Non-maintenance of accounts by a trust can't be cause for denial of its registration, rules HC

IT : Non-maintenance of accounts properly cannot be reason to deny registration under section 12A

Waiver of penalty by adjudicating authority deemed as reference to sec. 80, even though provision wa

ST: Where adjudication order holds that assessee had voluntarily paid service and on its own approached department to rectify lapses and, hence, assessee was eligible for waiver of penalty, such order invokes provisions of section 80 even though section 80 is not specifically referred to in such order

No Rule 8D disallowance for sum parked in short-term investments which didn't generate exempt income

IT/ILT : Royalty did not include any information provided in course of advisory services

Service-tax charged on professional receipts but remitted separately would not be subject to sec. 19

IT: Where as per agreement, amount of service tax was to be paid separately from professional/technical charges, same would not be subjected to TDS

Coal Stocks At Indian Ports Rise 2% On Week To 10.2 Mil Mt: Interocean

30-Sep-2013

Imported coal stocks at 16 major ports in India stood at 10.2 million mt Saturday, up 2% from a week earlier, according to data released Saturday by New Delhi-based shipbroker Interocean Group.



Thermal/steam coal stocks stood at 8.2 million mt, up from 7.96 million mt the previous week, the data showed. Coking coal comprised 2 million mt, down from 2.1 million mt a week earlier.



The 16 ports surveyed Saturday were Mangalore, Tuticorin, Kakinada, Paradip, Kandla, Gangavaram, Vizag, Krishnapatnam, Muldwarka, Bhavnagar, Pipavav, Goa, Haldia, Magdalla, Hazira and Dahej.

Source:- platts.com

Debate On Rice: Make Informed Nutritional Choices To Gain Maximum Benefit From The Food Grain

30-Sep-2013

It's hard to think of a cereal that is more intrinsic to Indian culture than rice. It journeys with us for a whole lifetime — with the first solid food a baby is traditionally fed during the annaprashan ceremony to sprinkling it over a deceased person's mouth during the last rites. A vast majority of the Indian population eats rice as its staple grain, similar to Asian countries such as China and Japan, where it is almost always the main part of a meal.



However, opinions about the grain are sharply polarised — while some nutritionists advocate it over wheat because it is gluten free, a far larger number recommend avoiding it altogether because it is considered to be full of empty calories that fuel obesity and increase the risk of type-2 diabetes. So what is the truth about rice?



Are some varieties better than others? To get to the bottom of the debate on the nutritive properties of rice, it's important to start with a single grain. The outermost layer of the rice grain is known as the husk and removed during milling. The second layer called bran is highly nutritious and contains fibre, proteins and minerals. It can be light brown, black or red in colour, which gives the unpolished grain its characteristic colour.



This kind of rice is considered nutritionally superior to polished white rice. Milling the grain further removes the bran layer to reveal the endosperm, which contains carbohydrates, proteins and amino acids. A rice grain stripped down to its endosperm is what we know as white rice. The degree of processing determines the colour of the grain.



Colour Concerns



The process that converts brown rice into white rice destroys 67% of the vitamin BC content, 80% of vitamin B3 content, 80% of vitamin B6, 50% of the manganese and phosphorus content and 60% of iron, along with dietary fibre and essential fatty acids. So it is no surprise that brown rice is much more nutritious. However, the bran contains essential oils, which makes it more prone to spoilage than white rice, which has had the bran removed. Also, the antioxidant compounds called phytates present in the bran can hinder the absorption of important nutrients such as iron. This is a minor drawback of brown rice, but not significant enough to take away from its other benefits.



"Cooking reduces the phytate content of brown rice to some extent," says Sheela Krishnaswamy, a Bengaluru based nutrition and wellness consultant. "If brown rice was really problematic for health, it would not have been widely used many decades ago. Also, since brown rice has more nutrition than white rice, some kind of a balance is struck." Where does that leave white rice? In its defence, it is not completely devoid of nutrients. It is an important source of carbohydrates (amounting to 77.5%) and high quality protein (about 4 gm per cup).



However, protein from white rice is incomplete because it does not contain adequate quantities of an essential amino acid called lysine. Eating foods rich in lysine helps the body procure this missing essential amino acid. Some of these foods are beans lentils, soya products, nuts and dairy products. This also explains why combinations like dal and rice or yoghurt and rice are nutritionally complete. There is another variety of rice — parboiled rice.



Here, rice that is still in the husk is partially boiled and dried. Nutrients from the husk and bran are allowed to seep into the endosperm. Parboiled rice is used almost daily in south India and also for making the batter for idlis or dosas. The American Diabetes Association lists it as a low glycaemic index food, or one that takes longer to digest, thereby preventing a sudden spike in blood sugar levels.



Weighty Matters



One of the most debated aspects of rice is its association with weight gain. "A lot of weight loss clinics and self-styled experts do not permit the consumption of rice because they believe it's difficult to quantify rice intake, often leading to excess intake," says Krishnaswamy. The truth is that it is often tougher to practise portion control with rice. In rice eating communities, three or four dishes are typically paired with the grain, making it difficult to keep track of the quantity being consumed. However, Krishnaswamy says it is not true that rice has higher calorie burden than other grains.



According to an article published in the Journal of the American Dietetic Association in October 2009, "Americans who eat rice obtain a smaller portion of their daily calories from fat and have a lower rate of saturated fat consumption than those who do not eat rice." The study also found that people who eat rice consume more fibre, vegetables, iron and potassium than their counterparts who shun it. In counties such as Japan and south Korea, rice is typically paired with protein rich foods such as fish and meat, which is why obesity rates in these predominantly rice eating societies are very low.



Fight Against Wheat



In a world where gluten intolerance is on the rise, rice seems like the logical alternative to wheat. Since rice is naturally gluten free, it can be a primary source of carbohydrates. It is also usually free of any stomach irritants or allergens, which is why it is the safest weaning food for babies. However, unpolished rice is a more nutritionally complete alternative to wheat than white rice is. Also, since the protein content of rice is less than that of wheat, it's wise to combine the grain with other protein rich foods. The supremacy of rice as one of the country's staple foods is unlikely to be challenged. However, eat it mindfully and make informed nutritional choices to gain the maximum benefit from this versatile grain.

Source:- articles.economictimes.indiatimes.com

Promising Outlook For Plastics Processing Industry In Indian Subcontinent

30-Sep-2013

With a population greater than China but polymer demand only one-fifth the size, the Indian subcontinent region's plastics industry has enormous potential for growth. Thermoplastic consumption has grown by 10% pa since 2007 and is expected to continue on a similar positive trajectory over the next five years, despite the recent slowdown in economic growth. According to Applied Market Information the total demand for thermoplastic resins in the Indian subcontinent will top 12.5 mln tons in 2013. Historically the region has been fraught with policy restrictions on foreign investment in certain industries, high tariff barriers and protectionist government policies but a process of deregulation and the removal of quotas and production licences has facilitated greater investment in both petrochemical and plastics processing activities. Strong economic growth is raising living standards and increasing consumption of a wide range of consumer goods from packaged foods to automobiles. Investment in infrastructure and agriculture is also important in driving the plastics industry in the region.



Whilst the outlook for plastics processing in the Indian subcontinent is undoubtedly positive, the industry still faces many challenges in terms of its infrastructure and the fragmented nature of its plastics processing industry. Infrastructure limitations relate not just to transport links but to a whole range issues from energy to the banking system, the limitations of which all serve to hold back business. Whilst these countries tend to have a strong entrepreneurial ethic this has led to a proliferation of small processing companies, running old and inefficient equipment, which lack the access to capital to invest and really develop an internationally competitive, modern manufacturing industry. For the Indian subcontinent to reach its full potential the plastics processing industry will need to rationalise, consolidate and invest in modern equipment to reduce costs and improve performance. The scale of the potential for the region is illustrated by its per capita demand which for 2013 will still be less than 8kg/head, although this compares to 5kg/head in 2008.



By contrast, per-capita consumption of polymer stands at 24kg in China and 75kg in Europe, with the world average 28kg. Unsurprisingly India has led the growth as it accounts for 87% of the subcontinent’s consumption of polymer. Growth has been driven through a number of different end use industries such as building and construction, packaging, automotive and agriculture. Sri Lanka now has the second highest level of per capita demand for thermoplastics, highlighting the recovery in manufacturing following the ending of its long civil war with the Tamil Tigers in 2009.



Pakistan has experienced the slowest growth in the subcontinent over the past five years where the economy was more impacted by the effects of global recession reducing its exports and the on-going security situation. Bangladesh has a population that is only 15% smaller than Pakistan’s but a polymer consumption which is roughly a quarter of Pakistan’s. The market has been constrained by lack of infrastructure, its tendency to flood during the monsoon and a lack of local polymer production, but the availability of cheap labour gives it the potential to develop as a low cost manufacturing base for exported plastic products. Nepal is the smallest subcontinent consumer of polymer and although demand has been growing ahead of GDP, it is developing from a very small and unsophisticated base. The country is unlikely to be able to develop a significant plastics processing industry because of its geography, both in terms of its landlocked mountainous terrain and its proximity to two manufacturing giants in China and India.

Source:- plastemart.com

Cotton Prices Firm On Active Demand

Prices almost firm on the cotton market on Monday in the process of selective buying from millers and spinners, dealers said. The official spot rate was unchanged at Rs 7250, they said. Prices of seed cotton in Sindh per 40 kg were modestly inert at Rs 3250-3400, while in Punjab prices were at Rs 3200-3350, dealers said. In the ready session, over 15,000 bales of cotton changed hands between Rs 7000-7400, they said.



Some dealers said ginners showed no interest in selling at the lower rates. Cotton analyst, Naseem Usman said China was going to impose import duty on cotton, which may not bring discourage local cotton exports and at least prices are likely to move in a narrow band in the near future. Additionally, it is expected that heavy rains in India may stabilise rates on the local market due to demand from Indian exporters, other brokers said.



The following deals were reported as 1,000 bales of cotton from Shahdad Pur at Rs 7100/7200, 800 bales from Tando Adam at Rs 7100-7200, 1,000 bales from Sanghar at Rs 7000-7100, 1,000 bales from Mirpurkhas at Rs 7000-7100, 1,400 bales from Nawab Shah at Rs 7300, 2,000 bales from Khair Pur at Rs 7350-7400, 1,000 bales from Upper Sindh at Rs 7350-7400, 200 bales from Mamo Kanjan at Rs 7275, 400 bales from Burewala at Rs 7300, 200 bales from Hasil Pur at Rs 7300, 600 bales from Bahawal Nagar at Rs 7300/7350, 200 bales from Dera Ghazi Khan at Rs 7350, 200 bales from Adda Flor at Rs 7350, 600 bales from Chichawatni at Rs 7350-7400, 200 bales from Bakhar at Rs 7350, 400 Jhang at Rs 7350-7400, 400 bales from Jahainan at Rs 7350-7400, 600 bales from Lodhran at Rs 7350-7400, 400 bales from Vehari at Rs 7350-7400, 600 bales from Chistian at Rs 7350-7400, 400 bales from Haroonabad at Rs 7350-7400, 400 bales from Mian wali at Rs 7350-7400, 400 bales from Khanewal at Rs 7350-7400, they added.

Source:- brecorder.com

Iron Ore Exports From India Seen Plunging On Taxes, Mining Ban

30-Oct-2013

Iron ore shipments from India are poised to tumble for a fourth year as government curbs on mining reduce supplies and higher export taxes prompt buyers to secure the steelmaking raw material from other producers.



Exports will probably fall by about 50 percent in the 12 months through March from 18 million metric tons a year earlier, said Hukam Chand Daga, president of the Federation of Indian Mineral Industries. A tax of 30 percent and waning availability have made exports almost unprofitable, he said.



Shipments to countries, including China, India’s biggest buyer, plunged after mining and transport in the western state of Goa, the top producer, was stalled by the nation’s Supreme Court in October last year pending probe into violations of norms. There was no case to lower taxes on exports, Finance Minister Palaniappan Chidambaram said on Sept. 27, two months after Prime Minister Manmohan Singh said the government was trying to remove constraints in shipments.



“High taxes and railway freight coupled with court-ordered bans on mining have cut output and made us unviable in the international market,” said Daga, who is also an adviser to Essel Mining & Industries Ltd., an ore producer owned billionaire Kumar Mangalam Birla. “With tax cuts, the shipments could have crossed last year’s figure.”



India is considering reducing taxes on some exports to boost shipments and help reverse a decline in the local currency, two government officials with direct knowledge of the matter said last month. Taxes on exports of low-grade fines may be cut to 20 percent from 30 percent, they said.



The rupee has rebounded 9.8 percent from a record low of 68.845 per dollar touched Aug. 28 after the U.S. Federal Reserve said Sept. 18 it will continue $85 billion a month of bond purchases.

Source:- bloomberg.com

Coffee Exports Fall 5.3% On Low Demand From Us, Eu

30-Sep-2013

India's coffee exports fell 5.34 per cent to 2,99,266 tonnes in the year ended September 30, as demand from the US and the European Union (EU) remained subdued. In the previous coffee year (October 2011 to September 2012), India had exported 3,16,164 tonnes.



“The decline in exports was mainly due to weak demand from European nations such as Italy, Spain, Greece and Portugal, as buyers were looking for cheaper coffees,” exporters said. Realisation from exports declined 1.3 per cent to Rs 1,51,379 a tonne between October 2012 and September 26, 2013, against Rs 1,49,459 a tonne in the previous coffee year. In value terms, total coffee exports fell 4.1 per cent to Rs 3,530 crore, against Rs 4,725 crore in the previous year, according to the Coffee Board.



A sharp drop in the prices of the arabica variety last financial year contributed to the decline in exports, as a large number of farmers withdrew sales, exporters said. Arabica prices declined 20-25 per cent.



“Arabica coffee prices ended within a cent of a more than a four-year low on Thursday, as big supplies of the beans and tepid demand encouraged selling. Prices were down about 20 per cent for the year; roasters appear to be waiting for even lower prices due to large supplies, particularly from Brazil. LIFFE robusta coffee futures hit an almost three-year low last Thursday, as expectations of a large crop from top grower Vietnam weigh on prices. LIFFE robusta coffee futures for November delivery settled $43 lower at $1,663 a tonne,” the Coffee Board said. India primarily exports coffee to Italy, Germany, Russia, Belgium and Spain.



The outlook for exports in 2013-14 isn't very promising. The Coffee Board has said in 2013-14, production would be at least 10 per cent lower than post-blossom estimates. In its post-blossom estimates earlier this year, it said production would stand at 3,47,000 tonnes. In 2012-13, production stood at 3,18,200 tonnes.



“Based on the conditions in February and March, when the growing regions received good blossom showers, we had estimated we would record 3,47,000 tonnes. However, due to a drought in the two subsequent months and the heavy rains in June, July and August, we anticipate a drop of about 10 per cent against the post-blossom estimates,” Coffee Board Chairman Jawaid Akhtar had told Business Standard earlier this month.



This means for 2013-14, India's bean production could be about 3,12,000 tonnes. However, growers estimate it at 70,000-2,90,000 tonnes. Exporters said low production would hit exports in the next crop year, too.

Source:- business-standard.com

India Pushing Iran To Accept Rupee For Oil Imports

India is making a last-ditch effort to get Iran to accept rupee payments for oil but has kept the option open to pay the West Asian exporter in Japanese yens or Chinese yuans as a more viable alternative to the US dollar. The department of economic affairs (DEA) is lobbying with Iran for a memorandum of understanding on rupee payments.



The ministry of petroleum is keen to prune the oil import bill by about $8.47 billion through 100 per cent rupee payment to Iran set off against Indian exports to that country.



In July, Iran had agreed in principle to full payment in rupee terms. But after India's announcement of the plan to save its forex outgo, the Islamic republic hardened its stand.



"Iran has stopped issuing invoices in rupees. It wants it in some other currency. The DEA is trying to convince them to sign a memorandum of understanding for 100 per cent rupee payment," said a senior official close to the development.



"Since Iran is facing sanctions that restrict its transactions in dollars or euros, our options are open to pay in yens or yuans in a 55:45 ratio with rupees. If none of these payment plans works out, we'll have to look at other destinations like Iraq or Saudi Arabia," said the official.



Last year, under the pressure of sanctions imposed by the US and the EU,



India had to resort to 55 per cent payments through the Turkish Halk Bank and the remaining through UCO Bank, as EU banks were not permitted to process dollar purchases.



After the Turkish bank refused to transact payments late last financial year, 100 per cent rupee payments began happening through UCO Bank.



At present, more than $5 billion of Iranian money is parked in UCO Bank while Indian exports to Iran were worth $3.4 billion last year.



"Payments of over Rs 2,000 crore are due to Iran from Indian companies for last year's invoices. But Iran is taking a hard stand now, refusing even to take forward the production-sharing contract for the Farsi block," said an official from a state-run company. The new Iranian regime under Hassan Rouhani has reportedly refused India's offer to sign a production-sharing contract for the block.



ONGC Videsh (OVL), Indian Oil Corporation (IOC) and Oil India (OIL) had won the block in 2002 from National Iranian Oil Company. While OVL and IOC have 40 per cent each, OIL holds 20 per cent stake in the block with proven reserves of at least 12.5 trillion cubic feet of gas.



Raising hopes of removal on the US sanctions, president Barack Obama had spoken to Rouhani last week, the first presidential discussions between the two nations since 1979.



India had cut its oil imports from Iran to 13.3 million tonnes in 2012-13 from 17.4 million tonnes in 2011-12 in the wake of the US sanctions. According to minister M Veerappa Moily, India plans to reduce that to 11 million tonnes this financial year.

Source:- business-standard.com

India Current-Account Gap Below Estimates As Gold Imports Curbed

30-Sep-2013

India’s current-account deficit widened less than economists estimated in the second quarter after the government tightened curbs on gold imports to tackle a shortfall that’s weighed on the rupee.



The deficit was $21.8 billion in April through June, compared with $18.1 billion in the previous quarter, the Reserve Bank of India said in a statement in Mumbai yesterday. The median of 26 estimates in a Bloomberg News survey was for a $23 billion gap. The current account is the broadest measure of trade, tracking goods, services and investment income.



The monthly trade deficit has almost halved since May as higher gold-import taxes deter inward shipments of a metal used in India for everything from wedding jewelry to hedging against inflation. The government aims to pare the current-account imbalance from a record $87.8 billion in the fiscal year ended March, part of efforts to support a currency that’s weakened 12 percent versus the dollar in 2013.



“Concerns over deficit financing are alleviating due to improvement in the trade deficit in recent months and steps by the central bank to boost dollar inflows,” said Tirthankar Patnaik, a strategist at Religare Capital Markets Ltd. in Mumbai. The current-account gap will narrow to $55 billion this financial year, easing pressure on the rupee, he said.



The rupee weakened 0.2 percent to 62.6175 per dollar at the close in Mumbai yesterday. The S&P BSE Sensex index of stocks fell 1.8 percent. The yield on the 10-year note due May 2023 rose to 8.77 percent from 8.71 percent on Sept. 27. The currency appreciated about 4.9 percent last month, helped by RBI Governor Raghuram Rajan’s efforts to attract dollars.



The government has boosted levies on gold bullion bought from abroad thrice in 2013 to 10 percent, most recently in August. Finance Minister Palaniappan Chidambaram said the same month that India intends to compress imports of gold, silver and some non-essential items, as well as demand for crude oil.



India’s imports fell for three straight months through August. Exports (INMTEXUY) climbed 13 percent that month from a year earlier and the merchandise trade deficit narrowed to $10.9 billion, from $20.1 billion in May.



The current-account gap for 2013-2014 may be less than $60 billion and the depreciation in the rupee is probably helping overseas sales to some extent, according to Barclays Plc.



The current-account deficit was 4.9 percent of gross domestic product in April through June, yesterday’s report showed. The central bank estimates the sustainable level is about 2.5 percent of GDP.



India’s budget deficit in the first five months of the fiscal year reached 74.6 percent of the target for 2013-2014, another release showed.



Prime Minister Manmohan Singh’s second term in office has been marred by graft scandals, average consumer-price inflation of about 10 percent in the past year and slumping economic growth. HSBC Holdings Plc predicts expansion will slow further to 4 percent in 2013-2014.

Source:- bloomberg.com

Rupee Falls Further By 9 Paise To 62.60 Against Dollar

30-Sep-2013

The rupee depreciated further by nine paise to close at 62.60 against the Greenback following weak equities amid sustained dollar demand from importers.



Fresh capital outflows also weighed on the rupee while some weakness in dollar overseas restricted the rupee fall.



At the Interbank Foreign Exchange (Forex) market, the local unit resumed sharply lower at 63.00 a dollar from last weekend's close of 62.51 and declined further to a low of 63.03 on month-end dollar demand from importers, mainly oil refiners and sluggish domestic stocks.



However, it later recovered on fresh dollar selling by exporters and fall in dollar overseas to a high of 62.50 before settling at 62.60, still showing a loss of nine paise or 0.14 pct. Last Friday, it had plunged by 44 paise or 0.71 pct.



The S&P Sensex on Monday plunged by 347.50 points or 1.76 pct while FIIs withdrew Rs 244.95 crore last Friday, as per provisional data with stock exchanges.



The dollar index, which tracks USD against the basket of six major currencies, was down by 0.02 pct.

Source:- businesstoday.intoday.in

Deemed offence under Competition Law if person fails to comply with directions of authorities withou

Competition Act : Moment it is proved that concerned person has without reasonable cause failed to comply with direction issued either by Commission or by Director General, offence under section 43 is complete

Transactions among Indian subsidiaries pursuant to contract with their parent cos. out of purview of

IT/ILT : Where assessee sold its medical imaging business to another Indian Company namely 'C' Ltd. in pursuance of larger transaction whereby holding company of assessee sold its imaging business to holding company of 'C' on global basis, since both transactions were independent of each other and there was no international element involved in assessee's transaction, revenue authorities were not justified in making transfer pricing adjustment to transaction entered into by assessee

Services offered by day nursery or crèche for children are liable to service tax

ST/ECJ : Day nursery/crèche for children run by an individual lady is liable to service tax, except where it amounts to pre-school education falling under negative list under section 66D(1)(i) of Finance Act, 1994

No disallowance under sec. 40(a)(ia) if taxes withheld were paid before due date of filing of return

IT: Where tax deducted at source during previous year relevant to and from assessment year 2005-06 was paid to government on or before due date of filing of return of income, no disallowance under section 40(a)(ia) could be made

Voters likely to get ‘None of the above’ button in EVM in forthcoming elections; SC gives right of n

CL : Direction of SC for provision of 'NOTA' (None of the above) button in EVM to enable voters to exercise their right not to vote while maintaining their right of secrecy

Pre-deposit not demanded from sub-contractor as tax on whole value was already paid by contractor

ST: Where contention of assessee, a sub-contractor, is that service tax liability had been discharged on whole value of transaction by main contractor including value of service rendered by them, there was no need to order any pre-deposit

No reassessment to curtail sec. 10B relief if AO couldn't prove failure of assessee to begin product

IT : Where assessee, an export oriented undertaking, claimed that it purchased raw material in form of ROM and finished goods of various grades being manufactured therefrom had been exported and Assessing Officer held that assessee did not purchase ROM and accordingly curtailed its claim for deduction under section 10B, in absence of any evidence to show that what assessee purchased was not ROM, conclusion drawn by Assessing Officer was unsustainable

Entities carrying on diverse aspects of one business with their independent finances can't be deemed

CL: Separate Corporate entities carrying out different aspects of same business cannot be treated as one especially when there is no inter-mingling or dovetailing of finances of two companies

Deposit in bank account deemed as undisclosed income as assessee failed to prove its legitimate purp

IT : Where additions were made as cash credits in absence of evidence to show that money was received for making payments to various persons, assessee's appeal could not be allowed

Application for condonation of delay and evidences in support

ST: Where application for condonation of delay does not mention number of days of delay and is also not accompanied by evidences, it is liable to be dismissed for default

HC upholds penalty as assessee failed to explain relevance of seized docs to justify its default in

IT: Where in response to notice issued by Assessing Officer, assessee did not file return taking a plea that relevant documents had been seized by department during search proceedings, in view of fact that relevancy of said documents was not explained and, moreover, assessee was in possession of relevant books of account, assessee's plea was to be rejected

Depreciation claim on goodwill to be decided in view of SC's ruling in Smifs Securities, ITAT direct

IT : Where assessee had written off amount of bad debt in its books of account, deduction was allowable under section 36(1)(vii)

Limitation for revisionary order reckoned from date of assessment if additions weren’t dealt with in

IT: Limitation for passing revisionary order is to begin from date of original order instead of reassessment order, where subject matter of additions made in revision are not dealt with in reassessment

Exhibition of films in private cubicles are not entertainment events; liable to ST

ST/ECJ : Payment made by a customer so as to be able to watch on his own one or more films, or extracts from films, in private cubicles does not fall within concept of admissions to 'exhibition of cinematographic film' under section 66D(j) read with section 65B(24) and is liable to service tax

Sale proceeds of flat obtained in a 'Development Agreement' shall be taxable as 'Capital Gains'

IT: Where assessee got a multi-storied building constructed on his land under development agreement by giving 50 per cent of constructed area to developer as cost of construction and thereafter sold two flats out of his share of constructed area, income from sale of flats would be assessed as capital gain

Sec. 234B interest couldn't be levied on NR if his income was subject to TDS but payer failed to ded

IT/ILT: Where payer failed to deduct tax at source while making payments to non-resident assessee, it was not permissible for revenue to charge any interest from assessee under section 234B

Service tax refund rejections choking IT cos' cash flow

The high rejection rate of service tax refund claims by the income tax department has placed Indian IT firms firmly on the backfoot. According to a wide cross section of top IT officials and industry consultants, service tax refunds to the tune of Rs 4,000-5,000 crore are pending on various grounds, largely flimsy.

The IT industry is eligible for refund on the service tax inputs for units operating under the ambit of Software Technology Park (STP) regulations but over the last couple of years their claims have seen a high rejection rate. Of this, Bangalore accounts for the lion’s share given that the city is the sector’s hub.

Infosys board member and former CFO V Balakrishnan admitted that service tax refunds have become a huge concern for the industry and the delay in settling of claims has a bearing on the cash flow.

According to executives, the provision of refund on service tax was introduced during 2005-06 but since then it has been an uphill task for the companies to get approval on their claims. For many, though, the reasons for delay are not very clear.

“Nothing much has changed in the last two-three years and even the refund one receives is not 100%,” a senior executive said on the condition of anonymity. The delay or rejection in refund of service tax has been attributed to high internal revenue targets to be met by the I-T department.

The alternative route for getting the claims through litigation is a lengthy and costly process.

Manipal Global Education chairman and former Infosys board member TV Mohandas Pai said, “Even if a company goes on appeal there is no guarantee that there would be any refund and the entire process would take a very long time.”

PricewaterhouseCoopers executive director Pramod Banthia said, “There has been outright rejection of claims in most of the cases with many of them on untenable grounds.” The delay in refund has a higher impact on smaller companies, given the size of their profitability, while larger entities are able to offset this delay due to their deeper pockets.

Central Board of Direct Taxes extends deadline for electronic tax returns

After facing severe opposition for last minute changes in the utility tool for filing income tax returns for the assessment year 2013-14, Central Board of Direct Taxes (CBDT) has extended the deadline for filing returns to October 31, 2013 from September 30. However auditors, who are made responsible for filing returns of individuals or companies will have to file the report physically before September 30 to acoid penalties. The decision added to the confusion of CAs and auditors as two of the four days left till the deadline are a weekend. There is no clarification by the Income Tax department on whether the office will work this weekend or not. Auditors and CAs fear long queues for filing physical audit reports because of this. CBDT under Section 119(2)(A) of the IT Act, 1961 read with Section 139 and Rule 12 announced a relaxation in the requirement for filing audit reports electronically before September 30 and allowed a one-month extension. CBDT clarified that the decision was taken keeping in mind problems faced by auditors and CA in uploading audit reports electronically, due to eleventh hour amendments in the utility. CA Ajit Shah says, "We expected an extension for filing audit reports both manually and electronically. CBDT has granted relaxation only in the date for filing electronically. Taxpayers and auditors who prefer filing returns on the last day will face a severe rush as on 28th and 29th, the I-T office will be shut for the weekend." One chief commissioner said, "Keeping in mind the complaints, we extended the date for filing audit reports electronically, but those who fail to file it physically before September 30 will have to pay the due penalty." On whether the I-T office would remain open on Saturday and Sunday, he said "It is not decided yet." The penalty for missing the date is 0.5% of turnover, to a maximum of Rs 1.5 lakh. Taxpayers under the ITR 4,5,6,7 which includes charitable and religious trusts, news agencies, research institutions, partnership firms, companies with turnovers over Rs 1 crore and individual professionals earning more than 25 lakh per year will be affected by the announcement.

Pakistan Turmoil Takes Toll On Indian Tea Exports

COIMBATORE : Indian tea exports to Pakistan have been hit in view of turmoil in the neighbouring country, a senior Tea Board member said here.

After the visit of a tea trade delegation from Pakistan last year, there was a spurt in the exports from India, R Ambalavanan, executive director, Tea Board, told reporters here on Saturday night.





However, subsequent disturbances there have seriously affected the exports, he said.



Ambalavanan, who was here to attend the 31st Annual General Meeting of Tea Traders Association of Coimbatore, later said that there were no immediate plans to invite tea delegations of different countries to India. "At least not for now," he said.



The association had made an appeal to the board to initiate major measures to bring in tea delegations especially from Poland and Russia, to capture the lost market share, since export from India dropped to 201 million kg in 2012 as against 215 million kg in 2011. With regard to setting up of Tea Park, Ambalavanan said about 9 acres of land has been identified near Mettupalayam and other modalities are being worked out, since it was a special purpose vehicle, having various stakeholders, with funding from the Centre and state governments.

Source:-economictimes.indiatimes.com

Iran Rejects India’S Plea For Full Rupee Payment For Oil Import

In a setback for the government’s grand plan to cut down the current account deficit (CAD), through containing the outflow of dollars and saving around $8.47 billion on crude oil imports from Iran, the Persian Gulf country has turned down India’s request for accepting full rupee payment for oil imports.



Highly placed sources in the Oil and Natural Gas Ministry said that Iran’s Petroleum and Energy Minister Bijan Zangeneh has conveyed to the Indian government that they would not accept full rupee payment for crude oil imports, as agreed in July this year, and India would have to explore paying the rest of the amount through euro currency. In addition to this, Iran has also conveyed through Indian diplomats in Tehran that it was also withdrawing the offer of production sharing contract (PSC) for the development of Frazad-B gasfields to Oil and Natural Gas Corporation Videsh Limited (OVL)-led consortium as the present conditions were not acceptable to the new government.



Petroleum Minister Veerappa Moily had rolled out a plan for saving around $8.47 billion in crude oil imports by stepping up imports from Iran. “Iran has stopped issuing invoices for full rupee payment to oil companies for import of crude oil and now has reverted to the 45 per cent rupee payment system. It wants India to explore rest of the 55 per cent payment through the euro of some other currency mechanism. India will not come under strain on this account as Iraq has offered to fill in the gap for supply of crude oil but then outflow of dollars will happen. This development is totally unexpected for us,” a senior official of the Petroleum Ministry said.



Under the PSC, an operator gets a share of production or revenue in proportion to its investment. In the normal service contract that Iran offers, the OVL consortium would get a flat 15 per cent return on the investment for developing the field.



In fact, the Petroleum Ministry even moved a Cabinet note for the Cabinet Committee on Economic Affairs (CCEA) to float a new company to do oil and gas business in Iran, especially for the Farzad-B fields in the Farsi offshore block to avoid U.S. and EU sanctions on the existing oil companies. OVL is keen to develop the Farzad-B gas find in the Farsi offshore block in Iran. The field is estimated to hold in-place reserves of up to 21.68 trillion cubic feet (tcf), of which 12.8 tcf of gas and 212 million barrels of condensate may be recoverable.



Officials in the Petroleum Ministry said about two million tonnes had so far been imported from Iran. Import of an additional 11 million tonnes would help cut the foreign exchange outgo by $8.47 billion (given that crude rules at $105 a barrel). Because of the sanctions, India pays Iran in rupee through a UCO Bank branch in Kolkata. Since July 2011, India had been paying Iran through the Ankara-based Halkbank in euro for 55 per cent of its oil purchases. The rest was remitted in rupee in the accounts of the National Iranian Oil Company in UCO Bank. However, payments in euro ceased on February 6.



Iran was India’s second biggest oil supplier after Saudi Arabia in 2010-11. However, during 2012-13, it supplied only 13.1 million tonnes, lagging behind Saudi Arabia, Iraq, Venezuela, Kuwait and the United Arab Emirates. In 2011-12, Iran stood third with 18.1 million tonnes, against 32.5 million tonnes from Saudi Arabia and 24.1 million tonnes from Iraq.



In 2009-10, it supplied 21.2 million tonnes; in 2012-13, supplies accounted for 7.2 per cent of oil imports, down from 10.5 per cent during 2011-12.

Source:-www.thehindu.com

Leather Exports Up 15%, To Touch $5.75 Bn This Fiscal

September 29, 2013

Leather exports from India is expected to touch $5.75 during the current fiscal, though it is an increase of around 15% it is the original target which set by the industry. Exporters from this industry, which is among the top 10 foreign exchange earners, said they are now looking at new markets including Africa and South America as part of de-risking strategy.



M Rafeeque Ahmed, president, All India Skin and Hide Tanners and Merchants Association said that export of leather and leather products exports are expected to touch around $5.75 billion during the current fiscal, although the target is $6 billion.



Earlier, in his presidential address at the 96th Annual General Body Meeting of Association, Ahmed said that leather exports in 2012-13 rose by around 3% to touch around $5 billion, while originally it was expected to touch by $5.4 billion.



“Though I am not happy at the shortfall, I feel despite the turbulence in the global finance, we have done reasonably well on the export front,” he said.



Exports to the traditional markets like Germany, Italy, Spain and Russia have recorded more than 10% decline. However USA and Denmark have reported an increase of around 20% with UK coming next with 10%.



Ahmed said, the industry would look at East and African and South American countries for a huge push in exports as those countries have great potential. He added, domestic market is also encouraging and entrepreneurs are paying more attention the domestic market.



Speaking about the Rupee depreciation, during June to August 2013, the currency depreciated from a value of Rs 50 plus to an extent of Rs 68 against the US Dollar and Rs 100 against the British Pound. These are the industry's main markets. The depreciation may have benefited a few exporters for a short period but it is an ominous sign.



He further said, raw material shortage is a nagging problem facing the industry as large quantities of semi-finished leather are being exported to China and Italy. The recent decision of the Government of India accepting the views for Leather Exports (CLE), making certification by Central Leather Research Institute (CLRI) mandatory for leather exports so as to conform to the regulatory policies of the Government will prevent clandestine exports and Ahmed hoped that as a result make more raw hides and skins available for tanneries.



While stressing about revisit strategies with countries where Free Trade Agreement (FTA)/ Comprehensive Economic Partnership (CEPA) have been signed, Ahmed said, the idea of FTA is to boost exports by taking advantage of tariff concessions. Exports to countries with which India has trade pacts have naturally declined as seen from the India Exports to Association of Southeast Asian Nations which went down to $14.66 billion in the first six months of 2012-13, compared with $36.74 billion in the same period in 2011-12.



He suggested that such countries in the region should be put under the Focus Market Scheme to dovetail exports, conscious attempts should also be made by exporters to avail of the tax concession benefits and step up exports substantially.

Source:-www.business-standard.com

Import Curbs, Export Spurt Mean Cad Peaked Out In June

Deficit likely to narrow here on given that gold imports in July and August fell 40% and 74% on-year; export growth back in double digits.

current account deficit (CAD) is expected to print the worst figure of this financial year in the quarter ended June because of high gold imports.



However, given the curbs on imports and a rise in exports, economists expect the number to improve from the current quarter.



The numbers are due to be announced today.



After cooling off to 3.6% of gross domestic product (GDP) in the quarter ended March, CAD is expected to have crossed the 5% mark in the following three months.



The deficit was at 4% of GDP in the first three months of the last financial year.



Shubhada Rao, chief economist at YES Bank, sees CAD coming in at $24 billion, or 5.3% of GDP, in the first quarter.



“The first quarter data would be the worst point of stress this fiscal,” she said, adding that the sharp escalation in gold imports in April and May would be the key driver.



India is the world’s top consumer of gold.



The frenzied gold rush pushed trade deficit to over $50 billion in the first quarter of this financial year, higher than the $43.8 billion seen in the corresponding period last fiscal.



“After the quantitative restrictions, gold imports in July and August plunged by 40% and 74% as compared to last year,” analysts Tirthankar Patnaik, Prerna Singhvi and Saloni Agarwal of Religare Securities noted.



This, along with easing demand, should restrict the trade deficit to $12-13 billion per month through the fiscal, they said.



Anubhuti Sahay, economist at Standard Chartered Bank, said, “CAD in the second quarter may be much less than $20 billion.”



She expects CAD to peak out at $28 billion in the first quarter.



Growth in exports, which is back to double digits in the second quarter, would also help reduce the current account gap.



The government has pegged current account deficit at $70 billion, or 3.7%, of GDP for the current financial year, lower than $87.8 billion, or 4.8%, of GDP attained in 2012-13.



“Numbers could be better as gold imports have really collapsed. We have to see petrol and diesel prices, whether

there is a pick-up or not. If not, then there is a downward bias,” said A Prasanna, chief economist, ICICI Securities Primary Dealership.



Prasanna sees CAD printing at $22 billion in the first quarter.



The government and the Reserve Bank of India have taken a number of measures to curb the demand for gold in the past few months.



These include hiking of import duty on gold three times to 10% this year.



Recently, the import duty on gold jewellery was also increased from 10% to 15% in order to protect the interests of domestic artisans.

Source:-www.dnaindia.com

Official Liquidator not liable to indemnify buyer for inadequate measurement of property sold of liq

CL: Where tender notice specifically mentioned that purchaser should accept tenure of land as existing on date of confirmation of sale and there was no representation by Official Liquidator regarding area, it was not open for purchaser to demand refund for short delivery

Amended Health Insurance norms; No free look period on new health policies of less than a year

INSURANCE : IRDA Health Insurance Regulations, 2013 - Amendment in Regulation 5

Resident of UAE entitled to treaty benefits even if it hadn't paid taxes in its country but liable t

IT/ILT: Where assessee had no tax incidence but otherwise liable to tax in UAE, benefits of India-UAE DTAA were applicable

Profit of one eligible unit to be adjusted against loss of other eligible unit for sections 80-IA an

IT : Profit derived from one industrial undertaking should be adjusted against loss suffered in another undertaking

Association working in retail motor sector is a trade union and is exempt from service tax

ST/ECJ : A voluntary association of persons working in retail sector of motor industry whose aim is to defend collective interests of its members (viz. workers/employers) is eligible for service tax exemption in respect of trade union

Extended period for assessment wasn't available if penalty notice served to assessee was held as inv

IT: Unless a valid and reasoned penalty notice is served, extended period of limitation for completing assessment under section 153(1)(b) is not available

Commissioner (Appeals) can't admit additional evidences without recording reasons thereof

ST: Commissioner (Appeals) can admit additional evidence produced by assessee only after : (a) application by assessee in that regard, (b) recording reasons for admitting evidence and (c) giving any opportunity to Department to rebut evidence.

Stock brokers and sub-brokers Regulations amended; SEBI puts in place new Form for registration of s

SEBI : SEBI (Stock Brokers and Sub-Brokers) (Second Amendment) Regulations, 2013 - Amendment in Regulation 2 & Schedule III; Substitution of Chapter II (Regulations 3, 4, 5 , 6 7, 8, 9 & 10) Form A & Form D; Insertion of Chapter II-A (Regulations 10A, 10B, 10C & 10D) & Chapter VII (Regulations 29 & 30), Schedules V, VI & Form AD and Omission of Chapters III-A, III-B, III-C & Schedules IIIa, IV, IVA & IVB

Central Excise Notification No 12/2013 CE(NT) dated 27-09-2013

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification No. 12 /2013-CE (NT)

New Delhi, the 27^th September, 2013

G.S.R. (E).- In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2004, namely:-

1. (1) These rules may be called the CENVAT Credit (Second Amendment) Rules, 2013.
   

   (2) They shall come into force on the date of their publication in the Official Gazette.

   
   


2. In rule 3 of the CENVAT Credit Rules, 2004, for sub-rule (5A), the following sub-rule shall be substituted-
   

   “ (5A) (a) If the capital goods, on which CENVAT credit has been taken, are removed after being used, the manufacturer or provider of output services shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CENVAT Credit, namely:-

   
   
   
   
   1. for computers and computer peripherals:
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      

      for each quarter in the first year @ 10%

      for each quarter in the second year @ 8%

      for each quarter in the third year @ 5%

      for each quarter in the fourth and fifth year @ 1%

      
      
      
   
   
   2. for capital goods, other than computers and computer peripherals @ 2.5% for each quarter:
      

      Provided that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value.

      
      

      (b) If the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value.”

      
      
   
   
   
   

F. No. 267/42/2012-CX.8

(Vikas Kumar)

Director to the Government of India

Note.- The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), dated the 10^th September, 2004, vide Notification No. 23/2004 – Central Excise (N.T.) dated the 10^th September, 2004 , vide number G.S.R. 600(E), dated the 10^th September, 2004 and last amended vide Notification No. 3/2013-Central Excise (N.T.) dated the 1^st March, 2013 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 150(E), dated the 1^st March, 2013.

No sec. 40(a)(ia) disallowances if nil TDS certificate is received by deductor but not filed with CI

IT: Where person responsible to deduct TDS received declaration in form 15G/15H, non-filing or delayed filing of such form before Commissioner would not result in disallowance under section 40(a)(ia)

Case remanded for afresh adjudication as assessee furnished fresh evidences before ITAT

IT : After fresh evidence is produced before Tribunal, matter can be remanded to Assessing Officer for fresh adjudication

Case remanded as demand was confirmed in absence of evidences

ST: Where demand is confirmed mainly on ground that supporting evidences are not furnished and assessee is willing to produce evidence afresh, matter must be remanded back for consideration afresh

Penalty was rightly imposed on appellant as it didn't comply with summons issued by SEBI, says SAT

CL : Penalty was rightly imposed on appellant-company for non-compliance of summons issued by adjudicatory authority of SEBI

Audit objections don't lead to reassessment unless AO records his satisfaction

IT: No reassessment to be made merely on ground of audit objection

Interest payable by a Government Undertaking on loan taken from Government is out of ambit of sec. 4

IT : Spare parts of machineries used for generation of electricity merit depreciation

Tough approach for Investors Grievances; SEBI asks for quick resolution, monetary relief for pendenc

SEBI : Investor Grievance Redressal Mechanism

Sec. 158BD and not sec. 158BC applied if warrant wasn't in name of assessee and search was consequen

IT: When there was no search warrant in name of assessee and search of his business place was a consequential one, assessee could be called a person other than person with respect to whom search was concluded under section 158BD

Transportation of dead body and other related services provided by undertakers aren't liable to ST

ST/ECJ : Transportation of dead body and other services provided by undertakers pertaining to body, use of a funeral home, organisation of funerals and burial or cremation are not liable to service tax

No concealment penalty for adjustments made to ALP determined by assessee in good faith and with due

IT/ILT : If an assessee proves to satisfaction of taxing authority that price charged or paid has been computed as per section 92C, in good faith and with due diligence, then addition made under section 92C(4) would not attract penalty

Wife proves to be a lucky mascot; husband gets HRA exemption on rent paid to wife

IT: Interest relating to pre-construction period of house property is not part of cost of acquisition but allowable under section 24(b)

SC: Fixation of benchmark to short list and recruit best candidate as DG is permissible, not an anti

Competition Act: Fixation of Benchmark to short list candidates for purpose of selection/appointment of best candidate as Director General is permissible under law

SEBI's initiatives to relieve investors from arbitration cost; reduces charges for claims up to 10 l

SEBI : Arbitration Mechanism in Stock Exchanges

Investment by insurers in non-convertible debentures considered as investment in infra-sector, IRDA

INSURANCE : Investments in IDF - Mutual Fund

Investment by insurers in certain infra-debt funds considered as investment in infra-sector, IRDA cl

INSURANCE : Investments in IDF - NBFC

Payment to Singaporean Co. for executive training isn’t FTS as it falls in exclusive clause of FTS u

IT/ILT : Payment received by Singaporean company from applicant towards cost of teaching in education programmes conducted by applicant in India, is not in nature of fees for technical services and is not taxable in India

CLB constitutes benches to exercise powers of Tribunal under the Companies Act, 2013

CL : Section 10E of The Companies Act, 1956, Read with Regulation 4 of The Company Law Board Regulations, 1991 – Constitution of Board of Company Law Administration - Constitution of New Specified Benches of Company Law Board in Supersession of All Earlier Orders

CLB Regulations amended; Appeals filed under certain provisions of 2013 Act to be dealt with by amen

CL : Company Law Board Regulations, 1991 - Amendment in Regulations 2, 4, 14, 15, 18 & Form No.1 & Annexure III

New Form to seek advance ruling on whether proposed arrangement is an ‘Impermissible Avoidance Arran

IT/ILT : Income-Tax (Eighteenth Amendment) Rules, 2013 – Amendment in Rule 44(E) and Insertion of Form No.34EA

Matter remanded as TP method applied by assessee wasn't justified and it agreed to apply CUP method

IT/ILT: Where method applied by assessee to determine royalty was found to be not just and proper and CUP method was agreed to be appropriate by both parties, matter needed fresh adjudication

No service tax can be demanded until machinery provisions are workable, says HC

ST : A recipient of clearing and forwarding services was made liable to file return by section 71A and section 73 was amended by Finance (No. 2) Act, 2004 to enable demand of service tax from persons falling under section 71A; therefore, such persons could not be asked to pay service tax prior to such amendment w.e.f. 10-9-2004 and show-cause notice issued prior to that date was invalid

Silence of assessee on issue of profit earned from sale of imported goods justified additions on est

IT: Merely because assessee was found to be owner of said proprietary concern and investment made in purchase of goods had been found to be unexplained, it could not be said that a separate addition for investment made in proprietary concern was called for without bringing enough material on record to justify addition on account of purchase consideration

Non-profit entities arranging child care services are exigible to service tax

ST/ECJ : Intermediary services provided by non-profit entities involving provision of childcare between host parents and parents owning child, on payment of specified sum per child per hour, are liable to service tax

Profit from sale of shares deemed as 'Capital gains' as foremost intention of assessee was to make i

IT : Profit earned from transaction of shares will be taxed as capital gains when dominant intention of assessee was to make investment

Refund arising from self assessment tax is also eligible for interest, says HC

IT : Refund arising on account of self assessment tax is eligible for interest

Ex-auditor couldn't complaint against new auditor if client founds no discrepancy in audit report of

CA Act: Where company whose audit report was stated to have been prepared by respondent contrary to prescribed norms had not made any complaint against respondent, complainant who was replaced as auditor of company by respondent had no locus standi to make a complaint in that respect

Title to property vests in allottee from date of allotment; capital gains to be computed accordingly

IT : Where allotter failed to deliver property originally allotted and subsequently registered alternate property in lieu of original property, allottee's right to property became vested from date of original allotment and capital gain on transfer of property would be ascertained accordingly

No input service credit is available beyond factory gate if foods are liable to specific rate of dut

ST : Definition of 'place of removal' in section 4(3)(c) of Central Excise Act, 1944 is applicable only when goods are liable to duty based on value determined under section 4; and is inapplicable for Cenvat Credit Rules, 2004 when duty is payable: (a) at a specific rate or (b) on value determined under section 3(2) or 4A

Loss incurred from cancellation of a contract for purchase of a machinery would be a 'capital loss'

IT : Where assessee advanced a sum for purchase of machineries and further he himself rescinded said contracts, loss incurred due to forfeiture of advances by suppliers was on capital account

Assessee's failure to explain entries in books caused its rejection on ground of manipulation

IT: Books of account to be rejected on ground of manipulation where assessee had failed to explain entries in books of account

Transactions in shares carried on systematically deemed as business and resultant profit business in

IT :Profit on sale and purchase of shares would be assessed as business income where involvement of assessee in share transactions was its only activity carried on regularly in a systematic and organized manner

Non-profit entity arranging services for non-members are chargeable to service tax

ST/ECJ : If a non-profit entity arranges exempt services for non-members, then, it cannot claim exemption under Entry 28(b) of Notification No. 25/2012-ST and reimbursement/share in contribution received by it would be liable to ST

RBI/2013-14/294 A.P. (DIR Series) Circular No. 55 dated 26-09-2013

RBI/2013-14/294

A.P. (DIR Series) Circular No. 55

September 26, 2013

To

All Category - I Authorised Dealer Banks

Madam / Sir,

Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No.49 dated September 20, 2013 , wherein the Rupee value of the Special Currency Basket was indicated as Rs.90.052266 effective from September 04, 2013.

2. AD Category-I banks are advised that a further revision has taken place on September 10, 2013 and accordingly, the Rupee value of the Special Currency Basket has been fixed at Rs.86.903352 with effect from September 13, 2013.


3. AD Category-I banks may bring the contents of this circular to the notice of their constituents concerned.


4. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(C.D. Srinivasan)

Chief General Manager

Some additional services rendered to AEs along with routine services are also subject to TP adjustme

IT/ILT: Where assessee-media company, being a marketing agent of a channel, also undertook channel promotion activities, a mark up was required to be added for rendering such specific services

Employer is not at default for not deducting tax from LTC and medical allowance paid before its incu

IT: Assessee-company could not be held to be in default for not deducting tax at source on LIC and medical reimbursement paid to employees by treating it as as exempt before actual incurring of such expenses, where bills/evidence to substantiate subsequent incurring of expenditure by its employees was maintained by assessee

Sugar Industry Crushed By Policies

September 26, 2013

The sugar industry has been passing through tough times owing to lower realisation and pressure on profits the last few years, says O. P. Dhanuka, Chairman and Managing Director, Riga Sugar Company Ltd.



Sugar makers, especially those from North India, have been incurring “huge losses” due to a growing disparity between cane and sugar price in the market and a substantially higher input cost, according to him.



Riga Sugar, a Kolkata-headquartered company which operates a sugar factory in Bihar, feels the pinch as much as its counterparts.

Cane price and recovery



“Though the production cost stands at Rs 3,600 a quintal of sugar, the ex-factory sugar price is ruling at Rs 3,100. So, we are losing about Rs 500 on each bag of sugar. How can the industry survive?” Dhanuka asks.



He feels sugar producing companies that have already diversified into power generation and other ancillary businesses are performing better. “However, their sugar businesses in particular is not doing well,” Dhanuka adds.



Cane prices in North India have gone up from Rs 160 a quintal to Rs 250 over the last two-three years. In addition, sugar recovery has dipped below 9 per cent due to bad weather.



“Heavy rainfall in the region impacts both cane production and sugar recovery. Currently, we are able to recover close to 9 per cent,” Dhanuka points out.



Implementation of unfavourable price policies by the State governments also results in a price mismatch in the sugar industry.



Unlike Karnataka, Maharashtra and Gujarat, which keep the cane price low to support the sugar industry, North Indian States make it a point to increase the cane price in “an unscientific manner”.



Sugar factories are supposed to buy cane at the fair remunerative price (FRP) fixed by the Union Government and the price may go up for every 0.1 per cent if the recovery is above 9 per cent.



While Karnataka, Maharashtra and Gujarat enforce buying cane at FRP, despite a better recovery (up to 12 per cent), sugar producers in North India have been paying a State Advised Price, which is much higher the price set by the Centre. “For these three States, cane cost becomes lower compared to the North Indian States,” Dhanuka adds.

Export-import losses



According to the CMD of Riga Sugar, the Union Government’s efforts to promote sugar import by reducing duty from 60 per cent to 10 per cent is turning out to be a major dampener for the domestic industry.



“Despite sitting on stocks of around 80 lakh tonnes, India imported 24 lakh tonnes of sugar between October 2012 and May 2013. Actually, we could have exported the same quantity of sugar,” Dhanuka points out. According to him, India is draining out thousands of crores worth of foreign exchange by importing sugar and piling the domestic stock.

Source:-www.thehindubusinessline.com

Rupee Fall Could Push Fiscal Deficit To Over 5%

Sep 26, 2013

COIMBATORE: The recent depreciation of the rupee could increase oil subsidy by 0.1%- 0.4% of GDP ( gross domestic product) in 2013-14 and this alone could push the fiscal deficit to over 5% of GDP against the budgeted 4.8%.



"Rupee depreciation has resulted in a sharp increase in Indian crude basket prices. Despite the 50 paise per litre monthly hike in diesel prices, under-recovery of three controlled fuels - diesel, liquefied petroleum gas and kerosene oil - is threatening the government's fiscal arithmetic," India Ratings said.



"Unless the price of diesel is hiked steeply or those of the three controlled petro products are hiked moderately, the government's fiscal deficit is likely to cross 5% of GDP," said Devendra Kumar Pant, chief economist and head - public finance, India Ratings.



In the 2013-14 budget, Rs 65,900 crore and Rs 65,000 crore were set aside for the fertiliser and oil subsidies, respectively. When these amounts were allocated, the rupee was fluctuating between 53 and 54 to the dollar. A sharp depreciation in the rupee since May this year has however substantially altered the budget's fiscal arithmetic.



India's annual fertiliser consumption is around 53 million metric tonnes and over 30% of this is met by imports. However, global fertiliser prices have declined in the range of 11.3% year-on-year (y-o-y) (for rock phosphate) to 23.9% y-o-y (for urea) between April and August 2013. The rupee depreciated by only 6% y-o-y during this period.



Based on the trend of global fertiliser prices, India Ratings does not expect any significant slippage in fertiliser subsidy on account of rupee depreciation in 2013-14. The situation with respect to oil, however, is different.



The price of Indian crude basket has increased 28% between the first fortnight of April 2013 and the first fortnight of September 2013. As a consequence, the daily under-recovery of oil marketing companies (OMCs) increased to Rs 461 crore in the first fortnight of September 2013 from Rs. 349 crore during the first fortnight of April 2013. OMCs' daily under recoveries of diesel alone shot up to Rs. 14.5 per litre as on September 16.



Although the rupee has appreciated between end-August and mid-September 2013, it is unlikely that it will rise to the level witnessed when the 2013-14 budget was prepared, India Ratings, which is part of the Fitch Group, said.



The agency expects the rupee to appreciate to 59-61 per dollar by the end of 2013-14 pushing the oil subsidy higher. "OMCs' under recovery will increase by Rs. 150 crore every day if Indian crude basket price rises by Rs. 1000 per barrel," said Sunil Kumar Sinha, director - public finance, India Ratings. "This would translate into an increase of around Rs 34,000 crore in the government's oil subsidy burden," he said.

Source:-timesofindia.indiatimes.com

Gold Eases From One-Week High; Some Banks Re-Start Imports

26-Sep-2013

Gold futures eased slightly from their highest level in a week in line with overseas market, and on a firm rupee, while some banks re-started imports after a gap of two months.



At 3.59 pm, the most-actively traded gold for October delivery on the Multi Commodity Exchange (MCX) was 0.29 percent lower at 30,128 rupees per 10 grams, after hitting a high of 30,290 rupees on Wednesday, a level last seen on September 20.



"They've cleared consignments of banks at Kolkata airport, and most banks are waiting for them to clear lots in Mumbai," said a dealer with a private importing bank in Mumbai.



Some banks, which are primary dealers of bullion, re-started imports for exports, after the customs department gave a green signal to some lots.



"Our shipment (for exports) just landed today in Mumbai. It is yet to be cleared by the custom. For other locations, where we have domestic business, we are yet to figure out how to deal with the 80/20 rule," said a dealer with a state-run bank in Mumbai.



Imports had virtually stopped after the so called 80/20 principle, which tied exports with domestic consumption, creating confusion among government officials, and prompting the commerce ministry to call a high level meeting to break the dead lock.



Restart of imports could be timely just ahead of the peak Christmas season for exporters, and the wedding and festival season for local dealers, when demand for the metal goes up.

Source:-in.reuters.com

Opec To Boost Exports Before Refinery Halts, Oil Movements Says

26-Sep-2013

The Organization of Petroleum Exporting Countries will increase crude shipments by 1 percent next month as they maximize flows before refineries are shut for maintenance, according to tanker tracker Oil Movements.



OPEC, which supplies about 40 percent of the world’s oil, will raise exports by 230,000 barrels a day to about 23.9 million a day in the four weeks to Oct. 12 compared with the period to Sept. 14, the researcher said today in a report. The figures exclude two of OPEC’s 12 members, Angola and Ecuador.



“It’s what you’d expect to happen at this time of year as we start to get into refinery maintenance season,” Roy Mason, the company’s founder, said by phone from Halifax, England. “It’s boring old seasonality and exports are likely to drift downward until the end of October or start of November.”



Refiners typically trim imports at the end of the third quarter while performing maintenance as summer demand in the northern hemisphere for gasoline and diesel dwindles. Brent crude was at $108.78 a barrel as of 3:17 p.m. today on the ICE Futures Europe exchange in London. It has risen 6.4 percent so far this quarter.



Middle Eastern shipments will climb 2.4 percent to 17.72 million barrels a day to Oct. 12, compared with 17.31 million in the month to Sept. 14, according to Oil Movements. Those figures include non-OPEC nations Oman and Yemen.



Crude on board tankers will increase 0.7 percent to 483.79 million barrels on Oct. 12, data from Oil Movements show. The researcher calculates volumes by tallying tanker bookings, and excludes crude held on vessels for storage.

Source:-www.bloomberg.com

Rupee Opens Higher At 61.90 Per Dollar

Mumbai: The Indian rupee on Friday opened higher at 61.9050 per dollar against its Thursday’s close of 62.0788 on positive sentiment in the domestic stock market.

The dollar index, which measures the US currency’s strength against major currencies, was trading higher at 80.526, up 0.01% from the previous close of 80.523.

Yield on the 10-year bond was at 8.745% compared with its Thursday’s close of 8.731%.

At 9.05am, the Indian currency was trading at 61.9613 per dollar, up 0.19%. India’s equity benchmark Sensex was trading at 19,934.15 points, up 0.2%.

Source:-www.livemint.com

India Withdraws Export Incentives For Cotton, Yarn

Sep 26, 2013

India has withdrawn incentives for exports of cotton and yarn, a value-added product used by textile mills, an official order said, a move that could cut exporters' margins in the world's second-biggest exporter of the fibre.



The Directorate General of Foreign Trade (DGFT), a unit of the trade ministry, did not give any reason for withdrawing the incentives. To see the official order, click here



Together the benefit of the government's Focus Market Scheme and Incremental Export Incentivisation Scheme on cotton yarn comes to around 4 percent of the free-on-board value of exports, according to Industry body the Confederation of Indian Textile Industry (CITI).



Currently there is no cap on cotton and cotton yarn exports but exporters need to register shipments with the DGFT.



CITI urged the government to restore export benefits.



"India is the most competitive yarn producer in the world at present and, therefore, there are increasing export opportunities opening up for our cotton yarn," Prem Malik, chairman of the CITI, said in a statement.



Despite the withdrawal of incentives for overseas sales, buoyant demand for cotton yarn would offset any fall in export margins, said M.B Lal, managing director of Shail Exports, a Mumbai-based exporter.



Trade commitments for cotton yarn exports rose more than 26 percent in August from a year earlier, data from the DGFT showed, mainly due to rising demand from China, India's biggest client.



However, exports of raw cotton are seen down at 10 million bales in 2012/13 from 12.9 million bales a year ago.



India, also the world's second-largest cotton grower, is forecast to produce a record 35.3 million bales, against 34 million bales a year ago.

Source:-in.reuters.com

Daimler India Sees Export Earnings Rise On Falling

CHENNAI: The sharp decline in the value of the rupee has helped boost the profitability of Daimler India Commercial Vehicles (DICV) thanks to increased export earnings.

According to a top company official, the Indian truck subsidiary of the German automobile major, which has been in the Indian market for a year now, is stepping on the gas in terms of localisation to neutralise the currency pinch on imported parts.



Marc Llistosella, MD & CEO, DICV, said: "Thanks to the currency slide, our export earnings have gone up which has helped improve our profitability. However there's a flip side to the currency issue. Right now our trucks have 15% imported parts which is hurting us and we have to increase local content quickly. But thanks to the currency, our cost and quality proposition in the world market is huge both for completely built units as well as for global sourcing of parts," he said.



DICV is part of Daimler Trucks Asia, under which it has charted out an aggressive export strategy. "In export markets, DICV- built trucks are being sold under the Fuso brand with only 26 parts changed," said Llistosella. "The currency helps but only because the product is accepted. Currency windfalls come and go but you can't build a business on that. For India the deceleration in the rupee is also an opportunity. For us our entire business case and export plan was calculated on an exchange rate fixed three years ago. Imagine what it means in today's calculations. But it only works on the back of localisation," he said.

Source:-timesofindia.indiatimes.com

Imports Up 8.7% In July On Electronics Rebound

September 26th, 2013

The country’s imports rebounded in July from a year ago after a slump in the two previous months as global demand for electronics improved.



The increase in imports for July substantiated earlier projections that purchases by key export markets would improve in the second half as the global economy continued to go through the recovery process.



The National Statistics Office reported Wednesday that imports grew by 8.7 percent year on year to $5.49 billion in July.



Electronics, which accounted for nearly a third of the country’s import bill, led the gain as sales to foreign markets amounted to $1.63 billion, up 33 percent from a year ago.



“This reflects the broadly upbeat prospects for the country’s export-oriented electronics industry for the remaining months of the year,” Neda Deputy Director General Rolando Tungpalan said in a statement.



Imports in July brought the total for the first seven months of 2013 to $35.1 billion, which was still lower by 2 percent from a year ago.



With exports for the same seven-month period at $30.42 billion, the country’s balance of trade as of July settled at a deficit of $4.68 billion.



Mineral fuels, lubricants and related materials were the second-biggest imports for July, with receipts amounting to $1.03 billion. Unlike electronics, however, imports of items in this group registered a 14-percent contraction from a year ago.

Source:-business.inquirer.net

As Investors Seek Silver Lining, Metal's Import Up 311%

September 26, 2013

While the government has put a series of restrictions to curb gold imports, it is silver that is ruling the roost. During the April-June quarter, import of silver rose 311 per cent to $1.78 billion, compared with $433.8 million in the corresponding period of last year due to a surge in demand.



According to traders and economists, restrictions on gold have drifted the general sentiment towards silver as they feel it is the closest substitute for gold. "Ever since the government has started putting measures to curb gold imports, demand for silver has seen a sudden surge. Moreover, there is a general scare in the market that the government might soon start curbing silver imports also, as a result, traders are stocking up silver," said Monal Thakkar, president of Amrapali Industries, a leading Ahmedabad-based stock and commodity broking house.



Thakkar added such a staggering rise in silver import could also be attributed to a substantial rise in demand for silver jewellery as well silver crockery. "People are buying silver as a viable investment option," he added.



According to Sudheesh Nambiath, analyst at Thomson Reuters GFMS, India's total silver imports have more than doubled from last year, crossing 4,000 tonnes in the first eight months of 2013 compared to 1,900 tonnes in the whole of 2012. "Because of the restrictions on gold, traders shifted towards silver," Nambiath said.



He added that even by mid of the year manufacturers already had full order books through to December, a clear indication of stocking and also higher demand expectation from fabricators. Indian imports had increased at a fast pace taking advantage of lower prices, however imports dropped to just over 300 tonnes in August. It suggests that investors and bullion traders were refraining from further imports after price crossed Rs 55,000 a kg. Also delivery of near 75 tonnes to the MCX together in the July and Sept contract, only reaffirms the strong participation from investors and traders this year.



This level of delivery on futures exchange is considered very good.



Anis Chakravarty, senior director, Deloitte India said silver import was basically offsetting the demand for gold as it was a safer option.



An industry veteran who is active in exports, however, said with RBI's restrictions on gold imports, round tripping of gold has come to a halt and some players, mainly export houses, who were active in gold round-tripping, seem to have shifted to silver.



Round-tripping means re-exporting silver without much value addition and export houses do so to maintain higher export volumes which allow them to retain status of a star trading house.

Source:-www.business-standard.com

Winding up petition admitted on failure to pay admitted rent liability even under an unregistered le

CL : Winding up petition would be maintainable if tenant admitted its liability to pay rent, even though lease deed under which rent was payable was an unregistered document

GAAR Rules notified; transactions up to 3 crores, FIIs and Cap Gains from investments prior to 30-08

IT/ILT : Income-Tax (Seventeenth Amendment) Rules, 2013 - Insertion of Rules 10U, 10UA, 10UB & 10UC and Form NOS.3CEG, 3CEH & 3CEI

RBI reduces minimum maturity period on overseas Forex borrowings by banks

FEMA/ILT : Overseas Foreign Currency Borrowings by Authorised Dealer Banks - Enhancement of Limit

‘Right to Equality’ under article 14 of Constitution should be respected while granting service tax

ST/ECJ : In granting full or partial exemptions, Government must respect principle of fiscal neutrality, which precludes treating similar supplies of services, which are thus in competition with each other, differently for tax purposes

Revenue to return seized cash on furnishing of bond and undertaking to re-deposit seized cash, if re

IT: There was no infirmity in interim order directing to return cash seized to assessee on condition of depositing same in Court as and when required

An appeal for rectification of mistake can't be filed on basis of an issue not raised earlier before

ST : Where there was no claim made by assessee as to a fact/legal-point at any stage before lower authorities and also in hearing before Tribunal, it cannot be said that there was an apparent error or mistake in order of Tribunal

RBI permits residents to borrow from NRs for further lending to infra sector and for investment in F

FEMA/ILT : FEM (Borrowing and Lending in Rupees) (Amendment) Regulations, 2013-Amendment in Regulation 6

For selection of comparables 'RPT' filter to be applied on standalone basis and not on consolidated

IT/ILT : Before selecting a company as comparable on basis of information obtained under section 133(6), TPO has to necessarily furnish such information to assessee and take its submissions thereon

No reassessment on short reporting of income if AO had earlier examined all receipts on which tax wa

IT: Assessing Officer having examined entire receipts of assessee on which TDS was deducted, could not re-open assessment on ground that assessee returned less income as compared to TDS certificates

No ad hoc additions for unexplained exp. without assigning reasons even if stock valuation found inv

IT: Where Tribunal found working of valuation of work-in-progress was not accurate, but determined unaccounted expenditure merely on estimated basis without assigning any reason, same could not sustain

Price band fixed for sale of equity shares is reasonable if ICDR Regulations and valuation methods a

SEBI: Price band fixed for sale of equity shares after following ICDR Regulations and on taking into consideration relevant methodologies of valuation could not be said to be unreasonable

Service tax on skill development companies rolled back

In a big relief for youth pursuing vocational training courses to land a job, Finance Minister P Chidambaram has rolled back the 12.36% service tax on skill development and training firms imposed in the Finance Bill of 2013-14. Experts had warned that the service tax introduced this year on all training firms working in tandem with the National Skills Development Corporation (NSDC) could jeopardise the government's ambitious goal of training 500 million people by 2022 by raising the effective fees payable by students. The NSDC, set up by the finance ministry as a public private partnership , has been assigned the task of fostering and funding private sector skill development initiatives to 150 million people. Though the government had put training firms in the negative list of activities attracting service tax last year, this year's Budget fine print explicitly omitted NSDC-affiliated training providers, from that list - making over 100 such firms liable to pay service tax. The government has set a target of skilling 9 million youth this year. The finance minister, who had addressed the National Skills Development Corporation board in June, personally ensured that a fresh notification was issued earlier this month to correct the anomaly. As per the new notification, service tax is not payable on any services provided by the National Skills Development Corporation or any training institutes, assessment agencies and sector skill councils approved by it. "This has resolved the uncertainty about service tax being levied on the course fees charged by our training partners for skill development programmes and related activities," Dilip Chenoy, chief executive officer and managing director of NSDC, told ET. NSDC partners are relieved about the service tax withdrawal, but believe that the government needs a fresh approach to skill development in order to meet its lofty goals. "Skilling can't be considered a forprofit business as it doesn't have a business model, but it is a model business," said professor Mukti Mishra, chairman of Gram Tarang Employability Training Services, which has trained over 35,000 people in Naxalaffected areas and aims to scale up its capacity to 1 lakh trainees a year by 2022. "The government must exempt training initiatives from all taxes, including income tax for five to ten years, offer incentives to create skill institutions and focus on their outcomes and impact," said Mishra, stressing that skill development is not just critical for school dropouts, but also for the formally educated who acquire no employable skills from their exambased degrees.

Question of law should be first raised before ITAT before raising it in the Supreme Court

IT : Questions of law being raised first time before Supreme Court, should be decided by Tribunal first

Time-limit for filing of an appeal commences with date of service of order as per section 37C of Cen

ST : Where service of adjudication order via registered post, as per section 37C of Central Excise Act, 1944, was completed only on 13-12-2011, appeal there against filed on 16-12-2011 was within time-limit

Employees contribution to PF is deductible if deposited before due date of filing of return of incom

IT : Employee's contribution to PF, etc. deposited prior to due date of filing return, would be deductible

RBI/2013-14/293 A.P. (DIR Series) Circular No. 54 dated 25-09-2013

RBI/2013-14/293

A.P. (DIR Series) Circular No. 54

September 25, 2013

To,

All Category - I Authorised Dealer Banks

Madam / Sir,

Overseas Foreign Currency Borrowings by Authorised Dealer Banks – Enhancement of limit

Attention of Authorised Dealer Category - I (AD Category – I) banks is invited to A. P. (DIR Series) Circular No. 40 dated September 10, 2013 , in terms of which AD Category I banks were allowed to borrow beyond 50 per cent of their unimpaired Tier I capital subject, inter alia, to the condition that the borrowing would have a minimum maturity of three years.

2. On a review, it has been decided to lower the requirement of minimum maturity from three years to one year for the aforesaid borrowings made on or before November 30, 2013 for the purpose of availing of the Swap facility from the Reserve Bank of India. It may be noted that after the said date, foreign currency borrowing by AD Category I banks beyond 50 per cent of their Tier I Capital shall have to be of a minimum maturity of three years.


3. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions/approvals, if any, required under any other law.

Yours faithfully

(Rudra Narayan Kar)

Chief General Manager-in-Charge

Notification No 42 (RE-2013) / 2009-2014 dated 25-09-2013

GOVERNMENT OF INDIA

MINISTRY OF COMMERCE AND INDUSTRY

(DEPARTMENT OF COMMERCE)

NOTIFICATION No. 42

NEW DELHI, THE 25^TH SEPTEMBER, 2013

G.S.R.--------. In pursuance of Rule 3(1) of Safeguard Measures (Quantitative Restrictions) Rules, 2012, the Central Government, hereby designates Shri Jaikant Singh, Additional Director General of Foreign Trade as Authorised Officer for the purpose of the said Rule.

(Anup K. Pujari)

Director General of Foreign Trade

e-mail:dgft@nic.in

[Issued from F.No.01/92/180/106/AM11/PC-VI/PRA]

Notification No 43 (RE-2013) / 2009-2014 dated 25-09-2013

Government of India

Ministry of Commerce & Industry

Department of Commerce

Udyog Bhawan, New Delhi

Notification No: 43 (RE-2013)/2009-2014

New Delhi, the 25^th September, 2013

Subject: Amendment in Chapter 3 of Foreign Trade Policy

S.O.(E) In exercise of the powers conferred by Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 read with Para 2.1 of the Foreign Trade Policy, 2009-2014, the Central Government hereby makes the following amendments in the Foreign Trade Policy (FTP) 2009-14 with immediate effect:

2. The following categories are added after serial no (x) in the list appended in paragraph 3.14.3 of Foreign Trade Policy bearing the Heading “Ineligible Exports Categories / Sectors for FMS”:
   

   (xi) Export of Cotton.

   
   

   (xii) Export of Cotton Yarn.

   
   

   (xiii) Exports which are subject to Minimum Export Price or Export Duty.

   
   


3. The following sub-paragraphs are added below paragraph 3.14.5(c) as under:
   

   “(i) Benefit of Incremental Export Incentivisation Scheme for the year 2013-14 will be limited to a scrip of a value not exceeding Rs. 1 Crore per IEC.

   
   

   (ii) Claims in excess of this value will be subjected to greater scrutiny by Regional Authority.

   
   


4. The following ineligible categories are added after Sl. No. (xvi) in the eligibility criteria specified in Paragraph 3.14.5(d) of FTP:
   

   (xvii) Cotton.

   
   

   (xviii) Cotton Yarn.

   
   

   (xix) Exports which are subject to Minimum Export Price or Export Duty.

   
   

Effect of this Notification: Category of ineligible exports has been expanded for certain benefits under chapter 3 of FTP as given at para 2 and 4 above. Para 3 restricts the entitlement for claiming IEIS benefit.

(Anup K. Pujari)

Director General of Foreign Trade

E-mail: dgft@nic.in

[Issued from File No. 01/61/188/AM 13/PC 3]

Notification No 44 (RE-2013) / 2009-2014 dated 25-09-2013

Government of India

Ministry of Commerce & Industry

Department of Commerce

Udyog Bhawan, New Delhi

Notification No: 44 (RE-2013)/2009-2014

New Delhi, the 25^th September, 2013

Subject: Amendment in Chapter 3 of Foreign Trade Policy

S.O.(E) In exercise of the powers conferred by Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 read with Para 2.1 of the Foreign Trade Policy, 2009-2014, the Central Government hereby makes the following amendments in the Foreign Trade Policy (FTP) 2009-14 with immediate effect:

2. The following sub-paragraphs (i) & (ii) are added below paragraph 3.14.4.(c) as under:
   

   “(i) Benefit of Incremental Export Incentivisation Scheme for the last quarter of 2012-13 will be limited to 25% growth or Incremental growth of Rs. 10 crores in value, whichever is less.

   
   

   (ii) Claims in excess of this value will be subjected to greater scrutiny by Regional Authority.

   
   

Effect of this Notification: Few amendments have been made in Notification No. 27 dated 28.12.2012 for claiming benefit of Incremental Export Incentivisation Scheme.

(Anup K. Pujari)

Director General of Foreign Trade

E-mail: dgft@nic.in

[Issued from File No. 01/61/188/AM 13/PC 3]

Sum received for conversion of interest bearing loan into interest free unsecured loan is out of rea

IT : Receipt on account of conversion of interest bearing loan to unsecured interest free loan, i.e., from one capital account into another capital account, could not be treated as revenue receipt for attracting section 41(1)

No sec. 80-IB relief for development and sale of plots without actual construction of housing projec

IT : Where assessee had just undertaken development and sale of plots and no construction activity was undertaken during relevant year, deduction under section 80-IB was not allowable

DRP was required to adjudicate objections raised before it on merit

IT/ILT: Where DRP was of view that assessee did not had option to withdraw objection raised before it, DRP was required to adjudicate objections filed by assessee on merit

India: 4 Million Jobs In Peril Due To Plastic Imports From China

25-Sep-2013

Finished plastic imports from China are threatening the survival of thousands of plastic manufacturers in India and the livelihood of over 4 million workers, according to the Associated Chambers of Commerce and Industry of India (ASSOCHAM).



“Many of the units have reportedly been closed down and many more are on the verge of closure, while surviving units are operating at less than 70 percent of their installed capacity as the sector is witnessing negative growth trends,” said D.S. Rawat, the secretary general of ASSOCHAM in a press release.



Heavy imports of finished plastics products under Preferential Trade Agreements specifically from China and other South-Asian Association for Regional Cooperation (SAARC) nations is reportedly harming the survival of over 55,000 of India’s domestic plastic processing units.



According to the release, the major cause of the threat is the decision taken by the Indian government in May this year to increase customs duty from five to 7.5 percent on plastic granules, the major raw material for the plastic industry—while import of finished products continues at zero or concessional duties.



To safeguard growth of plastics processing sector, ASSOCHAM has suggested the government that anti-dumping duty or safeguarding duty should be imposed on import of cheap plastic finished products from China and other neighboring countries. Customs duty of 15 percent should be applicable on imports of finished products from all countries.



The chamber also recommended certain immediate steps to boost the plastics industry, suggesting the government roll back the customs duty from 7.5 percent to 5 percent on certain plastic raw materials and to abolish any entry tax by state governments or local taxes on consumption in order to make local industry viable and fit for the competitive market.



“There is a need to bring [the] plastics processing sector back on growth path as it will contribute substantially to increase gross domestic product, create employment opportunities, help in controlling twin deficits of current account and fiscal, control inflation, and provide plastic items to masses at an affordable price,” Rawat said.

Source:- theepochtimes.com