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Thursday, Aug 08, 2002

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Gravy train chugs along

FOR those who are smarting under the frequent changes to perquisite rules, here is some salt to rub on, especially for those not working for Mr Nitish Kumar. A recent announcement by the CBDT has amended the perks rules for the 19th time, to make changes in Rule 3, sub-rule 6, which computes the value of "any benefit or amenity resulting from the provision by any undertaking engaged in the carriage of passengers or goods to any employee or to any member of his household for personal or private journey free of cost or at concessional fare, in any conveyance owned, leased or made available by any other arrangement by the undertaking for the purpose of transport of passengers or goods". The perk value would be "the value at which such benefit or amenity is offered by such undertaking to the public as reduced by the amount, if any, paid by or recovered from the employee for such benefit or amenity". With railways already being the focus of Samatas and Mamatas, CBDT has hastily declared a unilateral ceasefire stating that "nothing contained in this sub-rule shall apply to the employees of the Railways". The change shall be deemed to have come into force on the 1st day of April, 2001. (Income-tax (19th Amendment) Rules, 2002, Notification No 197/2002, SO817 (E) dated August 1, 2002)

International service

All taxable services specified for levy of service tax would be exempt from such tax where they are provided by any person to the United Nations or an international organisation. This has been done by the Central Government, being satisfied that it is necessary in the public interest so to do. "International Organisation" means an international organisation declared by the Central Government in pursuance of Section 3 of the United Nations (Privileges and Immunities) Act, 1947. (Ministry of Finance and Company Affairs Notification No 16/2002, GSR546 (E) dated August 2, 2002)

Rounding off

A vague note at the end of the prescribed format of vertical balance sheet is now being modified and it is about rounding off. Part I of Schedule VI of the Companies Act, 1956 gives the layout of vertical form of balance sheet, showing sources of funds and applications thereof. Note 3 at the end of the format specifies: "The figures in the balance sheet may be rounded off to the nearest `000' `00' as may be convenient or may be expressed in terms of decimals of thousands." The Department of Company Affairs has deemed it fit to allow different types of rounding, depending on the size of the company, measured by the turnover in the financial year. Thus, where the turnover is less than Rs 100 crore, permissible round off is to the nearest hundreds or thousands, decimals thereof. For the next bigger companies, with turnover of Rs 100 - 500 crore, it would be to "the nearest hundreds, thousands, lakhs or millions, or decimals thereof". For the really big ones, with Rs 500 crore or more as turnover, round-off could be to the "nearest hundreds, thousands, lakhs, millions, or crores, or decimals thereof." No billions please. (Notification No GSR545(E) dated August 1, 2002)

Crime Inc

"Organised crime" means any continuing unlawful activity by an individual, singly or jointly, either as a member of an organised crime syndicate or on behalf of such syndicate, by use of violence or threat of violence or intimidation or coercion, or other unlawful means, with the objective of gaining pecuniary benefits, or gaining undue economic or other advantage for himself or any other person or promoting insurgency. (The Maharashtra Control of Organised Crime Act, 1999)


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