NEWS REPORT

FOR THE WEEK 2nd March – 7th March 2009

 DNA MONEY
www.economictimes.com BENETT,COLEMAN & CO LTD THURSDAY 4 MARCH 2009

RIL-RPL Merger: Tax incidence on

Shareholders
As per the provisions of Sec. 47(vii) read
with Sec. 49(2), any transfer by a
shareholder in a scheme of amalgamation
of shares held by him in the
amalgamating company shall not be
regarded as transfer if-

a. transfer is made in consideration of

allotment to him of shares in the
amalgamated company ; and

b. amalgamated company is an Indian

 THE ECONOMIC TIMES
www.economictimes.com BENETT,COLEMAN & CO LTD THURSDAY 4 MARCH 2009

RIL-RPL Merger: Tax incidence on Shareholders

Mr. X, acquired 400 shares in RPL on December 15, 2008 @Rs
90 per share. Therefore, his total cost is Rs 36,000 (Rs 90 X
400 shares). on the record date, his holding of 400 shares in
RPL will be converted into 25 RIL shares (400/ 16). His total
cost remains the same, i.e. Rs 36,000, yielding a net cost per
RIL share of Rs 1,440 (Rs 36,000/ 25 RIL shares).

Let Say, Mr X sells 25 RIL shares on December 31, 2009 at Rs

1,600 per share. He would get Rs 40,000 on selling the shares.
The capital gain earned would be Rs 4,000 (Rs 40,000 less Rs
36,000).

Therefore, this capital gain would be long-term in nature

and hence free of tax.
 THE ECONOMIC
www.economictimes.com BENETT,COLEMAN & CO LTD THURSDAY 5 MARCH 2009

TIMES
SEZs to get tax refunds on input
News
services Impact Analysis
Developers of SEZ & the units inside can Impact on the SEZ units:
Refund of taxes will reduce the cost of
now claim refunds of taxes paid on all input
production & help finances of SEZ developers
services, for both the services used Inside
especially in this time of slowdown.
& Outside the zones.
Could result in unnecessary blockage of funds,
They will now have to first pay a tax on
paperwork and increase in transaction cost &
services consumed and then claim a refund
cash outflow of SEZ units.
within 6 months of date of payment of taxes.
Dissatisfaction among the exporters & unit
Until now:
owners as Govt had brought services under the
Services used within the zone
ambit of tax-and–refund scheme instead of an
– exempted from taxes
ab-initio/ Blanket exemption.
Services used outside the zone
– attract service tax @ 10% Clears ambiguity if services actually being
Decision by EGoM on SEZs’
consumed in SEZ or not.
 THE ECONOMIC
www.economictimes.com BENETT,COLEMAN & CO LTD THURSDAY 4 MARCH 2009

TIMES To Grow 20%

Service Tax Collections

News Impact Analysis

Would result in an increase in total tax
Service tax collections from Mumbai collection due to vigorous audits and
commissionerate are expected to clock preventive activities undertaken by audit
over 20% growth at Rs 22,000 crore in the parties. .
current fiscal (FY09).
Inspite of slowdown as well as reduction in
The growthis attributable to increased
2 percent points in service tax there is an
awareness among service providers of
overall increase in tax collection.
their liability to pay service tax.
 THE ECONOMIC
www.economictimes.com BENETT,COLEMAN & CO LTD THURSDAY 5 MARCH 2009

No FBT TIMES
Relief To Exporters
Union finance ministry have
rejected Commerce ministry’s
proposal.
Commerce ministry felt that
the FBT component should be
relaxed.
Impact of global financial
Meltdown.
No benefit to one section of
Tax-payers.
Financial implications in the
Full fledged budget.
 THE ECONOMIC
www.economictimes.com BENETT,COLEMAN & CO LTD THURSDAY 5 MARCH 2009

TIMES
No tax break may leave next NELP bid a lacklustre affair
 The 8th bid round under the New Exploration Licensing Policy (NELP), likely to
be announced in next few weeks, is being held under the shadow of a global
credit crunch and low oil prices as well as crisis of confidence in the policy
regime offered by India.

 The next bid round for oil and gas acreage is likely to be adversely
impacted due to lack of an income tax break on gas production, Petroleum
Minister said. We had asked Finance Ministry for income tax holiday for natural
gas production (similar to the one already enjoyed by crude oil), but it hasn't
come through," he said here.
 THE ECONOMIC
www.economictimes.com BENETT,COLEMAN & CO LTD THURSDAY 5 MARCH 2009

TIMES
No tax break may leave next NELP bid a lacklustre affair

Implications
 Lack of tax holiday for gas production has reduced interest among companies in
NELP.

 It may get reflected in the bids we receive.

 Will harm India's brand as an investor friendly country.

 This, despite the fact that more gas, like the giant KG-D6 field of Reliance Industries,
has been discovered in NELP blocks offered in previous rounds and gas is a cleaner
fuel with negligible carbon footprint.
 THE ECONOMIC
www.economictimes.com BENETT,COLEMAN & CO LTD THURSDAY 5 MARCH 2009

TIMES
Jeevan Varsha
Last date for Filing Tax
Return is 31st march 2009 Rs. 65 per thousand (6.5%) of
Offer for Limited period – S.A. for the policy of 9 years
16th Feb to 31st March 2009
Returns earned on policy are
completely tax free