Probe if service tax is paid to govt on pre-paid top-upsa

Concerned that additional talk time schemes on pre-paid cellular services may not be translating into extra service tax revenue for the government, the Bombay high court has directed the service tax and income tax authorities to "investigate the issue closely".

The HC was hearing a PIL which alleged that the state is being deprived of huge sums as service tax by retailers who collect them for each "top-up" from customers but don't account for all of it. Justices Dhananjay Chandrachud and S C Gupte appointed counsel Milind Sathe as an amicus curiae (friend of court) to study the case.

The PIL filed in 2011 and later this year as a criminal petition, by Kanchandevi Kothari and Jitender Kothari, questioned the loss of revenue to the state. Retailers receive extra talk time directly from cellular service providers or distributers as commission, which are not accounted for in the books but sold to consumers from whom service taxes are collected. It is alleged that this service tax is not remitted to the government. The assistant commissioner of service tax said that "investigation by the Anti Evasion wing of the Service Tax-I, Mumbai Commissionerate, has not confirmed any evasion of service tax".

Observing that the services provided by cellular operators are chargeable to service tax, the HC held that the "service tax department must ensure that service tax is assessed and levied on all schemes by whatever name called and under whatever schemes as long as they result in providing of service by cellular operator to the consumer".

CBDT alleges tax settlement commission too lenient on offenders

In a case without parallel, the Central Board of Direct Taxes (CBDT), the agency that collects income tax and sets policies in this space has launched a scathing attack on the Income Tax Settlement Commission (ITSC), a quasi-judicial body that is empowered to grant immunity from prosecution and penalty from any offence under the Income Tax Act.

The CBDT has alleged that the ITSC has been granting immunity to individuals without satisfying whether disclosure of concealed income made before it is “full and true.” The Board has also criticised the commission for failing to verify the manner and source of income of individuals found to have committed tax violations.

On March 4, the CBDT circulated a note to all Chief Commissioners (Central) and Directors General (Investigations) stating that the ITSC determined and settled the assessable income (concealed income that is declared) in various cases, which was several times the amount originally admitted in the application made before it.

The note said that the income was settled in such cases, and in addition, the commission granted immunity from penalty and prosecution.

The CBDT’s confrontational stance stems from ITSC’s rejections of the board’s objections to individual applicants who sought immunity from prosecution by appealing before it.

The Commission had recently admitted applications of Congress MP Abhishek Manu Singhvi, energy consultant Satish Sawhney (who has Swiss bank accounts), Sanjeev Lamba, Kailash Lamba, Kammi Lamba and Madulika Lamba (all HSBC account holders in Geneva).

The Income Tax department, which functions under the CBDT, had opposed these applications on the grounds

Rupee Sheds 10 Paise To 63.33 Vs Dollar

Mumbai: The rupee shed 22 paise to 63.45 per dollar in the opening trade on Wednesday against the previous close of 63.23 on the back of high demand for dollar from oil importers.



However, the domestic unit slightly recovered and was trading at 63.33 at 10.06 a.m. local time.



On Tuesday, the currency had breached the 64-level mark against the dollar and also surpassed Rs 100-mark against the British pound to a fresh low of Rs 100.35 making pound the most expensive currency for the rupee.



According to dealers, lack of inflows and pull out of foreign institutional investors from emerging markets are weighing on the currency.



Moreover, a strong American currency and concerns over funding the current account deficit (CAD) amid heavy outflows by foreign investors from emerging markets continue to weigh on the rupee sentiment.



In addition, JP Morgan has downgraded India to ‘neutral’ from ‘overweight’ citing strain in balance of payments. This could further weaken the country’s sentiment for foreign investors.



Export prospects



Rafeeque Ahmed, President, Federation of Indian Export Organisations (FIEO), said this is a temporary phase and that the rupee will strengthen looking at the bright export prospects in the coming months.



“Improvement in overall economic parameters in the US and modest growth in Europe in the last quarter (after four consecutive contractions) would help India’s exports which may clock 20 per cent growth from October onwards,” he said.



Exporters should use the rupee depreciation to augment exports by cutting down their prices to outprice their competitors, Ahmed added.



Currencies of emerging economies such as South Africa, Brazil and Indonesia among others have also been under pressure due to outflows after the US central bank indicated that it would start withdrawing its monetary easing policy as the US economy starts recovering.



G-secs, call rates



The benchmark 7.16 per cent government security, which matures in 2023, opened sharply higher at Rs 92 from yesterday’s close of Rs 86.78. The yields on the security softened sharply to 8.37 per cent from 8.90 per cent.



The call money rate, rate at which banks borrow from each other for short-term funding, a tad higher at 10.35 per cent from the previous close of 10.30 per cent.

Source:- thehindubusinessline.com

Onion Price Ease A Bit To Rs60/Kg

21-Aug-2013

consumers, retail prices of onion today softened slightly to Rs 60 per kg in the national capital on improved supplies.



Retail prices are expected to fall further in the coming days as arrivals are likely to be more with the recent initiatives taken by the government to curb exports and import of onions to boost local supplies, traders and experts said.



The wholesale price of onion has cooled down slightly but still rule high at Rs 35-40 per kg at Azadpur mandi since yesterday. Prices stood at Rs 50-55 per kg last week.



"There is no change in onion prices. It is sold at the yesterday's level of Rs 35-40 per kg as there is enough stock in the market and supplies are also more than normal," Onion Merchant Traders Association President Surendra Budhiraj said.



The demand for the kitchen staple has come down on account of high retail prices. The prices would drop further in the coming days on higher arrivals, he said.



Similarly, retail price has come down but still rule at an unaffordable level of Rs 60 per kg in most parts of Delhi since yesterday as against Rs 70-80 kg last week.



Consequently, Mother Dairy and Nafed have also brought down prices of onion at their outlets. Mother Dairy is selling onions today at Rs 60 per kg, while Nafed is selling onion at Rs 44 per kg through its six outlets and mobile vans.



The cooperative major Nafed is likely to float an import tender by the end of the week. Imports are expected to boost supplies and cool down prices.



Onion supplies to the city, which come from Maharashtra, Rajasthan and Madhya Pradesh, were around 16,000 tonnes today against normal supply at 12,000 quintals, while around 30 per cent of Monday's stock is also unsold, Budhiraj said.



At Lasalgaon in Nashik district of Maharashtra, Asia's largest onion wholesale market, prices eased by Rs 5 per kg to Rs 30-35 per kg yesterday on increased supplies, an official data showed.



To control rising prices, the government had imposed a minimum export price (MEP) of USD 650 per tonne and had directed cooperative major NAFED to import onions.



Production stood at 16.6 million tonnes in 2012-13.

Source:- dnaindia.com

India Bans Duty-Free Import Of Tvs

20-Aug-2013

The plunge in the Indian rupee was, so far, good news for expat Indians, but it has now started taking its toll.



Non-resident Indians (NRIs) and those on a holiday to the Gulf or anywhere else in the world will no longer be able to carry a duty-free flat panel TV with them back home from next week, with the Indian government imposing a punishing 35 per cent duty on such imports besides other charges.



The sagging rupee has plunged to a fresh lifetime low, under the Rs17-level against the UAE dirham and below the Rs63-mark against the US dollar [Read: Indian rupee plunges to fresh record low of Rs17.26 vs Dh1: Should you remit now?]



Using the declining rupee as a pretext, Indian government yesterday gave in to the long-standing demand of local TV retailers and banned duty-free import of flat-screen television sets by air travellers.



According to Indian government estimates, more than 1 million TV sets were brought into the country last year, with Dubai, Bangkok and Singapore as the primary sources.



Earlier, NRIs and other airline passengers could carry one piece of flat TV (plasma/LED/LCD) for personal use, worth up to Rs35,000 (Dh2,100) as part of their baggage allowance, without incurring any customs duty on the same.



However, from next Monday (August 26), that will no longer be the case as India has issued a moratorium on the scheme, citing the declining Indian rupee. As per the new rules announced yesterday, passengers will have to pay a 35 per cent duty and other charges, officials said.



As Emirates24|7 reported in June this year [Read: No Samsung India warranty for TVs bought in UAE], electronics retailers in India have long been complaining about duty-free TV imports from the UAE and other countries as such imports offer major price discounts compared to retail prices in India.



According to reports in the Indian media, Samsung India had been one of the most vocal critics of the free TV allowance policy, with R Zutshi, past president of industry body Consumer Electronics and Appliances Manufacturers Association (CEAMA) and deputy managing director, Samsung India, estimating that parallel imports of flat panel TVs accounted for between 10 and 15 per cent of the market in India.



According to him, the flat-panel TV market was as big as 3.7 million units in 2012, and is estimated to grow to over 5 million units in 2013.



In June this year, Samsung removed free international warranty on television sets imported from the UAE and a few other countries in an effort to protect dealers there against bulk and parallel imports.



The communication from Samsung India to retailers stated that that measure was be the first in a series of measures the Korean giant was going to take to protect Indian traders.



“As you know, India receives a lot of parallel imports of panel televisions from countries such as Thailand, Singapore and Dubai etc. As a first step in addressing this problem, we are pleased to announce that India has been removed from International Warranty Policy for Samsung Panel Televisions.



"Hence, standard one year free warranty with free installation support will no longer be applicable in India for any Samsung Television imported from Thailand, Singapore or Dubai. This policy has already come into effect and we wanted to inform you of the same,” said the memo.



The continuously declining rupee is a symptom of a weak Indian economy, but until this latest salvo, there had been no negative impact on NRIs working in the Gulf and elsewhere.



The Indian currency is down more than 18 per cent in less than four months since the beginning of May 2013, providing expat Indians further reason to remit record sums home and also evaluate fresh investment opportunities in their home market, especially real estate.



The rupee was yesterday officially crowned the worst performing Asian currency, falling past the Australian dollar and the Japanese yen.



The rupee, which has seen a plunge of more than 15 per cent since the beginning of the year, is now in competition to become the world's worst performing currency this year, with only the Brazilian real (down 16.64 per cent YTD) and the South African rand (down 20.30 per cent YTD) faring worse than the Indian rupee.

Source:- emirates247.com

Tapping Potential Of Larger Home-Textile Export

The statistics of Export Promotion Bureau (EPB), showing a fall in export earnings from home textiles, should draw attention of the country's policy-planners. The EPB's data showed Bangladesh fetched $791.52 million in the last fiscal year (FY) 2012-13, which was 12.64 per cent down from the previous fiscal's value. Market watchers attribute this to global economic slowdown. The sector, which had once seen an impressive growth in global markets, could still be revamped with well-thought-out policies and expansion of market outlets through extensive exploration as home textile products are usually used in cold seasons. Once a land of famous Muslins, adored across the world, Bangladesh still has the potential for exporting its quality textile products that are of common use abroad. Locally produced 'lungi' and indigenous towel, called 'gamcha', could even earn a sizeable amount of foreign currencies through exports to countries in the Middle East and India. Nearly six million Bangladeshis are working alone in the Middle East. Towels are in great demand in the vast markets of Europe, the USA and Canada.



The home furnishing industry in Bangladesh does, in fact, offers a splendid range of bedspreads, curtains, linen, cushion covers, table covers, kitchen accessories, bath linen, and other home textile products. The industry, as the concerned quarters suggest, now needs capacity building to really capitalise on the upcoming opportunities to take a sizeable part of the world home textile market.



China, India, Pakistan and Turkey are traditional producers of home textiles and have earned reputation for their product ranges. But then Bangladesh's home textile industry has also been growing at a rate of 20 per cent on yearly basis, making it a promising contender among these 'stronghold' countries. Newer opportunities are emerging ahead as buyers from China and Pakistan are shifting to Bangladesh. In fact, export earnings from home textiles, according to some analysts, can cross $2.0 billion in the upcoming three years. Along with good quality, low cost of production, lower wages, duty-free access to some developed countries are the factors that weigh in favour of Bangladesh for the retailers to source their related imports.



However, some lingering problems are hindering the growth of the industry in Bangladesh. According to the world's largest home textile sourcing company Tasa, due to infrastructure bottlenecks, even if the product is ready, getting the products from Bangladesh through timely shipment arrangements is still an issue and is a big obstacle to increasing business with the country. There are also many home textile buyers abroad who are more sensitive than others about the compliance and environmental issues. With compliance situation improving, getting orders will be easier. The industry needs capacity building and expansion now to explore more orders. The Bangladesh Textile Mills Association is otherwise upbeat about the home textiles' contribution to the economy. In the winter season, uses of home textiles rise and it is a seasonal product. That's why export earnings from home textiles, according to the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), witnessed a decline last fiscal. Export of home textiles, the FBCCI expects, would rise in September.



What is now needed most is the government's wholehearted thrust on the home textiles sector. It can take steps to assess the country's potential and provide necessary incentives to the entrepreneurs who are capable of attracting orders from abroad, through their adherence to compliance-related issues.

Source:- thefinancialexpress-bd.com

India To Supply 20 Lakh Bales Of Cotton To Bangladesh

20-Aug-2013

India said yesterday it will export 20 lakh bales of cotton to Bangladesh in the 2013-14 cotton season starting in October, even if a ban is imposed on such exports.

The two countries also exchanged the final draft of a cotton purchase deal and signed a textiles sector collaboration agreement after a meeting between visiting Bangladesh’s Textiles and Jute Minister Abdul Latif Siddique and Indian Textiles Minister K Sambasiva Rao here.

There is, however, no official word from either side as to when the agreement on cotton purchase will be finalised and signed.

“Under the proposed cotton purchase agreement, I have assured Bangladesh’s textiles minister that Bangladeshi textiles mills will get a smooth flow of cotton and would have no difficulties in sourcing it from India even if we have to ban cotton exports to other countries,” Rao told journalists.

He said Bangladesh had sought a minimum of 20 lakh bales and “we have assured them that we will give them that much and not ban it”.

India’s cotton production was 340 lakh bales (170 kg each) last year and consumption 270 lakh bales, leaving a surplus of 70 lakh bales, Rao said. The cotton season in India runs between October and September.

Rao said, “It was in India’s interest that Bangladesh becomes strong as otherwise infiltration of people from that country will continue.”

“As regards the cotton purchase agreement, the final drafts have been exchanged between the three sides — the textiles ministry, Cotton Corporation of India (CCI) and Trading Corporation of Bangladesh (TCB),” Rao said.



Under the draft pact, private sectors of the two countries and the CCI and the TCB will engage in exports and imports.

“In case of imposition of restriction on export of cotton by India at any time, the CCI and TCB will determine through consultation the remaining volume of cotton exports in the season,” an Indian textiles ministry official said.

At present, exports of cotton are in ‘open general licence’ category with registration of export contracts by the Indian Directorate General of Foreign Trade.

India’s cotton exports are estimated at around 100 lakh bales in the current cotton season. In the previous season, the country exported 129 lakh bales.

The textiles sector collaboration pact came into effect yesterday and will remain in force for a period of five years. The agreement will be reviewed in every two years, the official said.

“We have signed the collaboration agreement which would act as a major trade facilitation mechanism, by establishing institutional mechanism for collaboration through Joint Working Group,” Rao said.

Under the textile cooperation pact, India and Bangladesh would cooperate in different areas like fashion technology through exchange programmes, skill exchange through institutions and upgradation and enhancement of productivity, efficiency, management techniques and research and development.

The pact was signed by Indian Textiles Secretary Zohra Chatterjee and Bangladesh Textiles Secretary Ashraful Moqbul.

Also, the two sides discussed about establishment of a successor organisation for the International Jute Study Group in Dhaka through joint efforts at the UNCTAD.

India and Bangladesh together account for nearly 94 percent of the world’s production of jute and allied fibre.

Source:- thedailystar.net

Gail India Will Ink Pact With Pakistan Firm For Gas Export

21-Aug-2013

NEW DELHI: State-run gas utility GAIL IndiaBSE -0.62 % will enter into contract with a Pakistani firm to export natural gas through a pipeline from Punjab, Minister of State for Petroleum and Natural Gas Panabaaka Lakshmi has said.



GAIL plans to import gas in its liquid form, called liquefied natural gas (LNG), on a port in Gujarat or Maharashtra.



After converting this again into gaseous state, it will transport the gas through cross-country pipeline network to Jalandhar. From Jalandhar a 110-km line is proposed to be laid to international border near Atari for delivery to Pakistan.



"GAIL would enter into the necessary contract for export of regassified-LNG with its Pakistani counterpart based on import of LNG at Petronet's Dahej (import facility in Gujarat) or Dabhol LNG terminal (in Maharashtra)," she said in a written reply to a question in Lok Sabha.



The written reply in response to a question was to be given on Friday August 16 but since a holiday was declared on that day, the answers were tabled today.



"After regasification at the above terminals, R-LNG will be transported by GAIL through pipelines upto the delivery point located at international border near Atari," she said.



Pakistan wants to import gas from India to meet its rising energy deficit. Initially, it wants to take 1-1.5 million tonnes of LNG (4-6 million standard cubic meters per day of gas).



Pricing and other commercial agreements are being negotiated.



Oil Ministry sources said the delivered price of gas will be up to $ 22.3 per million British thermal unit after including transportation charges and all taxes and duties.



Considering imported LNG price of $ 14.50, the delivered rate would be $ 15.46 after considering shipping and import duty charges. After re-gassification and service tax, it would cost $ 17.01 per mmBtu.



Further, transportation of gas through trunk pipelines would cost a further $ 1.75 exclusive of service tax. Then again, $ 0.5 would be charged for transportation of gas through a dedicated pipeline up to Indo-Pak border bringing the total cost to about $ 19.54 per mmBtu.



A slew of other costs along with Value Added Tax (VAT) is expected to raise the price of gas to a final $ 22.3 per mmBtu at which it will be delivered to Pakistan, they added.

Source:- economictimes.indiatimes.com

India Poised For Gold Scrap Supply Surge As Import Curbs Bite

20-Aug-2013

Rising incentives could help mobilise sales of an estimated 20,000 tonnes stored in Indian households, and minimise the impact of the 80/20 imports principle, which effectively puts an upper cap on shipments.

Harmesh Arora, director with the Bombay Bullion Association, said scrap gold supply could reach 300-400 tonnes this year. Estimates of the amount of gold recycled last year vary.

Bachhraj Bamalwa, director of the All India Gems and Jewellery Trade Federation, also saw supply of recycled gold in India rising to 300 tonnes this year compared to an average of 200 tonnes per annum.

"(Jewellers) will need more gold to manufacture jewellery, as imports have been heavily restricted," Bamalwa said. "If I sell today and (am) not in a position to replenish my stocks, then I'll have a problem and then I'll have to source gold from somewhere else."

"Jewellers will have to offer incentives to get old jewellery," he said. "If jewellers offer incentives, people will bring in their old jewellery more and more." These could include discounts on fashioning old pieces into new ones, he said.

India has long been the world's biggest gold consumer, with fabrication demand of 736 tonnes last year, according to GFMS.

In the domestic market, gold surged 10 percent from the start of the month to 30,820 rupees on Tuesday to trade near its highest level in eight months, helped by a weaker rupee.

Kumar Jain, vice-chairman of the Mumbai Jewellers Association, which groups more than 7,000 members, said he had seen a marked increase in customers exchanging old gold jewellery for new.

"People are getting old gold jewellery and taking new instead (for) the last 25-30 days," he said.

This trend for scrap supply is expected to be sustained until government eases restrictions and give "relief to people" on its imports policy, he said.

The Indian government has been on the offensive to curb shipments to contain a record trade deficit, that has triggered record weakness in the rupee.

On August 14, the federal government also hiked import duty on gold for a third time in 2013 to 10 percent.

"As gold prices have surged we expect good quantities to come in at current levels. People might sell out at these levels, and cover up at a later stage, when the rates come down," Harmesh Arora said. (Reporting by Siddesh Mayenkar and Jan Harvey; Editing by Veronica Brown and William Hardy)

Source:- in.reuters.com

No penalty on payer for non-quoting of PAN in TDS certificates as it was payee's duty to intimate hi

IT : No penalty on deductor of TDS for non-mention of payee’s PAN in Form 16A if payee didn’t intimate his PAN to deductor

Weighted Avg. method is an acceptable method for stock valuation, can't be held as notional method

IT: Weighted average method is a recognized method of valuation of stock and, therefore, value taken on basis of weighted average method cannot be held as notional

Without proving lock, stock and barrel sale of business, it can't be treated as 'slump sale'

IT : Where assessee sold hotel with some assets, and it was not known whether other movable assets used by assessee were also subject matter of sale so as to constitute running business, it could not be held as slump sale

Central Govt. notifies "National Iranian Oil Company" as the foreign company for sec. 10(48) exempti

IT : Section 10(48) of the Income-tax Act, 1961 - Exemptions - Foreign Oil Company selling Crude Oil in India - Notified Foreign Oil Company

Professional training isn't a commercial one even after retro amendment to definition of 'Commercial

ST: Word "commercial" in definition of 'Commercial Training or Coaching Services' is not superfluous; prima facie, a professional training cannot be considered as "commercial training" even after retrospective addition of Explanation to section 65(105)(zzc) by Finance Act, 2010

FDI cap on Asset Reconstruction Co. raised to 74%; Bar on investment by FIIs in Asset Reconstruction

FEMA/ILT : Foreign investments in Asset Reconstruction Companies (ARC)

Reassessment notice was invalid if AO didn't record reasons for reassessment while issuing notice

IT: Where at time of issuance of notice for reopening assessment, Assessing Officer had not recorded his reasons, notice itself would be rendered ineffective

Income from commercial exploitation of machinery to be treated as business income

IT: Where labour income received by assessee from commercial exploitation of machinery was treated as business income in earlier assessment years, same was to be followed in current assessment year

Commission paid through banking channel and approved by Government isn't an illegal exp.

IT : Where assessee had paid commission on exports through banking channel, in pursuance of an agreement approved by Government and UN, same could not be disallowed in absence of evidence of its illegality

Cenvat credit may be allowed even on basis of analogous docs which serve the purpose of original inv

ST/ECJ: Department may require production of original invoice in order to establish right to deduct input tax; and if a taxable person no longer holds original copy, department may admit other evidence to establish that transaction in respect of which deduction is claimed actually took place

No concealment penalty if mistake was bona fide and rectified prior to initiation of assessment

IT: When assessing authority was fully aware of status of assessee as local authority, a mere wrong description of status which was rectified immediately when pointed out, could not attract penalty

AO can't impose concealment penalty if no variation is found in return filed under sec. 153A and ass

IT : Where returned income filed under section 153A is accepted by Assessing Officer and there is no variation in assessed income and returned income, penalty under section 271(1)(c) cannot be imposed