Expansion of Bhuntar Airport
Kullu (Bhuntar) airport is an operational airport and is suitable for operation of ATR type of aircraft with load restrictions in fair weather conditions. As per the study report submitted by IIT Roorkee, the runway can be extended by 550m subject to diversion of river Beas and acquiring additional 1000m x 200m land in the river bed by the State Government. Flight operations in domestic sector have been deregulated and the airlines are free to operate anywhere in the country subject to Route Dispersal Guidelines (RDG) issued by the Government. However, the airline operators provide air services to specific places depending upon the traffic demand and commercial viability. The draft National Civil Aviation Policy 2015 envisages implementation of Regional connectivity scheme with affordable fare by way of revival of unused and under-served aerodromes/airstrips and by viability gap funding for airline operators etc. to meet the demands of increasing traffic and to avoid air congestion. No definite timeline for expansion of Bhuntar airport can be drawn at this stage as it is for the State Government to demarcate and acquire the land, complete the process of river training / river diversion etc. and to hand over the land to AAI for extension of runway. Rod Smith Jersey
Setting up of New Airports
Government of India (GoI) has granted ‘in-principle’ approval for setting up of 14 Greenfield airports namely, Mopa in Goa; Navi Mumbai, Shirdi and Sindhudurg in Maharashtra; Shimoga, Gulbarga,Hassan and Bijapur in Karnataka; Kannur in Kerala; Pakyong in Sikkim; Datia/Gwalior (Cargo) in Madhya Pradesh; Kushinagar in Uttar Pradesh; Karaikal in Puducherry; and Dholera in Gujarat. Further, Government has laid down Route Dispersal Guidelines (RDG) of air transport services taking into account the need for air transport services of different regions of the country. However, it is up to the airlines to provide services to different regions depending on their commercial viability subject to compliance of RDG. As per the Greenfield Airport Policy, 2008, financing and development of a Greenfield airport is the responsibility of the Airport developer. Government of India has established Airports Economic Regulatory Authority of India (AERA) under the Act of Parliament, AERA Act, 2008, for determination of charges in respect of aeronautical services provided at major airports in the country. AERA determines aeronautical charges for each airport separately considering various aspects of the airport viz. investment on infrastructure, cost of operations, improvement of service level, viability of the airport etc. Fuel charges component on airfare is levied by airlines under the provisions of Rule 135 of Aircraft Rules, 1937 according to which every air transport undertaking engaged in scheduled air services are required to establish tariff having regard to all relevant factors, including the cost of operation, characteristic of services, reasonable profit and the generally prevailing tariff. As per approved summer schedule 2016, there is no scheduled flight to/from Mount Abu. Nate Thurmond Jersey
Air Connectivity to Unserved Areas
Airports Authority of India has appointed a Consultant for undertaking a study for promotion of Regional and Remote Area Air Connectivity in the country during 2013 based on population, economic potential, tourism potential and lack of existing air connectivity. No case of deviation of the Route Dispersal Guidelines (RDG) by any domestic airlines have been observed as per the monthly traffic data analysis by DGCA. Dholera at Navagaon village, Ahmedabad has been granted in-principle approval and Bhiwadi in Rajasthan, Bhogapuram, Dagadarthi and Oravukallu in Andhra Pradesh have been granted site clearance in the last three years. Government has streamlined aircraft import procedure in order to reduce time and hassle free import of aircraft by the scheduled domestic airlines for their capacity enhancement in a timely manner. The draft Civil Aviation Policy 2015 envisages implementation of Regional Connectivity Scheme with affordable fare to cater to middle class income bracket by way of revival of unserved and underserved aerodromes/airstrips and unserved cities. It also envisages for revival of unserved and underserved aerodromes / airstrips and unserved cities, depending on demand as no frills airports. Johan Franzen Womens Jersey
Mondelez gets income-tax breaks for factory found non-existent by excise Department
What’s anathema to one arm of the government appears to be kosher for another. Last December, a Mumbai income tax dispute resolution panel (DRP) allowed Mondelez India Foods, formerly Cadbury India, to claim tax breaks of about Rs 90 crore from 2010 at its chocolate factory in Baddi, Himachal Pradesh. In March 2015, the central excise department had found that the company had tried to pass off part of its already existing factory as a second unit to claim excise benefits on offer under a promotional industrial policy. The department claimed back duties of Rs 342 crore and fined Mondelez India Rs 242 crore for evasion. It also penalised top company officials for making fraudulent claims and some state government officials for helping them create documentation to show two distinct factory units existing before March 31, 2010, the sunset date of the industrial policy. The income tax DRP relied on the excise department order to allow the company tax waivers arguing that levying of excise duties showed that the company had actually commenced production in a separate unit. On March 25, 2015, the same day that the excise department had ordered penalties, an income tax assessment officer had denied the company tax benefits citing proceedings by excise officials. The DRP order overturned the assessment officer’s ruling saying that he did not get a chance to look at the excise department’s findings. The DRP ruling comes at a time when the US stock market regulator Securities and Exchange Commission and the Department of Justice (SEC-DoJ) are investigating Mondelez International, the company’s American parent, over allegations that it paid bribes for government approvals and documentation to show the phantom factory at Baddi as real. An ET investigation published in its edition of December 8, 2015, showed how Mondelez’ top management in the US knew about the irregularities at least three months before the SEC-DoJ began their probe. Earlier this year, the Central Bureau of Investigation started looking into the matter after the SEC-DoJ sent a formal request for assistance in its investigation. Mondelez claimed income tax benefits based on the date on which it began commercial production of 5-Star bars, button-shaped Gems and Cadbury Dairy Milk chocolate from its so called Unit II. The DRP order states that commercial production of 5-Star and Gems began in June 2009 and Cadbury Dairy Milk from March 30, 2010. ET tried to contact the DRP members. One of them said he could not remember the Mondelez case specifically as he dealt with hundreds of cases. The other two could not be reached. In reply to an ET questionnaire, Mondelez said: “We have received a favorable order from the IT department in December 2015. A compliant and ethical corporate culture, which includes adhering to laws and industry regulations in all jurisdictions in which we do business, is integral to our success.” The company’s internal communications, documents and the excise department’s order that ET reviewed, however, paint a fuzzy picture. Barely six weeks before the day the company claims it began commercial production, its finance director Rajesh Garg wrote an email to CEO Anand Kripalu with the subject line “Will need 10mins to walk you thru a Baddi Unit 2 related issue/opportunity”. Garg said in an email of February 19, 2010, that the supply chain folks were pushing to move some chocolate from Unit I to Unit II via a pipeline to start trial runs of the new line, till Unit II making gets up and running. “Pumping chocolate from unit 1 to 2 is a cardinal sin per the whole concept,” Garg wrote. “We have worked a plan to let them do this. I want to bounce off the risk with you before I give them the green signal.” The government notification on income tax breaks to industrial units clearly mentions that a company cannot claim tax benefits by splitting up or reconstructing an existing unit. However, the company had applied for deamalgamating the Unit II and got a conditional permission from the government on March 16, 2010. In August 2009, two months after commercial production of 5-Star and Gems is supposed to have started, Jaiboy Phillips, the supply chain head of the company sent a detailed memo to split the production lines into two units to claim tax benefits. “A tax position can be taken that Garuda [that makes 5-Star and Gems] and E4 [moulded chocolate] is a separate Unit (Unit-2) within the same factory. A key change required to our current design is to separate all common core processes akin to a common fountain and referred to as the “fountain principle”,” Phillips wrote in the memo seeking approval for a total expenditure, including capex, of 5.5 million pounds. In other emails as late as November 2010, officials were still discussing expansion of production lines at Baddi. “By modifying Everest to secure a bigger new line for Baddi the production start up appears to have been delayed from Q4 2009 to Oct 2010,” Carolyn Gibbs, the company’s audit chief, wrote in an email to colleagues seeking more information on the rationale for expansion at Baddi. In March 2011, during the course of an internal investigation into allegations of bribery and forgery by company officials for securing government approvals, Mondelez asked its legal head Shivanand Sanadi whether a separate unit existed on June 29, 2009 or March 31, 2010. Sanadi pointed out the inconsistency in various documents and applications for government approvals. He also recommended to Mondelez to make full disclosure to the authorities. When contacted, Sanadi told ET that the external lawyers hired by Mondelez too had given a similar opinion in the context of Unit II, that they had noticed inconsistencies in various applications and approvals. He added that this statement had also been recorded in his submissions in legal proceedings of the excise department against Mondelez and in the excise order. The DRP relied on the excise order showing that Mondelez received factory licence for Unit II on July 28, 2010, and
Karnataka penalising bar-cum restaurants for not selling enough liquor
While more and more states in the union are imposing prohibition, Karnataka is penalising bar-cum-restaurants under a now-defunct law that required establishments to sell a minimum of 468 litres of liquor every month. The state excise department has slapped fines, totalling crores of rupees, on over 150 bar-cum-restaurants in Bengaluru, with retrospective effect. Of these, over 30 premium establishments have even moved the High Court against the penalities. The notices were issued under Rule 14(2) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968, that required CL-9 licence holders in the city municipal corporation areas to procure a minimum of 52 cases or 468 litres of liquor – excluding fenny, wine and beer – every month. The penalty amount is Rs 100 for shortfall in procurement for every litre. The rule was scrapped nearly two years ago, but it is cited for violations in the past. The notices threaten cancellation of liquor licences if the establishments do not pay up before June, when their CL-9 licences come up for renewal. Excise Commissioner SR Umashankar was categorical: “Yes, the rule was quashed in August 2014, and there is no longer any prescribed quantity to be sold. But they have to pay a penalty for not serving 468 litres a month in the past. If they do not pay the penalty, we won’t renew their licence.” Fava, a popular restaurant in upmarket UB City , has been asked to pay a penalty of Rs 20 lakh. Similarly, DV Raghuovernath, owner of Adithya Entertainment, received a notice to pay Rs 1.13 crore for the five bars and restaurants he runs in the city. “Many liquor licences are due for renewal by June-end, but excise officials won’t renew until we pay the penalties,” said Ashish Kothare, head of Bengaluru chapter of the National Restaurant Association of India. Some establishments, he pointed out, have been asked to pay penalties for shortfall in procurement from as far back as since 2004. Rule 14(2) came into existence in April 2003 and was followed by the setting up of the Karnataka State Beverages Corporation Limited in July 2003. The state-run entity became regulator and sole distributor of liquor in the state. “The Corporation was meant to stop the distribution of illegal liquor,” said PO Mathew, joint managing director of Koshy’s bar and restaurant. “They have fined us over Rs 10 lakh for 10 years,” he said, adding that his restaurant’s liquor-demand is only about 250 litres a month. PM Ananthanarayana, owner of Fusion Lounge (on Brigade Road) and Roadhouse Bell restaurant (in Koramangala), who was slapped with a fine of Rs 10.36 lakh for 2012-2014 -is one of the petitioners. “When the government is the distributor, there is no question of illegal sale of liquor. And, when they quashed the rule itself, there is no value to this notice or penalty. If customers are not drinking more, it is not our fault,” he argued. Establishments that procure a liquor licence in the CL-9 category, like Koshy’s, are primarily known for their food. Liquor, for these restaurants, is a value addition. “Tandoor on MG Road is famous for its food. How can they be expected to sell more liquor?” Kothare asked. Jordan Phillips Jersey
Centre considering common regulator for metro fare fixation
The Union Ministry of Urban Development is looking at appointing a common regulator for fare fixation for all metro projects. The proposal was discussed at a review meeting called by Urban Development Secretary Rajiv Gauba. Issues ranging from appointment of independent directors and chief vigilance officers, standardisation of equipment, bulk procurement, fare fixation, performance-based promotions, competitive bidding, security etc were discussed at the meeting, an official statement said. States to be consulted “It was decided that the views of respective States would be taken into consideration while taking a decision (on a common regulator),” the statement added. Officials of metro projects felt that since the losses on account of metro operations were to be borne by respective States under the law, their views need to be factored in while considering a common regulator. The Ministry has also asked all metro projects being built and operated with Centre’s equity to promote efficiency in procurement and while hiring manpower, the statement said. Independent directors Gauba urged all metro operators to ensure early appointment of independent directors on the boards, including at least one woman director as required under the Companies Act, 2013. He also called for early appointment of Chief Vigilance Officers by respective boards in consultation with Chief Vigilance Commissioner. Delhi Metro Rail Corporation (DMRC) has been directed to come out with a Draft Tender Document within three months to facilitate common bulk procurement of various equipment required by different metros to take advantage of economies of scale as done in the case of seven ultra mega power projects, it added. Slater Koekkoek Womens Jersey
Hyderabad Metro project faces 18-month delay
The country’s biggest public-private partnership project (PPP), the ?16,375-crore L&T Metro Rail Hyderabad, is likely to see delay in implementation of the 71-km elevated metro rail, as also faces cost-overrun. Proposed to be ready by July 2017, the project is likely to be ready by December 2018, on completion of all the three metro segments. Pending clearances Even the proposed commissioning of two stretches, Nagole to Mettuguda (8 km) and Miyapur to SR Nagar (11 km) of completed rail network, to be launched on the June 2, 2016, coinciding with the Telangana State formation, is unlikely as several mandatory clearances are yet to be secured. The project seeks to connect three corridors of Nagole to Hitec City, Miyapur to Dilsukhnagar and Mahatma Gandhi Bus Stand to Falaknuma. Addressing a press conference, senior management of L&T expressed the hope that the project execution pace would pick up once the clearances are received. They said it would not be possible to peg the increased cost at this point as they need to factor in various external issues and delays. Investment J Ravikumar, Chief Financial Officer of LTMRHL, said they had invested about ?9,000 crore out of ?16,375 crore. This includes ?2,700 crore equity, ?600 crore from VGF and the rest is debt. SN Subrahmanyam, Deputy Managing Director and President, L&T, and Chairman of L&T Metro Rail (Hyderabad) Ltd, said, “As a concessionaire, L&T has been executing the project on behalf of the Telangana government. Most of the hurdles have been crossed, while some are being sorted out. Once that is done, we will be able to expedite the project.” Asked if the project will head for arbitration given the delay and cost escalation potential, he described the metro project as a greenfield project in brownfield congested city area. ‘Complex project’ “This is one of the most complex and largest projects taken up in the PPP mode where L&T has made its biggest investments. We have cordial relations with the government and are confident that the project will be implemented as early as possible,” he said. VB Gadgil, Chief Executive of L&T Hyderabad Metro Rail, said, “Nowhere in the world, a metro rail project has managed to cover so much in terms of development within three-and-a-half years in spite of the hurdles it faces. There continue to be several issues to be resolved including right of way and acquisition of some key properties.” On the third corridor which passes through Old City, Gadgil said, “We are yet to hear from the government on the progress of acquisitions and right of way.” Luc Robitaille Womens Jersey
An Indian touch to global aerospace companies
Aerospace and defence companies in India are helping aircraft-makers in developed countries to cut costs. Even as the US fighter jet-makers Lockheed Martin and Boeing have expressed interest to set up manufacturing facilities in India, several other aircraft manufacturers such as Airbus and Bombardier have made Indian companies part of their global supply chains. Earlier this month, Lockheed Martin and Boeing met Defence Ministry officials to discuss the possible production of F-16 Super Viper and FA-18 Super Hornet fighter jets in India. Lockheed Martin’s largest programme, the C-130J Super Hercules, a four-engine turboprop military transport aircraft, already has an Indian touch. New mantra Phil Shaw, Chief Executive for Lockheed Martin India, said the C-130J Super Hercules was the first major military contract between the US and India. “Now, all C-130Js produced have major elements manufactured in India,” Shaw told BusinessLine. Component manufacturing appears to be the new mantra for Indian companies. Tata Advanced Material Limited (TAML) bagging an extended 10-year agreement with Austria firm FACC Operation, for the supply of Rolls-Royce engine components is a case in point. “Aerospace companies have been gunning for Indian firms as suppliers of high value components, and eventually as assemblers of aircraft. The complexity of the industry’s technology, the importance of protecting intellectual property with regards to aircraft engine design or avionics, and the relationship between military and civilian technology have been hurdles in the past, but no more,” said an industry expert, adding that cost advantage was clearly the chief attraction. Cyient solutions Hyderabad-based Cyient has also supported a number of critical design-engineering projects for Boeing airplanes, and currently provides design and stress support on the 747-8 Freighter and the 787-8 and 787-9. In an earlier interaction with BusinessLine, Cyient’s Executive Chairman BVR Mohan Reddy said as a Boeing supplier partner for decades, Cyient has been providing a broad range of engineering skills and solutions to Boeing that include product development and lifecycle support, and content engineering. “It is not just cost. The ability to develop aircraft, manage supply chain, coordinate manufacturing, and assemble a plane’s structure is critical. All of these are available in India,” he said. Cost-competitiveness Srinivasan Dwarakanath, President of the Airbus Division at Airbus Group India, explained how Airbus’ cooperation with India offers the benefits of cost-competitiveness and a highly-skilled workforce. “There is something made in India in every one of our aircraft being produced today,” Dwarakanath said. Airbus’ largest Indian partner is Hindustan Aeronautics Limited (HAL), which produces half of the A320 Family’s forward passenger doors. HAL began supplying Airbus since the 1990s. Similarly, TAML has been providing composite parts for Airbus’ A320 and A350 XWB wing, while TAL Manufacturing, a subsidiary of Tata Motors, supplies over 500 sheet metal and machined parts and sub-assemblies. In the case of Airbus, supporting these major suppliers is a growing network of small and medium-sized Indian companies, like CIM Tools, Gardner-Pranitha, Triveni and Sansera Aerospace. Roy Halladay Authentic Jersey
100% FDI allowed in online retail under new rules: Centre to Delhi High Court
The Centre today told the Delhi High Court that it has issued a press note in March this year clarifying that 100 per cent foreign direct investment (FDI) through automatic route was permissible in online retails running under ‘marketplace model’. The submission was made before Justice Rajiv Sahai Endlaw by Additional Solicitor General (ASG) Sanjay Jain who said that in view of the March 29 press note, the plea of All India Footwear Manufacturers and Retailers Association against FDI in ecommerce was “infructuous”. The petitioner Association, however, contended that FDI norms were still being violated despite the press note and sought time from the court to consider what course of action to take. The bench, thereafter, listed the matter for hearing on May 23, when the Association will tell the court whether they intend to challenge the press note by amending the current petition or by filing a fresh one. As per the press note, while 100 per cent FDI is allowed in ecommerce following a marketplace model, such online retailers are restricted from more than 25 per cent discount from one vendor. The high court had in an earlier order directed the government to probe 21 e-commerce websites for alleged violation of FDI norms. DeSean Jackson Jersey
E-commerce company flouting FDI norms? Vendors protest against Paytm’s cashback model
Many online sellers have flagged a possible violation of the latest foreign investment guidelines by Paytm to the government. Chinese firm Alibaba Group is a major shareholder in the ecommerce marketplace. The department of industrial policy & promotion (DIPP) in response to the query raised in social media site Twitter clarified that giving discount is a prerogative of the seller only. All India Online Vendors Association (AIOVA), which represents about 500 medium-to-large sellers on various ecommerce platforms, in a tweet tagged to DIPP’s verified Twitter handle @DIPPGOI early this week sought clarification on whether Paytm giving cashback over and above the seller-funded discount is within the purview of the latest FDI guidelines. “Giving discount or not is prerogative of the seller owning inventory. FDI permitted in marketplace, not in inventory based model,” DIPP tweeted, but it did not clarify whether Paytm’s cashback strategy is in line with the latest guideline or not. DIPP in a press note issued in late March had clarified that 100% foreign investment was allowed in online marketplaces. However, it barred such platforms from influencing retail prices or offering any discounts of their own. Sudhanshu Gupta, vice-president at Paytm, defended the Noida-based company’s strategy. “Everywhere in the world, including India, all financial services and payment companies incentivise consumers to use their products. Banks promote usage of their credit and debit cards by giving extra reward points and cashback-…Paytm cashback promotions are similar in nature since they are driving usage of Paytm wallet,” he said. Some experts are not convinced about such an argument, pointing out that marketplaces are barred from influencing prices both directly and indirectly. Anil Talreja, partner at Deloitte Haskins & Sells, refused to comment on any specific case, but said, “The fine print of the circular clearly says that prices cannot be influenced directly as well as indirectly. Hence in no circumstance any kind of discount, whether monetary or in form of offers or any other form, will be in accordance with the circular.” Paytm’s Gupta also said, “There is a selection criteria in allowing sellers to fund cashback promotions on Paytm which is based on their overall performance in terms of deliveries and returns.” “Cashback, given above and beyond the seller discount, goes to the Paytm wallet of the buyer and is used for other purchases. Cashback offers are either not at all discussed with sellers or is discussed only with select sellers,” said one of the large sellers on the platform who requested not to be named. “A select group of sellers benefit from the attractive cashback offers as their products become cheaper than the rest, influencing customers decision. This is a way of influencing pricing and not maintaining level playing field,” he added. Sellers have sought further clarifications from the government on the issue. According to the regulation, ecommerce marketplaces are expected to be just technology platforms connecting buyers and sellers; they cannot influence the sale price of goods or services in any manner and must maintain level playing field. A spokesperson for AIOVA said, “DIPP is responding to us on Twitter which is a great step in order to remove doubts announced in the latest policies. We have requested them to give us the procedure of application to clear all doubts that we have.” The person said the association has also sought clarity on what nodal authority should be informed about violations of the FDI policy. “This also strengthens our ongoing demand for a regulatory body for ecommerce marketplaces on lines of Trai, Sebi, and IRDA.” In another grievance related to the FDI guidelines, sellers had questioned their responsibility of aftersales support. “@DIPPGOI how can sellers be responsible for warranty or service of branded products as Dey r just resellers n not manufacturers #mociseva,” one said. To this DIPP said case-specific clarification should be sought. “@AIOVA3- Sellers may or may not be manufacturers. Case-specific clarification may be sought from DIPP using prescribed format,” it said. Sellers on online marketplaces had recently written to the Prime Minister’s Office (PMO), demanding regulations to safeguard their rights and help resolve their issues with ecommerce giants. Denzel Perryman Authentic Jersey