The draft direct tax code, on which the government has invited comments from the public, has argued for bringing the entire range of savings schemes under the EET mode of taxation
Trade unions have asked the Indian government to shelve the proposal in the draft Direct Tax Code (DTC) to tax all savings and provident fund (PF) schemes at the time of withdrawal, saying that the move would hit the salaried class hard, reports PTI.
"This effort of bringing PF withdrawals under income-tax purview shall adversely hit the salaried class as their social security will be seriously hampered. This is just not acceptable," said the Hind Mazdoor Sabha (HMS), in a letter to finance minister Pranab Mukherjee.
Cautioning the government that implementation of the proposal could create a 'serious situation', the HMS appealed to the finance minister “not to open a confrontational front.”
The secretary of the All India Trade Union Congress, DL Sachdev, also raised concerns about the proposal and said that the Union would take up the issue with the government.
The draft DTC, on which the government has invited comments from the public, has argued for bringing all savings schemes under the exempt, exempt, tax (EET) mode of taxation.
At present, no income-tax is levied either at the time of contribution, accrual of interest, or withdrawal of provident funds by subscribers.
The EET mode would cover retirement funds, including General Provident Fund (GPF), Public Provident Fund (PPF), Recognised Provident Fund (RPF) and Employees' Provident Fund (EPF).
"During a meeting of the working committee of the HMS on 31st October, a resolution was passed to oppose the government's move to bring PF under income-tax purview,” said AD Nagpal, secretary, Hind Mazdoor Sabha, in a statement to PTI.
"We oppose this proposal as this would hit the salaried class of the society badly. Subscriptions to PF schemes are mandatory and not voluntary. Thus the government should not charge income-tax on withdrawals of PFs before or after superannuation," he said.
Mr Sachdev, who is also an Employees’ Provident Fund Organisation's (EPFO) trustee, said, "We will raise this issue in the next meeting of EPFO's apex body, Central Board of Trustees, which is headed by the labour minister."
"We will spare no efforts to get this resolution passed in the CBT that trustees don't favour charging of income-tax on PF withdrawals,” Mr Sachdev said, adding that a letter opposing the proposal would be sent to the labour minister as well as the finance minister.
The issue, Mr Sachdev said, is likely to rock pre-budget consultations of the finance minister with the unions.
All central trade unions would stage a dharna in front of Parliament House on 16th December, he added.
Dabur is looking at expanding its 'Rea' and 'Activ' range, including entry into new formats of packaged food products, which are showing good growth potential
Fast-moving consumer goods (FMCG) company Dabur India Ltd has said that it plans to launch ready-to-cook products under its 'Hommade' brand to expand in the estimated Rs2,800-crore packaged food segment, reports PTI.
The company currently sells culinary products under the 'Hommade' brand, besides 'Real' and 'Activ' brands of fruit juices in the packaged food category.
"Going forward, we are looking at expanding the range soon, including entry into new formats of packaged food products, which are showing good potential," Dabur India marketing head (foods) KK Chutani told PTI.
He, however, declined to give details on the kind of products that the company would launch, but said that Dabur is looking at traditional items like paneer, adding that the products would be launched under the 'Hommade' brand.
Mr Chutani said that the company will have strong regional focus for the new products, adding that the products were still in the developmental stage. It has already started working on marketing campaigns.
"Primarily, we will focus on the southern market. Hence, the regional TV channels in the south will be prime carriers of the new TV commercial," he added.
Dabur is likely to launch these new products in the beginning of the next fiscal.
At present, Dabur sells culinary paste like garlic, ginger, ginger-garlic and tamarind in packaged format besides tomato puree and coconut milk under the 'Hommade' brand.
The company's food business, including beverages, is worth Rs400 crore and contributes around 13% of its overall turnover.
Rising inflation pulled down Indian markets, while Asian markets remained positive after news reports of Dubai’s bailout package
Indian markets slipped on fears that recovery in the economy and a surge in the wholesale price inflation index may add pressure on the central bank to raise interest rates. The Sensex declined 21 points from Friday’s (11 December 2009) close, ending the day at 17,098. The Nifty closed at 5,106, down 12 points.
During the day, Reliance Industries Ltd (RIL) remained flat on reports that the company would take a call on submitting a final bid for bankrupt Dutch petrochemical company LyondellBasell (LB). The company is now concerned about LB’s high debt, with the company’s lenders having hiked interest rates to about 12%.
Bajaj Auto rose 3% after a leading foreign broker raised its rating on the stock to ‘buy’ from ‘neutral’, saying that demand for two-wheelers was growing. Bajaj Auto will reportedly stop producing scooters by March 2010 to focus on motorcycles.
Western India Shipyard rose 5%, after the company bagged an order worth Rs5 crore for the repair of a deepwater oil rig named JUR Noble Ed Holt.
Chambal Fertilizers & Chemicals’ step-down subsidiary ISGN Solutions Inc based in the US has completed the acquisition of Fiserv Fulfillment Services of Pennsylvania on 12 December 2009. The stock was down 1%.
ACC was up 5% on reports that the company’s cement plant in Thondebhavi, Karnataka, was inaugurated on Saturday, 12 December 2009. ACC Thondebhavi Cement Works was set up as a greenfield project.
During trading hours, trade minister Anand Sharma said that rising wholesale prices were a matter of concern and the government is monitoring prices of essential commodities. As per data released by the government, inflation based on the wholesale price index (WPI) surged 4.78% from the previous month’s annual rise of 1.34%. The food article index within the wholesale price index rose 16.71% in November 2009. The manufacturing products index in the WPI rose an annual 3.99%. In its October policy review, the Reserve Bank of India (RBI) had raised its WPI inflation projection for end-March 2010 to 6.5% with an upside bias, from 5% earlier.
On Sunday, 13 December 2009, the chairman of the empowered committee of state finance ministers Asim Dasgupta said that the goods and services tax (GST) regime would have four slabs and it is likely to be unveiled within 15 days. GST slabs would include exempted items list, one standard rate for majority of the goods and services and another having a moderate rate, he said. The implementation of GST is scheduled for 1 April 2010. However, there are doubts prevailing at various quarters on whether the new tax regime would come into effect at the targeted date because of differences of opinion over the rates among States and the items to be included under GST. The Committee had released a discussion paper on GST on 10 November 2009. It proposes to replace Central levies like excise duty, service tax, special additional duty and countervailing duty by GST. State levies like VAT, sales tax and entry tax would also be subsumed. Besides all this, Central and State cesses and surcharges would also be out once GST comes into effect.
Meanwhile, the RBI has reportedly expressed its concerns over many investment companies with a low capital base raising disproportionately high funds. As per the current norms, corporate investment firms, which hold strategic stakes of group companies, are exempt from following the stringent norms applicable to NBFCs. The RBI may impose regulatory restrictions on such investment arms having high leverage as a measure to limit the aggressive borrowing by corporate houses. Currently, the RBI is reported to be in discussions with some corporate groups on this issue.
During the day, Asia’s key benchmark indices in China, Hong Kong, Taiwan, South Korea and Singapore rose by between 0.31%-1.71% after Dubai said that it had received $10 billion from Abu Dhabi to help it repay $4.1 billion to meet its liabilities towards a maturing Islamic bond. However, in Japan and Indonesia, key indices were down by between 0.02%-0.72%.
Dubai said that it had received $10 billion from fellow UAE emirate Abu Dhabi to help it repay $4.1 billion in Islamic bonds maturing on Monday. The statement said the excess amount would be used to cater to Dubai World’s needs, until the end of April 2010. Sheikh Ahmed bin Saaed al-Maktoum said in a statement that Dubai wanted to reassure investors, financial & trade creditors, employees and citizens that its government would act at all times in accordance with market principles and internationally accepted business practices. He also said that Dubai is—and will continue to be—a strong and vibrant global financial centre and that the emirate’s best days were yet to come. The statement also said that the United Arab Emirates’ Central Bank, which governs monetary policy in Dubai, Abu Dhabi and other UAE constituents, is also prepared to provide support to local UAE banks.
On Friday, 11 December 2009, the Dow Jones Industrial Average rose 66 points while the S&P 500 was up 4 points while the Nasdaq Composite was down 1%.
The US Federal Reserve is expected to maintain its pledge to keep US interest rates close to zero for “an extended period” after chairman Ben Bernanke warned that US economic recovery still faced “formidable headwinds”, such as tight credit conditions and rising unemployment. Mr Bernanke’s re-appointment as chairman of the Federal Reserve by the Senate banking committee is expected on Thursday.
US industrial production during November, the figures for which are due on Tuesday, is expected to rise 0.5%. This would slow the year-on-year decline from (-) 7.1% in October to (-) 5.4%. US producer prices are expected to show the headline measure returning to positive territory for the first time in a year, with the year-on-year rate rising from (-) 1.9% in October to a rise of 1.6%. US consumer price inflation is also likely to move into positive territory for the first time since February 2009, with the headline measure expected to rise from (-) 0.2% in October to a rise of 1.8%. Core inflation, though, remains low and could sink below 1% next year following a sharp slowdown in labour costs.
In premarket trading, the Dow was trading 56 points higher.