Receipt of share capital on direction of SEBI is a capital receipt

IT : Sum received by way of share capital as per directives of SEBI is a capital receipt

‘International roaming’ service is an ‘export’ of service; UK and Australian laws relied upon

ST : Provision of telecom services in India to international inbound roamers registered with foreign telecom network operators but located in India at time of providing said services amounts to "export of service"

Only commission earned on Hawala transaction to be charged to tax and not the total accommodated ent

IT : Where assessee, a share broker, earned commission on providing accommodation entries to its customers, it was only said commission which could be added to assessee's taxable income and not entire amount representing value of transaction

Replacement of ‘integral’ part of machine would come within realm of current repairs under sec. 31

IT : When an integral part of machine is replaced, it would come within connotation of 'current repairs'

Positive Change For Domestic Sector

The finance ministry has allowed removal of goods to duty-free shops at international airports without excise duty payment for sale in foreign currency to international travellers. Earlier, duty on only some electronic goods was exempted for sale through such shops. So, such shops mostly contained only foreign goods.



To give effect to this very welcome provision that will help domestic manufacturers, the government has notified such duty-free shops or godowns as export warehouses, waived the registration requirement for these and exempted the goods cleared to such warehouses on which excise is legally leviable. The Central Board of Excise and Customs (CBEC) has issued circular 970/04/2013-CX, dated May 23, prescribing the conditions, limitations, safeguards and procedures for removal of such goods to godowns or retail outlets of duty-free shops at international airports, to which the warehousing provisions have been extended. Travellers going abroad or returning to the country can now hope to see India-made goods along with foreign ones in the shelves of duty-free shops.



While this attempt to promote Brand India is a welcome move, the CBEC should consider grant of drawback to such India-made goods sold to departing travellers against payment in foreign currency. And, include removals to such warehouses under Rule 6(6) of the Cenvat Credit Rules, 2004, so that the manufacturers are not required to forego the Cenvat Credit on the inputs used in the manufacture of such goods.



The CBEC has also issued circulars to facilitate transhipment of imported goods directly from gateway ports to Container Freight Stations located inland and to resolve the difficulties in availing of import duty exemptions concerning the oil exploration sector. These clarifications will ensure more flexibility to importers and reduce transaction costs.



The Directorate General of Foreign Trade has clarified that the benefits of deemed exports under para 8.2(f) are available only if supplies are under International Competitive Bidding (ICB), except for mega power projects; for the latter, this needn't apply. The relevant circular (no 1, dated May 29), says para 8.3(c)(i) and 8.4 of the Foreign Trade Policy (FTP) clearly provide that if supplies are under ICB, then these are exempted from payment of terminal excise duty. And, if supplies are not under ICB, then these are eligible for refund.



The circular reiterates that deemed export benefits are not available for supplies to non-mega power projects and that para 8.2(f)(i) and para 8.2(f)(ii) of the FTP are in continuation and, hence, to be read in conjunction. It says that para 8.2(f)(ii) of the FTP lays down conditions in respect of supplies covered under para 8.2(f)(i). The circular is clearly worded, tracing the evolution of the relevant legal provisions and leaves no doubt regarding the correct position.



The Reserve Bank of India widened the interest subvention scheme to include six more tariff lines in the textile sector and 101 more in the engineering sector. The dispensation will help exporters' access to pre-shipment credit at lower interest rates. Meanwhile, the development commissioner of the SEEPZ Special Economic Zone says gold and jewellery units must achieve a certain minimum value addition, a condition that comes as a surprise, as the SEZ laws prescribe only positive net foreign exchange earnings.

Source:-www.business-standard.com

Data Goof-Up: Iron Ore Exports Shown 157% Higher In 2012-13

Though the mining crisis in India led to an unprecedented decline in iron ore exports in 2012-13, following a regulatory crackdown, the official statistical department had merely glossed over this.



Figures compiled by the Directorate General of Commercial Intelligence & Statistics (DGCIS), under the commerce ministry, showed India's iron ore exports jumped a whopping 157 per cent to 121 million tonnes in 2012-13, compared with 47 million tonnes a year ago.



The same data showed the export value for iron ore declined to about $1.6 billion from about $4.6 billion through the same period.



These figures vary significantly from data released by other entities. According to the Federation of Indian Mineral Industries, outbound shipments of iron ore declined from 61.74 million tonnes in 2011-12 to 18.37 million tonnes in 2012-13.



Latest provisional data from the mines ministry showed iron ore exports during the April-December 2012 period stood at 14.2 million tonnes.



"We have released the principal commodity wise figures for March 2013, as well as April-March 2012-13. The item level data for March 2013 is currently under validation," DGCIS Director General D Sinha told Business Standard.

He added according to provisional figures, in 2012-13, iron ore exports stood at only 17 million tonnes, compared with 47 million tonnes in 2011-12. A revision would be made when item-wise figures are released by end of this month.



To a query on whether the revision would lead to a change in the value of export figures for the item, he said, "There will be no change in the value figures for exports." To increase domestic availability of iron ore, the government had, last year, increased the duty on iron ore exports to 30 per cent.



Also, due to various illegal activities in the mining sector, exports from two of the largest iron ore producing and exporting states, Goa and Karnataka, were banned.



Earlier, the ministry of statistics and programme implementation had made an error, showing industrial growth for January 2012 at 6.8 per cent, against the actual 1.1 per cent, owing to confusion over sugar output data sent by the Directorate of Sugar.

Source:-www.business-standard.com

Marriott Exports A New Hotel Brand For Millennials

Marriott International today will announce plans to introduce to the U.S. a European-based hotel chain that targets younger, tech- and design-savvy travelers.



Marriott will import the AC Hotels by Marriott, a Madrid-based, midprice brand it partnered with in 2011 to broaden its European presence. The Bethesda, Md.-based hospitality giant is betting on the urban lifestyle hotel chain to capture the lucrative Millennial market and its rapidly growing purchasing power.



"It's the right time to bring it to the U.S.," says Brian King, global brand officer for Marriott Endorsed Brands. "You import wine and you import cars. We're going to import a hotel brand."



It's a first for Marriott. And it's the second aggressive move the company has made on the Generation X and Y traveler this year. Recently, Marriott announced it is partnering with the Swedish IKEA furniture company to launch Moxy, a budget chain for Europe. It will run the AC Hotels by Marriott as a joint venture in the U.S. There are already 79 AC Hotels by Marriott in Spain, Portugal, France and Italy.



Hoteliers and researchers say Millennials, those generally born in the 1980s to the early 2000s, are unique travelers because they want to stay constantly connected through social media, they want coffeehouse-like spaces where they can work and play, and they want unique and local amenities. They also want it all instantly and in a comfortable, modern setting.



The company will describe its plans for AC Hotels by Marriott at the 35th Annual New York University International Hospitality Industry Investment Conference today.



King says the Generation X and Y business traveler has been underserved. He cited Marriott research that indicates that business travelers ages 21 to 49 who make three or more business trips a year spend $34 billion on hotel rooms.



"This generation … they grew up with Gilt, Target, Fab.com, Apple," he says. "These brands are affordable and stylish and they're great-looking and they feel curated. And that's what AC Hotels is."



Chekitan Dev, an associate professor at Cornell University's School of Hotel Administration and author of Hospitality Branding, says other hotel companies have started brands to appeal to the young traveler, most notably Starwood's Aloft and IHG's Hotel Indigo. Commune Hotels & Resorts, parent company of Joie de Vivre Hotels and Thompson Hotels, last week announced it is launching Tommie, a brand for the price-conscious youthful traveler.



"There are multiple brands that are capitalizing on the Millennial demand growth with smart design and advanced technology," Dev says. "This space is expected to grow."



King says AC Hotels will appeal to those travelers who appreciate design, technology, good lighting and quick, efficient service. An AC Lounge will have a menu of small plates, cocktails, wines and craft beers. Visitors will be able to book spaces for meetings from their smartphones using Marriott's Workspace on Demand app. And Wi-Fi will be free throughout the property.



King says Marriott hopes to open 200 AC Hotels by Marriott in the next 10 years. The company is scouting out locations for the first property but could open one as soon as next year.



APPEALING TO MILLENNIALS



Millennials already outnumber the Baby Boomer generation. According to the United Nations Department of Economic Social Affairs, there are about 79 million Millennials vs. 76 million Baby Boomers. By 2030, Millennials are expected to exceed the number of Baby Boomers by 22 million.



Older Millennials are starting to spend more money and travel more, especially for work, experts say.



C. Patrick Scholes, a gaming and lodging analyst for SunTrust Robinson Humphrey, says hotels started to appeal to the younger generation before the recession hit. The recession slowed hotel building, but hotels are now ready to pick up the pace.



"As the economy improves and development slowly starts to return, it is a natural progression that the hotel companies will go after the next generation of business travelers," he says.



A survey last year by Boston Consulting Group of 4,000 Millennials ages 16 to 34 and 1,000 non-Millennials ages 35 to 74 found key differences between consumers in both age groups. Millennials value speed and convenience, are more likely to trust advice from peers than people with professional credentials and use technology to connect with more people in real time, the study found.



Dev says hotels are responding to that by "emphasizing off-beat and accessible locations, modern and comfortable design, smaller and more functional rooms, fewer and targeted amenities, cutting-edge and easy-to-use technology, fun and hospitable service, and fewer and multifunctional public spaces."



Aloft, which has 70 hotels in 10 countries, has drawn younger business travelers with live music in lobbies and high-tech amenities, such as Smart Check-In, which lets members of the loyalty program bypass the front desk and go directly to their rooms with special key cards.



Recently, Aloft also partnered with Design Within Reach, known for its modern design, to furnish the hotels' public spaces.



"We skewed to people who like design, like fashion. They're interested in the next generation of technology," says Brian McGuinness, senior vice president for Starwood's specialty select brands. "They're flipping through Architectural Digest. They like modern design. They also like authenticity."



Design is also important to Hotel Indigo's clientele, says Mary Winslow, director of Americas Brand Management for Hotel Indigo. She says Indigo, which started in 2004, does not target any particular demographic. Instead, the hotels appeal to people who exhibit certain behaviors.



"We look more at the behavior and interests of the guest," she says. "We know that they're curious, that they seek out new experiences, that they appreciate vibrant design. … It's more about who they are."



That approach has worked well enough for the company that it plans to double in size from 51 hotels around the world to about 100 in the next three to five years.



Commune's Tommie, which will launch in New York in 2015, is unabashedly going after Millennials. Public lounges called Reading Rooms will promote socializing. Guests will be able to check themselves in and dine from a gourmet grab-and-go marketplace. Rates will stay in the mid-$200 range because of the limited services.



"We are creating hotels that will appeal to youthful, design-savvy, connected and discerning travelers seeking responsible and immersive experiences," says Jason Pomeranc, co-chair of Commune Hotels & Resorts and founder of Thompson Hotels.



Antonio Catalan, founder of AC Hotels, said that even though the chain is targeting younger business travelers, the properties can appeal to just about anyone. "It's really adaptable to a wider range of customers," he says.

Source:-www.usatoday.com

Coal Exports Rise 5Pc In April

COAL shipments from Australia, the world's No 2 exporter of the fuel, rose in April as key mining regions in the country's east recovered from torrential rains that earlier this year disrupted some mining operations and damaged infrastructure.



Exports from major Australian coal terminals increased 5% during the month to 27.55 million tonnes, from around 26.24 million tonnes in March, figures compiled by The Wall Street Journal showed today.



Shipments from Queensland state's Abbot Point, Australia's most northerly coal port, were up 30% on the month at 1.80 million tons, while exports from Newcastle, the nation's largest coal export port, located in New South Wales state, rose 7.6% to 11.95 million tonnes.



Despite the monthly rise, throughput at the country's largest coal ports was down 15% compared with December, prior to the rain damage, when exports peaked at 32.43 million tonnes.



Australian coal shipments fell sharply during the first few months of 2013 after the remnants of a tropical cyclone battered Queensland, the country's largest coal-producing state. Some rail links were shut for parts of February and March after severe flooding from what was the state's heaviest rainfall in two years and major producers like Rio Tinto and Yancoal Australia declared force majeure on contracts they weren't able to fulfil.

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Australia is the world's largest exporter of coking coal, used in steelmaking, and the second-largest shipper of thermal coal, used for electricity generation. The country accounts for more than half of all coking coal traded by sea and one-fifth of seaborne thermal coal.



The Australian government has forecast coal exports will reach nearly 340 million tons, valued at more than $40.59 billion, in the fiscal year through June. Official coal export data from the Australian Bureau of Statistics for April are due to be released on Thursday.



Exports from Australia were up from a year earlier, the survey data showed, with increased capacity at ports like Newcastle helping drive up volumes. Shipments were 6.9% higher in April compared with the same month a year earlier, when they stood at 25.78 million tonnes, according to the figures.



Coal exports from the resource-rich country have been rising despite a sharp fall in prices due to slowing demand from important buyers like Japan, South Korea and China.



Australia exports more than 80% of its coal output, and miners have continued to produce high volumes of the raw material - despite a significant squeeze on margins - after signing so-called "take or pay" contracts with rail and port operators.



Coal producers agreed to long-term deals to lock in space at export terminals when the coal industry was booming, but it means they would now need to pay for access even if they were to cut production.



Mining companies such as Glencore Xstrata and Yancoal have tried to sell excess port capacity, but Yancoal said it had so far had little luck attracting buyers.

Source:-www.theaustralian.com.au

Imports Of Edible Oils, Pulses Also Rise

Imports of both, edible oils and pulses grew significantly (by 15.5 and 26.21 per cent, respectively) in 2012-13 year-on-year, as India struggled with flat production and rising demand in these two food items.



While imports of edible oils crossed $10 billion in 2012-13 from $9.7 billion, those of pulses were still comparatively less. India imported $2.33 billion of pulses last financial year compared with $1.85 in 2011-12. Analysts blamed the pricing policy of the government in favour of rice and wheat, which do not factor the changing consumption pattern.



Oilseed production dropped almost 8.25 per cent to 29.79 million tonnes in 2011-12 (November-October) because of low kharif harvest on account of uneven rains.



In 2012-13 too, oilseed production is expected to be only marginally better than last year also because of poor rains in the main growing regions of Maharashtra and Gujarat. It is estimated to be around 30.7 million tonnes.



Going forward, experts said domestic oilseed production is falling woefully short of edible oil demand, which would continue to rise further aggravating supply-demand mismatch in the coming years. "India every year needs an additional seven to eight lakh tonnes of edible oils, for which oilseed production has to increase by at least five million tonnes, unthinkable given that India's domestic oilseeds production has stagnated at around 28-32 million tonnes," said executive director of Solvent Extractors Association of India, B V Mehta.

Source:-www.business-standard.com

Paper Work: Updating details in the NPS

A subscriber of the National Pension System (NPS) needs to record any change in signature in the NPS database. An updated photograph can also be recorded using the same procedure. For any of these changes, the subscriber needs to use Form UOS-S7. This form is available with the POP-SP (point of presence service provider) or can be downloaded from the NPS website at http://tinyurl. com/qj2wbv7.

Information

The subscriber needs to indicate whether the request is for change in signature or for updating the photograph. If the request is for the latter, a recent colour photograph of 3.5 cm x 2.5 cm needs to be affixed.

Verification

The NPS subscriber needs to visit the office of the POP-SP in person and submit the form along with a copy of the PRAN card. On receipt of the form, the POP-SP shall affix the stamp of 'Verified in person' with the date as well as the name and signature of the authorised official of the POP-SP who has done the verification.

Process

The POP-SP will forward the request to the central recordkeeping agency (CRA) for updating records for the new signature and/or photograph. The CRA shall print a new PRAN card and dispatch it to the subscriber's address.

Conditions

The POP-SP accepts request for change of signature or photograph only from a subscriber associated with it.

Points to note

- The signature/thumb impression of the applicant should be inside the rectangle provided on the application form. It must be the lefthand thumb impression for males and the right-hand thumb impression for females.

- The photograph should be clearly visible and should not have any marks, stamps and signatures across or on it.

(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre and Arti Bhargava.)

Smart things to know: SWP instead of dividend option

1 - The dividend option in debt funds is subject to dividend distribution tax (DDT). From 1 June 2012, individual investors are subject to 25% DDT on all debt funds.

2 - DDT is levied on all investors and paid directly to the government. Investors cannot claim a refund for the DDT deducted before paying them dividends.

3 - If the investor's marginal rate of tax is less than 25%, choosing the dividend payout or reinvestment option will result in lower posttax return.

4 - Such investors can choose the growth option instead of the dividend one. They can set up a systematic withdrawal plan (SWP) that redeems a few units and pays them the income they need.

5 - The redemption is subject to marginal rate of tax, if made within one year. A monthly SWP will generate a better level of income for them than dividend reduced by the DDT.

(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre and Arti Bhargava.)

High income will make it easy for Shindes to achieve goals

When it comes to planning finances, each family has its own peculiar problems. While some may face a cash crunch, others don't know what to do with their excess cash. The Shindes belong to the latter category.

Comfortably placed with a multinational company, Rakesh Shinde falls in the high-income bracket. A substantial monthly income leaves him with a large surplus. Unfortunately, this is not being converted into adequate investments. Though the Shindes' portfolio is not perfect, they are not unduly worried about the situation.

The couple believe that they will be able to channel their excess cash in the right direction to achieve their goals with the guidance of a professional planner. "Surplus cash is not a problem as it can always be invested in the right options," says Rakesh.

Apart from a high savings rate, the Shindes have a strong net worth at about Rs 1 crore. Rakesh Shinde, 41, lives with his wife, Vandana, also 41, in Mumbai. The couple have two daughters, Sara and Riddhi, aged seven and one, respectively. Rakesh takes home a monthly salary of Rs 1.9 lakh, while Vandana is a homemaker. The couple spends Rs 56,433 on household expenses every month. Another Rs 8,206 is incurred as insurance premium each month, leaving the couple with a whopping surplus of Rs 1.25 lakh. This is sufficient to take care of all the couple's goals.

The Shindes may not have been the smartest at using their surplus cash, but they deserve applause when it comes to getting adequate cover and building a contingency fund. Rakesh has done an excellent job when it comes to preparing himself and his family against exigencies. A life cover of Rs 3 crore—via term plans of Rs 2 crore and Rs 1 crore—will act as a strong shield to protect his family in case of any unforeseen misfortune.

Besides, health insurance is also in place with individual plans of Rs 3 lakh for himself and his wife. Rakesh has also bought a top-up plan of Rs 10 lakh. So, he doesn't need to buy any additional policies.

Apart from this, Rakesh has also amassed a sizeable contingency fund to take care of unexpected expenses. He has Rs 3.7 lakh in his savings bank account, which is more than sufficient for this purpose. Sumeet Vaid, CEO of Ffreedom Financial Planners, advises that only about Rs 70,000 be kept in the savings bank account while the rest can be invested in either a short-term debt fund or a sweep-in fixed deposit. However, as he falls in the highest income bracket, a debt fund will be more suitable for Rakesh.

Given his strong back-up, Rakesh can proceed towards planning for his goals. To achieve these, his current investments in mutual funds and gold can be divided proportionately for each goal. His top priority is to amass a corpus to fund his daughters' education. For Sara's education, he will need Rs 9 lakh in 11 years.

For this goal, Rakesh's debt fund investments that are currently worth Rs 3 lakh will contribute about Rs 8.23 lakh in 11 years' time. Apart from this, his gold investment of about Rs 10,000, is likely to grow to Rs 30,000 in the set time frame. On the other hand, for Riddhi's education, he will require Rs 13 lakh in 15 years. For this goal, his debt fund investments that are currently worth Rs 1.7 lakh are likely to grow to Rs 10 lakh by then.