to natural justice. That's the only hope for India.

Coromandel International net profit down 8% in FY12

Coromandel International consolidated net sales rose by 30% to Rs9,789.18 crore in 2011-12 from Rs7,530.83 crore in 2010-11

Mumbai: Fertiliser producer Coromandel International reported a decline of almost 8% in its consolidated net profit at Rs638.79 crore for the 2011-12 fiscal due to rise in input costs, reports PTI.

The company had posted a net profit of Rs 693.67 crore in the 2010-11 financial year, it said in a filing to the BSE.

The total expenditure of the farm input major increased by 34% to Rs8,906.83 crore in the last fiscal from Rs6,645.78 crore in 2010-11.

The consolidated net sales of the company rose by 30% to Rs9,789.18 crore from Rs7,530.83 crore in 2010-11.

For the quarter ended 31 March 2012, the consolidated net profit of the company stood at Rs66.89 crore compared to Rs70.98 crore in the year-ago period.

The consolidated net sales of the company increased to Rs2,735.64 crore in the fourth quarter of the last fiscal from Rs1,179.16 crore in the same quarter in the 2010-11.

Coromandel has also recommended a dividend of Rs3 per share for the year ended 31 March 2012.

Coromandel, which is the country’s leading producer of phosphatic fertiliser, along with its wholly-owned subsidiary Parry Chemicals has acquired a total of 74.57% stake in Mumbai-based Sabero Organics Gujarat, making the company its subsidiary, effective 17 December 2011.

The company, a part of the $3.8 billion Murugappa Group, is engaged in manufacturing fertilisers, specialty nutrients, crop protection and retail.

Meanwhile, Coromandel International managing director Kapil Mehan told reporters in Hyderabad, “The total capex for the fiscal will be Rs450 crore, including Rs250 crore on both Punjab and Kakinada plants.”

He added that Rs200 crore will be spent on repair, maintenance and replacement of some of the machinery.

The Kakinada plant, whose capacity has been increased to 4 million tonnes from the existing 3.2 million tonnes, will be ready by the second half of this fiscal, he said.

Mr Mehan said the company has paid Rs25 crore to Sabero Organics, which the company acquired last year, as non-compete fee which impacted the net.

Coromandel had acquired a total of 74.57% stake in Mumbai-based Sabero Organics Gujarat, making the company its subsidiary effective 17 December 2011.

Sabero contributed around Rs90 crore to the top line of the company, he said.

In late afternoon trade, Coromandel International was trading at around Rs282.25 per share on the Bombay Stock Exchange, 2.77% down from the previous close.

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ADB to fund Reliance Power's solar plant

Under the government’s ambitious Jawaharlal Nehru National Solar Mission that started in January 2010, the country aims to have 2,000 MW of installed solar power generation capacity by 2013, which would be further increased to 10,000 MW by 2017 and to 20,000 MW by 2022

Jodhpur: To help boost private investment in renewable energy, multilateral lending agency ADB (Asian Development Bank) announced $103 million loan to Reliance Power for setting up a 100-MW solar plant in Jaisalmer district of Rajasthan, reports PTI.

“I would like to inform you that ADB has just agreed to extend financing for Reliance Power's 100-MW concentrated solar thermal plant which will be one of the largest solar power generation facilities in India and Asia as well,” ADB director general (regional and sustainable development department) S Chander said.

He was addressing the inaugural session of the fourth Asia Solar Energy Forum, which is being attended by several public and private sector experts, investors, and companies.

The plant, which is expected to be completed in May 2013, will cost around $415 million.

Besides ADB, other bilateral agencies and local lenders will provide funds for the project. It will be the first solar energy plant built by Reliance Power, which is a listed company of the Reliance ADA Group.

Under the government’s ambitious Jawaharlal Nehru National Solar Mission (NSM) that started in January, 2010, the country aims to have 2,000 MW of installed solar power generation capacity by 2013, which would be further increased to 10,000 MW by 2017 and to 20,000 MW by 2022.

Reliance Power was one of the successful bidders to develop 470 MW of concentrating solar power capacity under the first phase of the NSM.

The plant will be located near the village of Dhursar in the Jaisalmer district of Rajasthan, which is about 180 km from Jodhpur. The site has one of the highest levels of direct sunlight in the country.

The plant is estimated to avoid more than 2.5 lakh tonnes of carbon dioxide emissions every year, compared to the energy produced by a conventional fossil fuel plant.

The project will share a transmission line with Reliance Power’s existing 40 MW Dahanu solar power plant, which is also partly financed by the ADB.

“This 100-megawatt plant will help meet growing energy demand in India in a way that avoids emission of harmful greenhouse gases,” said Michael Barrow, director, ADB's private sector operations department.

He further said, “We hope that the success of this project will spur others to invest in the solar energy sector, which has massive potential in India.”

According to the Asian Development Bank, it will be one of the largest solar plants in India and the loan marks ADB's first-ever financing for a concentrating solar power project.

Concentrating solar power captures solar energy to convert water into steam, which in turn drives a steam turbine to produce energy. Photo-voltaic plants convert sunlight into electricity through solar panels using semiconductors.

ADB is supporting the development of solar energy in Asia, as part of its goal of promoting environmentally sustainable economic growth.

Under its Asia Solar Energy Initiative, announced in May 2010, ADB aims to commission or support 3,000 MW of solar power capacity in developing member countries by May 2013.

In late afternoon trade, Reliance Power was trading at around Rs109.25 per share on the Bombay Stock Exchange, 0.14% up from the previous close.

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