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

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

Brought forward unabsorbed depreciation can be set off against capital gains

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

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

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

Europe Remains A Threat To World Economy: Oecd

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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



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



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



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



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



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



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



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



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



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



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

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

Rupee Gains In Early Trade

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

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

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

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

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

Import Dip Mirrors Industry Slump

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Jn Port Scraps Decision To Split Planned Mega Container Terminal

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Japan Eases Defence Export Ban On India

29-May-2013

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



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



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



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



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



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



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

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

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

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



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



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



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



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



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



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



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



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



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



WESTERN INVESTMENT



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



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



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



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



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

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

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

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

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

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

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

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

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

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

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

Government of India

Ministry of Commerce & Industry

Department of Commerce

Directorate General of Foreign Trade
Udyog Bhawan, New Delhi

Trade Notice No. 3/2013

Dated 28^th May, 2013

To

All RAs of DGFT

Members of Trade

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

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

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

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

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

(Daya Shankar)

Deputy Director General of Foreign Trade

Email: daya.shankar@nic.in

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

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

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

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

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

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

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

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

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

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

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

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

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