IT: Where in writ petition challenging validity of reassessment proceedings, despite order passed by High Court maintaining status quo, Assessing Officer passed an order raising certain demand, order so passed could be challenged by assessee in appeal before Commissioner (Appeals) and not by filing another writ petition before High Court
Thursday, 22 August 2013
Commission earned from service of collection of electricity bill is liable to ST as 'Business Auxili
ST: A co-operative society of retired government servants earning commission on collection of electricity bills is a commercial concern and is liable to service tax on such commission under Business Auxiliary Services
Direct Taxes Code Bill not taken up by Cabinet
A proposal to tax the super-rich at a higher income tax rate of 35 per cent in the Direct Taxes Code (DTC) Bill was not taken up by the Cabinet today.
While the Bill proposes to keep exemption limit at Rs 2 lakh for individual tax unchanged, it proposes to introduce a fourth slab of 35 per cent tax rate for those with an annual income of over Rs 10 crore.
"The DTC Bill was not taken up by the Cabinet today," Information and Broadcasting Minister Manish Tewari told reporters after a meeting of the Union Cabinet chaired by Prime Minister Manmohan Singh.
While Tewari did not give reasons for the Cabinet not taking up the Bill today, sources said it was possibly due to paucity of time and would be taken up at the next meeting.
Earlier in the day, Finance Minister P Chidambaram said the approval for the Bill was listed in the Cabinet agenda. "Lets see what the Cabinet members decide," he said.
Among other things, the Bill proposes to levy a 10 per cent tax on dividend income of more than Rs 1 crore.
Besides, Minimum Alternate Tax (MAT) may be levied on book profit and not on gross assets, sources said. Further, the Securities Transaction Tax (STT) is likely to be retained, as against the recommendation of the Standing Committee on Finance that the levy be abolished.
At present, tax is levied on income between Rs 2-5 lakh at 10 per cent, Rs 5-10 lakh at 20 per cent, and above Rs 10 lakh at 30 per cent. Further, those earning more than Rs 1 crore have to pay a surcharge of 10 per cent.
Sources said the government has accepted most of the 190 recommendations made by the Standing Committee on Finance, headed by Senior BJP leader Yashwant Sinha.
Cabinet defers Direct Taxes Code bill, says timing not right
The union cabinet on Thursday deffered a decision on the direct taxes code (DTC) bill that proposes to tax super rich at higher rates following some concerns that timing was not right for such a measure.
The DTC Bill 2013, that proposes to re-write the over 50-year old income tax law, was expected to be moved for the consideration of the parliament in the ongoing monsoon session.
The bill proposes to tax incomes in excess of 10 crore at 35% rate against current rate of 30%. In the budget, finance minister P Chidambaram had imposed a surcharge of 10% on those with taxable income in excess of 1 crore, pegging the number of such taxpayers at 42,800.
The code also proposed to impose 10% tax on dividend income in excess of 1 crore, aimed at bringing under the tax net high earners whose primary income is dividends.
At present, dividends are tax free in the hands of investors but the entity distributing dividends has to pay a dividend distribution tax at the rate of 15%.
The prime minster's office (PMO) also had some reservations on the crucial proposals..
Some of the proposals talked of reintroducing some tax proposals that were removed by PM Singh as finance minister in 1993, said one senior government official explaining the objection the PMO has to the proposal.
There is a feeling that the timing is not right to tax the rich at higher rates in the current environment of downbeat sentiment and declining growth, the official said. The bill also proposes to tax wealth in excess of 50 crore at the rate of 0.25%.
Growth forecasts for the current year have fallen to around 5% now, same as the decade low of 5% recorded last financial year, though the government still maintains the GDP could grow at least 5.5% this year.
The DTC bill has been vetted by Parliament's standing committee on finance, which is headed by BJP leader and former finance minister Yashwant Sinha.
The government has accepted or partially accepted over 150 out of 190 suggestions made by the committee though it has not agreed with the recommendation to widen the income tax slab rates.
Receipt of shares from promoter without consideration confirms mainpulation of scrip
SEBI : Where appellant received shares of company from promoter without any consideration, nexus between appellant and promoter group in manipulating scrip was proved and appellant was guilty of violating regulations 3 and 4 of FUTP Regulations
Trust assisting a specific community with accommodation and other facilities for marriages wasn't ch
IT : Where assessee-society was formed with an object to provide accommodation and facilities for performance of marriages and other auspicious functions to members of a particular community, viz., Telugu Beri Vysia Community, it could not be regarded as society formed with a charitable purpose within meaning of section 2(15)
Rice Exporters Fear Strained Indo-Iran Ties Could Hit Basmati Trade
Detention of an oil tanker from India, carrying crude from Iraq, by Iran has led to concern among rice exporters here, as they fear it could be a setback to basmati export from the country. Iran is the biggest importer of basmati rice, especially long-grained Pusa 1121 variety, from India. In 2012-13, Iran accounted for about 10.82 lakh tonnes of basmati rice export, out of total 34.56 lakh tonnes, from India.
"Iran is a major importer of Pusa 1121 rice from India, therefore strained relations are bound to reflect on the trade," observed Kulwinder Singh Makhni, director, Punjab Basmati Rice Limited while talking to TOI on Tuesday.
Makhni said Punjab, especially Amritsar district, contributes maximum to the export of Pusa 1121 rice to Iran. "More than four-five lakh tonnes of Pusa 1121 rice is exported from Amritsar, out of nearly 10 lakh tonnes sent to Iran from Punjab," he said.
According to reports, Iranian Revolutionary Guard Corps had detained oil tanker MT Desh Shanti in the Persian Gulf on August 12 and taken it to Bandar Abbas port. The tanker was carrying crude oil from Basra in Iraq.
A rice broker who had recently visited Iran on a business tour, Daniel Masih said the recent developments have left the exporters a worried lot. "They expect the Indian government to resolve the issue immediately. After all, Iran is a major consumer market for Pusa 1121 basmati from Punjab," he said.
Allaying the fears of basmati rice trade being hit because of the detention of tanker, Rajiv Setia, executive director of Chaman Lal Setia Exports, claimed it is an isolated incident and not much should be construed from it.
Source:- timesofindia.indiatimes.com
India's Iran Oil Imports Drop 75% In July
22-Aug-2013
NEW DELHI: India's imports of Iranian crude plunged by three quarters in July from June, tanker arrival data obtained by Reuters showed, as the country's only active importer in the past two months curbed buying.
The cut in Essar Oil's Iran volumes were likely due to New Delhi's delay in extending approvals for Iranian insurers covering shipments into India, a trade source said.
Indian imports of Iranian crude are expected to rise from August, however, with refiner Mangalore Refinery and Petrochemicals Ltd resuming shipments after a gap of four months because of a separate insurance issue.
MRPL's return as a buyer could give some relieve to Iran, which has seen its exports more than halved by sanctions imposed in 2012 by the United States and the European Union, costing Tehran billions of dollars a month in lost oil revenue.
India on July 17 granted a three-month approval to Iranian shipping underwriters Kish P&I Club and Moallem Insurance Co with effect from June 28, the date of lapse.
Essar Oil has declined to comment on whether the issue over the shipping insurers resulted in its lower imports for July or if the resolution means its imports would rebound in August.
Essar Oil imported 35,500 barrels per day (bpd) of oil from Iran in July, compared with 140,800 bpd in June, tanker arrival data made available to Reuters shows.
The cuts dropped India's Iranian oil imports 82 per cent from 201,900 bpd in the same month a year ago, when state-backed refiners were also taking shipments.
Iran dropped in July to 15th place on the list of India's crude suppliers for the month, down from eighth place in June and fourth for all of 2012.
The US and EU sanctions placed on Iran over its nuclear programme have reduced its oil exports more than half from pre-sanction levels of about 2.2 million bpd.
In the first half of 2013, imports of Iranian oil from its four biggest buyers - China, India, Japan and South Korea - fell more than a fifth from a year ago to around 960,000 bpd.
MRPL, which used to be Iran's top Indian client, and Hindustan Petroleum Corp Ltd halted Iranian oil imports in April due to difficulties in getting insurance for refineries processing Iranian oil. That forced New Delhi to look at providing its own reinsurance after European firms backed out over sanctions.
MRPL has already started taking Iran oil again, while HPCLBSE -0.27 % has said it wants more adequate coverage for refineries running the sanctions-hit crude.
The Indian government also wants to boost imports from Tehran to prop up the rupee, which fell past 65 to the dollar to a record low on Thursday.
The US and European Union sanctions have pushed Tehran into accepting payment in rupees for some of its oil, and higher volumes could support the currency.
"Within the UN sanctions and fully complying with the sanctions, there may be more space for imports from Iran," Finance Minister P. Chidambaram said earlier this month.
Overall in the first seven months of this year India's imports from Iran have declined 46 per cent from the same period last year to about 185,700 bpd, the trade data showed.
India imported nearly 58 per cent more oil from Latin America in the January to July period as its Iranian shipments dropped.
Overall, Asia's third-largest economy shipped in 14.1 per cent more oil in July than a year ago, while imports for the January-July period rose about 10.3 per cent, the data showed.
Source:- economictimes.indiatimes.com
Onion Import Decision Wrong: Experts
Floating of tenders by the National Agriculture Co-operative Marketing Federation of India (NAFED) for import of onions from Pakistan, Iran, China and Egypt has raised heckles in Nashik.
Following the rise in onion prices in retail markets to Rs 50 to Rs 60 a kg, the central government has decided to import onion to bring the prices under control. Accordingly, the NAFED floated a global tender on Wednesday. According to sources, the government is planning to import three lakh tonnes of onions a month.
A veteran onion cultivator associated with the NAFED said, "The decision to import onions is wrong. The import will take at least a month. By the time the imported onions reach the domestic market the kharif crop of onion will also arrive in the market. Hence, there will be no use of importing onions and it will lead to heavy loss to the government."
"There is no adequate stock in Pakistan and importing onion from Pakistan will create political issues as some people may oppose it. The traders had imported onions from Iran in the past, but people did not like it as it tasted different. Onions from China are not fresh and will come from cold storage. It will rot by the time it reaches India," the farmer said.
"There is enough stock in the country that may last till the arrival of the kharif crop. There is at least three lakh tonne stock in Maharashtra. The kharif crop has already started arriving in Andhra Pradesh, while regular arrival in Karnataka is expected by September 15. In Maharashtra, arrival of the next crop is expected by mid-September. In Nashik, the fresh arrival of crop will commence by the first week of October," the cultivator added.
Speaking to TOI, director of the National Horticulture Research and Development Foundation (NHRDF) R P Gupta said, "There are major fluctuations in onion prices. The prices declined on Monday by around Rs 1,000 a quintal but increased by the same rate in the next two days. Actually, there is a stock of eight lakh tonnes of onion in the country. It can't be said how the prices are increasing and whether they are being manipulated. The decision of the government is to bring prices under control. If it costs up to Rs 30-32, then it will be of use."
The president of the Nashik District Onion Traders' Association, Sohanlal Bhandari, said, "Import of onion will be good if we get it at minimum rates. The imported onions will take at least 20 to 25 days to reach the consumers. The fresh kharif crop will also start arriving at the same time. The government took good decision, but it was with much delay. Actually, they should have taken this decision earlier."
Source:- timesofindia.indiatimes.com
Workshop On Export Procedure And Documentation Conducted
22-Aug-2013
DIMAPUR: A workshop on Export Procedures and Documentation was organised in Dimapur on Thursday, August 22. The seminar was conducted by the Export-Import (EXIM) Bank of India and Federation of Indian Export Organisations (FIEO) North-East Chapter in Association with YIMSEAN Livelihood Development Society, Nagaland.
The objective of the workshop was to sensitise entrepreneurs on the nuances of the export and import business. Developing knowledge and skill of entrepreneurs in compliance with the procedures and the necessary documentations involved while enhancing business prospects in the sector was at the core of the workshop.
Director of the department of Industries and Commerce, Thekruneituo Kire attended the programme as the chief guest. Addressing an enthusiastic turnout of entrepreneurs, Kire said that entrepreneurs, irrespective of the size of their trade, can make great impact in the export-import trade. However, while doing so, entrepreneurs foraying into the sector must be aware of the procedures involved. Export promotion is also high on the agenda of the state government, he said, while adding that the government has identified and designated certain villages falling along the international border with Myanmar in this regard.
Resource persons, BR Khaklary, Foreign Trade Development Officer of Directorate General of Foreign Trade; Prabhat Rajbongshi, SBI, Guwahati and Shonly Litting, regional head of Exim bank (Guwahati); and Nirveek ghosh, head of FIEO, North-East Chapter presented papers on Foreign Policy Overview and Role of DGFT, Export Procedure and Documentation, role of Exim Bank and role of FIEO respectively.
Source:- morungexpress.com
Rupee Up 25 Paise Against Dollar In Early Trade
Snapping a six-session losing streak, the rupee on Friday rose by 25 paise to 64.30 in early trade on fresh selling of the U.S. dollar by exporters, after Finance Minister P. Chidambaram sought to assuage investors asserting there is no need for “excessive and unwarranted pessimism.”
Also, weakening of the dollar against some currencies overseas and RBI Governor D. Subbarao assuring that the central bank has adequate foreign exchange reserves to deal with the declining value of rupee also boosted the currency, Forex dealers said.
The local currency had lost 44 paise to close at a new low low of 64.55 against dollar, after breaching the 65 mark to mark all-time intra-day low of 65.56 in Thursday’s trade at the Interbank Foreign Exchange market.
Finance Minister P. Chidambaram on Thursday said rupee is undervalued and has overshot appropriate levels but sought to assuage investors asserting there is no need for “excessive and unwarranted pessimism.”
The Finance Minister met Mr. Subbarao and his advisor Raghuram Rajan to take stock of the situation.
“I believe our Forex reserves are adequate to manage current situation,” Mr. Subbarao said on Thursday in response to whether RBI has enough firepower to defend the rupee, which plunged to an all-time low of 65.56 on Friday.
Meanwhile, the BSE benchmark Sensex fell 61.96 points, or 0.34 per cent, to 18,250.98 in early trade on Friday.
Source:- thehindu.com
Marketing support services carry elements of risk; Adjustment to be made accordingly while computing
IT/ILT: Engineering companies providing end to end solutions are not functionally comparable to companies providing marketing support services, for purposes of computing arm's length price of international transactions
India-Bahrain Tax Information Exchange Agreement is effective from April 11, 2013
IT/ILT : Section 90 of the Income-tax Act, 1961 - Double Taxation Agreement - Agreement for Exchange of Information with respect to taxes with Foreign Countries - Bahrain
Circuitous transactions among sister concerns inflicting losses held 'artificial'; concealment penal
IT: Where assessee having purchased distribution right of a film from sister concern at a very high price on minimum guarantee basis, entered into agreement with another sister concern for exhibition of said film on commission basis, there was a valid basis with revenue authorities for regarding transaction in question to be device, and loss, thus, was self inflicted in order to reduce assessee's taxable income earned from production of another film and, therefore, penalty order passed for raisi
HC directs to expedite disposal of stay application, till then no coercive steps had to be taken for
IT: Where assessee's appeal as well as application seeking stay of recovery of tax were pending for consideration before Commissioner (Appeals) since January, 2011, Commissioner (Appeals) was directed to decide same expeditiously and till stay application was decided no coercive steps be taken against assessee for enforcing recovery
Reassessment to disallow depreciation was valid if impugned docs were recovered subsequent to assess
IT: Where subsequent to framing of original assessment, Assessing Officer recovered that alleged transactions of purchase of computers and lease out of same were bogus, initiation of reassessment proceedings to withdraw depreciation was justified
ST levied on terminal handling charges incurred for export of goods is eligible for refund
ST: When service tax on Terminal Handling Charges was paid under category of Port Services and Port Service was a notified service, assessee was held eligible for refund under Notification No. 41/2007-ST
SEBI strengthens testing procedures to ensure deployment of bug free software for trading of securit
SEBI : Testing of Software used in or Related to Trading and Risk Management
SEBI permits AMCs to carry out trades in debt segment on behalf of mutual funds
SEBI : SEBI (Mutual Funds) (Third Amendment) Regulations, 2013 - Amendment in Regulations 24 and 26
Direct Taxes Code: Super rich with over Rs 10-crore income may have to pay 35% tax
The super rich may have to pay more as the government strives to raise revenues to meet its commitment to rating agencies and markets to bring down fiscal deficit.
The government is proposing a 35% tax rate for those earning more than Rs 10 crore in the Direct Taxes Code (DTC) that is likely to be tabled in Parliament during the ongoing session. The Union Cabinet will consider the code on Thursday. The direct taxes bill, once approved by Parliament, will replace the current Income-Tax Act, which dates back to 1961.
At present, taxable income in excess of Rs 10 lakh is taxed at 30% while those earning more than Rs 1 crore have to pay a surcharge of 10%. Further, since top earners receive substantial income by way of dividends, the Direct Taxes Code incorporates a 10% tax on dividend income in excess of 1 crore.
In the current dispensation, dividend income is tax-free in the hands of the investor as the company distributing dividends pays a dividend distribution tax at the rate of 15%.
Super rich with over 10-crore income may have to pay 35% tax "There can be no quarrel over taxing those earning that kind of income, but this more a symbolic gesture and does not seem like a revenue-raising move," said Sudhir Kapadia, national tax leader, EY.
Few Crorepati Taxpayers
"The government should have looked at a new design architecture for taxing dividends in the hands of recipients as dividend distribution tax adds to the overall corporate tax rate," said Sudhir Kapadia.
The corporate tax rate is proposed to be retained at 30% while the Securities Transaction Tax, which has faced vehement opposition from market participants, will stay in place.
"This will make our tax system progressive. Those earning high income should pay higher tax," a senior finance ministry official told ET.
There are only a few thousand income-tax payers that earn more than Rs 10 crore, but they account for a significant percentage of the tax paid. In 2011-12, only 1.3 lakh assessees had income in excess of Rs 20 lakh, but they accounted for 63% of the total personal income-tax collected.
Finance Minister P Chidambaram had said in his budget speech that there were only 42,800 taxpayers with income in excess of Rs 1 crore. Those earning over Rs 10 crore are likely to be a lot less, though exact numbers are not in public domain.
Many experts see these low numbers as evidence of widespread tax evasion. Political contribution of up to 5% of gross total income will be eligible for deduction.
The bill proposes to levy wealth tax at the rate 0.25% for those with assets exceeding Rs 50 crore. The new tax law, if passed by Parliament, would come into effect from April 1, 2015.
The DTC, as originally conceived by Chidambaram, had sought to radically reform and simplify the over 50-year-old Income-Tax Act by reducing tax rates to expand the base of taxpayers while doing away with exemptions. But before the draft could be made public, he moved to the home ministry.
Business deemed to have commenced on commencement of one of the activities constituting business
IT : In order to determine as to whether assessee has commenced its business for purpose of allowing certain expenditure under head 'Business expenditure', it is not necessary that all activities which go to make up business should have been started rather it is sufficient if one among activities which constitute business is commenced which is first in point of time and which must necessarily precede all others
RBI Liberalizes its Policy on Investments by NRIs under Portfolio Investment Scheme
FEMA/ILT : Investments by Non-resident Indians (NRIs) under Portfolio Investment Scheme (PIS) Liberalisation of Policy
Discrepancy found during assessment not to be added separately if it's a part of sum brought to tax
IT: Any discrepancy found during assessment cannot be added separately, if assessee had offered certain additional amount to tax for covering the same
Cenvat credit Rule 6 doesn't apply to transactions not amounting to service
ST/ECJ: A transaction, which is outside scope of service tax (i.e., not a service), cannot form part of proportion used for seeking reversal of Cenvat Credit under Rule 6 of CENVAT Credit Rules, 2004; however, value of exempted service would form part of such proportion
HC permitted special audit because books of account were found to be complex
IT : Notice can be issued for appointment of special auditor to examine books of account, if they are complex and not understandable
INCOME TAX APPELLATE TRIBUNAL,LUCKNOW BANCHES : LUCKNOW CONSTITUTION FROM 19.08.2013 TO 23.08.2013 AND 28.08.2013 TO 30.08.2013
[unable to retrieve full-text content]INCOME TAX APPELLATE TRIBUNAL,LUCKNOW BANCHES : LUCKNOW CONSTITUTION FROM 19.08.2013 TO 23.08.2013 AND 28.08.2013 TO 30.08.2013 {ad} For more information...
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