ST : Irrespective of claim and nomenclature of assessee as agent, if transactions carried out are in nature of purchase and sale, profit earned therefrom cannot be charged to service tax under Business Auxiliary Services
Wednesday 21 August 2013
Entry of a liability in books to be deemed as acknowledgement of liability, HC admits winding up pet
CL: Where respondent-company did not deny its liability which was reflected in its audited balance sheet, entry in books of account of respondent showing that an amount was outstanding to petitioner should be taken as acknowledgement of debt
Sec. 68 additions upheld as assessee deposited sum in bank account of lender prior to raising loan
IT : Where substantial amount was deposited in bank accounts of lenders shortly prior to issuance of cheques by them, transaction in question being sham, loan amount was to be added to assessee's taxable income under section 68
Gain accruing to a salaried taxpayer from share transaction to be treated as capital gain : Guj HC
IT : Where assessee, a salaried class person, earned profit amounting to Rs. 68 lakhs on sale of shares, Tribunal was right in holding assessee as investor and treating gain as capital gain as against business income treated by Assessing Officer
June Thermal Coal Imports Jump 52 Pct
21-Aug-2013
NEW DELHI: Thermal coal imports rose in June at their fastest pace in 2013 and jumped by more than half from a year ago as traders and power utilities stocked up to get through the monsoon season, provisional data from government sources showed.
The surge in shipments at the world's fourth-largest coal importer is bad news for India which is restricting imports of commodities such as gold and silver in an attempt to halt a three-month slump in its currency. The rupee fell to an all-time low of 64.13 against the US dollar on Tuesday.
The decline in the currency is making the imports costlier even as international coal prices are weakening and has raised the urgency for domestic producers such as Coal India Ltd to lift their flagging output.
Thermal coal shipments to India was 12.02 million tonnes in June, up 52.5 per cent from 7.88 million tonnes imported in the same month of last year, data obtained by Reuters showed.
Local supplies typically fall during the June-September monsoon season due to lower production, prompting coal traders and consumers to stock up before restrictions kick in at several ports due to squally weather conditions.
Energy-hungry India relies on coal to fuel more than half of its power generation, but domestic production has not kept up with capacity additions in the power sector, leading to power cuts that crimp growth and also result in costlier imports.
Last year, 670 million people in the northern, eastern and northwestern parts of the country had no power for two days, the biggest outage in the world, as a few states drew excess power from the national grid causing it to snap.
During the first half of the calendar year, India's overall overseas coal purchases, which include coke and briquettes, rose 28.3 per cent from a year earlier to 75.73 million tonnes, the data showed.
The numbers could only go up as ports, where documentation is done manually, send their figures to the government with a considerable time lag, one of the sources said.
Total coal imports this fiscal year to March 31, 2014 could hit a record 165 million tonnes from 137.56 million tonnes in 2012/13, according to the government.
India does not release coal import data on a regular basis. It places no restrictions on the imports of the commodity, which are shipped in by traders and mainly power utilities.
Source:- economictimes.indiatimes.com
Weak Steel Demand Hits Alang Yard
RAJKOT: Ship-breakers in Alang, the biggest ship-breaking yard in Asia, are facing a queer situation. On one hand, their business is booming due to large number of vessels coming for dismantling, while on the other the slowdown in construction sector has resulted in a massive pile-up of steel in the rerolling mills.
The re-rolling mills in Bhavnagar and Sihore that make steel bars and ingots from the dismantled vessel are seeing material piling up in their units.
The demand for steel has plummeted drastically as major infrastructure projects are on hold. Close to 60 lakh tonnes of steel is produced in rolling mills.
This has forced the ship-breakers to shut down the yard on Saturdays and work just six days a week. "In order to avoid overproduction, we have decided to shut down the yard for one day every week at Alang. We have also cut down daily working hours of labourers," president of Sosiya Ship-breakers Association and vice-president of Ship Recycling Association of India Ramesh Mendapara said.
Mendapara said that the rolling mills which purchase steels from ship breakers have decided to shut down their units twice a week. They have also cut down on procurement of materials from ship breakers.
A ship-breaker in Alang Haresh Parmar said, "Vigorous monsoon throughout the country has also affected the transportation of steel as compared to previous years. We have limited space on our plots to store all material extracted from ship-recycling."
According to an estimate, Alang ship-recycling industry provides direct employment to 15,000 and indirect employment to nearly 1.5 lakh.
"We are expecting the situation to ease after monsoon recedes as the construction activity is expected to pick up," Mendapara added.
Source:- imesofindia.indiatimes.com
India Pursuing Oil Tanker's Detention With Iran
21-Aug-2013
New Delhi: India is vigorously pursuing with Iran the detention of the MT Desh Shanti oil tanker, but there has not been any progress so far, an official said on Wednesday
MT Desh Shanti, belonging to the Shipping Corporation of India (SCI), was detained by the Iranian Revolutionary Guards Corps (IRGC) in the Persian Gulf Aug 13.
"India has been in touch constantly with Tehran over the matter, but there has been no progress regarding release of the ship," the external affairs ministry spokesperson said.
Iran has demanded an anti-pollution undertaking from the ship's captain and SCI for releasing the vessel. Tehran has termed the detention as a "technical and non-political issue".
The vessel was carrying 140,000 tonnes of Basrah crude oil from Iraq to India.
According to Iranian media reports, the oil tanker had been impounded because it discharged its oily ballast water 30 miles away from Iran's Lavan Island in the Persian Gulf, causing a 10 mile long oil slick in the sea.
India has cut its crude imports from sanctions-hit Iran.
Source:- zeenews.india.com
TNMM : Term 'related party transaction' means transactions affecting profitability of related partie
IT/ILT : In context of TNMM, where underlying object is to ascertain profitability from international transactions at arm's length with a suitable base and question is of determining comparability of a case, term 'related party transactions' cannot be considered in its generic sense rather it will encompass only such transactions between related parties which directly affect overall profitability in one way or other
India Asks Russia To Allow Rice Imports
21-Aug-2013
Seeking greater market access for its agriculture products, India on Wednesday asked Russia to lift the temporary suspension on importing rice from the country.
The issue came up for discussion during the meeting of Commerce and Industry Minister Anand Sharma and Russian Minister of Economic Development Alexey Valentinovich Ulyukaev on the sidelines of the ASEAN Ministerial meeting in Brunei.
Mr. Sharma sought resolution over sanitary and phytosanitary (dealing with basic rules for food safety and animal and plant health standards) measures concerning standards of Indian agriculture exports to Russia.
“Sharma particularly raised the issue of temporary suspension of Indian rice export to Russia and sought market access for Indian bovine meat,” an official statement said, adding, “Sharma asked Ulyukaev to review the rice export suspension“.
As per reports, India’s rice export to Russia increased five times to $25 million in April-December 2012, compared to $4.5 million in the same period of the previous fiscal, before breaks were applied by the Russian Federal Service for Veterinary and Phytosanitary Surveillance (FSVPS) on the imports in February.
It placed a temporary ban on import of rice from India following detection of Khapra Beetles in the consignments.
Source:- thehindu.com
Onion Price Jumps Back To Rs 80/Kg; Nafed Floats Import Tender
21-Aug-2013
NEW DELHI: Cooperative major Nafed on Wednesday floated a global tender for import of undisclosed quantity of onions from Pakistan, Iran, China and Egypt to boost domestic supply and curb prices, which have again risen back to Rs 70-80 per kg in most retail markets of the country.
Retail prices jumped back to Rs 70-80 per kg on Wednesday, up by 10 per kg from yesterday's level. Wholesale prices too rose at the same pace to 45-55 per kg in the national capital and other states.
The wholesale price at Lasalgoan in Maharashtra -- Asia's largest onion market -- on Wednesday rose slightly to Rs 41.25/kg.
"Nafed is interested to import onions from Pakistan, Iran, China and Egypt. Interested parties having experience in importing onions may specify the quantity that can be offered and rates on cost and freight per tonne along with final rate per tonne in INR for delivery," the cooperative said.
The last date for submitting the offer is August 27. Global traders will have to import fresh onions grown in 2013 on behalf of Nafed and the shipment to Delhi should be effected in a week's time after confirmation, it said.
Imported onions from these countries should be of good quality and completely free from fungus infestation and attack by insects and moulds. Nafed has sought phytosanitary and fumigation certificates issued by a competent authority of the exporting country certifying onions are fumigated with methyl bromide and are free from smut, dry rot and maggot.
Onion prices have skyrocketed since last fortnight as the crop in Maharashtra, the largest growing state, is expected to be lower due to drought in some parts. Besides, supplies from other growing states like Rajasthan, Madhya Pradesh, Andhra Pradesh and Tamil Nadu are not coming as rain has affected transportation and logistics.
To control rising prices, the government had imposed a minimum export price (MEP) of $650 per tonne and had directed cooperative major Nafed to import onions. Onion prices are likely to be under pressure till October when the new crop is expected to hit the market. According to the Nashik-based National Horticultural Research and Development Foundation (NHRDF), the area under onion crop is down by 10 per cent from 10.87 lakh hectares this year.
Source:- timesofindia.indiatimes.com
Cotton Yarn Exports Registration Jumps 55% On Huge Chinese Demand
21-Aug-2013
The registration for cotton yarn exports has jumped 55% in the first four months of the current financial year due to a resurgence in Chinese demand. If the trend continues, cotton yarn export will likely hit a new record this year.
Data compiled by the Directorate General of Foreign Trade showed traders and exporters had registered for a shipment of 488.15 million kg between April and July 2013, compared with 314.19 million kg in the corresponding period last year.
Export registration for cotton yarn almost doubled from 245.84 million kg in the April-July 2011 period.
“If the trend continues, cotton yarn exports would beat all previous expectations to set an all time record this year,” said D K Nair, secretary general, Confederation of Indian Textile Industry.
According to reports, the Cotton Yarn Advisory Board has projected a marginal 14.2% increase to 1,150 million kg in cotton yarn exports from India this financial year. But actual exports could be even higher. Total cotton yarn production this year is estimated at 4,000 million kg.
“The substantial increase in exports, however, has not affected domestic supply to mills at all. Domestic mills are operating smoothly with adequate capacity,” said Nair.
The exponential growth in cotton yarn shipment has lowered the prospects of cotton exports as Chinese importers find purchase of fibre cost effective.
According to Arun Sakseria, a Mumbai-based cotton trader and exporter, the government of China has levied around 40% accumulative import taxes and local levies to encourage local power loom and textile sectors. In contrast, import duty on cotton yarn works out to seven-eight%. Hence, importing cotton does not make sense for Chinese textile mills, he added.
China produces around 6.7-7 million tonnes (mt) of cotton annually against the country’s consumption of 9.5 mt. China has framed a policy under which the shortfall should be bridged through “zero” import, while the additional purchase from overseas would attract huge duty.
“The same policy should be adopted by India also. The government should levy high export duty on cotton yarn to discourage shipment of the textile raw material overseas. Instead, local textile mills should be encouraged by making available of surplus quantity to produce cheaper garments,” said Sakseria.
Meanwhile, the benchmark 40’s count combed cotton yarn price moved up by 4-5% in the last one month to trade between Rs 250-255 a kg in Mumbai.
Bharat Malkan, proprietor of IB Yarn Agency, a trader and exporter of cotton yarn, said: “While demand from China, Brazil and Turkey is on full swing, enquiries have started floating in from Europe and Italy also after four years of uninterrupted halt.”
Another factor which helped exports is the record depreciation in the rupee against the dollar. Exporters have rushed to sign a pact with importers at the current exchange rate and lock in till exports are executed.
Also, cotton price jumped 11.79% to trade at Rs 13,329 a quintal on August 19 against Rs 11,923 a quintal a month ago.
Source:- business-standard.com
Pricey Gold Loses Its Sheen For Business
Gold has lost its sheen for most jewellers in the state, with Goa Gold Dealers Association president Pramit Raikar saying the metal's ever-escalating price has eaten into business by 30%.
With gold crossing the 30,000/10gm mark this week, worried goldsmiths are hoping the upcoming festival season brings them some cheer.
"The sharp spurt in international prices and a weak rupee against the dollar have seen gold at an eight-month high, and this week's jump is the highest in over two years," says Vikram Verlekar, managing director, Ulhas Jewellers.
Sagar Pednekar, president, North Goa Jewellers Association, adds, "In Goa, MMTC in Vasco is the only gold importer. It imports approximately 124kg annually. Since the central government has stopped imports, MMTC has suspended imports."
Explaining the impact this has on the market, Verlekar, an immediate past president of the Goa Gold Dealers Association, says the only option for jewellers in Goa is to purchase from small bullion dealers who get the gold from Mumbai from leading importers. This increases the price of gold even further as VAT is inevitably applied.
"This could well lead to the trade stopping altogether," warns Verlekar.
The jewellers' woes are further compounded by the central government's decision to increase import duty and the RBI's new policy allowing India to import a maximum of only 350tonnes.
Verlekar explains that of the allowed amount, 70tonnes will be exported, leaving the domestic industry with just 280tonnes, as against a consumption of about 850tonnes.
Pednekar adds that the gold mined in India is not enough and Indian jewellers rely mainly on imports. "But to import we have to pay in dollars and with the dollar growing stronger the price of gold is only going to rise."
He says the central government's decision to suspend imports has left the industry "in chaos on where the raw material will come from".
Calling the gold market in Goa "small" in terms of consumption, Pednekar says the stoppage in mining and the drop in European tourists to the state has also led to the jewellers' drop in business.
Raikar, echoing the other jewellers, says the current developments and rising prices are leading to malpractices such as smuggling.
He points out that the price of 22 carat gold has doubled from 550 per gram in 2003 to 950 per gram today. Further pointing out that notwithstanding all kinds of developments in the market the metal has survived to remain in demand, Raikar concludes, "The festive season is approaching and despite the high prices there will be increased demand soon."
Source:- timesofindia.indiatimes.com
Rupee Breaches 65 Per Dollar To Record Low
The Indian rupee breached the 65 mark against the dollar on Thursday surpassing the previous all-time low of 64.55 hit just yesterday. The partially convertible rupee fell 1.4 per cent against Wednesday's close of 64.11.
Markets tracked the rupee, falling for the 5th consecutive day. The BSE Sensex traded down 140 points or 0.7 per cent in opening trades, while the broader Nifty slipped below the key 5,300 levels, dropping over 45 points.
The rupee weakened tracking the strength in the dollar index, which measures the greenback versus a basket of six currencies. The dollar index rose to 81.422, from a low of 80.896.
Fresh weakness in the rupee comes after minutes from the Federal Reserve's July policy meeting showed the U.S. central bank was on track to start tapering stimulus as early as next month.
Top officials of the Fed were mostly in agreement that the central bank should end its massive bond-buying program, which has been in place in one form or another since late 2008 to keep interest rates low and encourage economic growth.
A Deutsche Bank report on Wednesday had predicted the rupee's slide all the way to 70 in a month or so.
The Reserve Bank of India has proven unable to stem the rupee's selloff, despite intervention and curbs on outflows from companies and individuals, which have dented India's stock and bond markets. The government continues with incremental steps, banning duty-free import of flat-screen televisions.
The RBI's announcement on Tuesday to reverse its tightening strategy and start buying bonds has further confused traders.
"In our view, the problem is that the RBI is trying to juggle too many balls, which sends confusing signals and damages its credibility," Nomura said in a report on Wednesday.
However, Arvind Narayanan of DBS bank told NDTV that it is unfair to blame the Reserve Bank.
"There is no magic wand here. The rupee is behaving in-line with broad fundamentals of the region. The only thing we can do is to attract long term capital inflows," he said
Source:- profit.ndtv.com
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