Education Cess Went into Mid Day Meal Scheme

By Vijay Kumar

THE Ministry of Human Resource Development received over Rs. 18334.00 crore in 2011-12 from Education Cess. The Lok Sabha was informed yesterday by the Minister of State for Human Resource Development, Dr. Shashi Tharoor that Ministry spent about 18006.27 crores from this money in Mid Day Meal Scheme (MDMS) and the Sarv Shiksha Abhiyan (SSA).

No Multi Member CAG: Chairman, High Level Committee (HLC) for Commonwealth Games, ShriV.K. Shunglu had suggested for certain changes in CAG organization, including for making it into a multi-member body. It was suggested that a three member body would have greater transparency in its operation. Out of the three members, one member should possess professional accounting qualifications, CA or its transnational equivalent. This should not seem to exclude an IAAS officer from the triumvirate, who has wide exposure to Finance, Audit and Accounts and best International practices in these areas. No decision has been taken by the Government to make the CAG a multi-member body like the Election Commission - NAMONARAINMEENA, MOS, Finance.

Whether it is a fact that companies like Vodafone, Shell, Nokia, IBM and Hewlett-Packard are having conflict with Income-Tax Department on the issue of undervaluing share sales to parent companies: Out of these five companies, Transfer Pricing adjustment has been made in the case of M/s Shell India Markets Private Limited and M/s Vodafone India Services Private Limited for assessment year 2009-10, under section 92 CA of the Income- tax Act, 1961 (the Act) on the issue of undervaluation of shares transferred to their associated enterprises (AE). The Assessment Orders are yet to be passed in these cases. In case of M/s Shell India Markets Private Limited and M/s Vodafone India Services Private Limited, Transfer Pricing Officers (TPOs) have held that these companies have transferred shares to their respective AEs at price below fair market value of shares. Accordingly, TPOs determined arm's length prices in accordance with the provisions of the Act as per following details:

• In the case of M/s Shell India Markets Private Limited, as against the rate of Rs. 10/- per share adopted by the assessee on 87.64 crore number of shares transferred to its AE based in Netherlands, the TPO worked out the arm's length rate of Rs. 183.44 per share, at market price in accordance with the provisions of the Act, leading to adjustment of Rs. 15201 crore on account of undervaluation of shares.

• In the case of M/s Vodafone India Services Private Limited, as against the rate of Rs. 8509/- per share adopted by the assessee on 2.89 lacs number of shares transferred, the TPO worked out the arm's length price at Rs. 53,775/- per share, leading to adjustment of Rs. 1308.91 crore on account of undervaluation of shares.

- S. S. PALANIMANICKAM, MOS Finance.

Vodafone in Discussions: An Expert committee had been set up by the Government to look into the issue of retrospective amendment of tax laws. The Committee has submitted its report to the Government. The report of the Committee is under consideration of the Government. Vodafone is engaged in discussions with the Department of Revenue, Ministry of Finance.

- P. CHIDAMBARAM, FM