JEFF BEZOS IS NOW WORTH MORE THAN BILL GATES EVER WAS

Jeff Bezos’s net worth reached $105.1 billion on Monday on the Bloomberg Billionaires Index as Amazon.com Inc shares added to a 12-month surge that’s lifted the online shopping giant’s market value by almost 57%.

Amazon shares have risen 6.6% this year, with a report showing the Seattlebased company captured 89% of online spending among dominant holiday retailers in the fiveweek period beginning the day after Thanksgiving in the US.

The latest jump has pushed Bezos’s fortune definitively above the high reached by Microsoft Corp’s Bill Gates in 1999. The Amazon founder passed Gates in October with a net worth of $93.8 billion and his fortune crossed $100 billion for the first time a month later when the holiday shopping season kicked off on Black Friday.

Gates, 62, would have a net worth of more than $150 billion if he’d held onto assets that he’s given away, largely to the Bill & Melinda Gates Foundation. He has given away almost 700 million Microsoft shares and $2.9 billion of cash and other assets since 1996, according to an analysis of his publicly disclosed giving.

Bezos also controls closely held space exploration business Blue Origin and the Washington Post.

BLOOMBERG

(TOI)

MIDDLECLASS CAN EXPECT TAX RELIEF IN UPCOMING BUDGET

Middle class can hope for a big relief in 2018-19 Budget, which will also be the last regular Budget of the NDA government, as the Finance Ministry is contemplating to hike personal tax exemption limit and tweak the tax slabs, according to sources.

The proposals before the ministry is to hike the tax exemption limit from the existing Rs 2.5 lakh per annum to at least Rs 3 lakh if not 5 lakh, they said.

Besides, the tinkering of tax slab is also being actively considered by the ministry to give substantial relief to middle-income group, especially the salaried class, to help them tide over the impact of retail inflation, which has started inching up.

In the last Budget, Finance Minister Arun Jaitley left the slabs unchanged but gave marginal relief to small tax payer by reducing the rate from 10 per cent to 5 per cent for individuals having annual income between Rs 2.5 to Rs 5 lakh.

In the next Budget to be unveiled on February 1, the Government could lower tax rate by 10 per cent on income between 5-10 lakh, levy 20 per cent rate for income between Rs 10-20 lakh and 30 per cent for income beyond Rs 20 lakh.

At present, there is no tax slab for income between Rs 10-20 lakh.

“Considering the steep rise in cost of living due to inflation, it is suggested that basic limit for exemption and other income slabs should be enhanced to give benefit to low income group. The income trigger for peak rate in other countries is significantly higher,” industry chamber CII said in its pre-Budget memorandum to the Finance Ministry.

Although the industry chambers want the government to reduce peak tax slab to 25 per cent, it is unlikely that the ministry will agree to that due to pressure on fiscal deficit.

The subdued indirect tax collection following roll out of Goods and Services Tax from July 1 last year has put pressure on the fiscal deficit, which has been pegged at 3.2 per cent of the GDP for 2017-18.

The Government recently raised borrowing target by additional Rs 50,000 crore for the current fiscal to meet the shortfall.

According to industry body FICCI, there is a likelihood that demonetisation effects may linger on for some more months and hence there is a need to further boost demand and therefore, the government should consider revision of income tax slabs, by raising the income level on which peak tax rate would trigger.

“This would improve purchasing power and create additional demand. For individual taxpayers, 30 per cent tax rate should be applicable only if the income is above Rs 20 lakh. Additionally, interest rates should be lowered to enable affordable finance for conducting business operation and expansion,” it said.

Among other things, chambers have suggested re- introduction of the standard deduction for salaried employees to at least Rs 1 lakh to ease the tax burden of them and keeping in mind the rate of inflation and purchasing power of the salaried individual, which is dependent on salary available for disbursement.

(THE PIONEER)

WILFUL DEFAULTERS FORM 14% OF PSB BAD LOANS

With 53%, Vijaya Bank On Top Of RBI List

Mayur.Shetty@timesgroup.com

Mumbai: Around 14% of the bad loans in public sector banks (PSBs) are due to wilful defaulters. The total gross non-performing assets (NPAs) of 21 PSBs stood at Rs 7.33 lakh crore as on September 30, 2017. Of this, Rs 1.01 lakh crore of loans were termed as those in wilful default.

Wilful defaults have an element of malfeasance as it broadly means that the borrower has reneged on the agreement on usage of funds or has not paid despite having resources.

Recovery from such accounts are difficult because in many cases the money is siphoned off from the books of the defaulting company and most of them are being fought in courts. Some of the largest cases of wilful default are Kingfisher Airlines, Zoom Developers, Winsome Diamonds and Varun Industries.

Of the 9,025 cases of wilful defaults in PSU banks, lenders have filed cases against 8,423 for recovery of Rs 95,384 crore of NPAs. They have also filed 1,968 police complaints in cases of loan amounts totalling 31,807 crore. In 6,937 accounts, representing an outstanding of Rs 87,458 crore, banks have also initiated proceedings to attach and sell assets under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.

Data released by the RBI in response to a Parliament query shows that Vijaya Bank has the highest share of wilful defaulters in its books. The Bengaluru-based banks had NPAs worth Rs 6,649 crore as on September 30, 2017. Of this loans amounting to Rs 3,537 crore were on account of wilful defaults. Punjab National Bank has the highest share of wilful defaults in its books among the larger banks. Of its bad loans worth Rs 57,630 crore, 25% are on account of borrowers who have deliberately defaulted.

The implication for a business or promoter being declared a wilful defaulter is that they will never be able to get bank loans as long as they have the tag. For a lender, declaring a borrower as a wilful defaulter is a complicated process with senior bankers having to give a hearing to the borrower. In several cases, courts have ruled against the labelling of the borrower due to shortcomings in the process.

Among banks with small percentage of wilful defaulters among NPA accounts are Punjab & Sind Bank (4%), Bank of Maharashtra (5%) and Syndicate Bank (5.4%).

As on September 30, 2017, leading corporate houses accounted for approximately 77% of the total gross NPA from domestic operations for banks in India.

(TOI)

TCS QUARTERLY GROWTH FLAT IN JULY-SEPT

TCS quarterly growth flat in July-Sept

Slowdown In Tech Spends By Banking, Retail Weighs

Tata Consultancy Services (TCS) reported a near-flat sequential dollar revenue growth in the second quarter, its slowest in four quarters -a trend that most of the other leading Indian IT services companies too are expected to witness given the slowdown in technology spends by major industry segments such as banking, financial services and insurance (BFSI).

The company , India's biggest software services exporter, said revenue rose 0.27% to $4.37 billion for the quarter ended September 30, from $4.36 billion in the earlier quarter.

When compared to the same period last year, revenue rose 5.2%. On constant currency (discounting the impact of currency fluctuations), the sequential revenue growth was 1%, which widely missed many analysts' estimates.

“It has been an unusual Q2 for TCS. Growing uncertainties in the environment is creating caution among customers and resulted in holdbacks in discretionary spending this quarter. In addition, volatility in markets like India and Latin America muted revenue growth,“ chief executive N Chandrasekaran said in a statement on Thursday .

Such muted results suggest that Infosys and Wipro, which report results on Friday and next week respectively, too will disappoint. Indian IT companies have eit her lowered their guidance over the year or warned investors of sequential lower revenue due to volatile macroeconomic conditions in Europe post the Brexit vote, currency fluctuations, slower ramp-ups in large deals won previously , and the low interest regime in the US.

TCS had observed last month that discretionary spends on IT were getting delayed, resulting in sequential loss of growth momentum. Chandrasekaran said the softness in the market was expected to continue. “We had a negative surprise from India, with delay in order execution worth Rs 180 crore ($30 million) getting spilled over into the current quarter. That is why growth decelerated by 7.6%,“ he said.

 (Toi)

ROSNEFT, OTHERS TO BUY 98% OF ESSAR OIL IN $13BN DEAL

Rosneft, others to buy 98% of Essar Oil in $13bn deal

Transaction Will Help Ruias Reduce Group's Debt Burden

In one of the biggest acquisitions by overseas investors in India, the world's largest publicly traded oil company Rosneft, along with commodities trader Trafigura and Russian fund UCP , is set to acquire a 98% stake in Essar Oil for $12-13 billion (over Rs 80,000 crore).

The transaction involves a takeover of Essar Oil's debt of around $4.5 billion (over Rs 30,000 crore). While the Russian oil giant will hold a 49% stake, Trafigura and UCP will equally split another 49%, leaving 2% with the promoters -the Ruia family , sources familiar with the deal said. The transaction will be formally announced on Saturday on the sidelines of the Brics summit.

The deal puts a seal to India's growing energy ties with Russia and comes at a time when there is a major push to attract overseas investment.Recently, state-run Indian oil companies completed deals worth close to $5 billion in Ros neft's exploration ventures.

Following the acquisition, Rosneft will have a large footprint in India and can hope to take on BP and Shell which are already in the country . In 2011, BP had paid $7.2 billion for a 30% interest in RIL's exploration portfolio, which was the largest ever deal in the oil sector. The government has repeatedly tried to get Saudi Aramco to invest in the country .

The transaction will help Ruias reduce the group's debt burden and focus on Essar Steel, which is also facing financial strain due to the large volume of loan on its books. In recent months, production has been ramped up at the steel company .

A news agency said the deal will be funded by Russia's VTB Capital, part of statecontrolled bank VTB. The VTB Group is under Western sanctions over Russia's role in the Ukraine crisis, which restrict its access to international capital. The deal will include the Vadinar refinery and an associated port. The refining capacity is estimated at 400,000 barrel-per-day and sells fuels through its 2,470 pumps. It is not clear if the pumps are part of the transaction. Oil & Natural Gas Corp, the largest Indian oil and gas explorer, and Hong Kong-listed United Energy Group are among bidders for Bangladesh natural gas assets being sold by Chevron Corp, people with knowledge of the matter said.

United Energy submitted a joint offer with Chinese conglomerate Orient Group, one of the people said. The gas fields, which could fetch as much as $2 billion, have also drawn interest from Brightoil Petroleum Holdings, the people said, asking not to be identified because the information is private.

The Bangladeshi government has also expressed interest in taking over Chevron's interests in the assets, according to the people. No final agreement has been reached with any party , the people said.

Energy companies have announced $43.2 billion of asset sales this year after crude prices fell to the lowest level in more than a decade, according to data compiled by Bloomberg. Chevron, the largest US oil producer after Exxon Mobil Corp, is seeking buyers for Asian geothermal assets that could fetch as much as $3 billion and is also holding talks to sell assets in Indonesia and Thailand, people familiar with the matter said earlier.

The San Ramon, California-based company operates the Bibiyana, Jalalabad and Moulavi Bazar natural gas fields in Bangladesh and sells all the production to state oil company Petrobangla, according to its website. Its net daily production last year averaged 720 million cubic feet of natural gas and 3,000 barrels of condensate.

“We can confirm that Chevron has been in commercial discussions about our interests in Bangladesh,“ Chevron said in an e-mailed statement Thursday .“At this stage, no decision has been made to sell our interests. We will only proceed if we can realize attractive value for Chevron.“

Representatives for ONGC, United Energy , Brightoil Petroleum, the Bangladeshi energy ministry and Petrobangla didn't immediately respond to requests for comment. Calls to Orient Group's general line were unanswered. United Energy agreed to buy BP's exploration and production assets in Pakistan for $775 million in 2010, its first venture in the country.

(Toi)

OLA IN TALKS WITH SOFTBANK, OTHERS TO RAISE FRESH FUNDS

Ola in talks with SoftBank, others to raise fresh funds

Held Discussions With General Motors As It Battles Uber

Home-grown transportation company Ola is likely to raise up to $500 million in a fresh round of funding led by existing investor SoftBank as it fights out cash-rich rival Uber to win the India market, people familiar with the matter told TOI.

With Uber's exit from China, the Travis Kalanick-led taxi hailing venture is doubling down on India as the two players square off in a battle which is likely to intensify, making it imperative for the Bengalurubased Ola to raise new capital.

TOI has also learnt that Ola held preliminary discussions with automobile giant General Motors, an investor in Uber's cross town competitor Lyft, a few months ago. GM's CEO Mary Barra had met with the taxihailing startup Ola's co-founder & CEO Bhavish Aggarwal in San Francisco a few months ago, but the talks with the automaker may not result in an investment in the company , sources said.

Aggarwal and SoftBank did not comment on the development, while Tony Cervone, SVP (global communications) at GM, said in an emailed response to TOI, “We won't comment on the possibility of talks with any potential partner.“

SoftBank recently led a $750million cash injection in Grab, Uber's competitor in Southeast Asia, signalling its support for its investee companies despite the overall slowdown in late-stage financing globally.

The deal, when it goes through, would be the largest in size for SoftBank in India after the abrupt exit of its high-profile president & COO Nikesh Arora in June. “Even after Nikesh's departure, Masa is very bullish on Ola and is ready to lead the round. But the deal contours are not final as yet,“ a person privy to the matter said on the condition of anonymity.

It could not be ascertained at what valuation the new capital is being raised, though Ola's last funding round a year ago valued it at $5 billion when it mopped up $500 million from Singapore's sovereign wealth fund GIC, Didi Chuxing and Scottish investment fund Baillie Gifford, among others, reported first by TOI. Sources, who cannot be named as talks are private and still ongoing, said Ola may look to launch a formal fund-raising process to rope in external investors to lead this new financing round. “SoftBank is very keen on backing Ola but there are chances of a new investor coming in as well.“

(toi)

DISCUSSING 7TH PAY PANEL ANOMALIES WITH PM: PARRIKAR

Discussing 7th pay panel anomalies with PM: Parrikar

Defence Minister Manohar Parrikar on Wednesday said he has raised the issue of anomalies in the 7th Pay Commission report with Prime Minister Narendra Modi.

"Yes, there are some anomalies in the 7th pay commission and the pension...we will resolve that. But, I don't think that can be an issue for national debate," Parrikar said at an event here.

"I can assure the people of the country and our armed forces that I have personally taken up the matter with the Prime Minister. There are procedures of the government of India. We will complete those procedure at the earliest and see that one by one, those anomalies are removed," he said.

Asked about the issue of disability pension, on which a draft notification on the recommendation of the 7th Pay Commission has been uploaded on the Defence Ministry's website, the minister said: "It is just a draft now."

The draft notification talks of replacing the present percentage-based system of pension with slab-based pension system.

"In disability pension also, there are some categories of officers, in whose cases there could be some anomaly. We will check it," he assured.

The minister maintained: "No final order has been issued as yet, only a draft resolution has been put up on the website. We will examine and try to address all that can be addressed, and forward the same to the anomalies committee for their opinion."

If the recommendations in the draft notification on disability pension come into effect, the disability pension for soldiers will go down substantially.

Parrikar said that misgivings are being created by "certain quarters", similar to what was done when the demand for One-Rank-One-Pension (OROP) was there. It took time to ensure that other forces do not move the court with similar demands, he added.

"Not every one can be satisfied," the Defence Minister said.

He informed that so far, two instalments of Rs 4,000 crore and Rs 2,000 crore have been released, with annual cost for OROP being Rs 7,500 crore.

"There are 20 lakh armed forces personnel and about 22 lakh pensioners. It is a huge number, almost a third of the government employees. Whenever you apply a principle to anyone, anomalies will surface," the minister said.

According to the pay panel's recommendation, for 100 per cent disability, an officer would get Rs 27,000 per month, those in the ranks of Subedar Major to Naib Subedar would receive Rs 17,000, while Havildars and below would get Rs 12,000.

At present, a soldier, who gets 100 per cent disability, is entitled to a pension equal to the last drawn salary and an additional 50 per cent as 'service component'.

The draft notification invited criticism from ex-servicemen, who said it will affect the morale of the soldiers.

(the statesman)

EASE OF DOING BUSINESS RACE HOTS UP AMONG STATES

Ease of doing business race hots up among states

After Bihar & U'khand, Now Telangana At No. 1, Replaces Andhra

The race to decide the easiest state for doing business in India has gone down to the wire.

If the year began with Bihar in the lead, it was Uttarakhand that led the race for the past few months. Now, Telangana is on top, dethroning arch rival Andhra Pradesh. The gap between the two is just one hundredth of a percentage point. On Sunday evening, India's youngest state, Telangana, had a score of 96.98% compared to Andhra's 96.97%.

And last year's winner Gujarat, which dropped to the sixth position just 10 days ago, is now placed third with a score of 94.99% as a World Bank team goes through the last 100 steps taken by Indian states before releasing the rankings. When the rankings were released for the first time last year, states were gauged on 98 parameters for improving the regulatory framework for business. This year, they are being graded on the basis of their performance on 340 parameters -so far the most detailed exercise of its kind.

States were asked to submit the steps they had taken on performance indicators such as ushering in transparency , sing le-window clearances, availability of land, construction permit enablers and environmental registration enablers. Their submissions are still being validated and marks assigned.

“We are taking a little time in releasing the rankings because we want to be sure that the steps that states are claiming to have initiated are properly verified,“ said an officer.

The idea of releasing the rankings -which are dyna mic and available online -is to prod states to move ahead with improving business processes, often a crucial factor in investors choosing where to invest.

States have taken it very seriously , with some hiring consultants to ensure that the steps that are taken do not go waste.

Data shows that Telangana has a positive response on 321 parameters, one more than Andhra but less than Gujarat's 322. In all cases, the maximum number of reform initiatives has come on environment registration enablers. Environment and forest-related clearances were seen as the biggest stumbling block for investors, especially at the state level.

Telangana has taken 27 steps each on easing construction permit related regulations and setting up systems for single-window clearances.

 

 (toi)

RJIO CROSSES 16M SUBSCRIBERS; SETS WORLD RECORD

RJIO CROSSES 16M SUBSCRIBERS; SETS WORLD RECORD

 

A new entrant in the 4G market Reliance Jio on Sunday claimed that it has created “a world record” by crossing the 16 million subscriber mark in its first month of operations -- September.

 Reliance Jio has achieved this growth faster than any other telecom operator or start-up in the world, including the likes of Facebook, WhatsApp and Skype, Reliance Jio Infocomm said in a release.

“We are delighted and humbled by the overwhelming response across India to the Jio Welcome Offer. Jio is built to empower every Indian with the power of data,” said Mukesh Ambani, Chairman, Reliance Industries (RIL).

“We are delighted that people have recognised this and are utilising our services to the fullest. We are customer-obsessed and committed to improving every day to exceed expectations of our customers.”

Reliance Jio Infocomm is a subsidiary of RIL. It launched its commercial services on September 5.

At RIL’s 42nd annual general meeting, Ambani had said his new telecom venture would aim to acquire 100 million customers “in the shortest possible time and create a new world record”. This would translate into a data usage of 250 crore gigabyte per month, he had then said.

Jio has introduced Aadhaar-based paperless Jio SIM activation across 3,100 cities and towns. This enables the customer to complete the SIM activation process in a matter of minutes, with only his/her Aadhaar number.

“This process will be extended across the country and fully stabilised for satisfactory on-boarding experience in the next few weeks,” the release said.

Jio, whose controversial entry into the world’s second-largest telephony market sparked off a tariff war, had onboarded 1.5 million users on its 4G network during the test phase.

It is competing head-on with players such as Bharti Airtel and Vodafone by offering users data services free for four months from September 5, after which it will offer 10 tariff plans starting at Rs 19 a day for occasional data users, Rs 149 a month for low data users and Rs 4,999 a month for heavy data subscribers.

Bharti Airtel, the largest mobile operator in India, has a subscriber base of 257.5 million, as on August. According to data by industry body COAI, Airtel’s subscriber addition in August stood at 0.70 million. It had added 1.07 million net new subscribers in July.

Vodafone had over 200 million subscribers and Idea about 177 million subscribers in August while the subscriber count of Aircel stood at 89.7 million. Telenor’s came in at 53.2 million and that of state-owned MTNL was about 3.6 million at August-end.

Bharti Airtel’s broadband base (3G+4G) read 35 million. Vodafone and Idea together as of date have 25 million broadband users.

They achieved these numbers in about 15 years while Jio has got 16 million broadband users in less than a month. Jio may have 35 million 4G users by October-end, crossing Airtel’s user base, industry observers said.

(the pioneer)

SENSEX, NIFTY CLOSE MARGINALLY UP; TATA STEEL JUMPS 3%

Sensex, Nifty close marginally up; Tata Steel jumps 3%

Snapping three-day losing streak amid mixed global cues, domestic bourses closed first trading session of the week on a marginally higher note.

The Sensex at the Bombay Stock Exchange (BSE) closed 21 points higher at 28,082 and the Nifty at the National Stock Exchange (NSE) closed 11 points up at 8,709.

On Friday, the Sensex had closed 45 points down at 28,061 and the Nifty had closed 12 points lower at 8.697.

In the broader markets, BSE Smallcap index gained 0.3 per cent but Midcap index declined 0.2 per cent.

Among the BSE sectoral indices, Consumer Durables index jumped the most, up 1.7 per cent, while Realty index became the lead loser with a tumble of 1.2 per cent.

Top gainers in the Sensex-30 pack: Tata Steel (up 2.9 per cent), Asian Paints (up 1.9 per cent), Cipla (up 1.9 per cent), Infosys (up 1.8 per cent) and Lupin (up 1.2 per cent).

Top losers in the Sensex-30 pack: NTPC (down 1.3 per cent), Reliance Industries (down 1.3 per cent), Adani Ports (down 1.2 per cent), Bharti Airtel (down 1 per cent) and HDFC (down 0.9 per cent).

Meanwhile, the Rupee was trading 10 paise higher at 66.58 against the US Dollar.

(THE STATESMAN)

RS 65,000CR REVEALED IN BLACK MONEY DISCLOSURE SCHEME

Rs 65,000cr revealed in black money disclosure scheme

May Yield Rs 30,000cr In Taxes

Surpassing expectations, the Centre's move to unearth black money received a robust response with the total amount declared under the Income Declaration Scheme totalling Rs 65,250 crore.

Finance minister Arun Jaitley announced that 64,275 declarations had been made under the scheme, which was open for four months and closed on September 30.

He said the number is ex pected to go up once all the declarations are verified. Based on the current declarations, the Centre is likely to get tax revenues of Rs 29,362 crore, of which Rs 14,700 crore will flow into its coffers by March and the rest in the next fiscal year. Those who have availed of the Income Disclosure Scheme can pay the amount in two instalments up to September 30, 2017. “It is an important step towards more and more becoming tax compliant,“ Jaitley said.

The declarations are seen as a major success for the government which had faced criticism from opponents who cited the muted response to a scheme for those with undisclosed wealth overseas last year, to claim that IDS is not going to fare better. “I compliment all those who chose to be tax compliant in IDS-2016. This is a great contribution towards transparency and growth of the economy ,“ Modi tweeted. He complimented Jaitley , revenue secretary Hasmukh Adhia and CBDT chairperson Rani Singh Nair for putting in a tremendous effort.

The IDS came into effect from June 1, 2016. The total levy is 45% with tax, penalty and surcharge. Jaitley said IDS cannot be compared with the Voluntary Disclosure of Income Scheme of 1997, which yielded tax worth Rs 9,760 crore. He said the effective tax rate for the scheme was in single digit as valuation was based on 1987 prices.Jaitley said the average declaration under IDS worked out to Rs 1 crore per declarant, suggesting that the scheme fared better despite a stiffer rate of 45%.

Jaitely said 164 prosecution complaints had been filed and assessment worth Rs 8,000 crore done in the 175 HSBC cases, while authorities had detected Rs 5,000 crore of undisclosed deposits in foreign accounts made out of cases revelaed by the Inter national Consortium of Investigative Journalists. Jaitley said 55 prosecution cases had been filed.

“The quantum jump in the searches has resulted in seizure of Rs 1986 crore as well as undisclosed income of Rs 56, 378 crore in the last two and a half years,“ Jaitley said. The finance minister said upgradation of IT capabilities of the tax department had led to non-intrusive methods of detection of evasion. He said Rs 16, 000 crore had been received as tax out of from the Non-filers of Monitoring System.

(TOI)

JIO CALL FAILURES DUE TO `VIOLATION' OF LICENCE NORMS BY TELCOS: TRAI

Jio call failures due to `violation' of licence norms by telcos: Trai

Can't Give Higher Interconnect Rates For Unequal Traffic'

Telecom Regulatory Aut hority of India (Trai) chairman R S Sharma has said that there is a “prima facie violation“ of interconnect norms over large number of call failures on the network of Reliance Jio as licensing conditions and quality of service norms have been breached.Sharma tells TOI in an interview that he finds no merit in the allegations of incumbent operators that there is an asymmetry of traffic. Excerpts:

What's your view on development over the issue of interconnect points in the past few weeks?

I feel very bad. It's not a good thing to happen as consumers are suffering. Consumers have a right to make calls, irrespective of the operator. Licensing conditions clearly state that it is mandatory for a licensee (telecom company) to provide interconnection.

Prima facie, do you feel that there has been an issue with interconnect?

There has been a very serious issue. As per the numbers provided by one operator, the call failure was very high. It is 80%, 90%, 70%. As per regulations, it cannot be more than 0.5%. So, it is really very shocking. The customer is suffering unnecessarily . We have asked for an explanation from the service providers concerned. We have also issued a show-cause notice -why action should not be taken for violating the licensing conditions as well as the quality of service norms.

Is there a violation of licensing conditions?

Prima facie, it's a violation and that is why we wanted to hear the operators before we come to a determination about a violation and who has done the violation.

Incumbents Airtel, Vodafone and Idea have been speaking in one voice through the platform of COAI, raising concerns over possible cartelization. The issue has also been raised by Jio. Do you agree?

There are couple of arguments that I have seen. One argument is that there is an asymmetry of traffic and therefore the 14 paise charge of interconnect is inadequate.Asymmetry of traffic is at the basis of this (interconnect) charge. If traffic flow between two operators is equal, then there is no need for interconnect charges. So asymmetry is built in. It is because of asymmetry that you have interconnect charge. If there was no asymmetry , there was no need for an interconnect charge.

On the allegation (of incumbents) that there is a huge asymmetry , the point is that interconnect charge does not prescribe the limit of asymmetry . The demand of incumbents that 14 paise rate is less and so they will not handle the traffic is like saying that since the law is very strict, we will not be abide by it.

(toi)

GST COUNCIL AGREES ON 5 AREAS; DIFFER OVER 1ST MEET DECISION

GST COUNCIL AGREES ON 5 AREAS; DIFFER OVER 1ST MEET DECISION

 

In signs of fracture, the Centre and states on disagreed on decisions reached at the first meeting of the GST Council on service tax assessment although they reached a consensus on area based exemption in the new tax regime.

The second meeting of the all-powerful GST Council, headed by Finance Minister Arun Jaitley, agreed on five subordinate legislations dealing with issues ranging from registration to invoicing under the new Goods and Service Tax (GST) regime.

It also agreed on the treatment of exemption from GST. Currently, the Centre gives exemption to 11 states mostly in North East and hilly regions from excise duty as also many states give the same as incentive for setting up industry.

The council decided that under GST, which will subsume excise duty and VAT among other levies, taxes will have to be collected and it can be reimbursed from the annual budgets to the exempted categories.

But there were divisions over ratifying or approving the minutes of the first meeting of the Council, held last week, after at least two states disagreed with what was documented as decided on the Centre’s assessing 11 lakh service tax filers in the new dispensation.

“Obviously the first item has to be approval of minutes of the last meeting. With regard to one item recorded in the minutes with regard to the service tax assessments in the new dispensation, there was a long discussion on the interpretation on the decision taken in the last meeting and that discussion consumed a lot of time on Friday.

“That discussion was inconclusive and, therefore, it will continue in the next meeting on 18th (October),” Jaitley told reporters.

Non-ratification of even one item on the minutes means the whole minutes are not agreed. Initially, it was thought that the minutes should be put to vote as those objecting to them were far less than those agreeing but Jaitley wanted to take decisions with consensus and so it was postponed.

Uttar Pradesh’s Minister for Vocational Education and Skill Development Abhishek Mishra said the minutes were not approved in entirety.

The second meeting of the GST Council finalised rules for registration, rules for payments, returns, refunds and invoices.

 With this as many as 6 issues have been settled by the Council, that has representatives of all the states, in two meetings in a span of one week. Discussions on service tax assessment and the formula forcalculating compensation to be paid to states in case of revenue shortfall as a result of implementation of the GST regime, possibly from April 1, 2017, would be taken up at the next meeting on October 18-20.

It will also decide on the all important GST rate, Jaitley said, adding that the Government is targeting November 22 for completing major work on deciding tax rate, exemptions and draft legislation by the Council.

There were two items regarding draft GST rules on agenda of Friday’s GST Council meeting, he said.

“Now these rules are with regard to registration, rules for payments, return, refund and invoices. These rules are notified once the Act is passed... These 5 sets of rules were taken up for consideration and have been approved. So we are in a state of readiness with the subordinate legislation once the act itself is approved,” he said.

The rules approved will form part of the supporting legislations needed to rollout GST. “So once the act is passed by Parliament or by the state legislatures as the case may be, we want the draft rules to be ready so that the rules can be notified immediately,” he said.

Stating that the second item on agenda was treatment of existing tax incentives by the Centre, he said, has given some exemptions from excise duty to 11 North-East and hill states.

Similarly, states too give out a series of incentives.

“It is possible that some of the exemptions may get phased out. But for the exemptions which may remain how will these exemptions fit into the GST system. So the Council took up for discussion the management of these exemptions. And it was agreed that there would be a levy of tax under the GST system on all exempted entities.

“Once the tax is levied, the Central Govt or State Government, which gets that tax, would then reimburse from the budget, that quantum of tax back to exempted entity,” he said.

Under the GST system, everybody will have to pay tax but those exempted would be entitled to be reimbursed the levy they pay.

On the issue of service tax assessment, he said the Central Government’s understanding is that an arrangement as been finalised for continuing with the existing system and transferring it to states when their officers are trained.

On services that are taxed partly by the Centre and partly by states, he said experts will examine and report it in next meeting for a final decision. 

(the pioneer)