• Relief for export units as CBDT untangles tax net
• Commerce dept for service tax waiver, not refunds, for SEZ cos
• Broadcasters can curb content if operators demand fee: TRAI
• ICAI opposes RBI move on restructuring loans
• Telenor to get over 67% in Unitech Wireless
• Tata Motors, Ashok Leyland clash over JV
• FIPB clears proposal to launch magazines
• Essar Telecom in merger talks with Tata-Quippo
• Central Board of Direct Taxes (CBDT) has instructed income-tax officials to allow export-oriented units (EOUs) set up in an export processing zone and approved by development commissioners to claim tax exemption, ending the uncertainty over tax benefits to EOUs. The power to approve EOUs was delegated to development commissioners but the tax authorities did not recognise approval given by development commissioner in some cases and began denying tax benefits and at times also imposed a penalty. (ET)
• According to sources, the commerce department feels that finance ministry should exempt companies in SEZs from paying tax on the services they consume instead of making them seek refunds. It is learnt to have written to the revenue department asking it to allow SEZs exemption on service tax within the zone as was being done earlier and for services outside the zone, developers and units could be given reimbursements on the taxes paid. (ET)
• Telecom Regulatory Authority of India (TRAI) has amended the Telecommunication (Broadcasting and Cable Services) Interconnection Regulation, 2004, doing away with ‘must provide’ clause under which the broadcasters did not have the discretion to refuse to provide content to the distributors. TRAI has stated that broadcasters need not compulsorily provide their channels to content distributors like DTH, IPTV or cable operators any more, if they are being forced to pay carriage fee for the same. Carriage fee is the fee paid by a broadcaster to the owner or operator of a distribution platform for carrying the channels of the paying broadcaster on his distribution platform. However, the ‘must provide’ clause is not waived off in case the channels agree to pay placement fee- i.e., a premium paid by the broadcaster for specific demand on the desired frequency on which he desires his channel to be carried for maximising viewership and revenue. Trai has also made it mandatory for all interconnect agreements for broadcasters and distributors to be reduced to writing. (FE)
• Norwegian mobile operator Telenor ASA has acquired 67% control in Unitech Wireless Ltd following its Rs 6,120 crore investment for a 60% stake due to a fall in the Unitech’s share value. According to the disclosure by Unitech to the Bombay Stock Exchange, while Telenor’s initial investment under the agreement will continue to be the previously agreed Rs6,120 crore, it has been agreed that Telenor, after this investment, would be holding 67.25% in Unitech Wireless. (Mint)
• The Institute of Chartered Accountants of India (ICAI) has opposed a proposal of Reserve Bank of India (RBI) to relax the provisioning norms for non-performing assets (NPAs). According to the RBI proposal, commercial banks need not classify a non-serviced loan under NPAs if the borrower has submitted an application for restructuring the package before March 31, 2009. ICAI states that by such treatment no NPAs would be reflected on the balance sheet of banks till December 31, 2009 which would have implications for the auditing standards to be followed by the auditors while giving their opinion on the quality of assets shown in the banks’ balance sheets. The issue is expected to be deliberated in the Auditing and Assurance Standards Board meeting on March 24. ICAI has also expressed its opposition to the managerial autonomy of public sector banks in appointment of auditor and wants these appointments to be done by the RBI. (BS)
• According to sources, strong differences have arisen between Tata Motors and Ashok Leyland, over a JV involving construction equipment and tractor manufacturer John Deere. Tata Motors subsidiary Telco Construction Equipment Company Ltd (Telcon) has opposed a proposal to the FIPB from John Deere for a JV with Ashok Leyland to distribute and market its construction equipment in India. Telcon, a 60:40 joint venture between Tata Motors and Japan’s Hitachi Construction Machinery, held a technology licence agreement with John Deere to manufacture loaders and it has refused to give John Deere the no-objection certificate required under India’s FDI guidelines (Press Note 1) to allow it to set up a JV with Ashok Leyland, on grounds that the new company is in the same or allied field. The proposal was discussed and deferred last month by the FIPB and a committee comprising of officials from the departments of industrial policy and planning, heavy industries and economic affairs and FIPB directors had been set up to hear all the parties concerned and advise the board.
• Reed Infomedia India, a JV between Infomedia 18 and Reed Business Information, a division of leading European media company Reed Elsevier, has received the approval from FIPB to publish Indian editions of six more foreign magazines (it already publishes six) on subjects like technology, hospitality, interior design and money management, among others. However, there will not be any inflow of foreign investment Reed Business Information holds 51 % in Reed Infomedia India, while Infomedia 18, a Network 18 venture, holds the rest. (BS)
• According to sources, India’s 2nd largest mobile tower company Essar Telecom Infrastructure is in talks with the Tata-Quippo combine (formed by merger of TataTeleservices’ tower arm and Srei group company Quippo Telecom Infrastructure) for a possible merger. Valuations are still being worked out. The yet to be named Tata-Quippo combine has over 18,000 towers and has an enterprise valuation of about Rs 13,000 crore ($2.6 billion). Essar has been looking to merge itself with another entity to bring scale into the business. (ET)
