IT : Where terms of partnership deed specifically provided payment of remuneration to working partners and remuneration paid to working partners was within provision of clause (v) of sub-section (b) of section 40, no disallowance of remuneration on account of being excessive warranted
Sunday 26 May 2013
Understatement of investment if disclosed value of property falls short of its market value
IT : Where value of property shown by assessee was very low as compared to prevailing market condition, it would be understatement of investment and property might be valued as per rules of Wealth tax Act, 1957
Sec. 143(2) notice isn't required if return is not filed in pursuance of re-assessment notice
IT : Where no return was filed in compliance of notice issued under section 148, issuing of notice under section 143(2) was not mandatory for making assessment
Speed post isn’t valid mode of service as law requires registered post with acknowledgement due
ST : It cannot be presumed that dispatch of order by speed post, in absence of any proof of delivery, results in communication of order
Cut In Tax On Gold Imports Proposed
26-May-2013
The Securities and Exchange Commission of Pakistan (SECP) has proposed tax incentives on the import of gold being traded on the commodity exchange with a reduced import tax rate to encourage documentation. Sources told Business Recorder on Sunday that this proposal was forwarded by the SECP to the Federal Board of Revenue (FBR) for coming budget (2013-14).
According to the budget proposal, the commission wanted to incentivise documentation of gold import if traded on commodity exchange with a reduced import tax rate (Clause (13G) (iv) of Part II of the Second Schedule to the Income Tax Ordinance 2001).
The SECP proposed that the tax on import of gold was imposed in FY 2006-07 at the rate of 1 percent of the import value. Since the imposition of this tax, the volume of gold imported through proper channels has decreased drastically and the amount of tax collected under this head is also insignificant for the last few years.
A reduced tax rate on import of gold at the rate of Rs 25 per 10 grams of the import value is proposed, provided the gold is imported by a corporate member for trading at the Commodity Exchange. The proposed change in tax will encourage legal import of gold, SECP said.
As the Commodity Exchange provides a regulated market place to buy and sell gold at transparent market prices, it would discourage manipulation by gold traders in the open market. It would promote documentation of trading of gold, against the current huge parallel economy in undocumented trading and resultantly, would increase Government revenues from documented import of gold.
Sources said that a mechanism to curb any misuse of the proposed facility was also shared with FBR last year, including certification containing detailed information from PMEX to avail the tax rebate at import stage and periodic reporting of all gold imports through PMEX to the FBR for comparison with customs data, SECP added.
Under existing provision ie clause (13G) (iv) of Part II of Second Schedule to the Income Tax Ordinance 2001. As per section (13G), the tax under Section 148 on the following item shall be collected at the rate of 1 percent of their import value as increased by customs-duty, sales tax and federal excise duty, if any levied thereon: Gold, mobile telephone sets and silver.
According to the new proposed provision of Clause (13G) (iv) of Part II of Second Schedule to the ITO, 2001, Section(13G), the tax under Section 148 on the following item shall be collected at the rate of 1 percent of their import value as increased by [customs duty, sales tax and federal excise duty, if any levied thereon:
iv. Gold; "Provided that Tax under Section 148 on the import of gold shall be collected at the rate of Rs 25 per ten grams of gold if imported for the purpose of selling at Pakistan Mercantile Exchange Limited," SECP proposal said.
Source:-www.brecorder.com
Wilkie Bill To Ban Live Exports By 2017
Live animal exports would be banned by 2017 under a private bill introduced by federal independent MP Andrew Wilkie, who says the industry has run out of "last chances".
Mr Wilkie lashed out on Monday at failed attempts to clean up the live exports trade in the wake of the 2011 scandal involving the slaughter of Australian cattle in Indonesia.
Reeling off continued breaches in countries such as Turkey, Kuwait, Egypt and Indonesia, the Tasmanian independent said the government's Exporter Supply Chain Assurance System had proven to be ineffective.
"No wonder the Australian people have no confidence in the live export industry," he told the House of Representatives.
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"There is simply no doubt that the industry and ultimately the government have got it wrong - surely they are out of last chances."
Under the Live Animal Export Restriction and Prohibition Bill 2013 the trade would cease by July 2017, following a phased reduction in exports.
Claims that a ban would be disastrous for farmers and rural communities were "patently false", Mr Wilkie said.
While the sheep and cattle meat industry was worth $16 billion each year, live exports were worth only $730 million.
"That's just five per cent," he said.
Greens MP Adam Bandt told parliament his party backed a ban on live exports, and had introduced a similar bill in the Senate.
"The reality is that expose after expose shows that the system is failing animals," he told parliament.
"It is clear that a shipment from Australia and the slaughter of livestock in overseas abattoirs cannot be controlled from behind a desk in Canberra."
Mr Bandt introduced his own private member's bill on Monday to set up a federal Office of Animal Welfare, which would be charged with monitoring the live export industry.
Debate on both the Voice for Animals (Independent Office of Animal Welfare) Bill 2013 and Mr Wilkie's export ban bill was adjourned to a later date.
Source:-news.smh.com.au
Shortage Of Thermal Coal In India Provides Opportunities
Thermal coal prices have been on the wane but India is relying on imports to bring coal supplies to power deprived regions of the country.
Delays in federal approvals for mines in Inida have meant that power plants of coal supplies and keeping almost 400 million in India without electricity.
According to the Central Electricity Authority, more than 33 power plants in the country, with a total generation capacity of 31,320 megawatts, had coal stocks of less than seven days as of May 21. Stocks of less than 15 days are considered critical.
Power producers in India are relying on imports of the fuel to bridge a shortfall in shipments from Coal India Ltd., the nation’s monopoly supplier.
Grade of domestic coal is also an issue, declining international prices are also encouraging Indian power producers to import coal.
NTPC Ltd., Asia’s second-biggest power utility by value, will almost double purchases of coal from outside India this fiscal year to curb fuel shortages at its plants.
NTPC has placed an order for 7 million tonnes of imports of thermal coal and set to import another 10 million tonnes in two phases during the year.
Source:-www.proactiveinvestors.com.au
Commerce Ministry Takes Steps To Help Exporters
The commerce ministry seems eager to help exporters in many small ways, while the Reserve Bank of India seems to be doing the opposite.
Last week, the commerce ministry enhanced the threshold limit for eligibility under the Market Development Assistance Scheme from Rs 15 crore to Rs 30 crore from June 1, 2013, thus enabling more exporters to take advantage of the scheme.
For participation in trade fairs and exhibitions, they will now get up to Rs 2,50,000 (instead of earlier Rs 1,80,000) - in Latin American countries and Rs 2,00,000 - (instead of Rs 1,50,000) in select African, CIS and Asian Australia and New Zealand and Rs 1,50,000 - (instead of Rs 80,000) in other countries. Reimbursements to the Export Promotion Councils have been enhanced. higher ceiling of Rs 40 lakh for international exhibitions for more than 75 members would encourage these organisations to provide exposure to Indian exporters on a large basis, says Rafeeque Ahmed, president of the Federation of Indian Export Organisations.
Earlier, the commerce ministry amended the grievance procedure allowing the Director General of Foreign Trade (DGFT) to grant personal hearing and decide cases, where an importer or exporter is not satisfied with the decision of Policy Relaxation Committee (PRC) or a decision/order by any authority sub-ordinate to him. The notification no. 8 dated April 22, 2013, says that the opportunity for personal hearing will not apply to a decision/order made in any proceeding, including an adjudication proceeding, whether at the original stage or at the appellate stage, under the relevant provisions of Foreign Trade (Development & Regulations) Act, 1992. It will apply to cases where a request for review before the said committee or authority has been filed, the committee or authority has considered the request for a review, the exporter/ importer continues to be aggrieved and makes a specific request for personal hearing. The office of DGFT has seven norms committees and eight other committees that meet regularly to decide a number of issues, including relaxation of policy or procedures, policy interpretation, etc. Exporters and importers used to feel helpless if the committees rejected their cases. Now, they have an option to go before the DGFT and explain their case, in person.
The DGFT has called for suggestions from the trade to identify reasons for high transaction cost in exports, to identify areas where Indian exporters face administrative impediments that lead to increase in transaction cost, compare procedural complexities in exports between India and its major competitors and suggest guidelines/steps for removal of procedural complexities drawing from the global best practices and to move towards transparent and increasingly paperless processing through digital platform. These will be considered by the Second Task Force on Transaction Cost that has been constituted under the chairmanship of DGFT in pursuance of the announcement made by commerce minister on April 18, 2013.
The DGFT has also called for feedback/suggestion on the draft Appendix 37 A (VKGUY) and Appendix 37 D (FPS and MLFPS) that have been prepared after alignment of the item description with ITC (HS) Codes.
The Reserve Bank, for no good reason, has cut the time limit for realisation of export proceeds from 12 months to 9 months. This move is unlikely to help RBI, as exporters who can't get their export proceeds within 9 months will seek extension in the time limit. It will only increase unnecessary paper work for exporters.
Source:-www.business-standard.com
Once exemption under DTAA is allowed, reassessment without any new material on record, is bad
IT/ILT : Where assessee's claim of exemption under article 8 of Indo-US DTAA was allowed, in absence of any new material coming to possession of Assessing Officer, initiation of reassessment was bad
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