ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Pleasures of Tax Holiday

Pleasures of Tax Holiday Hansavivek COROMANDEL FERTILISERS' results for 1975 arc the best in its 14- year career, with sales find earnings considerably higher than in the previous year. With no tax liability as before, dividend stepped up 10 points to 22 per cent is covered threefold. Such are the results notwithstanding the power restrictions in the first half and the fact that the acids and complex units had to be shut down for a couple of months for linking up with the new facilities built under the expansion project. Moreover, high prices of fertilisers restricted sales despite relaxations of some of the regulatory measures on distribution and sales of fertilisers by official agencies. The entire recommended dividend will be exempt from tax in the hands of shareholders. Dividends for the three earlier years (1972-74) have also been held to be exempt from tax, according to the judgement of the Supreme Court of India. Total relief to which the company is entitled, under section 80 J of the Income-tax Act according to income- tax assessments, is placed at Rs 664 lakhs. Of this, dividends paid so far amounted to Rs 268 lakhs, leaving a balance of Rs 396 lakhs in respect of which exemption under section 80 K will still be available. The period of tax holiday for the company is now over, and from the current year onwards profits will be subject to taxation. Selling agency agreements with EID- Parry and Rallis India have been discontinued. Fresh agreements on a 'principal to principal' basis have been concluded with them from the beginning of the current year. One of the notes appended to accounts shows that auditors were paid, apart from audit fees of Rs 52,500 as much as Rs 2,77,356 for various other services. The company did not earn any foreign exchange, whereas it consumed imported raw materials worth Rs 845 lakhs, and spent another Rs 96 lakhs in foreign exchange by way of professional consultancy fees, interest and dividend remittances.

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