IT: Where tax neutrality of accounting treatment was claimed, same has to be established with reference to accounts being maintained
Thursday, 15 August 2013
INCOME TAX APPELLATE TRIBUNAL,: BANGALORE BENCHES: BANGALORE CONSTITUTION FOR THE WEEK FROM 19.08.2013 TO 22.08.2013
[unable to retrieve full-text content]INCOME TAX APPELLATE TRIBUNAL,: BANGALORE BENCHES: BANGALORE CONSTITUTION FOR THE WEEK FROM 19.08.2013 TO 22.08.2013 {ad} For more information...
CBDT Notifies Revised TRC Format
A provision was recently introduced in the Indian Tax Laws (ITL) which required a nonresident (NR) taxpayer to provide such other documents and information, as may be prescribed, in addition to obtaining a certificate of it being a resident of a country viz., a Tax Residency Certificate (TRC). This was required for the taxpayer to be entitled to claim relief under the Double Taxation Avoidance Agreement (DTAA) that India would have entered into with such country or territory. Pursuant to the above, the Central Board of Direct Taxes (CBDT) has issued Notification No. 57 of 2013 dated 1 August 2013 (Notification) prescribing the information to be provided. This Notification is deemed to have come into force from 1 April 2013. This Tax Alert summarizes the key contents of the Notification. |
Trust earning profits from incidental activities won't be hit by proviso to sec. 2(15)
IT : Where aims and objects of assessee-trust were charitable and profit earned from said activities was incidental in nature, assessee was not hit by proviso to section 2(15)
Penalty order to be set aside if show cause notice doesn't satisfy conditions of section 78
ST: Penalty cannot be sustained, if show-cause notice merely refers to proposal to levy penalty without any discussion as regards various omissions, commissions and requirements necessary for levy of penalty
INCOME TAX APPELLATE TRIBUNAL,NEW DELHI CONSTITUTION OF BENCHES FROM 19.08.2013 TO 22.08.2013
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Order of attachment before judgment would require an almost infallible claim
CL: Order in nature of attachment before judgment would require an almost infallible claim to consider as to whether security or attachment was ought to be directed or not
Donations are not 'anonymous' if acknowledgements on their receipts were issued to donors
IT: A donation cannot be assessed as income under section 68, where receipt issued by assessee were already in custody of Department
Fee paid to foreign co. for training of employees does not entail transfer of technology, no FTS inv
IT/ILT: Where training services to assessee company's employees were general in nature, not involving any transfer of technology, fees for same was not taxable as fees for technical services as per article 13 of India-UK DTAA
Foreign Wheat Use To Reach A Record
15-Aug-2013
With the changes in wheat beginning stock almost fully offsetting, foreign wheat supplies are up 7.5 million tons, while foreign wheat use in 2013/14 is projected to increase 6.9 million tons this month to a record 671.1 million. All the global increase in wheat use is from foreign disappearance, as U.S. domestic wheat use is unchanged.
The largest increase is in wheat food, seed, and industrial use for India, up 2.0 million tons to 87.5 million. In order to at least partly relieve its bulging wheat stocks (currently at twice the required level), and dampen the high growth in domestic wheat prices, the Government of India has recently allocated a total of 9.5 million tons of wheat — 8.5 million tons to bulk consumers, and 1.0 million tons to small private traders — out of wheat stocks in Punjab and Haryana.
Another development in India that is expected to increase its food consumption (of both wheat and rice) is that the long-awaited overhaul of the Public Distribution System (PDS), a policy intended to support the hungry (nearly a quarter of the country’s 1.2 billion population), finally has a chance to materialize.
In July 2013, the cabinet cleared the National Food Security Bill (NFSB), which is expected to be passed into law during the current August session of the Parliament. The food security bill is expected to restructure the PDS, which is acknowledged as being inefficient, leakage prone, and corrupt.
Wheat food use is also projected slightly up in Iran, Turkey, and several more countries.
The largest increases in wheat feed use are projected for China, EU, and Syria. China is expected to feed 1.0 million tons more wheat with some of it coming from the abundant but lower quality harvest. A substantial amount of this wheat is below the government quality requirements for storage.
State reserves being rotated out of storage because of low quality or damage are also expected to boost wheat feeding.
At the same time, China is expected to boost imports of high-quality wheat for both milling purposes (mixing with low-quality wheat), and to replace the sub-par wheat in its state reserves. Some wheat imported into southern China may move directly into feed channels.
With more projected wheat output of marginal quality (because of generally wet growing conditions), the EU is expected to feed another 0.7 million tons, reaching 53.2 million of feed use (about the average of recent years).
In Syria, wheat feeding is projected to double, up 0.5 million tons to 1.0 million. Because of the political conflict, the Government is reportedly not capable of procuring its usual share of the harvest, as the large wheat-producing areas in the north are under the insurgents’ control.
Because of a record in both wheat production and yields, though of low quality, residual use is projected to increase year to year, while farmers in the northern part of the country are expected to use more of their wheat on farms as animal feed.
To counterbalance the shortage of wheat in the government-controlled part of the country, and to be able to feed the population, the regime is regularly issuing official tenders and buying larger than expected quantities of wheat.
Feed use is also expected to be higher in Moldova and Kazakhstan (up 0.3 and 0.2 million tons) because of higher production; in Morocco (up 0.2 million tons) because of higher beginning stocks; and by less than 0.1 million tons in a number of countries. Wheat feed use is projected lower in Thailand, Vietnam, and Jamaica because of lower expected wheat imports.
World wheat ending stocks for 2013/14 are up 0.6 million tons this month to 173.0 million, as projected increases in production are marginally larger than this month’s growth in expected use. The increase in foreign stocks is larger, up 1.3 million tons to 158.0 million, as U.S. wheat stocks are down 0.7 million tons.
Projected global stocks are down only 1 percent from last year, and almost 27 million tons lower than in 2011/12. The largest increase this month in ending stocks is for Iran, up 1.3 million tons to a record of 7.4 million.
The country appears to continue to amass record-level wheat reserves, a trend that started about a year ago, and is related to the sanctions and other reactions of Western countries to Iran’s nuclear program.
Ending stocks are also projected up 0.8 million tons for Pakistan, with its reported substantial purchases of wheat mostly from the Black Sea countries.
Partly offsetting is a decline in EU wheat ending stocks, down 0.7 million tons to 11.0 million. Despite a hefty increase in production, lower expected imports and higher exports pull the stocks down. There are small (under 0.3 million tons) changes in projected ending stocks this month for a number of countries.
Source:- porknetwork.com
India's Trade Deficit With China Touches $9.6 Bn In Q1
India's trade deficit with China in the April-June quarter of the current fiscal touched USD 9.6 billion, the commerce ministry said in New Delhi on Monday.
Giving details of steps to address the growing trade deficit, Minister of State for Commerce D. Purandeswari said in a written reply in parliament that in this regard the two countries have signed a series of memorandum of understandings (MoUs) on pharmaceuticals, buffalo meat and fisheries and an agreement on feed and feed ingredients.
The MoUs were signed during Chinese Premier Li Keqiang's visit to India in May.
An MoU for the export of buffalo meat from India to China was signed between Chinese General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) and India's Agricultural and Processed Food Products Export Development Authority (APEDA).
The Marine Products Export Development Authority (MPEDA) and AQSIQ also signed an MoU on co-operation for import and export of fishery products. The MoU aims to institutionalise co-operation in promoting trade of fishery products.
An MoU was also signed between the Pharmaceuticals Export Promotion Council of India (Pharmexcil) and the China Chamber of Commerce for Import and Export of Medicines and Health Products (CCCMHPIE). This MoU is expected to ease Indian generic drugs access to the Chinese market.
An agreement was also signed between Export Inspection Council of India (EIC) and AQSIQ on trade and safety of feed and feed ingredients.
The India-China trade deficit increased from USD 1.08 billion in 2001-02 to USD 40.77 billion in 2012-13.
Bilateral trade between has gone up from USD 2.09 billion in 2001-02 to a high of USD 75.59 billion in 2011-12, before falling to USD 67.83 billion during 2012-13. - See more at: http://www.smetimes.in/smetimes/news/top-stories/2013/Aug/16/india-s-trade-deficit-with-china-touches-9.6-bn-in-q1629934.html#sthash.W7y63lDN.dpuf
Source:- smetimes.in
Onion Farmers, Traders Stop Exports
he central government’s warning that it would impose a temporary ban on onion exports is unlikely to result in a drop in prices as the farmers and traders in Lasalgaon, the largest onion market in Asia, have already stopped exporting the crop.
This is because the price they are getting out of the domestic market is Rs48 per kg of onion, compared to Rs40 for exports.
Also, the transportation costs involved in exports are higher.
This change took place over the past weekend when wholesale prices suddenly jumped by almost 36% from Rs31.50 per kg on August 8, to about Rs43 on August 12.
The Lasalgaon market in Nashik, about 220km from Mumbai, sells around 2.5 lakh tonnes (250 lakh kg) of onions annually, of which about 50% are exported.
Domestically, onions from Lasalgaon are being supplied to Mumbai, West Bengal, Punjab, Madhya Pradesh and Rajasthan and are exported to Malaysia and Dubai from Mumbai and Bangladesh from eastern India.
But currently, all the 10-12 lakh kg of onions being sent out daily from this market are for domestic consumption because of the better price.
“On Wednesday, the Lasalgaon agriculture produce market committee (APMC) rate was Rs47.75 per kg, which is far more than in the export market.
Considering the additional transportation costs, it is better to sell onion domestically,” said BY Holkar, secretary, Lasalgaon APMC.
On Wednesday, the Union ministry of commerce and industry had released a circular stating the minimum export price of onions would be $650 (Rs39847.60) per metric tonne.
Statistics from the ministry show that India has exported 6.39 lakh tonnes during April-July, compared to 6.94 lakh tonnes in the year-ago period.
Production in 2012-13 stood at 16.6 million tonnes.
It also asked one of its cooperative agencies, NAFED, to import onions from Pakistan and Iran, and procure onions at best rates from onion trading centers like Lasalgaon and Pimpalgaon.
According to Lasalgaon APMC, 30% of the produce moves to eastern India, where it is used domestically, and then exported to Bangladesh, while 40% moves to Mumbai.
source:- hindustantimes.com
Global Recession Eats Into Home Textile Exports
The country’s export earnings from home textile declined to US$791m in the last fiscal year, a 12.64% fall compared to the previous year’s (2011-12) value of $906m due to global economic slowdown.
Export Promotion Bureau data showed Bangladesh fetched $791.52m in the last fiscal year, which was 12.64% down from the previous year’s value. While the sector earned $68.15m, down by 16.76% compared to July 2012 of $81.87m.
Meanwhile, the exports grew 24% to $3bn in July as compared to $2.4bn of the same month previous fiscal (2011-12), according to EPB data. The government had set an export target of $30.5bn for the current financial year.
Though home textile marked decline in last month, the export of knitwear garments grew by over 25% to $1.25bn and woven garments by 27% to $1.26bn. Both the items also witnessed rise in exports in the last fiscal year with nearly 15% for woven totaling more than $11bn and 10% for knitwear amounting to $10.5bn.
According to Bangladesh Textile Mills Association, 40% industrial value addition comes from textile sector and the sector provide over 500,000 jobs, of them 80% are female.
“In the winter season, uses of home textile rises and it is a seasonal product. That’s why export earnings from home textiles saw a decline,” said Shahidullah Azim, vice president of the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI). He said export of home textiles would rise in September.
“Perhaps, appreciation of Bangladeshi Taka against dollar and depreciation of Indian rupee against dollar cast an impact on home textiles export as the buyers are more interested to buy Indian home textile products taking the opportunity of devaluation of Indian Rupee,” said Dr Khondaker Golam Moazzem, an additional research director of Centre for Policy Dialogue (CPD).
He said the country’s readymade garments sector, however, witnessed less impact of depreciation of Indian Rupee, because the sector are more advanced than that of India due to bulk buy orders.
“Home textile exports declined as the demands of home textile fell in European Union countries.
The consumers of those countries might have cut uses of clothes due to economic recession,” said Md Monsoor Ahmed, secretary of Bangladesh Textile Mills Association (BTMA).
The buyers’ countries will come out of recession within two or three years and the demands of home textile will increase again, he added.
“We cannot reach the potential market of home textile due to lack of proper projection of our products, which may cause down trend in export of textile products,” said Shubhashish Bose, vice chairman of EPB.
If the textile exporters and producers take part in world exposition to display their products to world buyers, it would help knowing about fashion and trend of consumers, he added. Bose said if our products can ensure international standards, it will pave the way to grab the international market.
He also stressed on more participation in international expo in order to display our products as this sector des not participate in different trade shows in a large scale.
Source:- dhakatribune.com
It Products May Escape Higher Import Duty
Finance Minister P Chidambaram’s plan to levy higher customs duty on imports of non-essential items like electronic goods is not likely to materialise.
Commerce ministry has told the finance ministry that most electronic goods are covered under IT agreements with other countries and India unilaterally cannot raise duty rates.
In case of imports of precious, semi-precious stones and pearls, the curbs may not be possible because a significant portion of these items are exported back in the finished form/jewellery.
That leaves the finance minister mainly with consumer durables like television sets, refrigerators and air conditioners, but his officials fear they won’t have any significant impact.
“Duty increase on these items would just have a symbolic effect. It would not make much difference to the current account deficit,” said a finance ministry official.
Another fear is that if India increases duty on certain products, which hurts exports from a particular country, that country may retaliate by increasing duties on exports from India of another product.
At $31 billion, electronic goods comprised 6.3% of the total imports of $490 billion in 2012-13. Pearls, precious & semi-precious stones were $22 billion or 4.4% of the total imports.
Petroleum, gold and machinery comprised 34.4%, 11% and 5.5% of the imports, respectively. On gold, the duty has already been increased to 10% from Rs 300 per 10 gram in January 2012. The government has also raised duty on silver and platinum.
Last month Finance Minister P Chidambaram had said the government was looking at some compression in non-oil and non-gold imports, especially of non-essential goods.
Source:- business-standard.com
Rupee Up 10 Paise Against Dollar On Rbi Measures
The rupee on Friday recovered by 10 paise to trade at Rs. 61.33 against dollar on increased selling of the U.S. currency by banks after RBI announced stern measures to curb forex outflow amid weakening of the U.S. currency overseas.
Dealers said selling of the American currency by banks and exporters after the RBI announced stern measures on Wednesday to support the rupee and dollar’s weakness against other currencies overseas helped rupee to trade a shade higher.
The Reserve Bank on Wednesday reduced the limit for overseas direct investment (ODI) by domestic companies, other than oil PSUs, under the automatic route from 400 per cent of net worth to 100 per cent to curb forex outflow. Oil India and ONGC Videsh are exempt from this limitation.
The rupee had lost 24 paise to close at an all-time low of Rs. 61.43 against the U.S. currency in the previous session on Wednesday after July inflation rose to a five-month high.
Forex market remained closed on Thursday on account of Independence Day.
Meanwhile, the BSE benchmark index Sensex fell by 145.82 points, or 0.75 per cent, to 19,221.77 in early trade on Friday.
Source:- thehindu.com
Government Curbs Add Zing To Leather Exports
CHENNAI: The leather industry in the country is on a high. In just two months, export of leather goods has seen a 10% jump. And it has the government to thank for this. The Centre imposed restrictions on export of raw materials, instead prodding the industry to export finished products. This has curbed illegal exports and reduced the shortage of raw material for the industry.
The government has mandated all exporters to get their goods certified by the Central Leather Research Institute (CLRI), to ensure that only finished leather that has some 'value add' by Indian companies and has qualified guidelines given by the CLRI can be exported. Certification by CLRI was earlier optional, but has now been made mandatory to regulate exports and curb illegal exports of semi-processed leather.
"This, coupled with the depreciating rupee has driven the Indian leather industry to bounce back, with exports growing 10% over the last two months compared to the previous quarter," said M Rafeeque Ahmed, president of Federation of Indian Export Organisations (FIEO).
Over the last few quarters, leather exports were falling due to the slowdown in the European region - the highest importer of Indian leather. However, things are looking up now that the Eurozone has recovered from the recession.
The industry has seen a 9.7% growth in exports of finished products over the last two months alone. According to data from the Director General of Commercial Intelligence and Statistics (DGCIS) of the Ministry of Commerce, India's export during April-May 2013 was $809.85 million against $738.18 million last year. "We expect this to continue and see a 12% growth over the next few months," Rafeeque Ahmed said.
DGCIS data showed that export of leather and leather products during 2012-13 had touched $4.99 billion compared with $4.8 billion last year.
Though finished products (especially footwear) constituted a large chuck of leather exports, large quantities of raw hides and semi-finished leather were being exported to China and Italy as raw material, leading to shortage of leather for the domestic industry. The policy to curb raw material exports could remedy the situation.
"The regulation would mean that more finished leather products will be exported rather than raw material. Prices of leather products have been going up of late and this will benefit the Indian industry," said N Shafeeq Ahmed, vice chairman, Council for Leather Exports. This change in policy will ensure that more leather is available for local manufacturers and could result in softening of prices, said Rafeeque Ahmed. Exports apart, this move will also create employment for the leather sector, which is one of the largest employers in the country, Shafeeq Ahmed said.
Source:- timesofindia.indiatimes.com
Despite Govt Curbs, India’S Gold Consumption Highest In 10 Years
New Delhi: India’s consumption of gold rose to 310 tonnes in the second quarter ended June, highest in the last 10 years, despite government curbs to restrict imports to rein in burgeoning current account deficit, a WGC report said on Thursday.
Much of the demand was met by stocks that had been built up to healthy levels following the April price drop. Imports more than doubled to 338 tonnes in April-June of this calendar year, it said. Gold consumption stood at 181.1 tonnes in the same quarter last year.
“Consumers in India showed continued strong appetite for gold, with recent government measures to curb demand having had little impact on the quarter’s figures. Consumer demand was 310 tonnes, up 71 per cent on last year,” the World Gold Council (WGC) said in its latest report.
According to WGC India Managing Director Somasundaram PR, “Gold demand in Q2 was best in the last ten years.”
The fall in the gold price last April resulted in an increase in jewellery demand by more than 50 per cent to 188 tonnes in Q2 this year from 124 tonnes in the year-ago period, while bar and coin consumption reached a record high at 122 tonnes from 56.5 tonnes in the review period, he said.
The introduction of restrictions on payment terms for gold imports in May and an increased import duty in early June to 8 per cent created uncertainty in the market but had a “limited impact on end-user demand,” he added.
India, the world’s biggest buyer of gold, has been trying to curb imports of the yellow metal, which is the second biggest imported item after crude oil. On August 13, the government raised import duty on gold for a third time in eight months to 10 per cent from 8 per cent.
Asserting that import curbs on gold alone would not address the current account deficit (CAD) situation, Somasundaram said: “While we understand the need to reduce the CAD, we believe that this can be achieved in other ways.”
The long term objective must be to increase the liquidity of domestic gold holdings through institutional, official channels, effectively monetising gold to support economic growth, he said.
Gold stocks of over 20,000 tonnes in the hands of millions of households are a strategic asset for India and policy direction should be formed by this, he added.
Somasundaram said: “However in the current quarter, demand in India has slowed down considerably due to various policy changes undertaken by the government to restrict gold imports.”
The change in emphasis from restricting payment terms to linking import quotas to exports “is likely to create further confusion and aggravate the normal Q3 lull in Indian demand ahead of the Q4 festival and wedding season,” the report said.
There could be dampening of Indian demand for jewellery over the coming months, more than normally expected during the usual Q3 slowdown, as the market digests import regulation changes, it said, adding that indications for the fourth quarter, however, so far remain positive.
However, it is interesting to note that price premiums in India have recently spiked again, suggesting that demand is healthy, the WGC observed.
“A good monsoon season so far also bodes well for demand later in the year, with the assumption that the market will by then have had time to digest and acclimatise to the recent restrictions imposed by the RBI,” it said.
India depends on gold imports to meet its entire demand, which is expected to be between 900 and 1000 tonnes in 2013 calendar year, it added.
Source:- firstpost.com
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