Industrial recovery by September say Bankers
Mumbai--Financial institutions and banks see the first signs of an industrial recovery in the non-food credit offtake which has increased in the three consecutive fortnights between July 2 and July 13 against the continuous decline seen during the earlier part of the current financial year.

They opine that worst part of the recession may be over and a firmer sign of industrial recovery will be visible by September. They add that most of the companies will have exhausted their inventories by September and production is bound to pick up in the second half of the financial year, said the chairman of a public sector bank.

State Bank of India, which registered a decline of over Rs 4,000 crore in credit off-take since the beginning of the financial year, too has begun to see a recovery.

The credit offtake was exceptionally high at Rs 3,952 crore during the fortnight June 29-July 13 squaring off the Rs 3,126 crore decline in the non-food credit offtake during the earlier part of the year and turning it to a growth of Rs 826 crore.

Banking analysts say there is generally a time gap of around two months before working capital gets translated into output and hence the recent surge in the non-food credit offtake may be reflected in an industrial recovery by September.
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Revenue dept says no special deal for e-com businesses
New Delhi-- Revenue department officials say that the government intends to treat e-commerce businesses like any other business and that no changes were required in the Income Tax Act for this.

Thus profits accruing through e-commerce will be treated as normal business profits for taxation purposes.

Industry chambers feel there should be a five-year tax holiday to this mode of business as it is in a nascent stage and needs support from the government.

According to a Nasscom-BCG study released recently, e-commerce transactions are slated to touch Rs 1,95,000 crore by 2005 and B2B (business to business) transactions with an estimate of Rs 1,92,000 crore are likely to dominate this growth. B2C (business to consumer) transactions are also estimated to grow to Rs 3,000 crore by 2005.

Sources said that till the institutionalization of a global e-commerce taxation framework, cross-border e-commerce transactions will be taxed on the basis of the Income Tax Act provisions and the double-tax avoidance agreements with other countries.
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