Monday, March 26, 2012

Kingfisher likely to layoff half of its workforce

Kingfisher Airlines has been eyeing layoffs to save costs for some time. Now, a report by Zee News claims that half of the company’s employees may be asked to leave. “In order to resolve its deepening debt crisis, the Kingfisher Airlines might lay off 50 percent of its current employees, sources claimed on Monday. “Kingfisher is expected to make an official announcement regarding its decision to slash 50 percent of its current workforce later in the evening,” the Zee News report said. The airline has close to 6,000 people on its rolls and a majority of pilots have already left to join rivals such as IndiGo and Go Air because of mounting salary arrears and uncertainty surrounding the airline over the last many months. The possibility of large scale layoffs comes amid a fresh warning by Civil Aviation Minister Ajit Singh today that the airline must pay dues to vendors if its wants to continue operations. This warning came hours before the Directorate General of Civil Aviation (DGCA).

General Anti-Avoidance Rules(GAAR)

General Anti-Avoidance Rules has been introduced as a result of Ruling in the case of VODAFONE by the Apex Court. The implication of this is that the Income-tax department will have powers to deny tax benefit if a transaction was carried out exclusively for the purpose of avoiding tax. 
For example, if a company is setting up in Gulf Country with the sole intention of claiming exemption from capital gains tax, now the tax department have the right to deny the claim for exemption provided under DTAA. However in the case of McDowell Ltd the Supreme Court, empowers the department to look through sham transactions devised for avoiding tax. The tax department at present is restrained by the apex court's own order in the case of Azadi Bachao Andolan in which it held that a certificate of residence from Mauritius authorities is sufficient proof for the taxpayer to claim capital gains tax exemption provided under the India-Mauritius tax treaty. 
A very liberal view on such kind of transactions taken by the Supreme Court in its recent order in the Vodafone tax case, put further restraint on the tax department from taking action against transactions suspected to have been devised for the purpose of avoiding tax. Incorporation of GAAR in the Income-tax Act now provides more freedom to the tax authorities to deal with same kind of transactions.

Manmohan urges South Korean Industries to have faith in India

Prime Minister Manmohan Singh on Monday asked South Korean businessmen to help India expand its burgeoning solar and nuclear power sectors by investing in these environment-friendly technologies.
“We are committed to increasing energy efficiency and the share of renewables, including solar and nuclear power, in our energy mix,” Dr. Singh told a group of top Korean CEOs here.
Among the CEOs present was Kim Joong-Kyum of the Korea Electric Power Corporation (KEPCO) which has interests in nuclear power that meets 45 per cent of Korea’s electricity requirements.
“There will be large business opportunities and I am aware of Korean capabilities in environmentally friendly technologies,” the Prime Minister said at a meeting organised by Korean industry chambers.
South Korean President Lee Myung-bak, during a bilateral meeting with Singh on Sunday, had requested that his country be allocated a site in India to build nuclear reactors.
Apparently sensing the concerns of the Korean businessmen with regard to the much-delayed $12 billion Posco steel project in Odisha, the Prime Minister told the CEOs that “our processes can be slow but there are effective mechanisms for resolution of problems and differences and a strong rule of law.”
“The government is keen to move forward with the Posco project and there is some progress in this regard. I believe that India is a stable and profitable long-term investment opportunity,” he said.

Worth reading