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India to amend double taxation convention with Italy
New Delhi: India has decided to amend the double taxation avoidance convention with Italy, with a view to boosting trade and investment from the European nation.

"The cabinet today gave its approval for signing of the protocol amending the double taxation avoidance convention," the information and broadcasting minister, S Jaipal Reddy, said after the meeting. The two sides agreed to incorporate the Italian proposals as well as the Indian proposals through a 'protocol' amending the existing convention, he said.

The main provisions of the protocol include substitution of local income tax with a regional tax on productive activities by Italy.

It also envisages broadening the scope of permanent establishment for taxation of services and insurance covers. The protocol also covers tax treatment of business profits, air transport and shipping.
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Industry welcomes new steel policy
New Delhi: Domestic steel companies and industry chambers have welcomed the new steel policy cleared by the Cabinet. The policy envisages the country's annual steel production to reach 100 million tonnes by 2020 from 30 million tonnes at present.

According to Tata Steel officials the policy took cognisance of improving the domestic demand, which was vital for the growth of the steel industry.

Essar Steel officials said it was a long-awaited decision that would enhance the country's steel manufacturing capability.
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Domestic steel prices soften
Kolkata: Steel companies are cutting steel prices as inventories are rising. This comes after steel prices have softened in China.

JSW Steel and Ispat Industries have cut prices by around Rs500 a tonne with effect from November 1. JSW Steel had had increased flat product prices by Rs500 a tonne on September 1 and has now corrected the move.

According to industry official's pressure on prices was coming from China where Baosteel, the Chinese market leader with a 21-million-tonne production capacity, cut prices by around US$100 a tonne in September. In India steel prices are aligning with the international market.

In recent times there has also been a deluge of cheap steel imports mainly from Russia, Ukraine and Romania. Industry sources said even after the price cut, there was a difference of Rs500 a tonne between domestic prices and import prices.
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Inflation down to 4.49 per cent
New Delhi: Inflation, based on the wholesale price index, declined to 4.49 percent for the week ended October 22 from 4.71 per cent the previous week.

The reason for the fall is mainly due to a fall in prices of essential food items and industrial fuel although manufactured products became costlier.
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Cabinet approves infrastructure SPV
New Delhi: The Government has given its nod for setting up of India Infrastructure Finance Company (IIFCL), a special purpose vehicle to fund mega projects.

The Government will provide guarantee up to Rs10,000 crore to IIFCL in 2005-06, for borrowing long-term funds, of ten years and above, from domestic and overseas markets. It can also borrow funds from multilateral lending agencies such as World Bank and ADB.

IIFCL would be incorporated under the Companies Act, and would be fully owned by Government.

The SPV would fund viable projects in sectors such as road, bridges, railways, seaports, airports, inland waterways, power, urban transport, water supply, gas pipeline, special economic zones, international convention centres and tourism projects.
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Tax revenue up 24 per cent in H1
New Delhi: Robust rise in corporation tax and customs duty along with a reasonable rise in excise duty collections have helped the Centre raise tax revenue by 24 per cent at Rs96,249 crore during the first half of this fiscal as against Rs77,860 crore in the previous half

Tax revenue, till September, constituted 35.2 per cent of the estimated Rs2,73,466 crore for the entire 2005-06. Till the first half of the last fiscal, tax revenue had touched 33.3 per cent of the estimated figure of Rs2,33,906 crore for the whole 2004-05.

Corporation tax collections rose substantially by 66.81 per cent at Rs33,926 crore during April-September period over the previous year's first half, reflecting industrial growth during the period. For the month of September itself, the tax yielded 44.2 0 per cent more revenue at Rs20,589 crore compared to Rs14,278 crore during the same month of the last year.

Excise duty collections grew by 10.35 per cent at Rs40,416 crore during first half of this fiscal compared to Rs 36,622 crore during the first half of the previous fiscal.

During the April-September period of this fiscal, excise duty collections contributed 41.99 per cent of the total tax revenue collections.
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ATF price cut by 1.85 per cent
New Delhi: Public sector oil firms have cut Aviation Turbine fuel (jet fuel) prices by up to Rs745 per kilolitre or 1.85 per cent, as oil prices across the world are falling.

The slash in ATF prices for domestic airlines ranges from Rs650 per kilolitre to Rs745 per kilolitre, according to Indian Oil Corporation, India's largest oil firm.

The new prices came into effect from November 1.

For international airlines, who do not have to pay local levies on the fuel, the cut would be between US$25 and US$26 per kilolitre.
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New law on limited liability partnership on the anvil
New Delhi: The concept paper on the new Limited Liability Partnership (LLP) Act, which has been released by the ministry of company affairs, proposes to allow firms to form LLPs.

This provision will provide the corporate sector greater business flexibility as two or more companies will be able to enter into an LLP to execute specific projects like mining, research and exploration.

As more and more Indian companies are entering into ventures with foreign companies, it was felt that the country needed a modern law, which gave flexibility to businesses. Globally, LLP is a recognised form of doing business, especially in the services sector, and now with the services sector driving India's growth, the time is ripe for the enactment of an LLP law, officials said.

The ministry is likely to introduce the LLP Bill during the winter session of Parliament.

Under the new legislation, all kinds of businesses and services, including professional services, like those offered by chartered accountants and lawyers, will be allowed to form LLPs.
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domain-B : Indian business : News Review : 4 November 2005 : general