AO can’t compare assessee’s GP rate with third party if no variation found in its past records

IT : Assessing Officer was not justified in making addition to gross profit rate declared by assessee comparing case of another assessee engaged in same line of business when assessee's past history was available and there was no material difference in facts pertaining to assessment year under consideration and current year

Winding up petition admitted as petitioner Co. failed to establish payment of alleged rental charges

CL : Where company had made all payments by cheque towards monthly rent in respect of property let out by petitioner, company's stand that some payments were made other than by cheque and receipt therefor was not issued by petitioner could not be accepted

Market Development Assistance Hike Cheers Garment Exporters

COIMBATORE: The increase in benefits under the market development assistance (MDA) scheme has cheered garment exporters. The MDA scheme helps exporters to participate in international fairs and buyer-seller meets.



The Centre has issued revised guidelines, which offer additional benefits, in the MDA scheme. The additional benefits will come into effect from June 1. The u pper ceiling for availing benefit under MDA has been revised from Rs 15 crore to Rs.30 crore FOB (free on board) value of exports of exporting units in the preceding yea r.



"The hike would help and encourage more number of exporting units in Tirupur to promote their products abroad," said A Sakthivel, President, Tirupur Exporters' Association. Financial support to the tune of Rs.40 lakh would be provided to export promotion councils like AEPC (Apparel Exports Promotion Council) when the number of participants exceed 75. "This positive measure would encourage exporters to participate in international fairs," Sakthivel said.



There has also been an enhancement in the financial ceiling for participation in trade fairs and exhibitions to various destinations under the scheme. For 'Focus Latin American' countries, the increase was from Rs.1.8 lakh to Rs.2.5 lakh. The ceiling has been hiked from Rs. 1.5 lakh to Rs. 2 lakh for 'Focus African' countries, CIS countries, Focus ASEAN, Australia and New Zealand.

Source:-http://timesofindia.indiatimes.com

India Turmeric Slips On Weak Exports; Jeera Steady

Indian turmeric futures slipped on Friday due to lack of demand from overseas buyers, higher carry-forward stocks and prospects of a good monsoon.

* At 0954 GMT, the key June turmeric contract was lower 0.10 percent at 5,926 rupees per 100 kg on the National Commodity and Derivatives Exchange.

* "Higher stocks with farmers, especially in Erode, coupled with huge carryover stocks may pressurise prices," Angel Commodities said in a research note.

Erode is one of the key markets in Tamil Nadu.

* Spot turmeric rose 27 rupees to 6,002 rupees per 100 kg in Nizamabad, a key market in Andhra Pradesh.

JEERA

Indian jeera, or cumin seed, futures were steady on overseas demand though a rise in local supplies and higher production weighed on sentiment.

* The actively traded jeera contract for June delivery was 0.11 percent higher at 13,062.5 rupees per 100 kg.

* "Local demand is moderate but exports are seen picking up in coming days. Lack of supplies from other producing countries is seen boosting exports from India," said Jai Kumar Jain, a trader from Unjha, a key market in Gujarat.

* India is the largest jeera producer in the world, followed by Syria and Turkey.

* Spot jeera edged up 4 rupees to 13,455 rupees per 100 kg in Unjha.

Solurce:-http://in.reuters.com

U.S Emerging As Major Export Market For Black Tea

The United States is emerging as a major importer of tea and would begin governing prices of black tea, Tea Board Chairman M G V K Bhanu told exporters here on Friday. He also told them to focus on markets preferring high-value tea.

Five countries he said, which should be focussed on, are: Russia, Iran, Kazakhstan, U.S. and Egypt.

Mr. Bhanu told The Hindu later that he would hold bi-annual sessions exclusively with exporters, as there was need for structured interaction with them.

“There are new markets developing like the U.S., Iraq and Sudan, which exporters need to be aware of,” he said.

Mr. Bhanu told the permanent exporters, (i.e. those holding export licences given by the regulator) that the overall consumer trend was moving towards high quality tea, as people had now become quality conscious and were willing to pay more for high quality tea.

“We will get greater value-realisation if we concentrate on exporting to those countries which prefer high-quality tea”, he told exporters.

Dominant player

He said that although, at present, the black tea segment was governed by Russia and CIS countries, the next two decades would see the U.S. dominating the scene.

Enquiries revealed that U.S. imports around 125 million kg of tea— mostly from Argentina. India’s share stood at around 14 million kg. “With the expansion of tea and coffee chains, the demand for quality Indian teas has been increasing in the U.S.” , the Chairman of ITA and Managing Director of Goodricke Tea A N Singh told The Hindu.

Indian tea exports average at 200 million kg with the unit realisation averaging at about Rs. 175.3 per kg.

Source:-http://www.thehindu.com

AO can’t initiate reassessment to cut down sec. 10B exemption merely on change of opinion

IT : Where assessee's claim for exemption under section 10B was allowed after scrutinising it in detail, subsequently Assessing Officer could not initiate reassessment proceedings merely on basis of change of opinion that apportionment of expenses between two units of assessee i.e. EOU and non-eligible unit, was not proper

Gain on sale of shares acquired in IPOs and held for short time span will be taxable as ‘business pr

IT: Where assessee used to apply initial public offer (IPO) in many companies and subsequent to allotment of shares sold same within 30 days, gain arising on sale of shares was taxable as business income and not short-term capital gain

If assessee isn't able to conclude contracts, its marketing services to AE's can't be termed as comm

IT/ILT : Where lower turnover filter had been applied for selection of comparables, application of upper turnover filter was also warranted

India Corn Seen Up On Slow Supply, Export Demand

31-May-2013

Corn futures in India are expected to be higher next week on a slowdown in supplies from Bihar due to rains, a pick-up in local demand and some fresh export enquiries.

India expects average rainfall in 2013. The weather office has forecast the onset of monsoon over the Kerala coast by June 3, give or take four days, a time period treated as normal.

Maize is cultivated twice a year, during summer and winter, in India, Asia's largest exporter of the grain, with the major contribution coming from the summer crop.

"Rains in Bihar have restricted the supplies. If rains continue for some more time then it could cause some damage to the crop," said Kanhaiyalal Agarwal, a trader from Bangalore.

The key July contract for maize rabi rose 3.24 percent to close at 1,433 rupees($6.53 per bushel) per 100 kg on the National Commodity and Derivatives Exchange (NCDEX). It hit a contract high of 1,444 rupees earlier in the day.

Chowda Reddy, a senior analyst at JRG Wealth Management, expects the July contract to rise to 1,480 rupees by next week.

India's corn output is expected to be 21.82 million tonnes in 2012/13, as per the farm ministry's third advance estimate, as against 21.76 million tonnes a year earlier.

In Chicago, the key July corn contract on CBOT was up 0.38 percent at $6.56-3/4 per bushel at 1206 GMT.

Additional rainfall from late Thursday into the weekend will further stall corn and soybean plantings in the U.S. Midwest, threatening to trim acreage and yield potential for each crop, an agricultural meteorologist said on Thursday.

KAPASHKHALI

Indian cottonseed oilcake, or kapashkhali, futures ended up and are expected to continue to trade higher next week tracking a firm spot market, where demand was good amid thin supplies.

Kapashkhali is a by-product of cottonseed and is used as cattle feed, mostly for dairy animals, in northern India.

Cotton supplies have been very thin in the local market as the season has drawn to a close.

"Demand from local traders has improved and prices are likely to improve by another 50 rupees from the current levels," said Mayur Bhindora, a trader from Rajkot, Gujarat.

The key July contract on the NCDEX closed up 0.87 percent at 1,622 rupees per 100 kg.

At Akola, a key market in Maharashtra, cottonseed oilcake rose 23 rupees to 1,568 rupees per 100 kg.

Source:-http://in.reuters.com

Essar Ports To Develop 3 Iron Ore Berths At Visakhapatnam Port

NEW DELHI: Essar Ports, through its wholly owned subsidiary Vadinar Oil Terminal Ltd, has emerged as the highest bidder for mechanisation and operation of three iron ore berths at Visakhapatnam Port.



These three berths will have a combined capacity of 23 MMTPA, Essar PortsBSE -4.23 % said in a statement.



On commissioning of this project, the company's total capacity for iron ore export at the east coast will become 39 MMTPA with 4 highly mechanised iron ore berths -- three in Visakhapatnam Port and one in Paradip Port.



The company can start the operation of the two outer harbour berths within next 3-4 months as the upgradation and operation at the terminal will go simultaneously.



Vishakhapatnam port handled 12.3 million tonnes of iron ore during FY'13 in spite of slump in iron ore export, it added.

Source:-http://economictimes.indiatimes.com

Rupee Falls To 11-Month Low Of 56.51

MUMBAI: The domestic currency fell to an 11-month low of 56.76 against the dollar on Friday on the back of what dealers said was dollar purchases by defence and oil refiners. However, there was a correction with sales from exporters pulling back the rupee to 56.51 level towards close - down 13 paise from its previous close of 56.38.



"It was not necessarily an India story. The dollar has been gaining against all emerging market currencies following signs that the US economy is on the mend. Besides expectations that there will be a gradual reduction in quantitative easing there has been a massive sell-off in emerging market ETFs (exchange traded funds)," said Harihar Krishnamoorthy, treasurer, First Rand Bank.



The rupee, which traded at 53.82 at the beginning of the month, has slipped by 2.69 paise in four weeks - its biggest monthly decline in a year. Its lowest in the last 12 months was 57.14 on June 27, 2012. On Friday, sentiments were hit by a 455-point drop in the sensex which again tracked global movements particularly a sharp fall in the Nikkei in the previous day which had wiped out all of the gains by Japanese index in May. News that the gross domestic product grew by only 5% in FY13 did not surprise the market but acted as a dampener on sentiments.

Dealers said that the rupee appears to have found support at the current level having recovered nearly 25 paise without RBI intervention. However, some traders said that there were some dollar sales by public sector banks and these could have been at the behest of the central bank. In the forward market the one year forward rupee was dealt at 60 against the dollar. The fall in the rupee was, however, good news for IT stocks with the BSEIT index rising by almost 1%.

Source:-http://timesofindia.indiatimes.com

Notification No 14 (RE-2013)/2009-2014 dated 31-05-2013

GOVERNMENT OF INDIA

MINISTRY OF COMMERCE AND INDUSTRY

DEPARTMENT OF COMMERCE

NOTIFICATION No. 14 (RE-2013)/2009-2014.

New Delhi, Dated : 31 May, 2013

S.O. (E) In exercise of powers conferred by Section 5 read with Section 3(2) of the Foreign Trade (Development & Regulation) Act, 1992 (No.22 of 1992) and also read with Para 1.3 and Para 2.1 of the Foreign Trade Policy, 2009-2014, (as amended from time to time), the Central Government hereby makes the following amendment in the Foreign Trade Policy, 2009-2014:

1. Paragraph 2.1.2 of the Foreign Trade Policy stands substituted as follows: -

“2.1.2 Prohibition on Direct or Indirect Import and Export from /to Democratic People’s Republic of Korea

Direct or indirect export and import of following items, whether or not originating in Democratic People’s Republic of Korea (DPRK), to / from, DPRK is ‘Prohibited’: All items, materials, equipment, goods and technology including as set out in lists in documents INFCIRC/254/Rev.11/Part 1 and INFCIRC/254/ Rev.8/Part 2 (IAEA documents), S/2012/947, S/2009/364 and S/2006/853 (UN Security Council documents) and Annex III to UN Security Council resolution 2094 (2013) which could contribute to DPRK’s nuclear-related, ballistic missile-related or other weapons of mass destruction-related programmes; Luxury goods, including but not limited to the items specified in Annex IV to UN Security Council resolution 2094 (2013).”

2. Purpose of this notification:

1. This notification substitutes the updated versions of UN and IAEA documents, namely, INFCIRC/254/Rev.11/Part 1 and INFCIRC/254/Rev.8/Part 2 (IAEA documents), S/2012/947, S/2009/364 and S/2006/853 (UN Security Council documents) and Annex III to UN Security Council resolution 2094 (2013) for the existing documents mentioned in Para 2.1.2 of FTP.
   


2. This notification also adds luxury goods specified in Annex IV to UNSC Resolution 2094(2013) to the prohibition list for the purpose of export and import, to and from, DPRK.

(Anup K. Pujari)

Director General of Foreign Trade

E-mail : dgft@nic.in

[Issued from File No. 01/91/180/991/AM 07/Export Cell(SCOMET)]

No concealment penalty if exp. claimed in current year and withholding taxes deposited in subsequent

IT : Provision of sec. 40(a)(i) would be deemed to have been substantially complied with if taxes withheld from payment made to non-resident were deposited subsequent to the previous year in which expenditure was claimed by assessee. Hence, concealment penalty would not be leviable

An insurance broker to provide info on its capital structure and shareholding details to IRDA yearly

INSURANCE : IRDA (Insurance Brokers)(Second Amendment) Regulations, 2013

Losses from windmill business, being an eligible business under sec. 80-IA, can be set off against o

IT : Losses from windmill business, i.e., eligible business under section 80-IA, can be set off against other heads of income

RBI issues revised Prudential Guidelines on Restructuring of Advances by Banks and Financial Institu

BANKING : Review of Prudential Guidelines on Restructuring of Advances by Banks and Financial Institutions

Profit from dealing in shares is business income if transactions are carried out methodically with p

IT : Where purchase and sale transactions in shares were entered into by assessee on regular and systematic basis with profit motive, income arising from said transactions was to be taxed as 'business profits'

SEBI amends circular on 'comprehensive guidelines on sale of shares through offer for sale mechanism

SEBI : Comprehensive Guidelines on Offer for Sale (OfS) of Shares by Promoters Through the Stock Exchange Mechanism

Assessee can take credit of excess payment of ST under rule 6(3) of Service Tax Rules without any ti

ST : There is no time-limit indicated in rule 6(3) of Service tax Rules, 1994 for assessee to utilize or take credit of excess tax paid by him on advances towards services, which are not provided

CBDT announces Rules for notification of agricultural extension projects under sec. 35CCC

IT : Income-Tax (Fourth Amendment) Rules, 2013 - Insertion of Rules 6AAD & 6AAE and Form Nos.3C-O & 3CP

SEBI modifies Securities Lending and Borrowing framework

SEBI : Review of The Securities Lending and Borrowing (SLB) Framework

Non-compliance with pre-deposit order leads to dismissal of appeal

ST : If assessee does not comply with pre-deposit order, his appeal is liable to be dismissed

Size of Cos and their economies of scale are vital factors for selection of comparables for TP study

IT/ILT : While selecting comparables to determine ALP of international transactions size of two companies and related economies of scale under which they operate are important factors in comparability

Mere intimation by ITO won’t seal the fate of trust registration, unless CIT passes an order to disp

IT : A communication or even an order signed by Income-tax Officer cannot be treated as disposal of application under section 12AA

Services of call centre to financial institutions for sale of financial products are liable to ST

ST/ECJ : Call centre services provided to financial institutions in relation to sale of financial products are liable to service tax; they do not amount to 'trading in securities/financial products' as they do not create, alter or extinguish parties' rights and obligations in respect of securities

Sum incurred on delivery, servicing and installation of traded goods can’t be charged to service tax

ST : Expenditure incurred by assessee towards delivery, servicing and installation expenses on UPS systems traded by it cannot be charged to service tax in its hands, as no services were rendered by assessee

A person can’t object to a proposed scheme of amalgamation if he ceases to be a shareholder of the C

CL : Where objector who had objected to proposed scheme of amalgamation in his capacity as shareholder had transferred his shares, objector was not shareholder of transferor and transferee companies and, therefore, had no locus to object to proposed scheme

Payment of ST with interest prior to show cause notice saved assessee from rigours of penalty

ST: If assessee pays wrongly taken credit along with interest prior to issuance of show-cause notice, penalty is not leviable

Sec. 35E deduction couldn’t be allowed to assessee if mining work was performed by a third party on

IT : Where mining work was carried out by third party, assessee was not eligible for deduction under section 35E

No TDS on sum paid to NR which isn’t taxable as royalty or as business profits in absence of its PE

IT/ILT : Professional fee paid by assessee to non-residents was not royalty under section 9 of Act or under article 12 of respective DTAAs

Exp. on loan restructuring is business exp. as it is within sphere of and incidental to main busines

IT : Where loan taken is incidental to assessee's business, any expenditure incurred on restructuring of such loan does not result in an enduring benefit and is allowable as business expenditure

No concealment penalty for retro-amendment which confirmed two views on allowances

IT : No concealment penalty for retro-amendment which confirmed two views on allowances

IRDA releases new regulations for ‘places of business’

INSURANCE : IRDA (Places of Business) Regulations, 2013

IRDA makes Regulations on Non-Linked Insurance Products

Insurance : IRDA (Non-Linked Insurance Products) Regulations, 2013

Economic circumstances and functional similarity to be seen among comparables for TP analysis

IT/ILT : For carrying out comparability analysis, it is to be seen as to whether comparable company is comparable having regard to characteristic of property and service, functions performed, assets used and risk assumed

Sec. 54 relief can’t be declined merely because investment has not sprouted from the original sales

IT : Exemption claimed by assessee under section 54 cannot be denied on ground that assessee has not utilized sale consideration received from sale of flats itself, in purchasing a new residential house

Unfair to try ex-JV partner for alleged breaches of JV when such disputes were settled in his favour

CL : JV partner directed to buy out other JV partner's shares(return his investment with 8% interest) by CLB & HC(in appeal) in petition filed by the latter for oppression/mismanagement under section 397/398 and directed the former to repay Instead of complying with the CLB & HC orders, the former harassed the latter by filing criminal complaints on matters related to JV contractual disputes which were already settled by CLB & HC. This clearly amounts to abuse of process of law and criminal proc

Loss incurred by partner in a transaction entered into on behalf of firm isn't deductible in hands o

IT : Loss in foreign currency transaction entered by partner on behalf of firm from its account, cannot be claimed by individual partner as deduction

CIT can exercise revisionary power, if AO omits to examine the vital issues in the assessment order

IT : Where Assessing Officer had not raised any query on issue of non-deductibility of TDS on roaming charges paid by assessee-telecom service provider in assessment proceedings, it was a fit case for Commissioner to exercise his revisional jurisdiction

Call Centre services provided in relation to organization of bets are liable to service tax

ST/ECJ : Call Centre Services of providing staff, premises and telephone and computer equipment necessary to take bets do not amount to carrying out 'betting' transactions and, therefore, same is not covered in negative list under section 66D(i)

Order of SetCom to be rectified if authority failed to take into account some prima facie claims

IT : Where Settlement Commission passed an order of settlement without taking into consideration assessee's claim for unabsorbed depreciation, in view of fact that said issue was emergent from face of record and did not require any minute examination of accounts, application seeking rectification of impugned order passed by Commission was to be allowed

Corrigendum dated 30-05-2013

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

CORRIGENDUM

New Delhi, the 30^th April, 2013

G.S.R. (E). – In the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 51/2012-Customs(ADD), dated the 3^rd December, 2012 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.874 (E), dated the 3^rd December, 2012, in the Table,

(1) against S. No. 5, in columns (6) and (7), for the words

“M/s Kodak (China) graphics commounication system Ltd.”

read

“Kodak (China) Graphic Communication Company Limited”;

(2) against S. No. 6, in column (6), for the words

“M/s Kodak (China) graphics commounication system Ltd.”

read

“Kodak (China) Graphic Communication Company Limited”.

[F No. 354/45/2012-TRU]
(Akshay Joshi)

Under Secretary to the Government of India

DGFT Policy Circular No 01 (RE-2013/2009-14) dated 29-05-2013

Government of India

Ministry of Commerce and Industry

Directorate General of Foreign Trade
Udyog Bhavan, New Delhi

Policy Circular No 1 (RE-2013/2009-14)

Dated: 29^th May, 2013

To

All Regional Authorities/DCs

A reference has been received from trade seeking certain clarifications on admissibility of deemed export benefits under para 8.2(f) of FTP. The issues have been considered for issuance of appropriate clarifications under para 2.3 of FTP.

2. Chronological sequence is described as under:
   
   
   
   1. 21^st March, 2012: Notification No. 107(RE-2010)-2009-14
      
      
      This Notification inserted para 8.7 in the FTP. This para provided that notwithstanding any thing contained either in FTP or HBP vol.1, supply to Non-Mega Power Project shall not be entitled to any deemed export benefit.
      

      At the bottom of this Notification, under heading “Effect of this Notification” it was stated that when the Annual Supplement to FTP is brought out, the consequential changes of this decision will be reflected in the various provisions of Chapter 8 of FTP and also HBP vol.1

      
      
   
   
   2. 5^th June, 2012: Release of Annual Supplement to FTP
      

      In consequence to position given in para 2 (i) above, several changes were carried out in Chapter 8 of FTP in this Annual Supplement. Para 8.2(g) of FTP (which was related to deemed export benefits for supply of goods to Power Projects and Refineries not covered in para 8.2(f) of FTP) was deleted. Non-Mega Power Project were covered under para 8.2.(g) of FTP as Non-Mega Power Projects were not entitled for zero duty import and accordingly, in view of Notification given in para 2(i) above, this para was deleted. Similarly, provisions relating to deemed export benefits for Non-Mega Power Projects were also deleted from para 8.4.4(iv) of FTP.

      
      
   
   
   
   


3. Redrafting of para 8.2(f) in the Annual Supplement
   

   In the Annual Supplement released on 05.06.2012, para 8.2(f) was redrafted. This para was split in two parts. First para, 8.2(f)(i), allows deemed export benefits to supply of goods to any project or purpose which are entitled to import goods at zero customs duties in terms of the Notification No.12/2012-customs dated 17.03.2012. Second paragraph, 8.2.(f)(ii), elaborates that deemed exports benefits on such supply shall be available only if the supply is made under procedure of ICB. However, in regards to mega power project, the procedure of ICB is not required if the project has been awarded through tariff based competitive bidding or requisite quantum of power has been tied up through tariff based competitive bidding

   
   


4. Clarifications
   

   In view of the position explained above, following clarifications are issued:

   
   
   
   
   1. Deemed export benefits are not available for supplies to Non-Mega Power Projects.
   
   
   2. Para 8.2(f)(i) and para 8.2(f)(ii) of FTP are in continuation and hence to be read in conjunction. Para 8.2(f) (ii) of FTP lays down conditions in respect of supplies covered under para 8.2(f) (i) of FTP.
   
   
   3. Benefits of deemed exports under para 8.2(f) are available only if supplies are under ICB, except for Mega Power Projects. For Mega Power projects it could be ICB or other than ICB, as given in para 3 above. Para 8.3(c)(i) and para 8.4 of FTP (table given in this para) clearly provide that if supplies are under ICB, then such supplies are exempted from payment of TED. If supplies are not under ICB, then such supplies are eligible for refund.
   
   
   
   

This has been issued with the approval of DG.

(Jay Karan Singh)

Joint Director of Foreign Trade

File No.01/92/180/168/AM05/PC-VI

ROC may ask for declaration from directors that they won’t accept deposit in contravention of law, M

CL : Section 12 of the Companies Act, 1956 - Memorandum of Association - Mode of Forming Incorporated Company - Power of ROCs to Obtain Declaration/Affidavits from Subscribers/First Directors at the Time of Incorporation

Cos manufacturing similar products can’t be comparable if their turnover are not matched

IT/ILT : Company manufacturing same product as that of assessee but in very small portion of its total turnover, cannot be taken as a comparable for computation of ALP

Master Circular prescribing guidelines for record keeping requirements for insurance cos is modified

INSURANCE : AML/CFT Guidelines

Penalty not leviable if ST is paid with interest prior to issue of show cause notice

ST : If short payment of tax is ascertained by assessee on his own or being pointed out by a central excise officer and he pays said amount before issuance of show-cause notice along with interest, no show-cause notice can be issued to assessee to levy any penalty

Brought forward unabsorbed depreciation can be set off against capital gains

IT : Brought forward unabsorbed depreciation can be set off against income from capital gain

Scrutiny notice not valid if it’s not issued as per CBDT’s instruction for selection of a case for a

IT : Scrutiny notice not valid if it's not issued as per CBDT's instruction for selection of a case for assessment

Europe Remains A Threat To World Economy: Oecd

In its half-yearly update, the Organisation for Economic Cooperation and Development said that protracted economic weakness in Europe "could evolve into stagnation with negative implications for the global economy".

The recession in Europe risks threatening the world’s economic recovery, a leading international body warned on Wednesday.

In its half-yearly update, the Organisation for Economic Cooperation and Development said that protracted economic weakness in Europe “could evolve into stagnation with negative implications for the global economy”.

The OECD again slashed its forecast for the 17 European Union countries that use the euro, saying it will shrink by 0.6 per cent this year, after 0.5 per cent drop in 2012. The OECD had predicted a 0.1 per cent decline for the eurozone in its report six months ago and this time last year, it forecast growth of nearly 1 per cent for 2013.

The U.S. economy will continue to outpace Europe, the OECD said, with growth of 1.9 per cent in 2013 and 2.8 per cent in 2014. For global gross domestic product, the OECD forecasts an increase of 3.1 per cent for this year and by 4 per cent for 2014.

Noting that eurozone policymakers have “often been behind the curve,” the OECD warned that Europe was still beset by “weakly capitalised banks, public debt financing requirements and exit risks”.

Meanwhile, the eurozone’s 12.1 per cent unemployment “is likely to continue to rise further ... stabilising at a very high level only in 2014,” the OECD said.

The OECD report predicts unemployment will reach 28 per cent in Spain next year and 28.4 per cent in Greece.

The eurozone economy shrank 0.2 per cent in the January-March period, the sixth consecutive quarterly decline, making it the eurozone’s longest ever recession.

Austerity measures have inflicted severe economic pain and sparked social unrest across the continent. Europe’s young people are especially suffering, with unemployment of around 50 per cent in some of the hardest-hit eurozone countries such as Spain and Greece.

But OECD Secretary-General Angel Gurria also noted that the tough reforms that those countries to loosen their labor markets and make their public administrations more efficient will soon bear fruit.

“In the periphery in particular, which was hardest hit by the crisis, that is where the reforms are taking place at the faster pace and where things eventually are, I believe, going to be looking better faster once we go through the acute stage of the crisis,” Mr. Gurria told reporters.

With a population of more than half a billion people, the E.U. is the world’s largest export market. If it remains stuck in reverse, companies in the U.S. and Asia will be hit.

Last month, U.S.-based Ford Motor lost $462 million in Europe and called the outlook there “uncertain.”

The OECD also urged the European Central Bank to take additional emergency steps to boost the economy. It said the eurozone’s central bank should take the unusual step of cutting the interest rate it pays banks for depositing money with it to below zero. This would push banks to lend money rather than hoard it as super-safe central bank deposits.

The OECD also said the ECB should issue clear guidance on how long its exceptional measures such as very low interest rates will remain in place along the same lines as the U.S. Federal Reserve. The ECB was even urged to consider buying assets such bonds a tool that can ease borrowing costs and increase the supply of money in the economy but one that the central bank has so far been reluctant to take.

Other major economies have faltered this year but none are in recession, like Europe. The U.S. economy grew 2.2 per cent last year and China, the world’s No. 2 economy, is growing around 8 per cent a year.

In the U.S., the organisation urged politicians to soften automatic across-the-board budget spending cuts to make them less harmful to growth, and said “a credible long-term fiscal plan needs to be put in place.”

Source:-http://www.thehindu.com

Wwf Official Opposes Punitive Import Tariffs On Chinese Solar Panels: Official

A senior official with the World Wide Fund for Nature (WWF) in Brussels said on Wednesday that the punitive tarrifs the European Union plans to impose on solar panels imported from China are "insensitive, counter-jobs and counter green energy".



"WWF is fundamentally opposed to these punitive import tariffs on Chinese solar panels," said Stephen Singer, global policy director at the WWF branch in Brussels and also a well-known expert on energy issues.



"The cure of the problem has much greater impact than the cause of the problem," Singer added.



"There are closely three hundred thousand jobs in the entire solar supply chain in Europe, those which are not in the manufacturing sector provide the majority of jobs in the supply chain," Singer told Xinhua.



"We have some SME (small and medium-sized enterprises) who produce basic structural components which are exported to China and put in solar panels during manufacturing and re-exported to Europe, which leads to high price hike. These jobs might be at stake by the (European) Commission's decision," he added.



He explained the aim of trade row was "to prevent job losses and prevent certain companies from getting unjustified advantages in the markets."



"I don't think that is the case with Chinese solar panels because we still have quite substantial value chains back in Europe," he added.



Singer believes the import tariff is a wrong way, as it sends a wrong message to customers who wants to buy solar panels, and policy-makers who want a clean energy economy.



As regards the "illegal subsidies" claimed by the EU trade group Prosun, Singer said that before talking about subsidies in China, "let's address subsidies on fossil fuels first," he said.



The Organisation for Economic Co-operation and Development (OECD) issued a report in February suggesting 550 examples of fossil fuel subsidies and government support measures in 34 member countries.



Singer claimed that subsidies on fossil fuels "basically dwarfs subsidies on solar".

Source:-http://www.globaltimes.cn

Rupee Gains In Early Trade

The rupee on Thursday strengthened by 10 paise against the US dollar to 56.07 in early trade at the Interbank Foreign Exchange market, on the back of euro gains against the American currency overseas.

The rupee on Thursday strengthened by 10 paise against the US dollar to 56.07 in early trade at the Interbank Foreign Exchange market, on the back of euro gains against the American currency overseas.

Dealers said selling of dollars by exporters and euro’s gains against the American currency mainly supported the rupee.

The rupee had on Wednesday sunk to 10-month lows before closing with 21-paise loss at 56.17, making imports costlier that is likely to worsen government’s Current Account Deficit (CAD) woes and hit the common man hard.

Source:-http://www.thehindu.com

Import Dip Mirrors Industry Slump

Calcutta, May 29: Imports through Calcutta airport shrank by 17.5 per cent in the last fiscal, suggesting a slump in industrial activity in Bengal despite Mamata Banerjee’s claim that the state’s growth rate is higher than the national average.

This is the deepest decline in a decade despite a rise in imports in the last quarter of 2012-13 thanks to a demand for set-top boxes ahead of a February deadline for digitisation of Calcutta’s television network.

Figures from the Airports Authority of India and the aviation industry show how the announcement and establishment of the Nano factory had led to a 41 per cent rise in imports in 2007-08. Its pullout was followed by dips of 9.5 and 8.2 per cent in consecutive years. (See chart)

A drop in import volume indicates a reduction in industrial activity in a less developed region like Bengal, whose import basket has traditionally had a sizeable component of equipment and machinery, an expert said.

While exports out of Calcutta airport have witnessed a growth of 2 per cent, the export basket — dominated by tea, leather goods, clothes, vegetables, flowers and fruits — hardly includes any industrial product.

“Industrial activity in a less developed region like Bengal will always require import of machinery and equipment, needed to set up plants,” said a city-based economist who did not wish to be named.

“Besides, high-end manufacturing industry too needs inputs sourced through imports. If the import volume is negative, it’s clear that the industrial sector is not growing.”

This interpretation of the import dip at the airport contrasts with what Mamata claimed while celebrating her government’s completion of two years.

According to the state government, the industrial sector in Bengal grew by 6.24 per cent in 2012-13 compared with the national average of 3.12 per cent. The government’s claim of success has apparently failed to arouse the interest of international airlines that deal in cargo.

Etihad, which stopped its freighter service to the city last August, and Emirates, which withdrew its weekly cargo service last year, have no immediate plans to resume their Calcutta operations, airport sources said.

Airport, airline and import agency sources told The Telegraph that Calcutta was sustaining its import volume on project-based equipment like telecom apparatus, citing the late spurt in 2012-13 thanks to a demand for set-top boxes.

“The rise in imports in 2010-11 too owed mainly to a demand for telecommunications equipment powered by a boom in direct-to-home satellite television connections in Calcutta,” said an official of a US-based import agency that handles cargo in the city.

“Once the demands of the DTH market slowed down, the imports dipped again,” he added.

The overall demand has fallen because there is no industry in Bengal capable of bringing in huge imports for production, said an official of an airline that handles cargo imports and exports between Calcutta and Europe as well as parts of Asia.

“Things would have been different had the Tata Motors plant in Singur not shut down,” he said.

Airlines sources said the increase in imports before the Nano pullout happened mainly because steel sheets and automobile spare parts were brought in for the Nano plant.

The official of the US-based import agency said a significant part of current imports of machinery and automobile components through Calcutta airport were not meant for industries in Bengal. “They are for various Tata companies in Jamshedpur,” he said.

Apart from equipment and machinery, Calcutta’s import basket is made up mainly by cellphones, computer accessories, chemicals and spare parts for heavy earth-moving equipment like tractors and cranes used in mining.

While volumes in Calcutta have shrunk, other metros present a different picture.

For instance, Finnish handset-maker Nokia set up a plant in Sriperumbudur near Chennai in 2006 and subsequently invested over Rs 1,800 crore, which changed the region’s business climate. Over 9,000 people got jobs with the company and trade activity through Chennai airport received a boost, generating positive spin-offs.

“Singapore Airlines and Emirates added extra cargo aircraft to their Chennai services to import spare parts from Hong Kong and China and to export the finished handsets to Europe and other parts of the world,” said an aviation industry source.

Airports Authority of India chairman V.P. Agrawal said: “We have a new cargo-handling facility in Calcutta but only 15 to 20 per cent of the capacity is now used.”

Agrawal added that airlines would be given “concessions on landing charges” in Calcutta to encourage cargo-handling. He did not explain how that would help if demand did not rise.

Source:-http://www.telegraphindia.com

Jn Port Scraps Decision To Split Planned Mega Container Terminal

Bangalore: The Union government-controlled Jawaharlal Nehru port on Wednesday scrapped a decision by its board late last year to split a planned Rs. 8,200-crore container terminal into two.

Critics said the latest decision was pushed through hurriedly by a board of trustees that had fewer members than usual and would lead to the badly needed expansion suffering further delays. Bids will now be sought for the much-delayed capacity expansion as a single project, a tender for which will be issued in the next few days, two people briefed on the matter said on condition of anonymity.

The decision to revert to the single-project format came after L. Radhakrishnan, former port chairman and the driving force behind the plan to split the project, left on 13 May to become the principal home secretary of Kerala.

A reduced-strength board of trustees cleared the latest single-format proposal on Wednesday, reversing the 22 November decision to split the project into two, a port official having direct knowledge of the board decision said. He spoke on condition of anonymity because he is not authorized to speak to the media.

A spokesman for the port confirmed the board decision but declined to elaborate.

The decision could potentially turn controversial as it was cleared by only seven members—all of them government nominees—out of a 16-member board.

The numbers are fewer because the government is yet to reconstitute the board of JN port after the term of the earlier board ended on 31 March. Seven trustees representing the trade and two representing labour interests are yet to be nominated on the board by the shipping ministry.

The Wednesday meeting was chaired by N.N. Kumar, the port’s deputy chairman and chairman in charge, and attended by a representative each of the shipping ministry, the Directorate General of Shipping, the customs department, the Indian Railways, the Coast Guard and the government of Maharashtra where the port is located.

“According to procedure, the board of trustees can take decisions with the participation of at least six members who will make up the quorum,” a second port official said, justifying the decision approved by the seven trustees. He too spoke on condition of anonymity.

The move to break up the mega terminal into two was an effort to revive the capacity expansion project that collapsed after the auction winner refused to sign an agreement to construct the facility.

Each terminal was to have a berth length of 1km with a capacity to load 2.4 million standard containers a year, according to the restructuring plan approved in November.

JN port had earlier tried to auction the terminal that was planned to load 4.8 million standard containers a year as a single project. That would have made it India’s biggest single container terminal by capacity and size.

On 16 October, the port withdrew the letter of award given to a consortium led by Singapore-based PSA International Pte Ltd, the world’s top container terminal operator, after it failed to sign an agreement a year after it was awarded the project on 26 September 2011 in a public auction. Former port chairman Radhakrishnan had said in January that developing the terminal through two competing partners by re-designing the project would reduce costs and halve the time for implementing it to four years from eight.

A shipping ministry official said splitting the project would pose implementation risks.

“For instance, who among the two terminal operators will build the common approach road to the terminal for bringing and evacuating containers and how will the cost be apportioned to the second partner?” he said, requesting anonymity.

A Mumbai-based port consultant backed Radhakrishnan’s plan, saying there was no market appetite for big port projects.

“Splitting the project into two would allow smaller firms to bid, help get funding comparatively easily, create competition and enable the port to build the entire capacity much faster,” he said, declining to be identified.

A single, large project will “reduce competition because the pre-qualification criteria will be too stiff, allowing only a few big firms to bid, potentially lowering the revenue share accruing to the government-owned port,” he said.

“India’s exporters and importers will suffer if the project is delayed when implemented as a single project,” a Mumbai-based shipping company official said. “Why should a board which barely meets the quorum devoid of any trade or labour representation be in a tearing hurry to reverse a much-deliberated and widely participated decision of the earlier board?” he said, asking not to be named.

JN port, which loads more than half of India’s container cargo passing through its ports, is looking to expand capacity to cater to a growth in volumes. In the year to March, the port loaded 4.26 million standard containers, operating at more than its designed capacity of 3.6 million standard containers a year.

Source:-http://www.livemint.com

CIT can’t ignore the directions given by ITAT while remanding the case

IT : Where Tribunal had given a clear finding that assessee was entitled to registration under section 12A and remanded matter to Commissioner for limited purpose, Commissioner was not right in relooking at activities of trust and thereafter declining to grant registration to assessee

Japan Eases Defence Export Ban On India

29-May-2013

Moving with the times, the Japanese government has decided to "loosen the ban" on export of defence goods, a senior official said here Wednesday.



The easing of the defence export ban could mean that Japan could sell its amphibious aircraft US-2 (ShinMaywa) to India, Tonohika Taniguchi, councillor and a member of the Japanese prime minister's strategic team, said here.



The ShinMaywa US-2, known as the flying boat, is an STOL (short takeoff and landing) large amphibious aircraft used for air-sea rescue missions.



Japan has not been selling defence goods and equipment to other countries owing to a ban on this.



"The Japan government itself imposed the ban on defence goods' exports. To catch up with the reality of the 21st century, the Japan government has decided to loosen the ban," Taniguchi said.



However, he added that the easing of the ban did not mean that all defence goods would be allowed export.



"We are not saying that we can freely export anything, anywhere. But we can cooperate with countries like India in this," Taniguchi said.

Source:-http://indiatoday.intoday.in

India To Import Around 350-400 Tonnes Of Gold In Q2; Asia Demand To Hit Record: Wgc

LONDON: Asian gold demand from this April to June will reach a quarterly record as bullion consumers in the region take possession of supply freed up by selling from exchange-traded funds (ETFs), the World Gold Council (WGC) said on Wednesday.



Gold prices fell to their lowest in more than two years at $1,321.35 an ounce in mid-April on signs of economic improvement in main markets and fears that central banks around the world could start to curtail their bullion-friendly policy measures.



The move scared investors in the West, triggering a sharp liquidation of speculative and ETF positions. But lower prices also prompted strong physical demand from price-sensitive countries such as India and China, which together account for more than 50 percent of consumer demand for bullion.



"Asian markets will see record quarterly totals of gold demand in the second quarter of 2013," WGC Managing Director Marcus Grubb said.



"Even if ETF outflows continue in the United States, it is quite likely that the gold previously held in ETFs will find a ready market among Indian, Chinese and Middle Eastern consumers who are taking a long-term view on the prospects for gold."



The council expects Indian gold imports to reach 350-400 tonnes in the second quarter, 200 percent higher than a year earlier and almost half of last year's total imports. This also compares to imports of 256 tonnes in the first quarter of 2013.



"We now definitely expect Indian demand to come in at the upper end of the 865 tonnes to 965 tonnes range that we had previously forecast for 2013 because of the effect of what happened in April," Grubb said.



Grubb said as net imports of gold into China reached around 160-170 tonnes in April alone and physical demand shows no sign of abating, total offtake this year could reach more than 880 tonnes. This compares to a previous forecast of 780-880 tonnes.



Chinese coin and bar demand hit a quarterly record of 109.5 tonnes in the first quarter, up 22 percent, and jewellery consumption rose to 185 tonnes. India's bar and coin investment rose 52 percent to 97 tonnes over the period, while jewellery demand reached 160 tonnes, the WGC said in a recent report.



The council will publish its second-quarter demand trends report in mid-August.



WESTERN INVESTMENT



Gold investment in the West, however, plunged this year as a brighter view of the U.S. economy prompted investors to favour other assets such as stocks over bullion.



As of the end of April, ETF holdings had fallen by 13 percent, or 350 tonnes, with half the outflows recorded over the past month.



Holdings in the world's largest gold-backed ETF, SPDR Gold Trust, have lost 74 tonnes since the start of April, compared with outflows of around 120 tonnes in the first quarter.



These investment vehicles, which issue securities backed by physical metal, had proved a popular way to gain exposure to the gold price since the start of the financial crisis.



"We don't expect to see anything like the same exit of gold from the ETFs that we've seen in the first four months of the year ... the pace of redemptions is flattening out now," Grubb said.

Source:-http://economictimes.indiatimes.com

Payment for satellite space hiring isn't FTS or royalty; matter remanded to check if it could be tax

IT/ILT : Where assessee had taken space on transponder through its non-resident subsidiary company 'E' and paid certain amount as transponder fee to 'E', lower authorities were wrong in disallowing transponder fee by applying provisions of section 40(a)(i) only on limited ground that nature of impugned fee was royalty as well as fees for technical services on which tax was required to be deducted

AO can’t tell assessee not to borrow when it has sufficient cash balance, which is an innate require

IT : Where a sum was introduced by one of partners in assessee-firm and he had owned said transaction, any addition as cash credit should not have been made in hands of firm

Reassessment beyond 4 years merely on basis of retrospective amendment to sec. 80-IA isn’t permissi

IT : Assessing Officer could not initiate reassessment proceedings after expiry of four years from end of relevant assessment year on basis of retrospective amendment of section 80-IA(4) which came into effect from 1-4-2000

In case of non-compliance with pre-deposit order, assessee’s appeal to be dismissed

ST : Where assessee had not complied with pre-deposit order of Tribunal, assessee's appeal was liable to be dismissed

Trade Notice No. 03 /2013 dated 28-05-2013

Government of India

Ministry of Commerce & Industry

Department of Commerce

Directorate General of Foreign Trade
Udyog Bhawan, New Delhi

Trade Notice No. 3/2013

Dated 28^th May, 2013

To

All RAs of DGFT

Members of Trade

Subject: Online application and issue of Registration Certificates for export of various commodities with effect from 1^st July, 2013.

DGFT is happy to announce migration of the process of obtaining Registration Certificate (for export purpose only) from the existing manual mode to digital mode. With effect from 1^st July, 2013 such registrations would be online and would be mandatory. This will be applicable for obtaining registration certificates (RCs) for commodities like cotton, cotton yarn, non-basmati rice, wheat and sugar; all of which needs RCs as per existing Foreign Trade Policy.

The procedure to obtain the RCs online would be available on our website: www.dgft.gov.in. The application has to be made online indicating all the details. Once the Message Exchange System (MES) with CBEC relating to this issue is introduced, the RCs would also be transmitted online. As of now only the process of submitting the applications is made online; grant of RCs would continue to be in hard form. However, electronic copy would be made available on request.

At the time of receiving the hard copy of RC, applicant has to bring a print out of the application submitted online along with copies of Letter of Credit [L/C] or Foreign Inward Remittance Certificate [FIRC], as applicable and Export Contract. [Subsequently when the MES is established, this requirement will not be there]

For the period up to mid-night of Sunday the 30^th June, 2013 applications for grant of RCs for export of various commodities may be submitted in either form that is in manual mode or in electronic mode, as has been described above. From Monday the 1^st July, 2013 it would be mandatory to submit applications only online.

(Daya Shankar)

Deputy Director General of Foreign Trade

Email: daya.shankar@nic.in

(Issued from File No. 01/91/180/1194/AM10/EC)

Insurance claim for loss of stock-in-trade is also eligible for sec. 80-IA deduction

IT : Insurance claim for loss of raw materials/final products would be eligible for deduction under section 80-IA

Concealment penalty couldn’t be imposed on failure to deposit TDS on time

IT : Penalty under section 271(1)(c) cannot be imposed for non-payment of TDS, being a technical default

Sec. 13 can’t be invoked to deny exemption if siphoning off of funds by a trustee couldn’t be proved

IT : In absence of material on record showing that difference in cost of construction of building disclosed by assessee-society and estimation made by DVO resulted in siphoning off money by managing trustee, Assessing Officer was not justified in denying exemption of income to assessee by invoking provisions of section 13(1)(c)

Activities of unlawful betting are deemed to be covered under negative list and not liable to ST

ST/ECJ : Betting or gambling is covered under negative list and is, therefore, not liable to service tax even if it is done unlawfully

TNMM comes to the fore if internal and external comparables not available to apply CUP method

IT/ILT : Where internal and external comparables are not available for applying Comparable Uncontrolled Price (CUP) method, Transactional Net Margin Method is appropriate for calculating arm's length price

Appeal to be dismissed if requirements of pre-deposits not complied with

ST : When assessee fails to comply with pre-deposit order, appeal filed him is liable to be dismissed

Issue of show cause notice and adherence to principle of natural justice are a must for rejecting re

ST : For rejecting refund claim, issue of show-cause notice and observance of principles of natural justice is necessary

Exp. on renovation of rented premises used by assessee for its business is a revenue exp.

IT : Expenditure for renovating existing rented building which was used by assessee for its business purposes were allowable as revenue expenditure

PF set to cover all pay, not just basic pay

NEW DELHI: You may end up saving more in the months ahead with the Employees Provident Fund Organization (EPFO) readying to re-notify a new definition of "compensation" that will include all your allowances, amid intense lobbying against the move by industry bodies.

Currently, employers get away by contributing only 12% of the basic salary and dearness allowance, which is not paid by most companies, towards their share of "matching" provident fund and the Employees Pension Scheme contribution. So, for several thousand employees, the basic salary remains constant, while increments are passed by way of enhanced or new allowances. In most cases, the tax liability for the employee goes up due to the salary hike — and companies earn tax credits on salary-related expenses — but the statutory provident fund contribution remains unchanged.

As a result, EPFO notified the changes last year but had to withdraw the circular in the wake of protests from employers and the perception that take-home salaries would come down. Even now, industry is resisting the move but EPFO is expected to go ahead with the plan as a panel set up by the labour ministry to vet the proposal has endorsed it.

The report is currently pending with the labour ministry but sources said the government will go ahead and notify the norms. To ensure that the proposal goes through without facing legal glitches, the EPFO board may also discuss and ratify it.

Industry chambers have, however, not given up the fight against the move. Confederation of India Industry (CII) has already dashed off a four-page letter to labour minister Mallikarjun Kharge arguing that the plan should be deferred, while other industry bodies are expected to step up lobbying against the move.

It has suggested that the matter is pending before the Supreme Court after a series of orders by high courts. When contacted, a CII executive said the move will reduce the investment options before an employee. "Someone may want to invest in a mutual fund scheme or buy shares. Besides, employees are happy getting allowances and if the move goes through, take-home salaries may come down," the executive said. Then, he argued for the corporate sector, saying some of the small and medium enterprises will face a higher financial burden.

The lobby group is, however, backing another proposal that seeks to restrict reopening of cases beyond seven years, as it is meant to reduce harassment.

Government officials, however, countered the industry argument on the new compensation definition, saying EPFO membership was mandatory only for employees earning Rs 6,500 a month. Anyone beyond that level could opt out. Although it may be difficult for several employers to give the opt-out option, reworking of the salary structure to ensure that the wage bill doesn't shoot up can be on the cards.

Segmental profits of comparables to be preferred over margins of entity taken as a whole

IT/ILT : Where Transfer Pricing Officer applied lower turnover filter of Rs. 1 crore, upper turnover filter of Rs. 200 crores, as per Dun and Broadstreet analysis, was also warranted

India Starts Issuing Wc For Export Of Apis To Eu Ahead Of Deadline

Well ahead of the deadline to implement the European Union (EU)’s 'Directive on Falsified Medicines', India has put the mechanism in effect by issuing the first written confirmation (WC) certificate in line with the requirements set by the EU.



Drugs Controller General of India (DCGI), who was made the competent authority by the Union health ministry to issue the WC, granted the certificate to global leader Teva API India, thus pitching India on the track well in time before the EU directive comes into effect from July 2, this year.



The certificate was issued to the API manufacturing plant of Teva Pharmaceuticals, based at Ghinrongi in Bhind district of Madhya Pradesh, for nine active ingredients for manufacturing and packing. Clopidogrel bisulphate USP, olmesartan medoxomil, clarithromycin Ph. EP, losartan potassium EP, atorvastatin calcium USP, Irbesartan EP, quetiapine fumarate, sitagliptin phosphate and sitagliptin malate are the products that will now have smooth landing in EU.



“The issuing regulatory authority hereby confirms that the standards of good manufacturing practice applicable to this manufacturing plant are at least equivalent to those laid down in the EU (GMP of WHO/ICH Q7). The manufacturing plant is subject to regular, strict and transparent controls and to the effective enforcement of good manufacturing practice, including repeated and unannounced inspections, so as to ensure protection of public health at least equivalent to that in the EU,” according to the Certificate which will be valid till May 2016.



As per the certificate, issued on May 15, inspection of the plant was carried out on 13 and 14 of June 2011. The letter to the company by the DCGI also made it clear that the WC will be withdrawn in the events of non-compliance of standards.



The certificate was made necessary for import of active substances into EU for medicinal products for human use in accordance with the Article 46(2)(b) of EU Directives No. 2001/83/EC, which is aimed to prevent falsified medicinal products from entering EU from other countries. Each API unit requires WC by the enforcement authorities of the exporting countries confirming compliance with GMP standards/ rules 'equivalent to the rules applied in the EU', such as WHO GMP, 'International Conference for Harmonization' Q7 (ICH Q7), etc. effective from July 2, 2013.



The DCGI had recently issued detailed guidelines for issuing WC. It had specified that the first WC would be issued based on valid Certificate of Pharmaceutical Product (CoPP) issued as per WHO guidelines or US FDA or EDQM/ TGA certificates (not more than 24 months old). If the company does not have any of these, then inspection will be conducted.



Earlier in November last year, the union health ministry had made the CDSCO (DCGI office) as the competent authority for issuing WC certificate for each of its consignments ensuring compliance of the product with the good manufacturing practices (GMP) requirements of EU.

Source:-www.pharmabiz.com

Foundry Units Face Rs 11K-Cr Export Loss

28-May-2013

Indian foundry units are facing a severe threat of losing Rs 11,000 crore of exports business to competing countries like China and Taiwan due to the recent levy of import duty on metal scrap - the only raw material for producing critical equipment for the heavy-engineering sector.



Effective May 8, the government levied 2.5 per cent of import duty on all types of scrap imports, including aluminium, stainless steel, iron and steel. Also, four per cent of special additional duty (SAD) was levied on brass scrap -used for manufacturing brass artifacts, popular in developed countries.



Since, India does not generate adequate metal scrap to meet the annual requirements to produce 10 tonnes of castings, it imports it from development countries.



"The import duty on scraps of iron and steel, stainless steel and aluminium in most other competing countries is also 'nil'. Hence, the levy by the Indian government will make the Indian Industry incompetitive. This will also lead to inverted duty structure, since metal produced from scrap by free trade agreement (FTA) countries is allowed duty-free, whereas imports of scrap by manufacturers are being subject to duty," said A K Anand, Foundry Informatics Centre (FIC), a premier body of 4,500 foundry units in India.



Foundry units manufacture critical cast equipment from both ferrous and non-ferrous metal for use in automobiles, railways, heavy machinery, textile, cement, agro, power, oil and natural gas. There is no substitute of the critical cast component manufactured in foundry.



The Indian foundry industry has been facing a severe demand slowdown due to the unfavourable economic situation in the West - the major destination for India's casting exports. On the domestic front also, demand from the consumer industry has been lower since the beginning of the last financial year. While the sentiment revived for a short period early this calendar year, demand of castings started gradually waning in the last couple of months.



Primary metal being costlier by $300-350 a tonne, metal alloys are produced through scrap to make the finished products cost-effective.



Interestingly, the findings of Jawaharlal Nehru Aluminium Research Development & Design Centre (JNARDDC) appointed by the Ministry of Mines also highlighted the fact there was no alternative to imports of aluminium scrap, since the availability of aluminium scrap in domestic market for producing auto components was almost negligible. The said report recommended the imports of aluminium waste and scrap at "nil" duty.



"India imported 45,405 tonnes of aluminium alloy in 2010-11 from Thailand. These countries enjoy the advantage of not only duty-free imports of aluminium scrap, but also the advantage of lower energy and finance cost than India. With the present levy of 2.5 per cent duty on the imports of metal scrap, coupled with duty-free imports of aluminium alloy and other components from Thailand and other Asean FTA countries, the foundry industry in India will be quickly driven out of business, which will adversely affect the employment of millions in this industry," said Anand.



Similarly scrap of stainless steel, iron and steel is used as key input by metallurgical industries such as foundries and other steel producers to produce components for use by the manufacturing industry. They will also be hit badly.



"The levy of import duty on scrap is a counter-productive step. It will not only dissuade the usage and trade of scrap but also add immensely to carbon emissions, scrap recycling being 40 per cent less energy-intensive," said Zain Nathani, Vice President of Metal Recycling Association of India (MRAI).



MRAI urged the government to abolish the import duty levy to protect the metal recycling industry from closure.



Meanwhile, the government's $60-61 billion engineering exports target would be difficult to achieve in 2013-14 through such counter-productive steps, an analyst said.



Engineering exports are estimated to be 56 billion in 2012-13.

Source:-www.business-standard.com

Indian Rupee Opens At 11-Month Low, Above 56/Usd

The Indian rupee opened weak at 56.16 per dollar versus 55.96 Tuesday. The rupee was trading at its lowest level since June 28, 2012 on strong buying in US dollar.



The dollar gained broadly in early Asian trade on Wednesday after robust economic data boosted Treasury yields and raised expectations that the Fed may make an early exit from its easing scheme, making the greenback more attractive, reported Reuters.



Brent crude gained more than 1 dollar on Tuesday as US consumer optimism and signs of easier monetary policy from central banks pushed stock markets higher, while increasing Middle East tension also supported oil.



Pramit Brahmbhatt, Alpari said, "The rupee is likely to be rangebound with a slight negative bias as positive US data strengthened the dollar. Also month-end dollar demand by oil importers along with likely slower growth, which may be seen in Friday's Q4 GDP report could add more pressure on the rupee. The range for the day is seen between 55.72-56.28/USD."



The euro is still trading below 1.29 to the dollar. The dollar index is strong above the 84 mark.

Source:-www.moneycontrol.com

Krishnapatnam Port To Be Part Of Industrial Zone

GUNTUR: In a boost to industrial development in the state, the Centre has agreed to include Krishnapatnam port in the international industrial zone planned along the Chennai-Bangalore railway corridor.



Stating that the inclusion of the port would attract more industries to the state, industries commissioner Rajath Kumar said the central government has also granted a third National Investment Manufacturing Zone ( Nimz), which would be located in Prakasam district.



Speaking at a meeting organised here on Tuesday by the Dalit Indian Chamber of Commerce and Industry (DICCI), Rajath Kumar said a major superspecialty hospital is being set up in Guntur under the aegis of the DICCI. The hospital would become a major asset to the region as it would support medical cluster for the benefit of Dalit entrepreneurs

He added that a syringe-making plant would be set up at Kollur.



Guntur district collector S Suresh Kumar, Karunya Foundation chief Manjula and senior officials were present at the meeting.

Source:-timesofindia.indiatimes.com

Leather Exports Jump 11.6% In April

28-May-2013

NEW DELHI: India's leather exports jump 11.6 per cent to USD 367 million in the first month of the current fiscal compared to the same period previous year, on account of rising demand from western markets like the US and EU.



In April, 2012, these exports stood at USD 328 million, according to the data provided by the Council for Leather Exports (CLE).



"In April, the exporters have got good number of orders owing to growing demand for leather items in the US market. Also, the European market is picking up now," a CLE official said.



"We expect leather exports to grow up to 20 per cent in the current fiscal," he added.



The major markets for leather and its products are the US, the UK, Germany, Italy, France and Spain.



Among the items which witnessed growth in April 2013, leather garments saw maximum jump of 23 per cent, followed by leather goods 21 per cent, saddlery and harness 17.4 per cent, leather footwear 13 per cent and footwear components 9.3 per cent.



Besides, the official said, there is a good demand for leather products in emerging markets like China, Japan, Africa and Latin America.



During 2012-13, leather exports grew over 4 per cent year-on-year to USD 5 billion in 2012-13.

Source:-economictimes.indiatimes.com

Foundry Units Face Rs 11K-Cr Export Loss

28-May-2013

Indian foundry units are facing a severe threat of losing Rs 11,000 crore of exports business to competing countries like China and Taiwan due to the recent levy of import duty on metal scrap - the only raw material for producing critical equipment for the heavy-engineering sector.



Effective May 8, the government levied 2.5 per cent of import duty on all types of scrap imports, including aluminium, stainless steel, iron and steel. Also, four per cent of special additional duty (SAD) was levied on brass scrap -used for manufacturing brass artifacts, popular in developed countries.



Since, India does not generate adequate metal scrap to meet the annual requirements to produce 10 tonnes of castings, it imports it from development countries.



"The import duty on scraps of iron and steel, stainless steel and aluminium in most other competing countries is also 'nil'. Hence, the levy by the Indian government will make the Indian Industry incompetitive. This will also lead to inverted duty structure, since metal produced from scrap by free trade agreement (FTA) countries is allowed duty-free, whereas imports of scrap by manufacturers are being subject to duty," said A K Anand, Foundry Informatics Centre (FIC), a premier body of 4,500 foundry units in India.



Foundry units manufacture critical cast equipment from both ferrous and non-ferrous metal for use in automobiles, railways, heavy machinery, textile, cement, agro, power, oil and natural gas. There is no substitute of the critical cast component manufactured in foundry.



The Indian foundry industry has been facing a severe demand slowdown due to the unfavourable economic situation in the West - the major destination for India's casting exports. On the domestic front also, demand from the consumer industry has been lower since the beginning of the last financial year. While the sentiment revived for a short period early this calendar year, demand of castings started gradually waning in the last couple of months.



Primary metal being costlier by $300-350 a tonne, metal alloys are produced through scrap to make the finished products cost-effective.



Interestingly, the findings of Jawaharlal Nehru Aluminium Research Development & Design Centre (JNARDDC) appointed by the Ministry of Mines also highlighted the fact there was no alternative to imports of aluminium scrap, since the availability of aluminium scrap in domestic market for producing auto components was almost negligible. The said report recommended the imports of aluminium waste and scrap at "nil" duty.



"India imported 45,405 tonnes of aluminium alloy in 2010-11 from Thailand. These countries enjoy the advantage of not only duty-free imports of aluminium scrap, but also the advantage of lower energy and finance cost than India. With the present levy of 2.5 per cent duty on the imports of metal scrap, coupled with duty-free imports of aluminium alloy and other components from Thailand and other Asean FTA countries, the foundry industry in India will be quickly driven out of business, which will adversely affect the employment of millions in this industry," said Anand.



Similarly scrap of stainless steel, iron and steel is used as key input by metallurgical industries such as foundries and other steel producers to produce components for use by the manufacturing industry. They will also be hit badly.



"The levy of import duty on scrap is a counter-productive step. It will not only dissuade the usage and trade of scrap but also add immensely to carbon emissions, scrap recycling being 40 per cent less energy-intensive," said Zain Nathani, Vice President of Metal Recycling Association of India (MRAI).



MRAI urged the government to abolish the import duty levy to protect the metal recycling industry from closure.



Meanwhile, the government's $60-61 billion engineering exports target would be difficult to achieve in 2013-14 through such counter-productive steps, an analyst said.



Engineering exports are estimated to be 56 billion in 2012-13.

Source:-www.business-standard.com

State Industries Dept Staff To Get Training From Apex Export Body

28-May-2013

The Federation of Indian Export Organisation (FIEO), the apex export promotion council of India, will train at least 15 officials from Gujarat's industries department and another 15 entrepreneurs in a two-day capacity-building programme starting on Friday.



This comes after the FIEO prepared an overall report called "Gujarat Export Competitiveness Vision 2020" in January. It had cited that Gujarat contributed 25 per cent to the country's total exports. This percentage is expected to see a five-fold rise in the next seven years.



"Gujarat should take the lead in exports, considering it has a buoyant manufacturing sector. It must focus on overseas markets with more finished goods. We will host a series of training programmes to sensitise and train state government officers from the industries department on export regulations and guidelines. These sessions will guide them on procedural and regulatory requirements for exports in different sectors. We will also discuss some of the focus areas that the state should tap into," said Ajay Sahai, FIEO's Director-General and CEO.



Along with undertaking sensitisation training programme on exports, the FIEO is also in talks with the state Industries Department to set up 9 export facilitation centres in Gujarat to promote and encourage exporters in the state with ready information available from one single source. Sahai added that the facilitation centres were most likely to come up around areas that were the manufacturing hubs in the state.



"The FIEO experts will train our officers in a bid to increase in-house capacity, sensitising them to the opportunities in the export sector. We are also in talks with them for trade facilitation centres," said K D Vyas, AGM at the Industrial Extension Bureau (iNDEXTb).



The report prepared by the FIEO for Gujarat cited that while exports from India were currently pegged at $300 billion (Rs 16.50 lakh crore), Gujarat contributed around $75 billion (Rs 4.15 lakh crore). The report had estimated that while India's exports were likely to grow by $1200 billion, exports from Gujarat will account for $ 400 billion of the total share.

Source:-www.indianexpress.com

Rbi Wants Stricter Norms For Gold Import Firms

The restriction on gold import by banks was likely to be extended to gold import houses, also known as premier trading houses, Reserve Bank of India (RBI) sources said. In the annual policy review, earlier this month, RBI had imposed restriction on import of the yellow metal by banks to rein in the country’s widening current account deficit (CAD). This move opened a huge revenue opportunity for import houses, which do not face any restriction. They are now charging hefty premium on gold sales to retailers.



“We are in talks with the commerce ministry to extend the restriction to gold import firms,” a top central bank official said, requesting anonymity. Bankers said the objective behind putting restriction on gold imports was not being met, as nominated agencies were kept out of the revised norms.



In recent weeks, the premium on gold, the difference between domestic and international gold prices, had shot up to as high as $40 an once from less than $2 an ounce due to supply disruptions in the market following the RBI directive. Banks have also alerted the central bank about this anomaly and requested it to address the issue.



Currently, banks are permitted to import gold on consignment basis, unfixed price basis and loan basis, but only for the purpose of export and not for domestic use.



Import of the yellow metal, which is resulting in widening the CAD, has been a huge concern for both the government and central bank. Current account deficit soared to a record high of 6.7 per cent of gross domestic product in the quarter ended December 2012.



However, Finance Minister P Chidambaram had said the CAD was likely to come down to “more tolerable and acceptable” levels in 2012-13 once the fourth quarter numbers were out. A current account deficit of 2.5 per cent is seen as a comfort level of RBI.

Source:-www.business-standard.com

Ficci opposes changes in basic wage structure for PF deduction

NEW DELHI: Business chamber Ficci has opposed the proposed changes to the definition of 'basic wages' under the Employees Provident Fund & Miscellaneous Provisions Act (EPF and MP Act) 1952.

The government had introduction a triple test - 'Ordinarily, Necessarily and Uniformly' - to define basic wages for provident fund deduction through a circular issued in November last year, but had later stayed its implementation.

Ficci warned that the proposal will have 'huge financial implications both for industry and government and may even be counterproductive to the EPFO, as organisations who are extending coverage to employees receiving salaries above 6,500 may choose to opt out, depriving the employees coverage under a globally renowned social security scheme'.

Under the current rules, an organised sector worker is not required to mandatorily join the provident fund scheme of the EPFO if his basic salary exceeds 6,500 a month.

"Most of the employees today join an organisation above this statutory limit and they are voluntarily covered by the industry," the industry chamber said in a statement. It has argued that PF deduction should be on the full amount of 'minimum wages' where such wages are being paid under the Minimum Wages Act, 1948. "For employees who are on a higher salary bracket and receiving allowances as incentives to promote business, the PF contribution should be restricted to basic salary," it said.

Take a longer view on Inflation-indexed bonds

Prasanna A

The Government of India has decided to issue inflation-indexed bonds (IIB), starting from June, in an effort to broaden the menu of investment choices available for investors.

Although the bonds will be issued primarily for institutional investors, the government is making efforts to woo small investors by allocating a higher portion for non-competitive bidders. Further, the success of this bond and the pricing would have a bearing on a separate series of inflation-linked bonds that may be issued to retail investors, sometime later this year.

A lot of views have been aired about the potential success of IIBs and their likely pricing. In the context of declining WPI inflation, there seems to be an apprehension that IIBs may not receive an enthusiastic response. While it is difficult to hazard a guess before the first auction, participants should take a longer view on IIBs. A cursory glance at the benefits of IIBs for various stakeholders tells us that this instrument will be a net positive for the financial system.

For investors, IIBs represent the truest inflation hedge possible. Years of false marketing may have convinced some investors of the superiority of equity returns but neither equities nor physical assets can offer an effective and stable hedge against inflation. By their very design, IIBs are geared to provide such a hedge. IIBs have also known to provide diversification benefits and thus have emerged as a separate asset class, distinct from nominal bonds in many countries.

In advanced countries, IIBs have helped lower the cost of borrowing for the government, as nominal bonds contain an inflation risk premium; further, in periods when investors over-estimate inflation, IIBs could result in cost savings compared to nominal bonds. In some emerging economies, governments have been forced to issue IIBs as there were few takers for nominal bonds during periods of high inflation. None of these constraints hold in India.

Thanks to captive buying from banks and insurance firms and regular intervention by the RBI, the government is able to borrow as much as it pleases through nominal bonds. Further, the yields on nominal bonds continue to be extremely favourable to the government considering India's potential growth, inflation behaviour and chronic fiscal deficits. Thus, there is little conventional incentive for the government to issue IIBs.

Rather, the government's thinking seems to be to improve the choices available to investors and to wean away households from the gold obsession. One of the criticisms against IIBs in other countries is that such bonds lead to the spread of indexation i.e. the linking of wages and other prices in the economy to inflation. Studies have shown that such concerns are overblown. In India, indexation is already excessive. Public sector wages are linked to inflation and, more damagingly, the wages paid out in the rural job schemes are also linked to inflation.

What about the use of WPI instead of CPI for IIBs? It is a dampener when it comes to marketing the instrument to households; however, since the RBI has been basing its policy on WPI, the decision seems logical. Once India works out how to construct a representative and robust consumer price basket, then bonds linked to CPI can be issued.

Restrict EPF contribution to basic salary, says FICCI President

By Amit Shanbaug, ET Bureau | 28 May, 2013, 04.19PM IST

The reported proposal to re-notify the definition of 'basic wages' under the Employees Provident Fund & Miscellaneous Provisions Act (EPF and MP Act) 1952, is fraught with huge financial implications both for industry and government and may even be counterproductive to the EPFO, as organizations who are extending coverage to employees receiving salaries above Rs 6500 may choose to opt out, depriving the employees coverage under a globally renowned social security scheme. Most of the employees today join an organization above this statutory limit and they are voluntarily covered by the industry.

Currently, there are more than 50 million EPF subscribers from both organized and unorganized sectors and assets worth Rs 5 lakh crores with the EPFO are available for investment. Almost, 40 per cent of these assets go to the Central and State Government securities, said Ms. Naina Lal Kidwai, President, FICCI.

The introduction of a triple test- 'Ordinarily, Necessarily and Uniformly'- for the purposes of defining basic wages by notification no. 7 (1)2012/RCs Review Meeting/345 dated 30th November, 2012 will arm the field staff of the EPFO with full powers to brand any component of salary, other than those exempted, as part of the wages for deducting EPF contribution, imposing thereby a huge financial liability on the establishments. The move is ill conceived and if brought into force will dampen business and investment sentiments which are already at a low ebb.

However, FICCI strongly supports PF deduction on full amount of 'minimum wages' where such wages are being paid under the Minimum Wages Act, 1948. For employees who are on a higher salary bracket and receiving allowances as incentives or performance based rewards to promote business, the PF contribution should be restricted to basic salary.

Interest free advances to AEs can be compared with interest on risk free deposits made with banks

IT/ILT : Interest free loan to AE is comparable with risk free deposits made by individuals with banks

An NBFC can’t grant advances for purchase of gold in any form including units of Gold Mutual Funds

NBFC : NBFCs Finance for Purchase of Gold

IRDA makes Regulations on ‘Scheme of Amalgamation and Transfer of Life Insurance Business’

INSURANCE : IRDA (Scheme of Amalgamation and Transfer of Life Insurance Business) Regulations, 2013

Conversion from domestic tariff area to STP unit isn’t splitting up or reconstruction for sec. 10A b

IT : Conversion from domestic tariff area to STP unit cannot be termed as splitting up or reconstruction of business already in existence for purpose of section 10A exemption

While lending against gold, banks to consider the ceiling on weight of gold coins a customer can pos

BANKING : Lending Against Gold

No appeal to HC if amount involved is less than monetary limit fixed for filing revenue appeal

ST : No appeal less to High Court if amount involved (refund of Cenvat credit) is less than Rs. 10 lakh

No sec. 68 addition for share application money if a large number of applicants confirm said transac

IT : Where in respect of share application money received by assessee, it was apparent from records that large number of subscribers had responded to letters issued by Assessing Officer and submitted their affidavits, Tribunal was justified in deleting impugned addition made in respect of said amount

ORDER dated 23-05-2013

Indian Customs : Appointment of Common Adjudicating Authority



Click Here:http://www.eximguru.com/Notifications/appointment-of-common-adjudicating-authority-30813.aspx

ORDER dated 23-05-2013

Indian Customs : Appointment of Common Adjudicating Authority



Click Here:http://www.eximguru.com/Notifications/appointment-of-common-adjudicating-authority-30814.aspx

ORDER dated 23-05-2013

Indian Customs : Appointment of Common Adjudicating Authority



Click Here:http://www.eximguru.com/Notifications/appointment-of-common-adjudicating-authority-30815.aspx

Expenditure disallowed for default in tax withholding would also qualify for sec. 80-IB deductions

IT : Disallowance for non-deduction of TDS liability would increase profit of assessee from business of developing housing projects and ultimate profit would qualify for deduction under section 80-IB

Group Medical Insurance services are eligible for input service credit

ST : Service Tax paid on services rendered by insurance company on group insurance taken by him for employees, is eligible for input service credit

Case remanded as objections of assessee regarding selection of comparables were not entertained by T

IT/ILT : Where objections raised by assessee regarding selection of comparables were not considered, matter was to be remitted back for reconsideration

Services provided by Trustees and Asset Management Co. of Mutual Funds are liable to ST

ST/ECJ : Services provided by trustees of unit trust and by asset management company of a mutual fund are liable to service tax

Customs Circular No 22/2013 dated 24-05-2013

Indian Customs : Regarding Customs permission for transhipment of goods/containers from a Gateway Port to a Container Freight Station (CFS) of another Customs Station



Click Here:http://www.eximguru.com/Notifications/regarding-customs-permission-for-transhipment-30810.aspx

ORDER dated 23-05-2013

Indian Customs : Appointment of Common Adjudicating Authority



Click Here:http://www.eximguru.com/Notifications/appointment-of-common-adjudicating-authority-30811.aspx

ORDER dated 23-05-2013

Indian Customs : Appointment of Common Adjudicating Authority



Click Here:http://www.eximguru.com/Notifications/appointment-of-common-adjudicating-authority-30812.aspx

Customs Notification No.30/ 2013 dated 21-05-2013

Indian Customs : Amends Notification No. 12/2012-Customs, dated the 17th March, 2012



Click Here:http://www.eximguru.com/Notifications/amends-notification-no-12-2012-customs-30809.aspx

Constructions of Government or school buildings and dams aren’t commercial or industrial constructio

ST : Construction services by way of widening of roads, construction of Government building, school building, dams canals, etc. are not within purview of commercial or industrial construction services

Share trading by an entity for itself is speculative in native if it's business is to trade on behal

IT : Where company's engaged in business of share brokerage and share trading, income of an assessee on account of trading of shares for itself is speculation income

Companies claiming sec. 80-IA deduction for developing infrafacilities need not own such facilities

IT : For purpose of section 80-IA(4) enterprises carrying on development of infrastructure development should be owned by company and not that infrastructure facility should be owned by a company

Leasing services received from abroad are liable to ST even if the leased aircrafts are delivered ab

ST : Even if leased aircrafts were delivered abroad, leasing services received from abroad are liable to service tax as assessee had used it in travel business for flying from Indian destinations to foreign destinations and vice versa

Interest on borrowed capital to be dealt with sec. 36(1)(iii) and not by sec. 37(1)

IT : Interest on capital borrowed for purpose of business would be guided by provisions of section 36(1)(iii) and not by section 37(1)