23 Jan 2012;dailypioneer.com:New Delhi: Country’s biggest carmaker Maruti Suzuki India (MSI) on Monday announced a 63.6 per cent fall in its net profit at Rs 205.6 crore for December quarter as against net profit of Rs 565.17 crore for the corresponding period last fiscal. This is the worst performance by MSI in 12 quarters due to labour unrest and rupee depreciation. MSI’s net sales declined by 17.4 per cent to Rs 7,663.6 crore during the quarter under review from Rs 9,276.73 crore in the year-ago period. The rate of decline in profit is the sharpest since the third quarter of 2008-09 when the company had reported an around 55 per cent drop in its bottomline. “Unit sales in the quarter were impacted by sluggish market conditions caused by higher fuel prices and interest rates,” said a statement from the company. “MSIL results came in lower than expected at the operating and net profit level. 3QFY12 was an abnormal quarter as sales were hit due to strike at the company’s plant. While sales declined by 17.4 per cent YoY, strike at the company’s plant and adverse forex movement led to big drop of 63.6 per cent in YoY net profits,” said Kotak Securities Fundamental Research Head Dipen Shah while commenting on the MSI result. The company lost production of around 40,000 units due to the industrial relations problem at Manesar, it added. During the period under review, MSI sold a total of 2,39,528 units as against 3,30,687 in the year-ago period, a 27.56 per cent decline. Domestic sales stood at 2,11,803 units during the quarter under review, compared to 2,99,527 units in the same period last year. Exports stood at 27,725 units as against 31,160 units in same quarter last fiscal. On unfavourable currency movement, MSI Chief Financial Officer Ajay Seth told analysts in a conference call that the company suffered a total forex loss of Rs 200 crore in the third quarter on a year-on-year basis. Despite the poor results, the company’s shares closed 5.77 per cent higher at Rs 1,162.55 apiece on the BSE. “In the past few days, some positive news flow have led to appreciation of the stock price. Going ahead in FY13, volumes is expected to grow at a healthy rate, but adverse forex movement is expected to keep margins under pressure,” added Shah.
23 Jan 2012;deccanherald.com:New Delhi: At a time when the Centre and states trying hard to narrow down their differences over the proposed modalities for rolling out the Goods and Services Tax (GST), oil ministry has made a case for inclusion of petroleum products under the ambit of the proposed indirect tax regime. “As of now the crude and petro products have been kept out of the GST regime, they should be a part of it, this should also save oil marketing companies from losing revenue every year,” an official said. He said, at present, there are numerous rates of taxes and duties being imposed by different states on petro products. They think that if they sacrifice their revenue on these products, they will not be compensated by the Centre for the same. Currently, crude, motor spirit including ATF, HSD and natural gas have been kept outside GST. This is done to protect the high tax revenue generated by these products to the state governments. The current tax rates on these products are very high, in some cases as high as 30 per cent. But, this has also led to loss of oil marketing companies, which are losing over Rs 30,000 crore annually. Oil companies including Shell, BP, Essar and ONGC have held discussions with the Centre urging it to bring in all petroleum products like petrol, diesel and natural gas, under the GST so that they can avail of input tax credit on the same. However, the states are not very keen to keep these items within the GST purview as state taxes on petroleum products comprises as much as 30 per cent of total state revenue. There are very few states in India including Mumbai, Gujarat, Andhra Pradesh, Bihar, which have oil refineries. GST being a destination-based tax, all oil producing (or origin states) would stand to lose massively.
India making 'best efforts' for oil payments to Iran
23 Jan 2012;business-standard.com:New Delhi: India is making "best efforts" to make payments for crude oil it imports from Iran as it will abide by only UN sanctions and not those imposed by any individual or a regional block, Oil Minister S Jaipal Reddy said today. "I can only say Iran's attitude to India is still very positive. We have made our best efforts to make payments. In spite of difficulties, government of Iran has put up with us," he told reporters here. "It will be our effort to tap Iran as source [of oil] fully," he added. New Delhi is exploring all options to pay Iran as new US sanctions make it tougher for the two countries to find ways of payment for their trade in crude. "We will respect every bit of sanction imposed by United Nations. We do not go by sanctions imposed by regional blocks or individual nations," he said, rejecting US sanctions that deny access to the US financial system to any foreign bank that conducts business with the central bank of Iran. US President Barack Obama on December 31 signed into law such measures. European Union foreign ministers today agreed to ban oil imports from Iran starting July 1 as part of measures to ratchet up the pressure on the Persian Gulf nation's nuclear programme. "The situation is evolving. We will firms ways of meeting the situations as it evolves," Reddy said when asked if India was exploring payments to Iran in other currencies including rupee in case the current conduit through Turkey comes under pressure. A multi-disciplinary team last week visited Tehran to discuss options for payment of USD 12 billion a year trade. "It will be our endeavour in future to tap the Iran source fully because the terms are fairly favourable," he added. India pays its second largest crude oil supplier through Turkiye Halk Bankasi AS, based in Ankara. Iran accounts for 12% of India's crude oil imports and there are fears that Turkey may come under pressure and stop routing payments. "Iran is second-largest supplier of crude oil [to India]," Reddy said adding "there will be no energy supplies problems" even in case of shutdown of supplies from the Persian Gulf nation. Indian refiners are looking at diversifying their sourcing to avoid problems in future.
Will pay VAT on sale of gas in UP from Feb 1: RIL to SC
23 Jan 2012;timesofindia.indiatimes.com:NEW DELHI, Reliance Industries Ltd (RIL) on Monday assured the Supreme Court that it would start paying Value Added Tax (VAT) to Uttar Pradesh government on sale of gas in the state from February one till a decision by the Allahabad High Court on its plea against the tax imposition. Taking note of RIL's submission, a bench headed by Justice Altamas Kabir asked the high court to decide expeditiously the company's plea against state government's decision to impose VAT. The company also submitted that the VAT imposed on its product would be passed on to the consumers. The court's order came on an appeal by the state government challenging the high court's interim order staying imposition of the tax on the sale of gas by RIL. The UP government had challenged a July 26, 2011 order of the high court which granted stay on levy of Rs 724 crore as VAT for sale of the gas during 2009-2010. The Supreme Court had on August 23, 2011 issued notice and sought responses of the Centre. According to the state, RIL, which is engaged in extracting and refining petroleum and petrochemical products, was supplying natural gas to various fertiliser companies in Uttar Pradesh and, hence ,the state was entitled to levy VAT on the company. RIL had taken the plea in the high court that the transaction in question is central sale made by it from the state of Andhra Pradesh and it is not liable to pay local tax (VAT) to the state government.
22 Jan 2012;deccanherald.com:Annapurna Singh:A Group of Ministers’ (GoM) meeting will be held shortly to decide on direct import of Aviation Turbine Fuel by domestic airliners, a move, if it comes into force, will save airliners from paying hefty state sales tax. According to the current practice, the ATF is imported by the oil marketing companies and domestic airliners in turn buy it from these OMCs ending up paying hevy state-level levies. A senior government official told Deccan Herald that the GoM is expected to be held shortly on the issue. He said that the Directorate General of Foreign Trade (DGFT) has already given in-principle approval to the proposal by the airliners and it has been sent to the Cabinet for a decision. Earlier this week, the petroleum ministry had endorsed a proposal from the DGFT to let private parties to directly import jet fuel, giving a free hand to cash-strapped carriers to make their way through. State taxes on aviation turbine fuel range between 25 per cent and 30 per cent. The oil ministry gave its clearance at an inter-ministerial meeting on Tuesday. Importers, however, will have to pay an eight per cent customs duty on jet fuel, which is much less than the state-level levies that they will be able to save now. The cash-strapped Kingfisher airlines had recently told the DGFT that ATF accounts for about two fifth of its total operating cost. Kingfisher also said that cost cutting measures including direct import of jet fuel will enable it to remain functional and meet its commitments to customers and banks. Oil companies, however, are not very keen to allow this as they will have to face competition from imported jet fuel. India, which has a surplus crude oil refining capacity, exported 2.86 million tonnes of jet fuel in the April-October period this year, earning $2.87 billion.
Fiat to expand its presence in India through Chrysler's Jeep; To launch Alfa Romeo & Maserati
21 Jan 2012;economictimes.indiatimes.com:Lijee Philip & Ketan Thakkar:MUMBAI: Italian carmaker Fiat has plans to add heft to its diminutive presence in the Indian market by leaning on Chrysler, the US automaker in which it acquired a majority stake three years ago, as well as by launching a few of its own premium brands such as Alfa Romeo and Maserati. A team of senior officials from Chrysler recently visited India to conduct product clinics for the Jeep Grand Cherokee, an SUV in a price segment similar to that of Toyota's Fortuner, Ssangyong's Rexton and Chevrolet's Captiva. A person close to the development said a blueprint is being created to increase Fiat's presence in India with new models and, if these plans fructify, the new launches will be outside the 50:50 joint venture Fiat has with Tata Motors to make cars for the two companies as well as transmissions and engines. The Chrysler model will be brought into the country in completely-knocked-down (CKD) condition and assembled at the Tata-Fiat manufacturing operations in Ranjangaon, near Pune, on contract; the Fiat brands will be brought in via the CBU (completely built unit) route. While almost every global automaker has expanded operations in India by launching cars in segments from compacts to luxury sedans, Fiat hasn't quite stepped on the gas. By getting the cult Jeep brand, Fiat will plug a gap in its portfolio by carving out a presence in the SUV segment. Fiat India CEO Rajeev Kapoor said: "I have no comments to make on this." Ariel Gavilan, spokesperson for Chrysler, said, "There are no new plans to be announced at this time." People close to Fiat point out that Chrysler has big plans for emerging markets, and India is at the core of that strategy.
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