Manufacturing growth bounces back
Mumbai: Manufacturing activity in India rose at its fastest pace in three months during April, on the back of a rise in output and new orders and rebounding from a slump in the previous month. The ABN AMRO Bank purchasing managers' index (PMI) rose to a seasonally adjusted 53.8 in April, up from a March reading of 53.0, which was lowest level since the survey began in April 2005.

The PMI, compiled by British-based NTC research and sponsored by the Dutch bank, tracks changes in manufacturing by polling 500 companies each month on output, orders, employment and prices.

A reading above 50 suggests business conditions are improving, while a reading below 50.0 marks a deterioration.

The input price index in April eased to 52.7, its lowest since the survey began, from 53.9 in March, while output prices accelerated to a four-month high of 50.9.
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FM does not budge on FBT but makes peace with cement makers
New Delhi: While asserting that fringe benefit tax (FBT) on employee stock options (Esops) is here to stay, the finance minister P Chidambaram agreed to make certain modifications in the tax.

Apart from this, venture fund investment in assorted infrastructure sectors, excluding power and telecom, will get the benefit of tax pass-through.

These are the highlights of the amendments that finance minister P Chidambaram moved to his original Budget proposals before the Lok Sabha passed the Finance Bill on Thursday.

With obdurate cement companies refusing to cut prices, the government unveiled a new excise regime to lower prices. Under the new regime, while the concessional duty of Rs350 per tonne on cement sold below Rs190 per bag would continue, the commodity sold above this threshold would attract an ad valorem duty of 12 pc on the retail selling price instead of the flat Rs600 per tonne announced in Budget 2007.

After this 12 per cent duty, the effective reduction in tax burden on cement sold above Rs190 per bag would be up to Rs7, Finance Minister P Chidambaram said during the debate on Finance Bill 2007-08 in the Lok Sabha.

The finance minister also slashed the export duty on low-grade iron ore, removed customs duty on refrigerated motor vehicles-in a bid to boost food-processing, and brought down the excise/countervailing duty on these vehicles to 8 per cent. Cut and polished gems will also attract zero customs duty.

The FBT on employees Esops will stay, but employers will now be able to pass on the tax cost to employees who get these options. Also, FBT will be levied on the value of Esops at the time when it vests with the employee and not when the shares are transferred to him. However, the tax will be leviable only when the Esop is transferred.

Chidambaram also gave some relief to infrastructure funds. Along with the eight sectors such as biotech and biofuels, infrastructure VCFs will be able to avail of the pass-through benefit, under which tax is paid not by the fund but those who invest in the fund at the time they receive their payout from it.
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Railways to set up 100 budget hotels
New Delhi: The Railways plan to set up 100 budget hotels across the country to cater to the growing tourists' demand. The hotels will be set up through the public-private partnership using the open tender and competitive bidding system, the minister of state for Railways R Velu infirmed the Lok Sabha.

The government has set no targets for completion of these budget hotels Velu said.

The Indian Railway Catering and Tourism Corporation runs two Rail Yatri Niwas in New Delhi and Howrah stations.
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Flying clubs to benefit from import duty exemptions
New Delhi: The government has exempted aircraft used in training, non-scheduled and chartered operations from import duties to give a boost to the booming aviation sector and improve connectivity with remote areas.

The Union Budget 2007-08 had proposed to levy 3 per cent customs duty, 16 per cent counter-veiling duty and 4 per cent additional customs duty on import of all aircraft, except those bought by state-owned airlines. The civil aviation ministry had the asked Finance Ministry to roll back the tax proposal, saying the move contradicted the government's objective of promoting connectivity to remote areas and tourism and was bound to increase operational costs.
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