The Hindu Business Line : Kerala assembly opposes move to tax interest on NRI deposits

THE State Assembly has made known its collective dissent against the Union Finance Minister's move to tax, from September this year, interest earned on foreign currency accounts maintained by expatriate Indians.

The House on Friday urged the Centre to withdraw the newly introduced levy. Airing the concern, the Chief Minister, Mr A.K. Antony, said he would convey the sentiments in this regard to the Centre.

The Union Finance Minister, Mr P. Chidambaram, had said in his Budget speech that he proposed to withdraw "a few exemptions which have outlived their utility".

Hence, from September 1 onwards, interest earned from a Non-Resident (External) Account and interest paid by banks to a Non-Resident or to a Not-Ordinarily Resident on deposits in foreign currency would not be exempt from tax.

This, the Chief Minister said, would adversely affect the interests of the State whose economy depended NRI remittances for sustenance. He would take up the issue with both the Prime Minister and the Finance Minister.

Airfares to Gulf: The House also passed a resolution expressing strong resentment against the prohibitively high air fair regime prevailing in the Gulf sector. Both the Indian Airlines and Air India were taken to ask for their non-accommodative stance even after the State Government had volunteered to reduce sales tax on aviation turbine fuel (ATF).

Replying to discussion on a motion moved by a member, the Non-Resident Affairs Minister, Mr M.M. Hassan, said the Air India Board had agreed in principle to introduce `budget airlines'. According to information available, the international carrier would be able to launch the service only by March next.

Cinema as industry: The State Government was weighing the option of reducing entertainment tax and declaring cinema as an industry, according to Mr M.M. Hassan, who is also Minister for Information and Parliamentary Affairs.

Entertainment has been a contentious issue that has pitted the cinema sector on one side and the Government on the other.

A committee that studied the problems of the film sector had recommended reduction in entertainment tax from the prevailing 48 per cent. A Cabinet sub-committee on cinema was examining the report.

The committee has suggested reduction of the tax, which alone would save the sector from being blanked out. Its views on the issue would be put before the Cabinet for arriving at a final decision.

As for the demand for revision of electricity tariff, the Film Chamber had been told to approach the State Electricity Regulatory Commission, the Minister added.

NH-47 to be four-laned: The Public Works Minister, Dr M.K. Muneer, said that the Cherthala-Thiruvananthapuram stretch of the National Highway-47 would be converted to four-lane traffic.

The feasibility study had commenced and negotiations were on with the Bank of Japan for funds for the project, he added.

The Aluva-Walayar stretch in the northern stretch of the same highway would also be converted to hold four-lane traffic. Land acquisition procedures for converting the Thiruvananthapuram-Kaliyik- kavilai on the Kerala-Tamil Nadu border had commenced.

Keltron Counters: The Defence Ministry has been approached with a request to take over the ailing public sector unit, Keltron Counters, at Kazhakkoottam here.

Announcing this, the Industries Minister, Mr P.K. Kunhalikkutty, told the House that the company had been manufacturing defence - related equipment, but hit on loss-making streak. It had to be referred to the BIFR, which, in turn, recommended its closure.

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