• Wockhardt Towers on the block
• FIIs,NRIs may have futures in currency
• CBDT spells out format for e-filing of information
• DoT orders special audit on telecom cos
• Foreign cos royalty income from India to be taxed, says AAR
• Leela plans 5 new hotels by 2012
• According to sources, the promoters of India’s leading pharma firms, Wockhardt have put its headquarters, Wockhardt Towers, on the block. Wockhardt will be meeting several property consultants for evaluating the possible sale of its headquarters, located in the Bandra-Kurla Complex (BKC). The sale of Wockhardt Towers, which is one of the prime properties in BKC and the second-most valuable commercial property hub in Mumbai after Nariman Point, is likely to fetch Rs 500-600 crore, according to current market valuations. (ET)
• According to sources, a technical committee with representatives from SEBI and the Reserve bank of India (RBI) that takes key policy decisions on the currency futures has in-principle approved a proposal to allow foreign institutional investors (FIIs) and nonresident Indians (NRIs) to participate in the currency futures market in the next three to four months. Entry of FIIs and NRIs will be allowed only after recent measures like increasing exposure limits for traders and brokers have an impact and increase volumes in the currency futures market. Govt may also ease regulations on exchanges to let them decide on the timing of trading sessions and products they wish to launch. (ET)
• Central Board of Direct Taxes (CBDT) is keen to monitor and track payments made to non-residents to ensure that taxes are recovered at the stage of remittance itself and has come up with a new Form 15CA that spells out the information and the format in which they are required to be submitted. From July 1, information on the payments made to a non-resident or a foreign company should be electronically furnished to the tax department prior to making the payment. The obligation of providing this information to the tax department lies with the person making the remittance. CBDT has also mandated electronic filing of information on the accountant’s certificate. This new procedure is only for payments other than salaries to the non-residents. The payments that could be covered include royalty, fee for technical services and so on. (BL)
• DoT has ordered a special audit on the country’s largest telecom operator, Bharti Airtel, as well as Vodafone-Essar, Idea Cellular and Tata Teleservices Ltd. According to DoT officials, the purpose of the special audit would be to ascertain whether there was any loss to the government by way of licence fee in instances when these operators sell bundled handsets along with their services. Following a report by TRAI, DoT felt that when operators sell bundled handsets with their services, they do not show the revenue accruing from the sale of handsets in their AGR and hence pay no licence fee on it causing loss to the exchequer. In their defence the operators maintain that revenue from sale of handsets even when bundled with the services, do not accrue to them but goes to the manufacturer. The purpose of the special audit would be to ascertain this. (FE)
• The Authority for Advance Ruling has held that basic engineering and procurement services provided by Australian company Worley Parsons Services, for projects to Reliance Petroleum Ltd and Sterlite Industries fall within the scope of royalty income and the receipts are taxable in India. For foreign companies working in India through permanent establishments, this could imply a larger tax outgo as this could mean that if there is no effective connection between their PE and the services they provide in the country, their entire royalty income for the project can be held taxable in India. However, giving them a partial breather, the AAR ruling also upheld the principle that business income in relation to activities done by a PE in India will only be taxed. (BL)
• Leela Hotels, Palaces and Resorts is planning to invest $500 million (about Rs 2,500 crore) for opening five new properties across the country by 2012. At present, Leela Group has five hotels and resorts in India and is inaugurating their recently completed property in Udaipur this month. The group is now planning to invest $500 million to open five more properties by 2012, including a hotel each in Delhi and Chennai by 2010 and in Hyderabad, Pune and Agra by 2012. (BS)
