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Even Vidhyasagar scores better BGM than Ilayaraaja these days

Topic started by Youth (@ 202.188.22.180) on Mon Jan 27 05:51:52 EST 2003.
All times in EST +10:30 for IST.

Just watched Anbey Sivam and Ramana. Both have disaster scenes.

In Anbey Sivam, there is a train collision. Kudos to the art director for such realistic settings. Vidhysaagar scores pretty good BGM and gave very good sound effects, that you really feel that you are at the scene of the accident.

By contrast, in Ramana there is a scene where the aprtments collapse. The setting was extremely bad and did not reflect reality. In a buidling collapse, you can see a lot of dust, but not in Ramana. VK looks like he just had a bath!
As for Ilayaraaja's BGM, it just shows that he has lost it. There was absolute silence!
OK, never mind the music. What about human sounds? Shouldn't there be moanings and cries in the aftermath of such a disaster? Abdolutely none!!!

Ilayaraja has stopped delivereing listenable songs and the only quality left in him was supposedly his BGM capability. But if this is his idea of BGM, it is better if he packs up and goes.

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Responses:

• From: sabesan (@ 68.154.52.232) on: Mon Jan 27 06:15:04 EST 2003
  
  hmm.... there starts another war..... youth - and u called others as "vayatherichal" parties..... hmmm... whatever....
  
  
• From: Speaker (@ 203.126.142.232) on: Mon Jan 27 06:38:44 EST 2003
  
  How Kelkar plan could hit India Inc
  
  N Mahalakshmi | January 27, 2003 14:46 IST
  
  
  Ask the pros in the stock market and they would tell you the effective tax paid by a company is a vital measure to judge its corporate governance standards.
  
  And if Vijay Kelkar, advisor to the ministry of finance and company affairs and chairman of the task force set up to study and suggest tax reforms, has his way, most companies will get a better score at least on this count by default!
  
  Given the plethora of exemptions and concessions given under the Indian tax system, there is a huge difference between corporate tax rates and what the companies actually end up paying as tax.
  
  Kelkar's report gives enough evidence. In 1999-2000, the effective tax rate of a sample of 3777 companies was 21.7 per cent as against the statutory rate of 38.5 per cent.
  
  Similarly, in 2000-2001, the effective tax rate of a sample of 2585 companies was 21.9 per cent as against the statutory rate of 39.55 per cent.
  
  Again, the financial results of 1334 profit-making companies for the fiscal year 2001-2002 indicated an effective tax rate of 21.75 per cent for 1275 non-banks.
  
  For the 59 banks in the set, however, the effective tax paid was higher at 35.01 per cent.
  
  "The erosion of tax base is evidenced by the divergence between the statutory corporate tax rate and the effective tax rate and we are of the strong view that divergence between taxable income and book profit undermines corporate governance," states the report.
  
  Indeed, it is this anomaly that Kelkar seeks to correct.
  
  Kelkar's philosophy is to redesign corporate profit tax so as to align taxable income and the book profit so that corporate profits would bear the full burden of corporate tax.
  
  "This is possible only by eliminating the various tax incentives/preferences as well as rationalising various other allowances which are inconsistent with the accounting practices," states the report.
  
  Kelkar's suggestions for corporate taxes, if implemented, will result in a revenue gain of Rs 10,762 crore (Rs 107.62 billion) for the exchequer.
  
  Obviously, this will be a wholesome loss for the corporate sector. While the number of tax paying companies will increase dramatically, they will be left with lesser ways to evade tax.
  
  In a two part series, we examine the impact of the recommendations made by the task force on the corporate sector.
  
  This week we cover direct taxes.
  
  The key recommendations made by the committee in the area of direct taxes include bringing down the corporate tax rate, elimination of surcharge, lowering the depreciation rate, withdrawal of all exemptions, and abolition of long-term capital gains tax for listed equity, among other things.
  
  The task force has recommended lowering the corporate tax rate to 30 per cent for resident corporates and 35 per cent for foreign companies from the current rate of 35 per cent and 40 per cent, respectively.
  
  It has also recommended that the surcharge of 5 per cent on corporate tax be eliminated.
  
  Domestic companies, thus, will have to pay a tax of only 30 per cent compared to the 36.75 per cent currently.
  
  This may sound like a significant saving on the face of it, but most manufacturing companies will end up paying more tax as their taxable income will go up on account of withdrawal of exemptions and cuts in deductible allowances and concessions.
  
  "The biggest blow to the corporate sector will stem from the move to withdraw all tax exemptions," emphasises Ketan Dalal, partner, RSM & Co.
  
  Evidently, the reduction in corporate tax is not going to help lower the overall tax burden.
  
  “Given that the effective tax rate is about 20 per cent in the corporate sector, corporate tax should be brought down to the same level if all exemptions are to be taken away,” says Mukesh Bhutani, country head, Ernst & Young.
  
  "However, there is no case for continuing these exemptions because there is no economic rationale," he adds.
  
  The task force has recommended that the rate of depreciation on general plant and machinery be reduced to 15 per cent from 25 per cent, and the rates for other blocks of assets also be similarly reviewed.
  
  The idea is to align tax depreciation with book depreciation under the Companies Act 1956.
  
  "This move will affect capital intensive industries, beside acting a deterrent for companies to indulge in capital spending or modernising plants," says Dalal.
  
  Companies in sectors like steel, cement, oil and petrochemicals, heavy engineering and the like will be affected adversely.
  
  However, the task force's suggestion to allow carry-forward of business losses indefinitely will benefit companies which are in high-risk businesses, which have a long gestation period, or those which have unstable and volatile income streams.
  
  Notably, companies engaged in the telecom and steel business will benefit from this move since many companies in these sectors have huge accumulated losses.
  
  One favourable move for the capital markets will be the abolition of long-term capital gains tax on listed equity and the exemption for dividend income.
  
  The task force has argued in favour of such a move since corporate profits will anyway be subject to full tax post-exemptions and hence there is no case for the levy of additional tax when profits are distributed as dividends or undistributed profits get reflected in the form of share price appreciation.
  
  The sweeping deletion of exemptions set out by the task force will affect a wide range of sectors. Here is a short list.
  
  Section 10A and 10B
  
  Worst affected: Non-software exporters, BPO and IT-enabled services companies.
  
  These two sections deal with deductions available for exports by companies operating out of special trade zones, and 100 per cent export-oriented units.
  
  Under 10A, a 100 per cent deduction is available for the first five years after commencement of operations and a 50 per cent deduction for another two years, while 10B provides for a 100 per cent deduction for 10 consecutive years.
  
  The task force has recommended withdrawal of both these exemptions except for companies engaged in manufacturing computer software.
  
  For software exporters, the task force has suggested two alternatives.
  
  Under the first alternative, it is recommended that the exemptions be withdrawn, but at the same time allowing credit for federal and state taxes paid by such companies in foreign jurisdictions.
  
  Experts feel that this would mitigate the tax exposure on onsite software revenues, but offshore software revenues would be subject to tax in India.
  
  "While the recommendation is conceptually consistent with the overall fiscal policy orientation of removing exemptions and concessions, the competitive advantage of India-centric offshore software business models would come under strain in the short-to-medium term," points Bhutani.
  
  The second alternative recommends continuation of such exemptions for software companies until such time as the government enters into totalisation agreements for a single point incidence of taxes.
  
  However, as long as these exemptions continue, a dividend distribution tax of 30 per cent would apply and there would be no exemption from long-term capital gains on the sale of shares of such companies.
  
  Analysts feel that domestic infotech companies may lose their competitive edge if the tax benefits are removed. "Budding non-software businesses such as business process outsourcing and other information technology-enabled services, would be disadvantaged by the removal of a tax holiday," adds Bhutani.
  
  Section 33AC
  
  Worst affected: All shipping companies.
  
  This section relates to shipping companies. Under the section, shipping companies are allowed to claim a deduction on taxable profits provided they are set aside for building or acquiring new ships for a period of eight years.
  
  The task force has, however, refrained from taking a call on tonnage tax for which the industry has been pitching for more than two years now.
  
  "If this exemption is withdrawn and tonnage tax is not effected, it will be a double whammy for shipping companies," says Dalal.
  
  Section 35
  
  Worst affected: Pharma and biotech companies.
  
  This section relates to concessional treatment of expenditure on scientific research & development in the form of deductions for revenue and capital expenditure on scientific research in the year in which these are incurred.
  
  Treatment of capital expenditure tantamounts to 100 per cent depreciation.
  
  Besides, Section 35(2AB)(1) also allows weighted deduction of 150 per cent of the expenditure on in-house research by companies engaged in the business of biotechnology, drugs and pharmaceuticals, electronic equipment, computers, telecommunications equipment and chemicals.
  
  The task force has recommended that this section be abolished and instead the regular rules for revenue expenditure and depreciation for capital expenditure be made applicable.
  
  This will affect large-sized domestic pharma companies like Ranbaxy, Dr Reddy's and Wockhardt which take advantage of the tax cover.
  
  Because of their significant R&D spend they will now have to pay higher taxes.
  
  Though industry experts, on their part, argue that this move will disincentivise research initiatives, the task force defends the point on grounds that full expensing of capital expenditure creates a perverse incentive for fungibility.
  
  Section 80IA, 80IB
  
  Worst affected: All infrastructure companies.
  
  Section 801A relates to deductions allowed for infrastructure companies and those situated in backward areas.
  
  Such companies are eligible for up to 100 per cent deduction for a period of up to 10 years, based on the business they are in.
  
  The withdrawal of this benefit will affect companies in refining, power and telecom service provider segments.
  
  Under 80IA, telecom service providers are entitled to claim a deduction of 100 per cent of profits for five years and 30 per cent of profits for the subsequent five years, in a block of 15 years.
  
  Analysts point that telecom companies will come under tremendous pressure given that they are already under a tight grip after the rigorous price cuts.
  
  Another big casualty will be Reliance which enjoys exemptions under this section.
  
  The biggest beneficiary of Kelkar's recommendations, however, will be banks. The task force has recommended that the provision for bad debt be made an allowable deduction.
  
  As per the expense rule in the Income Tax Act, any provision is an allowable deduction if it is a statutory obligation.
  
  In case of banks and financial institutions, even though they have to make provisions for non-performing assets to comply with Reserve Bank of India regulations, for tax purposes this statutory obligation is disregarded.
  
  As of now, banks are allowed to claim deduction in respect of any provision made for assets classified by the RBI as doubtful assets or loss assets to the extent of 10 per cent of such assets, for assessment years 2003-04 and 2004-05.
  
  However, with respect to foreign banks, deduction in respect of the provision for bad and doubtful debts is restricted to the extent of five per cent of their gross taxable income.
  
  If full deduction is allowed, it will mean huge tax savings for banks. The task force expects the tax collections from banks to reduce by 35 per cent due to this move.
  
  Needless to say if all exemptions are withdrawn the concept of minimum alternate tax will become irrelevant since companies will anyway be subject to a higher rate of tax than the 7.5 per cent that MAT requires.
  
  Companies which now pay a minuscule tax under MAT, will be in the regular tax fold.
  
  The worst affected will be Reliance Industries, which paid an effective tax rate of four per cent of pre-tax profit in fiscal 2001.
  
  Another radical measure recommended bringing agricultural income under the tax ambit. However, this remains a politically sensitive issue and successive governments have abstained from touching this segment.
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  (irrelevant post to totally irrelevant thread)
  
  
• From: Mohan (@ 202.156.2.186) on: Mon Jan 27 06:51:33 EST 2003
  
  This stupid post needs to be closed now,,,, i mean now!!!!
  
  

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