Andhranews

New Delhi, Sept. 8: Finance minister P. Chidambaram said on Friday that from April 1, 2008, a new simpler Income-Tax Act can be expected. This will replace the existing Income-Tax Act,1961. The finance minister was presented with a report by the CBDT (Central Board of Direct Taxes) officials which was a simplification of the Income-Tax laws.

The finance minister said that the report is an exercise for the future. “This report is about a brand new Income-Tax Act, which if all goes well, will come into force from April 1, 2008,” he said. In the meantime, he said, the existing Income-Tax Act, 1961, will continue and whatever amendments have to be done will have to come through the finance bill each year.

Mr Chidambaram had announced in his Budget speech of 2005 that the Income-tax Act, 1961, would be simplified and a new bill would be introduced in Parliament. Accordingly, a group of officials from the CBDT was constituted to simplify and rationalise the law relating to income-tax. An extensive review of the existing provisions in the income-tax and wealth-tax codes has been done for the report, which was presented to the finance minister.

The report has taken into consideration the inputs received from various sources. Titled as the “Report on simplification of the Income-Ttax Act, 1961”, a prime feature of the report is that it combines all existing direct taxes like income-tax, wealth-tax, fringe benefit tax, etc, into one code known as the “Direct Taxes Code Bill, 2006”.

A finance ministry statement said that the language of the law is simple and does away with complicated legalese to provide for an easy reading and understanding of the law. All provisions and explanations in the existing law have been done away with and wherever necessary, suitably incorporated in the main provision.
Redundant provisions of law have been removed from the statute.

Similar provisions have been regrouped and placed at one place in a chapter-wise manner. Efforts have been made to remove existing anomalies and inconsistencies to enable easy implementation and to ensure better compliance. The concepts of “previous year” and “assessment year” have been replaced with the concept of “financial year”.

Also, the provisions relating to tax administration and procedures have been kept common for all direct taxes. Mr Chidambaram also said that the government intends to keep the country’s inflation rate below 5.0 per cent, and would consider steps if needed to keep it in check.

New Delhi, Sept. 8: Petroleum minister Murli Deora on Friday said that the blending process in the ethanol-blended programme (EBP) will commence from November 1. Mr Deora said that oil marketing companies had been directed for early implementation of the EBP programme on a national scale.

“In this connection, the process of procurement of ethanol by the OMCs through national competitive bidding has commenced as OMCs has begun issuing public notice for procurement of indigenous anhydrous ethanol in different states,” Mr Deora added. With this, the stage is set for taking up the national programme for blending 5 per cent ethanol with petrol countrywide except the Northeast, J&K, Lakshadweep and Andaman & Nicobar Islands.

Earlier, the 5 per cent ethanol-blended programme (EBP) was started in nine sugarcane growing states and contiguous Union Territories in 2003. This, however, did not make substantial headway for a number of reasons like decline in sugarcane production, restrictions on interstate movement of ethanol and the suppliers backing out.

The procurement of ethanol from the domestic market would help the sugarcane-growing farmers with better returns and supplement the availability of petroleum products in the country. A series of meetings have been held with the stakeholders such as ethanol suppliers, Indian Sugar Mills Association (ISMA) and the OMCs.

The petroleum ministry had earlier directed that open bidding process should be commenced forthwith by the OMCs for purchasing ethanol in which all suppliers can participate and the price discovery is achieved in an open and fair manner. Petroleum ministry did not favour the suggestion for direct purchase as it was felt that this method is non-transparent and thus has potential of embroiling the EBP programme in controversy.

Mumbai, Sept. 8: A consortium of Videocon Industries Ltd. and US fund Ripplewood Holdings was selected on Friday as the primary bidder to buy South Korean appliances maker Daewoo Electronics. The creditors of Daewoo Electronics, including Wo-ori Bank and Korea Asset Management Corp., a State-run restructuring agency, have been offered $700 million for their 97.5 per cent stake in the company by the consortium.

If successful, it will be the largest foreign capital takeover of a Korean manufacturing firm and Videocon’s third major acquisition in less than two years. “Videocon can become the new owner of Daewoo as early as December after two months of due diligence,” said Mr Park Ki-hoon of Woori Bank, one of Daewoo’s main creditors. Moreover, Korean equity firm MBK Partners was named as the reserve bidder.

Initially, five companies had made offers to the creditors, with the Malaysian fund company Neo Equity making the highest bid. However, the creditors tu-rned down the offer due to doubts about the firm’s ability to raise funds. Daewoo Electronics posted losses in 2005 and its earnings forecasts were not available. A creditor source had said banks wanted to sell the former unit of the failed Daewoo Group for more than $1 billion, considering its assets and business outlook.

Mumbai, Sept. 8: Indiabulls Financial Services Limited (IBFSL) has submitted an Expression of Interest (EoI) to the Reserve Bank of India (RBI) proposing merger of United Western Bank (UWB) with IBFSL. It also sent details of its proposals to the Bombay Stock Exchange on Friday. The proposal is subject to the approval of RBI and other requisite regulatory and statutory approvals.

The terms of the proposed merger, according to the note sent to the BSE by the company secretary Amit Jain, the offer has a merger ratio of 1 share of Indiabulls Financial Services Limited, post-demerger of the real estate business, for every 6 shares of the United Western Bank. The share price of Indiabulls is around Rs 50. The offer is based on 53.77 million shares of United Western Bank as per its June 30, 2006 filings with the exchanges and will result in the issuance of approximately 9 million additional IBFSL shares in exchange for United Western Bank shares.

The company said that IBFSL currently has 161.4 million shares outstanding. It is demerging its real estate business to its shareholders through a scheme of demerger which has already received in-principle approval of the stock exchanges and is expected to be completed in the third quarter of current fiscal year subject to the final approval from the high court of Delhi.

The board of Indiabulls Financial Services is proposing the merger as it strongly believes that the proposed merger would provide the best outcome for all the stakeholders of United Western Bank and would create an extremely competitive universal bank. It is also learnt Indiabulls had approached investor and stock broker Pradeep Bhavnani, who has mopped up next to 17 per cent of the equity of UWB since last Saturday when the bank came under a moratorium. But, Mr Bhavnani said that he has already promised his shares to Balaji Industries, which has also made a bid to take over the management of the bank.

New Delhi, Sept. 8: India’s biggest drug manufacturer Ranbaxy Laboratories Ltd, which has decided to put its manufacturing unit in Ireland on the block, may sell it for 25-35 million euros.
Sources familiar with the development said the Gurgaon-based company has roped in Merrill Lynch International to find a suitor for its Ireland unit, which has been valued at 25-35 million euros.

Company officials decli-ned comment saying: “We have decided to divest the facility in Ireland and cannot comment on specifics.” Ranbaxy’s Ireland unit has two blocks where it produces general solid dose products and semi-synthetic penicillin for the Irish and the UK markets besides serving as a gateway to the EU.

Hyderabad, Sept. 8: Godrej & Boyce will double its existing capacity once its new plant near Pune is ready, even as it eyes revenues increasing from the South and cashing on the upcoming festive season with new offerings. Once the Rs 100-crore plant is up and running, capacity for the frost-free refrigerators is expected to touch seven lakh units by 2007 from the current 3.5 lakh units, a senior company executive said here on Friday.

“We have acquired land at Sewri near Pune for the new plant and trial production at the facility will begin by mid-2007 before the plant goes commercial by the third quarter of the year,” Mr George Menezes, COO of Godrej’s appliance division, said after the launch of EON range of frost-free refrigerators.

Godrej & Boyce has consolidated its position in the South, where it enjoys a 22 per cent market share in the refrigerator segment, Mr Menezes said. The company expects southern India to contribute 30 per cent to the overall turnover with the launch of EON range of refrigerators. At its existing manufacturing unit in Mohali, Godrej & Boyce produces one million compressors and 6.5 lakh direct cool refrigerators, which account for 80 per cent of its refrigerator business.
The company posted Rs 750 crores in revenues in the home appliance segment in 2005-2006 and has now lined up 13 AC and seven microwave oven models to its product base to take the business to Rs 1,000 crores in the current year, Mr Menezes said.