Service tax on film industry might be rolled back

The I&B minister has said that she will try to roll back the service tax proposed in the Budget on the film industry, which amounts to double taxation

The service tax levied on the film industry, which was announced in the recent Budget, might be rolled back. The Union minister for information and broadcasting Ambika Soni has said that she would support the industry’s demand to get relief on service tax.

“I do not want the film industry to be unhappy about the double tax which was announced in the recent Budget. You cannot charge service and value added tax (VAT) on the same item. You already charge service tax on the input cost; you should not charge it on the output,” said Ms Soni, while speaking at the ‘FICCI-Frames 2010’ seminar in Mumbai.

She added, “Earlier, the tourism segment faced the same problem as they were already charged on their inputs (faxes, telephones, taxi services). The industry was also asked to pay tax on their turnover. We fought against it and the government granted 90% relief. I hope in this matter (the film industry) will get 100% relief.”

The government has also seen great potential in animation and visual effects, so it is taking steps to support this segment.

“We are planning to set up a national centre for animation, gaming and visual effects and an allocation of Rs52 crore will be made for the same. Most of the good animated films like ‘Avatar’, and ‘Krish’ faced piracy issues but now we are trying to curb the issue as much as possible. The Planning Commission is also allocating Rs660 crore to the National Heritage Mission for the 100th anniversary of the film industry,” said the minister.


Bombay High Court slams police in Abdulali attack case

The Bombay High Court has ordered the Mahad police to submit details of the action taken following the attack on environment activist Sumaira Abdulali, who has been fighting the menace of illegal sand mining

The Bombay High Court has ordered the Mahad police to file details of the action taken against the attackers, who on Tuesday attacked noted environmentalist Sumaira Abdulali and a team of journalists and local activists.

Ms Abdulali has been fighting against the illegal sand mining in and around Bankot Creek in Raigad district. The 41-km-long Bankot Creek that passes through Raigad and Ratnagiri districts is Maharashtra’s equivalent of the Sunderbans. However, due to illegal sand mining, the creek is being choked, endangering a rich habitat of crocodiles, migratory birds and virgin mangroves.

On Wednesday, the High Court had asked the Maharashtra government to submit a report about the action taken by it within 24 hours. In today’s hearing, the state government pointed out that the activist (Ms Abdulali) had not asked for police escort in advance before visiting the site and after a receiving a complaint of attack, a police team escorted them back to Mumbai.

However, this reply angered Justice FI Rebello who asked whether this action was enough. He also questioned the law and order situation in the state, asking why does one need police protection to visit public places like Bankot Creek.

Ishwar Nankani, counsel for Movement against Intimidation, Threats and Revenge against Activists (MITRA), pointed out that the accused had been continuously present at the police station for several hours and had even filed a counter-complaint against the activists for trespassing and rash driving, which would not have been possible without their physical presence.

The High Court has ordered the state government to file an affidavit giving a detailed report on the action taken in the said attack by next Thursday. Ms Abdulali has also been asked to file an affidavit stating details of the entire incident, including the presence of the accused at the police station.

Earlier, in her complaint to the Mahad police, Ms Abdulali said that she along with members of a news media house had visited the 41-km-long Bankot Creek, around 150km away from Mumbai. She had seen 14 dredgers operating in the space of that region from a distance of about one km and had taken photographs.

She, along with the media team, recorded the same in a video camera and left the place. On the way back when the group was returning after surveying the area, the team was confronted by at least five people in a sports utility vehicle (SUV). After an argument in which one of the persons claimed to be "the owner" of the creek, the activists and the media team left the place. {break}

However, the activist's car was intercepted repeatedly in a Bollywood-style car chase over the lonely ghat road and attacked later on the way back to Mumbai. A truck rammed their three vehicles on a bridge, apparently with intent to knock the car into the river below, while the two SUVs giving chase from behind blocked the road on both sides for vehicles carrying the activists and the media team.

"They hit our car and tried to push it in the river. It was an attempt to murder," said Ms Abdulali narrating the incident. Even after the police arrived, the accused smashed the windows of the cars in the presence of the police, and continued their verbal threats.

The traffic police reached the place after some time, but the attackers continued threatening the group, shouting abuses and claiming that they had "bought" the creek for Rs280 million and nobody could stop them from sand-dredging there.

The police later escorted the two vehicles to Mahad police station where a complaint of criminal intimidation, rioting and attempt to murder was lodged. The alleged attacker has in turn accused the activist and the team of trespassing and rash driving.

Activist Sumaira Abdulali has been working relentlessly against the illegal activity of sand mining in Maharashtra. The Bankot Creek is clearly a coastal regulation zone (CRZ) with the presence of mangroves all along its banks. According to the activist, the state government has given licenses to dredge sand there, supposedly for clearing the waterways for navigation. However, there is no boat traffic on this stretch nor is anyone except barge operators carrying sand allowed to enter the area which the license-holders claim has been 'bought' by them.

"Sand mining is extensively controlled by politicians in the state and all terms of licenses are routinely violated including quantity of sand dredged, timings of dredging operations and number of dredgers permitted to operate in a given area. Sand is also routinely dredged from beaches. Any opposition to illegal sand dredging is met with threats and violence and there appears to be a nexus between politicians and (the) administration to protect the illegal activity, forming a 'mafia'," added the activist.

Ms Abdulali's Awaaz Foundation has filed a public interest litigation (PIL) where, as directed by the Bombay High Court, Prof Shyam Asolekar of IIT Bombay has prepared a comprehensive report on alternatives to sand dredging and more environmentally-friendly methods of dredging sand and an eco-cess on natural sand. The report was prepared after consultations with all stakeholders. The Bombay High Court has also prohibited any sand mining activity in CRZ areas.



K B Patil

7 years ago

One citizen fighting alone is not going to stop these criminals. Only when a large section of society is conscious of the environmental damage will they rise and protest. Educating them is urgently needed. Our polticians have shown that the only God that they worship is Mammon.

Stake sale row adds fuel to Maharashtra Scooters’ run

In the ongoing tussle between stakeholders Bajaj Auto and WMDC, the recent HC ruling against Bajaj Auto has given the shares of Maharashtra Scooters a big boost

Despite being a dormant company for years, the share price of Maharashtra Scooters Ltd (MSL) has been surging. MSL shares have zoomed 67% since January this year. This phenomenal run on the bourses is only due to an ongoing tiff between two of its stakeholders over the valuation of the company.

For a while now, MSL has been dormant. It was forced to shut down operations ever since Bajaj Auto Ltd decided to stop production of scooters. Bajaj Auto and the Western Maharashtra Development Corp (WMDC) each have a stake in the company. Bajaj Holdings currently owns 24% while WMDC owns 27% stake in MSL. Both entities had entered into an agreement, which stipulated that in case if any one partner intended to either part with or transfer its shareholding in the company, the other would have the first option to purchase such shares.

A few years ago, Bajaj Auto intended to become a majority shareholder in MSL, for which it sought to buy WMDC’s stake in the company. However, the two parties had differences over the correct valuation and the matter went in for arbitration. At that time (January 2006), the Arbitral Award valued MSL’s shares at around Rs151 per share, when the prevailing market price was around Rs315.
This valuation obviously didn’t go down well with the state government agency and it subsequently appealed against the Award in the Bombay High Court (HC).
Recently, the High Court set aside the Award given by Justice Sawant, ruling in favour of WMDC and preventing Bajaj Auto from buying WMDC’s stake at around Rs152 per share.

Interestingly MSL has significant holdings in Rahul Bajaj group companies like Bajaj Auto, Bajaj FinServ, Bajaj Auto Finance and other group companies. As such, it has strategic significance for the Bajaj family. At current market prices, these investments in Bajaj group companies are worth around Rs1,000 crore.

WMDC has a higher number of representatives in the Maharashtra Scooters Board. This, along with the HC court ruling means that WMDC is under no obligation to sell its stake to Bajaj Auto and can offload the shares in the market at the prevailing price.

This has sent the company’s stock into a frenzy. Currently it is trading at Rs371. Other than the value of its investments, MSL has no business operations to support this upsurge in its stock price. An analyst with Anand Rathi said, “There is absolutely no manufacturing happening at the company’s end. In this situation, the stock price has run up too high. There is no value whatsoever at this level. Who will buy the stock at this value?”

A senior analyst with Enam Securities said, “MSL is basically a shell company. Its business has been wrapped up for a long time; it only has investments in various Bajaj entities, which it wants to sell. If it sells these investments, it will make a lot of money. That’s why the stock price is moving up so much.”

Bajaj Auto did appeal against the HC ruling, but the hearing ended with the same result. Bajaj Holdings has now appealed to the Divisional Bench of the Bombay HC. The matter is likely to come up for hearing at the court on 19th March.

There appears to be no end in sight to this saga. Bajaj Auto is unlikely to rest on its back and will continue to appeal to higher authorities.




7 years ago

Frankly speaking, for any responsible journalist it would be too difficult to put the entire WMDC-MSL episode in few lines.

It needs to make in-depth study right from -how vaulable MSL funds were used in doubtful ways to invest in BAJAJ group companies, why investments in MFs were made ONLY in growth options..etc.

Legal provisions already existed BUT were not interpreted in a lawful manner and judicious way. It is now that the matter has taken a requisite turn. However, if everything goes in right direction, both-WMDC[state treasury] and retail investors of MSL would stand to gain.

To comment on the view of learned Analyst from Anand Rathi, I would wish if he/she could convince the Co-promoter of MSL - Bajaj to sell his 24% stake in MSL at the prevailing price of 371/- to any strategic investor, if the former has to say-"There is no value whatsoever at this level. Who will buy the stock at this value?” !!!!!!!!!

Legal proceedings will take its own time and course and things are supposed to bring cheer and justice to small investors; provided any vested interest with corporate and political influence gives a new turn to this case.

In the interest of all the stakeholders , an Investigative Jounalist like Sucheta Dalal can definitely do the needful for the sake of justice.


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