• Service tax relief on rentals
• Airwaves may be auctioned to all telcos
• ISPAI drags DoT to TDSAT over spectrum
• India’s outbound investment slips 11%, says RBI
• Pyramid Saimira promoters barred from equities market
• Delhi High Court has, while disposing of petitions by retailers such as Lifestyle, Shopper’s Stop Home Solution and Barista Coffee, ruled that commercial renting of premises will not attract service tax as renting of immovable property for use in the course or furtherance of business cannot be regarded a service, and, therefore, can’t be taxed. The govt had brought “service provided in relation to renting of immovable property other than residential properties and vacant land for use in the course or furtherance of business or commerce” under the tax net through Finance Act, 2007 and subsequently issuing a detailed notification and circular, referring to ‘renting as a taxable service’. This was contested by Lifestyle, Shopper’s Stop Home Solution and Barista Coffee before the Delhi High Court Govt is expected to challenge the order in the Supreme Court. (ET)
• According to sources, a committee set up by the government last year to resolve the vexed issue of additional spectrum allocation is learnt to be of the view that the internationally-accepted auction-based system for issuing additional radio spectrum to existing mobile operators has much greater merit than the present practice of allocating the scarce national resource based on companies’ subscriber numbers. The committee is expected to submit its report to the communications ministry next month, and its recommendations are most likely to be adopted as policy by the new government after elections. (ET)
• Internet service providers (ISPs) have appealed to the telecom disputes tribunal against the government order to seven companies to return radio frequencies allotted to them in 2003 to auction them again at a base price of Rs 550 crore. The Internet Service Providers Association of India (ISPAI) has in its petition stated that the govt needs to rethink its policy. The DoT guidelines equate WiMax spectrum with 3G spectrum, which is unfair. If won by a large operator, the WiMax spectrum might end up lying unused, as has been the case with IP telephony. The petition further states that universal access service licence (UASL) and pure-play ISPs are different service licences with different business models and by unfairly and arbitrarily limiting the number of bands available for auction to only four, and reserving bands for MTNL/BSNL, the DoT guidelines restrict free competition, discriminating against private operators. The petition suggests a separate auction of spectrum for ISPs where the reserve price, if any, should not be more than 20-25% of the highest bid by UASL holders. (ET)
• According to RBI, India Inc appears to have restrained from overseas mergers and acquisitions as the country’s foreign investment has slipped by over 11 % during April-December 2008. During the first nine months of 2008-09, 2,828 proposals amounting to $16,352 million were cleared for investments abroad in JVs and WOSs, as against 1,595 proposals amounting to $18,437 million during the corresponding period of the previous year. Even though the number of proposals recorded an increase of 77.3 per cent, amount invested by India Inc on overseas ventures dipped by over 11 % during the period. There were a total of 2,828 proposals during the first nine months of 2008-09 against 1,595 proposals in the corresponding period previous year. (BS)
• SEBI has barred Pyramid Saimira Theatre promoters Nirmal N Kotecha and CMD PS Saminathan from trading in the equities market, accusing the latter of allegedly forging a letter from SEBI, the revelation of whose contents last December sent the company’s stock price soaring. The SEBI letter had purportedly asked the promoters to make an open offer to buy out minority shareholders. The interim order issued by SEBI also barred 228 others, including journalists and brokers, from trading on the markets, even primary issues. It said Saminathan had prima facie made misleading public announcements to create public interest in the Pyramid Saimira scrip to facilitate Kotecha off-loading shares at an “artificially inflated price”. (BL)
