IT: Lease rentals paid are allowable as business expenditure and not as interest by treating cost of leased assets as loan amount
Sunday 28 July 2013
Valuation report of DVO is an estimation and it can't form the basis for addition of undisclosed inv
IT : In respect of valuation of land and building, DVO's report may be a useful tool in hands of Assessing Officer, nevertheless it is an estimation and without there being anything more, it cannot form basis for addition under section 69B
Cenvat credit can be utilized for payment of service tax on GTA services under reverse charge
ST : CENVAT credit can be utilized for payment of service tax payable as recipient of service under reverse charge for period from April 2006 to March 2007
Company which discharges all its liabilities can’t be held liable for any loss under rehabilitation
CL: Where a company managed sick company under a scheme of rehabilitation and had discharged its liabilities and commitments, no liability arises for any losses after expiry of period of scheme
High incentives to directors merely on pretext of higher earning in particular year isn’t justified
IT: Payment of high incentives to directors was not justifiable, merely because assessee company had earned high profits in current year
Hpcl Slams Door On Iran For Crude Oil Imports
July 28, 2013
In a sign that Western sanctions weigh heavily on it, Hindustan Petroleum Corporation Limited (HPCL) has virtually slammed the door on Iran for crude oil imports during 2013-14 and has instead increased imports from Iraq.
The HPCL’s strategy paper for crude imports during 2013-14 — a copy of which is available with The Hindu — states that because of the sanctions the U.S. and the European Union imposed on Iran, it is proposed to have only an optional contract of one million tonne with the National Iranian Oil Company (NIOC); and it will be used on a need basis, if only there is no negative impact on HPCL business. The existing term contract for April 2012-March 2013 was 2 million tonne (40,000 barrels a day), with an optional contract of 1 million tonne (20,000 barrels a day) for 2013-14. But NIOC turned the proposal down, saying it did not have a policy to make a mere optional contract. “Hence, there is no crude-lifting contract with NIOC for 2013-14. This is due to the ongoing US/EU sanctions on Iran,” the paper says.
The HPCL’s stand runs counter to the Petroleum and Natural Gas Ministry’s stand that it is not guided by the Western sanctions while making crude imports from Iran and that it would follow the sanctions if only they were sponsored by the United Nations.
However, the HPCL has stepped up its engagement with Iraq. The paper says the existing term contract with Iraq’s State Oil Marketing Company (SOMO) for 2.25 million tonne (45,000 barrels a day) of Basra light crude has been revised to 3 million tonne (60,000 barrels a day). It will be in effect till December 2013. Iraq has emerged as the second highest crude oil exporter to India, after Saudi Arabia, which still stands first. The contract for 2013-14 with Saudi Arabian Oil Company (Saudi Aramco) is worth 2.5 million tonne (50,000 barrels a day).
The HPCL’s total crude oil requirement for 2013-14 is estimated at 18 million tonne. The availability of indigenous crude is expected to be 3.75 million tonne (the actual allocation of domestic crude from the Petroleum and Natural Gas Ministry for 2013-14 is 3.93 million tonne, with Mumbai High accounting for 3.24 million tonne and Ravva for 0.69 million tonne). So, 14.25 million tonne of crude will be imported under a combination of term and spot contracts.
Listing strategic objectives, the document says that securing supplies by diversifying the pool of suppliers and insulating consignments against disruption due to geo-political reasons are the factors that will guide the oil purchases during 2013-14.
Indian refiners imported 171.41 million tonne of crude in 2011-12. Of this, 32.63 million tonne came from Saudi Arabia, 24.51 million tonne from Iraq, 17.67 million tonne from Kuwait, and 15.79 million tonne from the UAE. India imported 2,71,200 barrels per day from Iran between April 2012 and February 2013, which was below the government’s target of 3,10,000 barrels per day for the fiscal ended on March 31. Imports from Iran decreased to 7.3 per cent from April last to February 2013, from 11 per cent.
Source:-www.thehindu.com
India To Drastically Reduce Duty On Pakistan Textile Imports
In an unprecedented move, India is planning to drastically slash tariff on import of textiles from Pakistan in an effort to normalise trading relations between both countries. Currently, India imposes 30-45 per cent duty on textile products from Pakistan. The government is planning to bring it down to five per cent and has not ruled out the option of allowing duty-free access too.
This would be done by reducing the sensitive list of items India maintains for Pakistan, under which certain items are not allowed from there. This list is maintained under the South Asian Free Trade Agreement (Safta). In 2011, India allowed duty-free access to Bangladeshi garments and apparel products.
Pakistan’s global exports basket has been dominated by products from the textiles and clothing sector, which, however, is not consistent with its exporting pattern to India. The said products are found listed in India’s sensitive list, thus restricting the possibility of Pakistan being able to formally export these products. The main items of informal trade from Pakistan to India are textiles and garments.
Recently, the new Pakistani government under Prime Minister Nawaz Sharif has renamed the official name of their Ministry of Commerce to Ministry of Commerce and Textile Industry, probably to highlight the importance of the industry to the world. While Sharif is himself handling the commerce portfolio, Qasim M Niaz has been appointed the new commerce secretary.
Source:-www.fashionunited.in
Exporters Look To Us To Renew Duty Sop
Calcutta, July 28: Domestic exporters are betting big on an early renewal of the Generalised System of Preferences (GSP) by the US to strengthen bilateral trade.
The GSP programme, which was renewed by the US in October 2011, will expire on July 31.
Under GSP, which is a preferential trade programme, the US allows duty-free entry to around 3,000 products, which include engineering goods, industrial machinery, chemicals, agricultural foods and electrical equipment, from about 130 developing countries, including India.
Besides giving a fillip to the exporters of developing countries, the scheme helps American business to lower the cost of imported goods that are primarily used as inputs in value-added production.
“The GSP implemented by the US is a very important programme for Indian exporters as it offers tariff saving on various commodities from India to the American market. Its timely implementation is significant for our exporters,” Rafique Ahmed, president of the Federation of Indian Export Organisations (Fieo), told The Telegraph.
According to the US government data, total GSP imports into the country stood at $19.9 billion in 2012, registering a growth of 7.5 per cent over 2011. India was the top exporter under the GSP programme, contributing $4.5 billion in 2012.
Market observers suggest that the average duty advantage to Indian exporters is about 6.5 per cent.
“Engineering exports from India to the US were a major part of the total exports from the country. We hope that the programme is renewed early so that it benefits our exporters,” said Arun Garodia, eastern region chairman of the Engineering Export Promotion Council (EEPC).
Sanjay Budhia, chairman of industry body CII’s national committee on exports and imports, said a timely renewal of GSP was crucial to maintain stability in bilateral trade.
“The timely renewal of GSP is very important for maintaining stable bilateral trade and to avoid uncertainty in quoting/bidding for new business, which will adversely affect the trade of both countries,” he said.
Budhia pointed out that the renewal of GSP by the US was delayed by about three months.
“Though the time gap was covered by ‘retrospective effect’, it had put both overseas exporters and US importers at a disadvantage for some time,” he said.
Source:-www.telegraphindia.com
Man Shot Dead In Port Clash
Jul 29, 2013
HALDIA: A person was shot dead and another injured in a clash between two rivals over control of territory near Haldia port on Sunday. No complaint has been filed yet. The ambulances that picked up the victims cannot be traced.
According to sources, Gokul Mondal and Rajesh were rivals and both worked for Trinamool Congress strongman in the port area, Shyamal Adak. Rajesh had reportedly taken Gokul's place after the latter went to jail, triggering a rivalry. On being released on bail, Gokul was trying to win back his lost territory.
"On Sunday, Rajesh and an accomplice came to Rani chowk on a bike and sent for Gokul. He said he wanted to negotiate.
As Gokul and his aide approached him, the duo opened fire. A bullet hit Gokul's aide on the head and killed him. Gokul was hit too. Rajesh fled the scene after the shooting ," said a police official.
Local Trinamool leaders refused to comment.
SP (East Midnapore) Sukesh Jain said: "A shootout took place near the port and Haldia policemen rushed to the spot. There has been no written complaint yet. Locals are being questioned."
Source:-timesofindia.indiatimes.com
ESOPs from foreign employer are taxable in India if related to services rendered by employee in Indi
IT/ILT : In case of assessee being an employee of a foreign company, only such proportion of ESOP perquisite is taxable, which relates to service rendered by such assessee in India
To Check Diversion, Govt Makes 3% Value Addition Must For Gold Exports From Sezs
29-Jul-2013
NEW DELHI: The government has said any gold export from the special economic zones (SEZ) must be done only after a certain minimum value has been added, a measure that is expected to further dampen demand for the precious metal.
All gold exports from SEZs will need to have at least three percent value addition on the imported gold to check instances of gold diversion from these zones to the domestic market because of duty differential.
SEZs can import gold at zero duty to make jewellery for export against 8% duty on gold imported for domestic consumption, creating a powerful incentive for export units to divert imported gold to the domestic market.
"As part of measures to check widening current account deficit and diversion of gold from SEZs, we have imposed a 3-5% value addition on all gold exports from these zones to ensure only genuine gems and jewellery manufacturers operate through SEZs. We have communicated this to all the development commissioners", a commerce department official told ET.
The move is In addition to the ban on gold trading imposed on SEZs in April, which led to a sharp reduction in gold exports from these duty free zones.
A number of units were found to be indulging in gold trading instead of manufacturing, taking the advantage of the zero duty in the tax-free zones.
SEZ units earn arbitrage profits as high as 9.5% (8% customs duty plus 1.5% excise duty).
Plain gold jewellery and articles and ornaments like mangalsutra containing gold and black beads/imitation stones, except in studded form of jewellery, needs to have a minimum of 3% value addition.
All types of studded gold jewellery and articles thereof, need to have a minimum of 5% value addition.
"There will be stringent checks on gold transactions in SEZs", the official said.
The department of commerce had suspended gold trading and medallion manufacturing in the special economic zones in May after complaints of diversion of gold from some SEZs by the revenue department.
With concerns over falling rupee, RBI and government have taken a series of measures in the last three months to check gold imports, the primary factor for the widening current account deficit, which touched a record high of 4.8% of the GDP in 2012-13.
The official said genuine gems and jewellery manufacturing involves a change in composition of gold and thus the imposition of value addition norm will not impact such exports.
Source:-economictimes.indiatimes.com
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