IT : Registration under section 12A could not be denied to assessee trust merely on ground that it earned profits by charging substantial fees and that it violated requirements of Right to Education Act
Wednesday 10 July 2013
Commissioner (A) may consider grievances of assessee and condone delay upto time limit specified in
ST : Whenever an appeal is filed belatedly, Commissioner (Appeals) should not hesitate to consider grievance of assessee, if a proper application is made before him and must condone delay up to period specified in section 85
Winding up petition dismissed as respondent Co. raised an arguable case against claim of petitioner
CL: Where respondent-company raised an arguable case against claim made by petitioning creditor, claim of petitioning creditor was to be relegated to a suit and winding up petition against company was to be dismissed
No recovery during pendency of stay application if such pendency wasn’t due to fault of assessee
ST : Department cannot recover service tax during pendency of stay application before Commissioner (Appeals), if such pendency is not due to any fault of assessee
Option of claiming higher depreciation deemed to be exercised if it's reflected in books of power ge
IT: Where there is no specific form or method prescribed for claiming higher rate of depreciation by undertakings engaged in generation and/or distribution of power, claim made in return which is reflected in books of account and audit report filed with return, is proper
Emerald's Bumper Grain Exports
MELBOURNE port terminal has set a new record on annual loading of grain.
About 1.4 million tonnes of grain were shipped through the port for the year ended June 30.
This was mostly made up of 1.3 million tonnes of bulk shipments of wheat, barley, canola and corn and 100,000 tonnes of containerised grain.
Emerald Grain said a record number of 47 ships berthed at the port during the year, loading an average 27,000 tonnes.
"We are extremely pleased with the way the terminal is performing," Emerald Grain's supply chain and operations general manager John Warda said.
Mr Warda said the higher throughput was due in part to the company's use of the Victorian and NSW train network.
Emerald aimed to receive at least half of its deliveries to the terminal by rail.
He said Emerald was hoping to build additional storage on the site and add extra road intake to increase throughput, subject to Port of Melbourne Corporation approval.
"Once these works are complete, the terminal will be capable of exporting around 2.4 million tonnes per year," he said.
Source:-www.weeklytimesnow.com.au
Ministry Likely To Upgrade Exports Of Import Intensive Commodities
10-Jul-2013
The ministry of commerce may come up with measures for enhancing exports primarily for commodities which are import intensive for raw material like gold, gems and jewellery exports.
It has further suggested to ministry of finance to link gold import with amount of gold items export. According to proposal an exporter of gold items will be allowed to import 3-4 times the amount of its export.
"It will act as incentive for the exporter as additional amount left after its use for export items, it can be sold to domestic market", said an official source close to the development. Besides, the license for gold export and import can be also made transferable and saleable to other, they added.
Explaining this, they said, if one entity with the license is finding it difficult to procure orders and hence not importing , it could sell the license to some other entity who has many orders. In this way, the license can be used fruitfully besides compensating the original licensee as it can help him earn some money. At the same, the new exporter will not have go through less administrative rigours for securing a license.
According to officials, this scheme should be made applicable for the second window of gold import. Currently there are two windows - one for import of gold for domestic consumption which attracts eight per cent import duty. The second for import of gold for exporters and export purposes which does not have any duty .
However this proposal is not finding favour with either ministry of finance or Reserve Bank of India (RBI) as according to them it will amount to quantitative restrictions. Further it will be difficult to monitor the entire scheme. However officials added, consultations are going on before any decision is taken.
Meanwhile, agencies importing gold for exporters have been advised to give priority to exporters for supply of gold after it is imported. Further different credit schemes like suppliers credit, buyers credit etc. will be further relaxed for easy financing the exporters.
Source:-www.business-standard.com
Depreciating Rupee Delays Export, Import Orders
July 10, 2013
The sustained depreciation of rupee in the past one month is showing its impact on the industry as both the exporters and importers in city have put their orders on hold.
The importers, who are being directly hit due to the situation, have reduced their orders considerably to minimise the losses, whereas many exporters have put their export orders on hold because of demand of heavy discounts from the customers.
Contrary to the common perception that the exporters would benefit from the strengthening US Dollar, the exporters here in the city, that is the hub of industry in state, rued that looking into the stronger position of the US currency, the overseas customers were demanding huge discounts from the manufacturers.
The exporters expressed that in an ideal situation, strengthening of rupee helped them, but the huge depreciation of the Indian currency had made their customers aware of the situation, who were seeking discounts, while the aspect of increase in input costs due to the situation was being ignored.
SC Ralhan, president, Ludhiana Hand Tools Association, and chairman of Engineering Exports Promotion Council, said the customers were virtually resorting to pressuring the manufacturers for granting discounts in the purchase. “Due to prevailing situation, the manufacturers are forced to pay discounts of about 2 to 5% or put the orders on hold, which is hurting them,” he said.
Rahul Ahuja, managing director of Rajnish Industries Limited, a manufacturers of auto parts, said what was more worrisome was the fact that the customers were ignoring the very fact that due to depreciation of rupee, their input costs had gone up.
“Due to the prevailing situation, we have to put on hold the supply of auto parts to our clients in Germany and Indonesia because they were demanding huge discounts,” he said, adding that they had no other option but to extend discounts or delay the consignments till the situation improved.
On the other hand, importers who are the direct sufferers on account of prevailing conditions have reduced their imports.
Ripan Jain, managing director of Sharman Shawls, said due to continuous depreciation of rupee, imports of law wool used in shawl manufacturing had gone very costly and was making them uncompetitive in the market.
“Its affect is visible as we had to reduce the imports by about 25% recently,” he said, adding that industry dependent on imports had no other option but to reduce the imports. Meanwhile, manufacturers of cycle parts are a happy lot. Due to prevailing situation the imports of cycles and their parts, which is mainly done from China, has gone costly, thereby giving the local parts manufacturers a chance to raise their business.
Pardeep Wadhawan, secretary of United Cycle and Parts Manufacturers Association, said the cycle parts' manufacturers were happy with the situation.
Source:-www.hindustantimes.com
Rupee Up 24 Paise Vs Us Dollar In Early Trade
MUMBAI: The rupee today rose by 24 paise to 59.41 in early trade at the Interbank Foreign Exchange market as the dollar weakened against other major rivals overseas after US Federal Reserve Chairman Ben Bernanke said its huge stimulus programme would stay in place for some time.
Besides, increased dollar selling by exporters and a higher opening in the domestic equity market also supported the rupee, forex dealers said.
The rupee had gained 49 paise, the most since June 28, to close at 59.65 against dollar in yesterday's trade, after the RBI and Sebi took steps to curb volatility.
Meanwhile, the BSE benchmark Sensex rose by 290.26 points, or 1.50 per cent, to 19,584.38 in early trade today.
Source:-economictimes.indiatimes.com
Tougher Times Ahead For Exporters
NEW DELHI: There is more bad news for Indian exporters with the preferential access to the US, known as generalized system of preferences (GSP), set to expire at the month-end.
Expiry of the benefits are expected to hit small scale and labour-intensive industries the most, prompting commerce and industry minister Anand Sharma to once again take up the issue when he meets US trade representative Mike Froman later this week. But given Froman's strong stance against imports from emerging market economies such as India and China, an extension is not going to come easily, said officials.
Even before he was nominated for the trade negotiator's job, Froman had taken a strong anti-India stance on the WTO trade talks and blamed India for blocking negotiations on issues such as trade facilitation.
In any case, Indian officials see growing signs of protectionism in the US, as manifested in the visa restrictions and attacks over the labour regime. Besides, the US is exerting pressure on India over its intellectual property regime, although New Delhi has maintained that steps such as patent waiver in public interest and checks on unwarranted patents are in line with the legal provisions and Trips. Besides, India is often blamed by the US for initiating "protectionist measures" such as local procurement for solar energy and telecom equipment.
The US is expected to use extension of GSP benefits to get India to address some of its concerns amid a growing clamour for canceling the sops that were started in 1976. On June 18, 14 US business groups launched "the Alliance for Fair Trade with India" that called upon the US government and Congress to press India on issues of concern to them. Companies such as IBM have advocated linking these issues to GSP benefits.
What is GSP?
The scheme provides preferential duty-free treatment for over 3,500 products from 127 developing & poor countries
Goods such as textiles and apparel, watches, footwear, handbags, luggage, flat goods, work gloves and leather apparel are not entitled for GSP treatment. No sops are given for import of sensitive steel, glass and electronics
The benefit is reviewed annually, programme lapsed in 2010
It was reauthorized in Oct 2011 and the current congressional authorisation expires on July 31, 2013
In 2011, India was the second largest beneficiary
Times View
The government needs to take immediate steps to make Indian industry, including the small scale sector, more competitive so that it does not have to lobby for getting preferential access for Indian exports. The emphasis should be on supplying uninterrupted power and better road, rail and port connectivity so that Indian companies are not burdened with a high cost of operations. At the same time, transaction costs need to be reduced and industry should be freed from bureaucratic red tape. For a country which is pitching hard for a place on the global high table, nothing can be more embarrassing than finding itself in a situation in which it is lobbying for concessions meant to go to the poor and least developed countries.
Source:-timesofindia.indiatimes.com
Price Hike By Import-Oriented Cos On The Anvil
10-Jul-2013
The weakness in Indian rupee has made imports expensive thereby forcing import-oriented companies to hike product prices. In the first quarter of the current fiscal (Q1FY14), rupee has depreciated by nearly 8.5 percent. Rupee has breached 61 mark against the dollar on July 8, 2013 and touched all-time low of 61.21. Experts believe that rupee depreciation may bring margins of import-oriented companies under pressure.
Recently, companies like Indraprastha Gas Limited (IGL), Exide Industries, OMCs (oil marketing companies) have increased the respective product prices in order to protect the margins. IGL has hiked the prices of compressed natural gas (CNG) and domestic piped natural gas (PNG) by Rs 2 per kg and Rs 1 per unit respectively in Delhi. The move has been taken to compensate part of increase in input costs because of rupee depreciation. Even, Exide Industries has raised battery prices across segments by 5–6 percent on high import cost of lead. OMCs have also increased the price of petrol due to the slide in rupee.
Furthermore, many companies are planning to follow the suit. Videocon is looking to increase the price of set-top box after the market leader Dish TV raised the prices of its set-top boxes by Rs 250. Tyre companies are also mulling price hike as they largely imports rubber from Thailand, Indonesia. Natural rubber is the major raw material used in the manufacture of tyres and accounts for 60-65 percent of overall raw material cost. In case of JK Tyre, rubber constituted 65.5 percent of total raw material cost in fiscal 11-12. For Ceat Limited, rubber constituted 64.33 percent of total raw material cost in fiscal 11-12. For MRF Limited, rubber constituted 65.02 percent of total raw material cost in fiscal 11-12.
Similarly, paint companies may follow the move as these companies import nearly 25 percent of raw materials. In case of Exide Industries, while lead constituted 77.18 percent of total raw material cost in fiscal 12-13, company imports about 60 percent of its lead requirements.
Reasoning out the price hike undertaken by import-oriented companies, Nipun Mehta, Founder & CEO, BlueOcean Capital Advisors, opined, “Import-oriented companies are going to hike prices as their operating costs are going up. Hence, they will try to pass on to the consumers. Essentially the oil marketing companies will be largely impacted by the rupee fall as they are the largest importer of crude.”
In sync with the view, Avinash Gorakshakar, research head, miintdirect.com, said, “Import-sensitive sector will be worst hit by rupee depreciation. Although companies having pricing power (generally FMCG companies) may opt for price hike yet it would be not easy for other companies to hike product prices as volume growth will suffer. Hence, other companies which don’t have pricing power will take one or two month before opting for price hike.”
However, Sudip Bandyopadhyay, President, Destimoney Securities, argued, “Except IT companies, I think every single company in India will get impacted because of rupee downfall. Wherever possible, companies will try to the pass the cost on to the end consumers and where it is not possible, companies will absorb the costs.”
Referring to the impact of rupee depreciation on the corporate earnings, Gorakshakar at miintdirect.com said, “Earnings of India Inc will witness some negative impact of rupee depreciation in Q1FY14. Imported inflation will have a negative impact on the demand (sales volume) for the next one quarter.”
Reiterating the view, Bandyopadhyay at Destimoney Securities asserted, “The second quarter of the current fiscal (Q2FY14) will be disastrous as full impact of rupee downfall will come into play.”
Source:-zeenews.india.com
India May Raise Import Tax On Refined Edible Oil
July 10, 2013
NEW DELHI—India, the world's largest edible-oil importer, is considering raising the import tax on refined products to prevent increasing supplies from Indonesia and Malaysia which hurt local refiners already struggling to generate profits, according to government officials.
Bulk consumers prefer to import refined edible oil from Indonesia and Malaysia because that is cheaper than domestically refined oil, as the difference between crude and refined edible oil has narrowed. Domestic refiners have been complaining that the government's decision to impose a 2.5% import tax on crude edible oil in January has made it almost as expensive to buy as refined products. India taxes all refined edible-oil imports at 7.5%.
Indian edible-oil refiners say their profit margins have been under pressure for more than a year since Indonesia raised the export tax on crude palm oil in order to encourage more production of refined oil, which would generate higher profit margins and job opportunities.
The Indian government will likely raise the import tax on refined products by 2.5 percentage points within a month, a senior food ministry official said.
But Sandeep Bajoria, chief executive of Sunwin Group, said a 2.5 percentage-point increase would only help domestic refiners just about break even. He said the import-duty difference between crude and refined oil needed to be at least 10% for domestic refiners to generate profits.
Imports of refined palm oil from Indonesia and Malaysia by bulk consumers rose about 16% to 1.25 million metric tons during the first seven months of this marketing year, according to the Solvent Extractors' Association of India.
Refined palm oil imports hit a monthly record of 373,837 tons in May.
In May, refined palm oil as a proportion of overall palm-oil imports surged to an all-time high of 42% from an average range of 12%-16%, according to a report by India Ratings & Research.
"Domestic refiners are now operating at 30%-35% capacity-utilization levels as against around 50% earlier," India Ratings said.
Indonesia's export tax on crude palm oil was fixed at 10.5% in July. The export tax for refined palm olein is at 4%, up slightly from 3% in June. Malaysia levies a 4.5% tax on crude palm oil, but it doesn't tax exports of palm olein.
Palm-olein prices in the local market are currently around 54,500 rupees ($908) per ton.
India's edible-oil imports have been rising over the past decade, hitting a record 10 million tons in the last marketing year ended Oct. 31.
Source:-online.wsj.com
No tax on sum paid to NRI for employment exercised in UK if it was offered to tax in UK
IT/ILT: Salary income received by assessee NRI, for employment in UK which was offered for taxation in UK, was not taxable in India under Indo-UK DTAA
MAT is a tax; it isn’t a compulsory interest free deposit and its provisions aren’t unconstitutional
IT : Provisions of sections 115JA and 115JAA are neither arbitrary nor unreasonable nor ultra vires to any provisions of the Constitution. The contention of the petitioner that the tax paid on the basis of computation under section 115JA of the Act amounts to a compulsory deposit on which no interest is paid to the assessee is also misconceived. The tax as payable on income as computed under section 115JA of the Act is a tax levied under the Act, albeit computed on the basis of the book profits
MAT is a tax; it isn’t a compulsory interest free deposit and its provisions aren’t unconstitutional
IT : Provisions of sections 115JA and 115JAA are neither arbitrary nor unreasonable nor ultra vires to any provisions of the Constitution. The contention of the petitioner that the tax paid on the basis of computation under section 115JA of the Act amounts to a compulsory deposit on which no interest is paid to the assessee is also misconceived. The tax as payable on income as computed under section 115JA of the Act is a tax levied under the Act, albeit computed on the basis of the book profits
Section 54EC benefit to be worked out before setting off long-term capital losses under section 70(3
IT : As per the scheme of the Act and the Board circular, for taking benefit under section 54EC, it is not necessary that one should first apply section 70(3) and thereafter only, the assessee could invest the capital gain arising from the long term capital asset to any specified bond as specified under section 54EC
No question of ‘under or over pricing’ if NR AE sells items to assessee at its purchase price
IT/ILT : When non-resident AE sold items to assessee at very same price at which AE had purchased from a non-AE, there cannot be any question of under-pricing or over-pricing
FII investment in specified security receipts to be reckoned against the existing corporate debt lim
SEBI : FII/QFI Investments in Security Receipts
HC orders partial pre-deposit in respect of demand relating to margin earned by freight forwarders
ST : Freight-forwarders, engaged in booking cargo space in airlines and shipping lines and charging freight from customers in excess of that actually paid by them, cannot be granted full waiver from pre-deposit of demand on such excess collection under Business Auxiliary Services
Banks can trade in currency futures or exchange traded currency options market only on behalf of the
FEMA/ILT : Risk Management and Inter Bank Dealings
Modification of ECB guidelines for NBFCs
FEMA/ILT : External Commercial Borrowings (ECB) Policy - Non-Banking Finance Company - Asset Finance Companies (NBFC - AFCS)
SEBI curtails position limits on client and trading members for currency derivatives
SEBI : Revised Position Limits for Exchange Traded Currency Derivatives
Date of ‘delivery’ of immovable property and ‘receipt’ of consideration preferred over date of ‘agre
IT: Date of agreement to sell cannot be treated as date of transfer of immovable property, it should be date on which delivery of possession is given and entire sale consideration is received
Clause (d) inserted in sec. 80-IB(10) won’t have retro effect
IT: Amendment brought about in section 80-IB(10) by insertion of clause (d) with effect from 1-4-2005 will not apply to an assessment year prior to 2005-06
Submission of audited accounts doesn't suppress the authority of AO to order for special audit
IT : Submission of audited accounts per se would not oust jurisdiction or authority of Assessing Officer to pass a direction for special audit
Penalty on a small assessee to be waived off if he co-operated in proceedings with department
ST : Where a small assessee had co-operated in proceedings and paid service tax with interest when demanded, penalty was liable to be waived under section 80.
Passenger transport from India and back to India without any stopover in other country is liable to
ST/ECJ : Transport by sea/air is carried out entirely within India and subject to service tax if : (1) places of departure and arrival are situated within Taxable territory of India ; and (2) there is no stop in another country
No additions merely on basis of seized docs if no evidences were found to prove their authenticity
IT : Making addition merely on basis of seized documents without cogent evidence that excess amount mentioned in seized document had actually passed on to assessee, was not sustainable where books of account of assessee-construction company were duly audited
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