Cement, Energy and Environment

GOVT PLANS REGULATOR FOR ENVIRONMENTAL CLEARANCE New Delhi: The Union environment ministry proposes to set up an autonomous regulatory body to reform the environmental clearance mechanism and strengthen enforcement of environmental laws. With the National Green Tribunal in place, the ministry has come up with the proposal to strengthen environmental governance in the country by establishing an independent regulator. The Jairam Ramesh-led ministry's proposed National Environment Protection Authority (NEPA) is expected to be an autonomous, professional, Science-based licensing and monitoring agency. Once the authority takes shape, the ministry will transfer its clearance functions and focus more on policy issues. The only exception will be projects of strategic importance (like nuclear projects) which may need the ministry's final approval. In its draft proposal under discussion, the ministry proposes NEPA to be focussed exclusively on the grant of environmental and coastal zone regulation clearances. NEPA, which will subsume the National Coastal Zone Management Authority, will undertake scientific studies like capacity studies for industrial units and coastal zone planning as well as monitor conditions associated with clearances and initiate enforcement actions in case of violations. REGULATION NEWS The central regulatory authority, to be set up by amending the Environment Protection Act (EPA), 1986, will also develop uniform guidelines on compliance and enforcement. Under the proposal, the Central Pollution Control Board will also be strengthened. Aiming to infuse professionalism, the authority, to be established on the lines of TRAI and accountable to Parliament, will have a governing body compns1ng scientists, lawyers and economists to ensure a multi– disciplinary approach to environment protection. With penalties for violation of environmental laws provided under EPA being very low, the ministry also proposes to enhance them substantially so that they have a deterrent effect. Courtesy: The Times of India, May 27,2010. GUJARAT PLAN TO INDIRECTLY RAISE CST WORRIES INDUSTRY While a number of states have increased value added tax (VAT) rates to get a higher share of the proposed goods and services tax (GST) , Gujarat has gone a step further. Instead of increasing VAT, it has increased central sales tax (CST) covertly by reducing VAT credit against CST. In its 2010-11 budget, it sought to bring down VAT credit by 2 per cent for goods bought from within Gujarat and sold in other states. In effect, this will increase CST by 2 per cent to 4 percent. CST was to be phased out at the launch of GST, according to finance ministry directions. All the states were to reduce it gradually and phase it out at the launch of GST. At present, 2 per cent CST is applicable on goods moving out of Gujarat. The state was supposed to reduce it further. But the state reasons that it has suffered huge losses in tax revenues due to decrease in the concessional rate of CST against Form C from 4 per cent to 3 per cent with effect from April 2007 and from 3 per cent to 2 per cent with effect from June 2008. Industry protests that it will put the state industry at a disadvantage against other states. FICCI Secretary General Amit Mitra has written to Finance Minister Pranab Mukherjee, urging him to share his view with Chief Minister Narendra Modi. "The proposed amendment will seriously affect trade and industry. The contracts for running projects would have to be revisited to determine whether additional cost over and above the mutually agreed contract price would be reimbursed by the customer," said Mitra. The industry says it can result in geographic integration of markets, relocation of industries and serious economic distortions within Gujarat. "It would put Gujarat industry in a tricky situation. As the cost of business will go up, either industry will have to bear the pressure on profit margins or increase prices," said Gaurav Taneja, partner and national tax director, Ernst & Young . This is opposed to the central government's endeavours to phase out CST by gradually reducing the tax rate, which forms part of the 59