ST : Where services provided by assessee are utilized only for SEZ operations, they must be regarded as consumed within SEZ and eligible for exemption under Notification No. 4/2004-ST
Tuesday, 30 July 2013
Indian Co. can't be treated as an agent of a foreign Co. if no opportunity of being heard is extende
IT/ILT: Indian company cannot be treated as agent of foreign company without giving opportunity of hearing and passing order under section 163
If books aren’t accessible, CA’s audit report is as reliable as actual books in assessment proceedin
IT: Where accounts were audited by Chartered Accountants on basis of books of account and assessee's books were not rejected during assessment, assessing authority should rely upon auditor's report
India's Iron-Ore Imports Seen Soaring This Year
30-Jul-2013
NEW DELHI—India, a leading iron-ore exporter just a few years ago, will see its imports of the key raw material jump as much as eightfold during the current financial year due to domestic mining restrictions, the Federation of Indian Mineral Industries said Tuesday.
This would mark a dramatic reversal for India, which was the world's third-largest iron-ore exporter until two years ago. But domestic output has plummeted by around half since then after environmental concerns prompted legal restrictions on mining in certain areas.
India's imports of iron ore, a key ingredient in steel, are likely to reach 20 million-24 million metric tons this year, up from around 3 million tons during the year that ended March 31, FIMI said.
This is likely to benefit Australia and Brazil, the world's two largest iron-ore exporters, who have been hit by lower prices, slowing global demand and spiraling costs, FIMI President H.C. Daga said.
India's Supreme Court ordered a halt to production at mines in the southern state of Karnataka in early 2012 due to concerns about the environmental impact of illegal mining. The court recently lifted the ban for most of the mines but imposed conditions on the resumption of operations that could take mines up to a year to meet.
Production at iron-ore mines in western Goa state and exports from eastern Odisha have also been halted by similar court ordered-probes into illegal mining.
India's iron-ore exports are likely to fall to around 10 million tons this year from 18.37 million tons in the previous financial year, FIMI Secretary-General R.K Sharma said.
He said iron-ore production is likely to fall to around a 100 million tons from 115 million tons in 2012-13.
India's iron-ore exports are likely to fall to around 10 million tons this year from 18.37 million tons in the previous financial year.
Mr. Daga said the decline in exports resulted in a loss of potential earnings of around $17.5 billion since 2010-11.
Despite a small bounce in recent weeks, international iron-ore prices remain well below their 2011 peak of $191.90 and down by around a fifth from their 2013 high.
Source:-online.wsj.com
Amnesty Scheme For Service Tax Defaulters Fails To Take Off
MUMBAI: The amnesty scheme for Service Tax defaulters, christened Service Tax Voluntary Compliance Encouragement Scheme, has not taken off, as the trade and industry await more clarity.
A major hurdle that precludes service tax defaulters from disclosing under the scheme is the fear that if their disclosures are rejected by service tax officials, the information in the disclosure could be used against them, in the form of a notice demanding interest and penalties on the basis of the undisclosed income offered in their disclosures. Sachin Menon who heads the Indirect Tax division at KPMG said: "There is an apprehension that if the disclosure is rejected by the service tax authorities, the amount paid can be forfeited by the authorities. So, there is great need for the government to revisit some of the provisions of the scheme to make it successful".
Industry and trade fear that in its existing structure, the scheme provides vast discretionary powers to the service tax officials, in the matter of accepting or rejecting the disclosures. For example, the scheme makes it ineligible for those facing inquiry or served audit notice, from subscribing to the scheme but leaves it to the service tax officials to interpret what constitutes a "pending investigation " or "initiation of Audit".
The scheme does not explain what constitutes a pending investigation. Routinely notices have been served to assessees, asking for information. Do such notices be construed as a pending investigation" or at what stage of a process it can be presumed that an audit has been initiated, an official affiliated to an industry association asked.
"It needs to be appreciated that the service tax department routinely calls for information / documents from the assessees for various purposes. There is no mechanism in place either under the law or by practice to make the assessee aware whether or not an inquiry or investigation has been initiated against it on the basis of such information or documents having been provided to the department," Ficci in its memorandum to the Finance Ministry said. Service tax has become a major component of the government's tax collection exercise since 1994 when it brought under the service tax net four service sectors, from which it raised over Rs 4,000 crore.
What began with a Rs 4,000 crore collection in the year of inception has now evolved into a Rs 1.8 trillion service tax collection projected for the current fiscal.
A senior service tax official in Mumbai said: "We are expecting the ministry to clarify certain provisions in the scheme to encourage maximum disclosures. The ministry is expected to clarify soon what constitute a 'pending investigation' and 'initiation of audit'. These are the two issues trade and industry are wary about.
Source:-economictimes.indiatimes.com
Company’s failure to reply to statutory demand notice leads to admission of winding up petition agai
CL: Where company did not reply to statutory notice of demand, it should be deemed unable to pay its debt and, thus, winding up petition filed by creditor would be admitted
Epch To Present Export Awards To 65 Exporters Today
30-Jul-2013
Considering Handicrafts an important segment of the India's export basket, the Export Promotion Council for Handicrafts (EPCH), nodal body for handicraft exports, will distribute the 19th Export Awards to 65 companies at an event in New Delhi on July 30.
Apart from 65 awards, three Life Time Achievement Awards, two Special Commendation & one Institutional Award will be distributed for their outstanding contribution to promote Handicrafts Sector.
Dr. K.S. Rao, Union Minister of Textiles, Govt. of India will distribute the awards. Shiela Dixit, Chief Minister of Govt. of NCT, Delhi will preside over the ceremony. Panabaaka Lakshmi, Union Minister of State for Textiles will be the Guest of Honour.
Zohra Chatterji, Secretary (Textiles), Ministry of Textiles, S.S. Gupta, Development Commissioner (Handicrafts) and other senior officials of the Govt. will be present at the award ceremony, leading luminaries of the handicrafts business, prominent personalities and representative of diplomatic core will also witness the ceremony.
The awards to 65 companies from different states of the Country will be distributed for their export performance during the year 2011-12.
C. L. Gupta Exports Ltd, J.P. Nagar(Moradabad) is receiving Top Export (All Handicrafts). 25 trophies including 03 women entrepreneur and 20 merit certificates shall be given for top export in different product categories, 14 merit certificate be given for excellent export growth and 6 regional awards to the exporters for highest export in each region. HAT-TRICK TROPHY is being given to M/s Hem Corporation for their consistent export performance.
Five types of awards are given to exporters under 22 qualified product categories in addition to merit certificates, regional export awards, life time achievement award and woman entrepreneur award. All these awards are decided by a committee headed by Addl. Development Commissioner (Handicrafts), Ministry of Textiles, Govt. of India.
The export awards were instituted by EPCH in the year 1989 under the overall supervision, guidance and control of the Development Commissioner(Handicrafts) in the Ministry of Textiles. The objective was to create a sense of healthy competition within the exporting community to achieve more and more so that ultimately exports of handicrafts continue to grow year after year.
The Export Promotion Council for Handicrafts(EPCH) is an apex body to promote exports of Handicrafts worldwide. The EPCH undertakes many important steps to facilitate production bases in the country in terms of technology, finishing, designs, packing etc and the Council also takes measures for developing International market. In fact, EPCH is an important catalyst between the producers, exporters, importers and government agencies.
The exports of handicrafts which were Rs. 386 crore in 1986 have now touched the stage of Rs.17970.12 crores in the year 2012-13.
In dollar terms, the exports have shown increase of USD 3304.90 million (2012-13) from USD 2705.66 million (2011-12) a growth of 22.15 % during the period April-March 2012-13.
Source:-www.smetimes.in
Rupee Opens At 60.84 Per Dollar
Indian rupee opened weak by 36 paise at 60.84 per dollar against 60.48 Tuesday. "With no new measures forthcoming from the central regulators and with policies that are hurting economic growth, the rupee has again revived its downward trend after consolidating for a couple of trading sessions, says Pramit Brahmbhatt, Alpari India.
On Wednesday the Indian rupee continues its downtrend as it opened weak by 36 paise at 60.84 per dollar against 60.48 Tuesday.
Pramit Brahmbhatt, Alpari India said, "With no new measures forthcoming from the central regulators and with policies that are hurting economic growth, the rupee has again revived its downward trend after consolidating for a couple of trading sessions. Moreover, month-end dollar demand will put more pressure on the rupee. The range for the day is seen between 60.10-60.90/USD."
The euro steady above 1.32 to the dollar. The dollar index was around 81.80 levels. The dollar yen was at 98.
Source:-www.moneycontrol.com
Agri Ministry Proposes Rise In Import Duty On Refined Oil
July 30, 2013
The ministry of agriculture has recommended for increasing the import duty on refined oil. As per the proposal, the ministry has suggested to increase the import duty from existing rate of 7.5% on imported refined edible oil to 10%.
This will make import of refined edible oil expensive in comparison to the crude edible oil. These recommendations will be placed before the cabinet committee.
At present, the imported cost of refined edible oil is cheaper than importing crude oil due to inverted duty structure adopted by exporting countries like Indonesia and Malaysia.
These countries have imposed tariff on export of crude edible oil to encourage export of refined edible oil and thus incentivise the domestic edible oil refining in their respective countries - Indonesia and Malaysia.
Reportedly, Since October 2011, in the exporting countries the export tax on crude palm oil export is much higher than refined oil. The export duty rates are changed each month in line with market prices of palm oil. Higher the palm oil prices, higher is the export duty, and consequently higher is the difference between export tax on crude palm oil and refined palm oil / palmolein, explained industry sources.
Due to such inverted duty structure, the differential between the Crude palm oil (CPO) and Refined Palmolein which was around $90-100 pmt stands currently only at around US$10 -20pmt. Therefore the Indian traders are favouring import of refined edible oil rather than importing crude oil and then refining it for selling in the domestic market.
On the other hand, in January 2013, the government imposed a duty of 2.5% on CPO from zero import duty earlier, thereby lowering the duty differential between imported and refined palm oil to five% from earlier 7.5 %. In May 2013, the proportion of refined oil to India's vegetable oil imports rose to a staggering 42%, compared with just 16% in March, according to data compiled by the Solvent Extractors' Association (SEA).
Meanwhile, the share of crude oil in the overall imported vegetable oil basket declined from 84% two months ago to 58%. Currently, domestic edible oil crushing and refining units are operating at 30-35% capacity, against about 50% a year ago, industry sources said.
Source:-www.business-standard.com
Pharma Export Growth From India Declines With Slow Down In Us, European Markets, Exporters Seek Govt Support
Faced with slowdown in some key markets like North America and Europe coupled with increasing competition from China in the international markets, pharmaceutical exporters in India are seeking some urgent short-term measures from the Union Government, if not any subsidies or funds.
Representing the exporters, industry leaders and Pharmaceuticals Export Promotion Council of India (Pharmexcil) have already suggested short-term, medium-term and long term measures to revive the exports and sought the intervention of the Commerce Ministry.
As the short-term measures, they have asked for some rebates and cuts in duties for the exporters while suggesting that proposed venture funds and financial assistance can be launched as long-term measures. Immediate reliefs in the form of duty cuts would improve the morale of the exporters, they suggested.
The growth rate of pharmaceutical exports is expected to fall below 10 percent this year due to the slowdown in markets like North America and Europe. “Going by the initial reports in the first quarter of the current financial year, the rate cannot go beyond nine per cent,” pointed out Pharmexcil SME panel chairman Nipun Jain.
The growth of Indian pharma exports during 2012-13 halved to 10.55 per cent over previous year to $14.6 billion. During 2011-12 the exports stood at $13.2 billion registering a growth of 23.7 per cent over 2010-11, according to the figures from the Pharmexcil.
What has added pressure on Indian exporters is the increasing competition from China. “India has been the leader in supplying paracetamol world-wide. In the first three months of the current year, Indian company has not won even one contract for global supply and Chinese companies have bagged the orders instead,” an industry leader said, pointing out the trend.
Source:-www.pharmabiz.com
Unlisted shares of Public Cos covered by definition of 'securities'; provisions of SCRA are applicab
SCRA: Shares of public limited company not listed in stock-exchange are covered within ambit of Securities Contracts (Regulation) Act, 1956
SEBI specifies operational, prudential and reporting norms for Alternate Investment Funds
SEBI : Operational, Prudential and Reporting Norms for Alternative Investment Funds (AIFS)
Cos with odd events like merger or demerger to be excluded from list of comparables
IT/ILT : Where there were extraordinary events like merger or demeger during relevant financial year having effect on financial results of companies, they could not be taken as comparables
Remand order can’t be challenged for an issue which could be addressed with execution of such remand
IT: Where Tribunal by passing an open remand order directed Assessing Officer to re-consider issue relating to exclusion of miscellaneous income for allowing deduction under section 80HHE, objection raised by revenue that said order would impliedly mean that Tribunal had held all other incomes intimately connected with business of assessee, did not require separate adjudication
Maintenance and insurance of rented property are input services
ST : In case of a provider of services engaged in renting of immovable property, maintenance and insurance of such property are eligible as input services
Sum advanced to a shareholder after it ceases to be a beneficial owner ins't a 'deemed dividend'
IT: Beneficial ownership of shares be established to treat loan advanced by a company to its shareholder as deemed dividend
NBFCs shall engage only registered telemarketers for promotional activities, RBI reiterates
NBFC : Unsolicited Commercial Communication- National Do Not Call Registry
Interest on Rupee Denominated Bonds not to exceed 500 bps over base rate of SBI, CBDT notifies
IT : Section 194LD of The Income-Tax Act, 1961 - Income by Way of Interest on Certain Bonds and Government Securities - Notified Rates of Interest on Rupee Denominated Bond of An Indian Company
Application of TNMM requires adjustments for capacity utilization in profit margin of comparables
IT/ILT : Rule 10B requires that, for TNMM, profit margin of comparables be adjusted for capacity utlilisation
Prior to 1-5-2006, only firms and not companies were liable to ST under Consulting Engineer’s Servic
ST : Prior to 1-5-2006, word "firm" as appearing in section 65(31) does not include a 'company' or 'any other body corporate'; hence, a company cannot be made liable to service tax under 'Consulting Engineer's Service'
Unexplained credit held valid as no reasons were given by assessee for retraction from his confessio
IT: Where assessee admitted a certain sum as his undeclared investment in two confessional statements and thereafter he retracted from said statements, but did not assign any reason for same, addition in hands of assessee was to be made
Income tax returns: 9 tax saving options other than Section 80C
Before you calculate your tax liabilities, remember to analyze the various sections of tax deductions under the Income Tax Act as tax planning does not end with Section 80C. (Calculate your tax liability here) 80D: 80DD: 80DDB: 80G: 80GG: 80GGC: 80CCG: Hence, there are several sections apart from 80C that can help an individual benefit from tax exemptions. It is time to start looking beyond 80C for tax savings. |
Service Tax on under construction property – To Pay or Not?
As per the new rules, Service Tax will be calculated at the rate of 12.36 percent of the gross value of the property. But, because there is a Government abatement of 75 percent (increased from 67 percent), tax will be levied only on 25 percent of the gross value of the property. The effective rate of service tax is therefore 2.575 percent.
Also read: CBEC to target 12 lakh non-filers of service tax: FM
The 2010-11 budget imposed service tax on all under-construction properties from July 1, 2010. Now, according to the Service Tax Act [Section 65(105)], the developer or builder of an under-construction property has to pay service tax when he sells a property to a buyer. There is only one situation in which the builder does not have to pay service tax when he sells an under-construction property: When he sells a building after a completion certificate is obtained from local authority and entire consideration is obtained from the buyer only after building completion certificate is obtained.
Therefore, although paying Service Tax is mandatory, it can be avoided if:
a. The builder has obtained a completion certificate from the issuing authority.
b. The buyer has paid the entire consideration only after the building completion certificate had been obtained by the builder.
Please note that you can even get the completion certificate from an architect or chartered engineer or licensed surveyor. It is not necessary to go to a Government authority to get the completion certificate. You may rely on the notification issued by the Government of India (D.O.F.No.334/03/2010-TRU) which reads as follows:-
“Before the issuance of completion certificate if agreement is entered into or any payment is made for sale of complex or apartment in residential complex, service tax will be leviable on such transaction since the builder provides the construction service. Completion certificate issued by a Government authority was prescribed as demarcation by introducing an Explanation in the Finance Act. During the post budget discussions, it was pointed that practice regarding issuance of completion certificates varies from state to state.
Considering the practical difficulties, the scope of the phrase ‘authority competent’ to issue completion certificate has been widened by issuing an order for removal of difficulty (Refer M.F.(D.R) Order No.1/2010 dated 22nd June 2010). Completion certificate issued by an architect or chartered engineer or licensed surveyor can be now taken to determine the service tax liability.”
However, this exemption above is only from paying Service Tax. You will have to pay Stamp Duty on the sale value of the property if you purchase property after construction.
Individuals holding fractional shares won’t make them a separate class; amalgamation scheme couldn’t
CL : Decisive factor for determining class of shareholder is not shareholding pattern but category of shares that one held; merely because some individuals held small fraction of shares would not make them a separate class
Transfer of life insurance contracts is a supply of service
ST/ECJ : A transfer for consideration of a portfolio of exempted life reassurance contracts constitutes a supply of services, but, it does not amount to provision of exempted insurance services and is, therefore, not exempt
Central Excise Notification No 22/2013 dated 29-07-2013
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
Notification No.22 /2013-Central Excise
New Delhi, the 29th July, 2013
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the scheduled formulations as defined under the Drugs Price Control Order (DPCO), 2013 published vide S.O. 1221 (E) dated the 15th May, 2013, falling under Chapter 30 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and which are subjected to re-printing, re-labeling, re-packing or stickering, in a premises which is not registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder, in pursuance of the provisions contained in the said Drugs Price Control Order (DPCO), 2013, from whole of the duty of excise leviable thereon under the said Central Excise Act subject to the following conditions, namely :-
(i) The scheduled formulations, in respect of which the manufacturer is liable to ensure that the Maximum Retail Price (MRP) of such formulation does not exceed the ceiling price within forty-five days of the date of notification of the ceiling price by National Pharmaceuticals Pricing Authority (NPPA), have been removed from the place of removal on payment of appropriate duty ;
(ii) The re-printing, re-labeling, re-packing or stickering, of the scheduled formulations results in downward revision of the MRP;
(iii) In respect of a given scheduled formulation, the exemption shall be valid for a period of forty-five days from the date of publication of the notification of the ceiling price in respect of such scheduled formulation by NPPA or such extended period not exceeding thirty days as may be permitted by the Department of Pharmaceuticals;
(iv) The manufacturer shall submit a prior intimation to the jurisdictional Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, containing a list of scheduled formulations requiring re-printing, re-labeling, re-packing or stickering alongwith the notification vide which these have been notified by NPPA, various locations and addresses thereof where the scheduled formulations are proposed to be re-printed, re-labelled, re-packed or stickered and the details such as description of the scheduled formulation, present MRP, proposed MRP, batch no., quantity and date of manufacture in respect of each such location. In the case of importer and marketer, they shall submit the intimation to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, having jurisdiction over their registered office;
(v) Subsequent to the aforesaid operations being carried out, the manufacturer shall submit the details in respect of the said scheduled formulations within a period of one month of such re-printing, re-labeling, re-packing or stickering.
Explanation. - For the purposes of this notification, manufacturer shall include any person defined as manufacturer under paragraph 2(n) of the Drugs Price Control Order, 2013.
[F.No.354/118/2013-TRU]
(Akshay Joshi)
Under Secretary to the Government of India
Relinquishment of rights in property in family settlements in lieu of cash is 'transfer'; chargeable
IT: Relinquishment of right over property in case of a family settlement falls under definition of 'transfer' and exigible to capital gains tax
Scrutiny assessment can't be held invalid on ground that best judgment assessment was called for
IT : Scrutiny assessment completed only on basis of documents found during survey due to non-compliance of notices under section 143(2) and 142(1), cannot be held as invalid on ground that best judgment assessment was called for
DGFT Public Notice No.20/(RE 2013)/2009-14 dated 29-07-2013
GOVERNMENT OF INDIA
MINISTRY OF COMMERCE & INDUSTRY
DEPARTMENT OF COMMERCE
DIRECTORATE GENERAL OF FOREIGN TRADE
PUBLIC NOTICE No. 20 (RE-2013)/2009-2014
NEW DELHI, DATED THE 29 July, 2013
Sub:- Inclusion of Kattupalli Sea Port as a Port of Registration under Para 4.19 of HBP (Vol. I)
In exercise of powers conferred under Paragraph 2.4 of the Foreign Trade Policy 2009-2014, the Director General of Foreign Trade hereby amends para 4.19 of Handbook of Procedures (v1):, 2009-14(RE 2012) to include “Kattupalli Sea Port, Tamil Nadu” as Port of Registration.
Kattupalli Sea Port (Tamil Nadu) shall be added at the end of Sea Ports in paragraph 4.19 of HBP Vol.1 related to Port of Registration.
(In the revised edition of HBP Vol.1 name of this Port would be placed in correct alphabetical order).
Effect of this Public Notice: Kattupalli Sea Port, Tamil Nadu is included under para 4.19 of HBP v.1 for availing export promotion benefits under Chapter 4 of Foreign Trade Policy.
(Anup K. Pujari)
Director General of Foreign Trade
E-mail: dgft@nic.in
(Issued from File No. 01/94/180/ 454/AM11/ PC 4)
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