The court said despite the department coming to know about tax evasion cases in 2008, it started taking action only after March this year after it was directed to file action taken report. The court added that had it not intervened, the officials would have "slept over it" and the oversees probe would not have proceeded
New Delhi: The Supreme Court today pulled up the Income Tax (I-T) department for not taking timely action against the companies involved in the second generation (2G) spectrum allocation scam and said had it not intervened, the officials would have "slept over it" and the oversees probe would not have proceeded, reports PTI.
The court said despite the department coming to know about tax evasion cases in 2008, it started taking action only after March this year after it was directed to file action taken report.
"We are sure they (I-T department) would have slept over it otherwise (if it had not intervened). There is no doubt about it," a bench comprising justices GS Singhvi and AK Ganguly said.
Additional Solicitor General Vivek Tankha, appearing for the department, tried to justify the delay saying that big companies are involved in the case and they are creating obstacles.
The court, however, was not satisfied with the submission and said there is no need to say all these things about these companies as they are "prima facie tax evaders".
"How are they big? What kind of mindset do you have? Prima facie they all are tax evaders. Do not call them big. Do not insult the word," the bench said.
The department also informed that all telecom companies, which after the allotment of the spectrum, have sold their controlling stakes to foreign firms through the Mauritius route, have been asked to pay tax on the capital gain from such transactions.
Mr Tankha submitted that the department has already served notices to these firms and are treating them as assessees.
"The Director General of International Transactions has already issued notices to them. Some of them have already admitted that they should be taxed in India and we have issued them notices. They have permanent offices in India and they are assessees now," said Mr Tankha.
The bench asked the I-T department to complete the departmental proceedings against the tax-evading firms within the permitted time.
The bench also asked the Central Bureau of Investigation (CBI), Enforcement Directorate (ED) and I-T department to cooperate with each other during the probe.
The department said that it was following the Vodafone case, where the UK-based telecom giant bought controlling 67% stake in the Hutchison Essar using the DTAA (Double Taxation Avoidance Agreement) route in Mauritius and claimed exemption. However, the apex court asked it to make part payment of Rs2,500 crore.
At a specially called ‘damage control’ press conference in Mumbai, Speak Asia officials refuse to divulge any details unless journalists sign a non-disclosure agreement with them. The officials also apologise for mentioning the names of ICICI Bank, Bata, Nestle and Bharti Airtel as their clients
Speak Asia (SpeakAsiaonline.com), the online survey company engaged in multi-level marketing (MLM) to spread its network across the country, on Monday said that it could not disclose specific information regarding its business. The company's top officials told a press conference in Mumbai, the first time the company has called such a media meet, that unless the journalists present sign a non-disclosure agreement with them, Speak Asia could not divulge details like the names of its clients and financials. (View the video of the press conference at 01.07.56, at the end of this report.)
Manoj Kumar, the company's chief executive for India, apologised for naming ICICI Bank, Bata, Nestle, Bharti Airtel and ING Vyasa Bank as Speak Asia's clients. "Taking the names of these organisations was a factual error on the part of our chief marketing officer Vivek Gautam and I apologise on behalf of Speak Asia," Mr Kumar said. He, however, said that during the initial period of operations, Speak Asia had worked on these brands, although the service was not commissioned by these institutions.
Throughout the press conference, all the company's officials, including Mr Kumar, president for emerging markets, Narayanan Rajagopalan and chief marketing officer Vivek Gautam, refused to answer any of the questions put by journalists in a simple 'yes' or 'no' manner. Mr Kumar repeatedly diverted the focus of the specific questions that led the media people to ask him to answer with a simple 'yes' or 'no'.
To date, Speak Asia does not have any registered office or registration of any kind in India. Today, the officials also failed to clarify the authority under which the company operates. All they pointed to were some generic documents and circulars of the Reserve Bank of India (RBI) and other authorities. Mr Rajagopalan said, "We are setting up a permanent establishment in India from 1st August and set up five offices across the country by the end of 2011."
Denying that Speak Asia is an MLM operator, he said that the company is neither a survey company nor a marketing company in the broad sense, but it was a 'precision' marketing services (panel) provider. While Mr Rajagopan insisted on the word 'precision', he failed to explain the rational of allowing its customers (again no agent, panellist or subscribers) to buy 21 pins or IDs to buy its e-zine, "Surveys Today".
Talking about market research, the official said that currently the cost of undertaking such activity was very high and there was inflated cost of ownership for it. "Therefore, Speak Asia, provides an opportunity for companies to do market surveys in a cost-effective manner from its number of panelists," he said. Speak Asia pays Rs500 for every survey filled by its panelist. However, according to market sources, the cost of conducting a survey in India is not so high and companies pay about Rs10 to Rs60 per person covered in a survey.
Mr Rajagopalan also claimed that in the US companies paid $12 to $100 for every online survey and yet the rate of responses there was just 0.5%. However, a simple web search shows that in the US companies pay $1 to $30 per online survey completed.
On the company's revenue stream, Mr Rajagopalan said, Speak Asia earned money by providing its panels to marketing research organisations (the company is not one of them) for online surveys, commission earned by selling products and revenues from displaying ads. The company started operations in January 2010, but its official launch happened only in May 2010. Since then, Speak Asia has remitted about Rs325 crore from India and distributed around Rs250 crore to its panelists, sorry...customers. The company spent about Rs50 crore-Rs60 crore on advertising, public relations agency fees and brand building, and earned a net profit of Rs15 crore, to date, Mr Kumar, the CEO for India informed.
Speak Asia claimed to have paid Rs68 crore as service tax through its collection agents, but preferred to keep mum on the question of any tax deduction at source (TDS), or income tax deducted from payments to its agents.
In a statement distributed today, Speak Asia said, "At the end of its first phase, Speak Asia Online Pte Ltd (SAOL) has clocked a revenue turnover of USD80.5 million over the last three quarters. 1.2 million panellists have received monies over USD52 million over this period through bank transfers via RBI authorized forex channels. This income has been generated by filling up of surveys, giving online opinion on advertisements watched, and income accrued from referring other panellists. The company has till date invested over USD9 million for various marketing, training and business development programmes. The company in line with other overseas online businesses has a collection representative, which pays all applicable service tax in India; they have paid a total of INR68 crores as service tax to the government of India, up to April 30, 2011."
To date, the company has avoided replying to e-mail messages by Moneylife about its registration and jurisdiction. However, in the statement, the company said SAOL is committed to transparency and corporate governance in all aspects of its operations across function areas.
Interestingly, company officials continued to play goof-up on the question about its operations. They said, Speak Asia operates in India, but has neither any operation nor any business in Bangladesh. Mr Kumar responded in the negative when asked at least two or three times about the company's operations in Bangladesh.
However, a letter from the company's owner Haren (Harender Kaur of Singapore) put up on the Speak Asia website mentions its ongoing operations in Bangladesh. According to Mr Kumar, Ms Kaur and her family owns SAOL. The letter which is not dated, says, "I am pleased to announce that Bangladesh has really done well in the Speak Asia way of operations and the rate of growth has been tremendous. The master distributor for Bangladesh has been finalised and shall be in working condition by the 20th of April. Their location shall be in Chittagong. All the new members joining Speak Asia shall have an option of paying in Bangladesh Takas only w.e.f 20th April 2011. Henceforth all the panel income (binary commissions) shall be remitted locally in BDT by direct bank transfers to the panelist accounts. This shall be completed by the end of April 2011. All the existing payouts shall be organised by the master distributor via bank transfers."
An interesting aspect is that the company, which up to yesterday said it was 'Asia's largest online survey company', today changed its tagline, choosing to be called 'Asia's leading integrated market services agency'.
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See the webcast of the press conference...
HDFC Bank sells silver at over Rs70,000 when the National Spot Exchange sells it for around Rs53,700 and the local jeweller sells silver for Rs55,000! And gullible customers are buying
Banks have hit upon a new idea to get a larger share of your wallet-retailing gold and silver. While the banks claim that buying gold or silver from them is a wise decision, if you want to buy gold or silver don't go to your bank!
Buying gold or silver from a bank may give you the satisfaction about the purity of silver as a bank is more reputable than the jeweller next door, but it also means that you pay much more.
HDFC Bank was the first bank in the country to sell physical silver. You will be surprised to know the rates that HDFC Bank is charging for gold and silver compared to the rates at the local jewelers, or even the National Spot Exchange Limited (NSEL). Silver is available at jewellers at between Rs55,000 and Rs56,000 a kg, whereas HDFC Bank is offering the white metal at Rs74,040 a kg. Those keen can buy e-silver from the National Spot Exchange at Rs53,700 a kg. It's the same for gold too. Jewellers are quoting around Rs22,300 to Rs22,500 per 10gm and one can also buy e-gold from NSEL at Rs22,300, however, HDFC Bank is quoting around Rs25,943 per 10gm.
But why this huge price difference?
When asked about the price issue, a spokesperson for HDFC Bank said, "It is true that we charge more than the market price, but this is because of purity, 24-karat gold made in Switzerland with Assay certification, that signifies the highest level of purity as per international standards and convenience." Some top jewellers challenge this, saying there is no difference between the gold and silver they sell and that sold by HDFC Bank.
The prices are only half the story. But what if you want to sell it? Will HDFC Bank buy back the gold and silver? No, and you will be in for a shock when you try to sell it in the open market.
If you bought silver from a bank today for Rs71,000, and you needed to sell it the same day (to a jeweller, as the bank will not buy the gold back from you), all you will get is, say, Rs54,000! Of course, you get to keep the certificate! The jeweler, on the other hand, will buy back the gold or silver from you on any day and at the prevailing price. Some jewellers also give you a certificate for the gold you buy, thus diluting a key selling point of the bank.
So, while buying gold and silver, give the banks a skip. Opt instead for a credible jeweler, as even in the case of jewellers, we found a lot of price variation with branded stores charging a premium. Do your homework well before you buy gold. It will help you if you read the Moneylife definitive study on gold. (Read,Gold: All told). And, of course always buy standard, hallmarked gold. If you do decide to go to a jeweler to buy gold in bulk, do negotiate. It is likely you will get a discount. In our conversations with a couple of brokers, we were offered a discount on bulk purchases.
Based on our interactions with thousands of individuals every month, we find that instances of mis-selling of investment-related services and products are growing at an alarming rate and the prime source of mis-selling are private banks. (Read, 'Customers need to be vigilant as bankers are turning bhayankar')
Customers don't know any better, as their trust the bankers blindly. No wonder, that HDFC Bank can claim to Moneylife that "in spite of higher charges we sold over 1,200kg of gold against 850kg last year during Akshaya Tritya. This year we sold around 600kg silver against 95kg last year."
Banks are making tonnes of money mis-selling financial and other products to their own gullible customers.