Back Cost audit
It seems cost audit is getting the pride of place in Companies Bill, 2009. Is it a good development?
Manoj Tiwari, Patna
I think it is a good development because we should be more cost conscious if we were to take on the world on the price front. Our products are out-competed on the price front by the Chinese, for example, in the export markets. It is not as if cost audit will suddenly make our products competitive. The point is it is time we paid attention to cost cutting and optimum utilisation of resources. Hype and hoopla through ads alone will not deliver the goods.
Allowances, perquisitesI am told that when the Direct Taxes Code Bill, 2009 becomes law, the distinction between allowances and perquisites would not survive. Please explain with an example.
Shivaji Kakodkar, Sangli
Yes, the DTC seeks to monetise all benefits and allowances and tax them. In the event an House Rent Allowance of Rs 25,000 per month given to an employee and a rent-free accommodation given to another employee involving an outgo of the same amount a month would be taxed exactly in the same manner — the employees’ salaries going up by Rs 3 lakh per annum. Ditto for medical reimbursement vis-À-vis medical allowance. The salaried class is particularly worried about the DTC because with all allowances and perks falling into the tax net, in many cases, the liberal hike in the slab rates may not after all neutralise the impact of the hitherto tax-free items becoming taxable in the new regime.
Dual listingIs dual listing a workable proposition?
Triloki Manik, New Delhi
The experience of companies that have tried the model is not very encouraging. Dual listing is touted as a via media, a compromise for those who are not able to consummate a merger. MTN of South Africa and Bharti-Airtel of India seriously considered this option when their merger talks broke down at the altar of ego — who should merge with whom with both the companies reluctant to come down from their high horses.
Dual listing ensures that both stay alive with both being listed in stock exchanges of both the countries. But a foreign listing calls for depository receipt mechanism in the absence of capital account convertibility of the rupee. Be that as it may. Dual listing appears, to many, as a farce with its virtues overstated and exaggerated. Only a merger can ensure pooling of interests and resources. Dual listing cannot ensure this.
S. MURLIDHARAN
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