IT: Order setting aside penalty for proper reasons recorded, is to be upheld
Sunday, 25 August 2013
Civil Court can entertain a suit relating to encroachment of civil rights in administration of co.
CL: Where some of questions raised by respondent-shareholders in civil suit as regards administration of company pertained to civil rights, Civil Court had jurisdiction to entertain that suit
Service tax paid on maintenance of SAP system is eligible as input service credit
ST: Service Tax paid on maintenance of SAP system is eligible as input service credit, as SAP system is relatable to manufacturing activity
'Tax avoidance' arrangement is legitimate if it's within four corners of law, says HC
IT: Where arrangement of assessee to avoid payment of tax did not contravene any statutory provision and was achieved within four corners of law, it cannot be found fault with
Nmcc, Steel Ministry Try To Block Iron Ore Exports
Within weeks of the Prime Minister's Office pitching for relaxation of iron ore exports, the steel ministry and the National Manufacturing Competitiveness Council (NMCC) are trying to block it.
They have argued that lowering of the 30 per cent duty on exports of the mineral would raise the cost of production for domestic steel companies currently battling a downturn and rising input costs.
Prime Minister Manmohan Singh had recently suggested relaxing the duty on iron ore exports as a key measure to contain the nation's current account deficit.
Accordingly, the commerce ministry has moved a note for the Cabinet Committee on Economic Affairs this month seeking reduction in duty of the mineral. Exports of iron ore had fetched the government nearly $7 billion before 2011 when it was banned.
The commerce ministry has argued that given the huge surplus stock of iron ore fines in the country owing to depleted exports, there is a need to incentivise its overseas sale.
But the steel ministry has countered saying of the total estimated reserves of about 25 billion tonnes, only a third can be mined. The rest is locked untapped in the Western Ghats as the Supreme Court has prohibited any exploitation there and other similar sensitive environmental zones. It has claimed demand for iron ore would shoot up with exports.
Steel secretary DRS Chaudhary has told expenditure secretary Sumit Bose in a letter earlier this month that considering that the Indian steel industry is passing through a difficult phase and is utilising only 82 per cent of its installed capacity due to depressed market conditions, it is imperative that access to higher quality of iron ore at reasonable prices is ensured for steel companies.
NMCC member secretary Ajay Shankar too has joined in suggesting the move to lower the duty should be aborted as the country needs to become a net exporter of finished steel from being a net importer currently.
To ensure the steel lobby is heard loudly, steel minister Beni Prasad Verma has told commerce and industry minister Anand Sharma in a letter last week that in the larger context of mobilising revenue for the economy, the government should always promote steel exports.
He has cited figueres to argue that domestic steel companies exported 5.25 million tonnes of finished steel in 2012-13 valued at $ 4.3 billion.
"It makes more sense to to push for exports of steel valued at $800-1000 per tonne rather than raw materials valued at $100-120 a tonne," Verma wrote in his letter to the commerce minister.
Source:-www.indianexpress.com
Euro Zone Growth To Push Exports
With the rupee weakening against the dollar and the euro zone registering growth in the second quarter after 18 months of economic contraction, exports are likely to benefit. Economists and trade promotion organisations are pencilling in an over 10 per cent growth rate for the current month.
In fact, given the rupee depreciation and base effect, the growth during August and September may even be in two digits as was seen in July.
Almost half of the growth recorded in July, 11.64 per cent at $25.83 billion, was on account of depreciating rupee alone and "but for the devaluation, exports would have contracted further", according to Rafeeque Ahmed, president, Federation of Indian Export Organisations.
Soumya Kanti Ghosh, chief economist, State Bank of India too said he expects a short term burst in exports primarily riding the low base of last financial year. "Only after September when the base effect is over, will we know the real trajectory of export growth".
Ahmed, said the currency alone wasn't responsible for the expected rise in exports. The improving health of major importing countries including the EU and US which showed signs of recovery — euro zone recorded 0.3 per cent growth while the US stood at 1.7 per cent in the second quarter of the year — has also played a key role in improving India's export growth. "We can manage $330 billion exports for the year. August should see anything between a 10-15 per cent growth," Ahmed said.
Indian exports rose 11 per cent in July. The commerce ministry targets $325 billion exports in FY'14. However, the benefits from depreciation would shave off about 40 per cent from export invoices as exporters have hedged their risk at a much lower exchange value than the current rupee to dollar exchange rate.
Source:- indianexpress.com
Imported Bicycles To Cost 10% More
25-Aug-2013
Imported bicycles are set to get dearer soon with importers deciding to hike prices of bicycles, including of high-end ones, by at least 10 per cent in the wake of depreciation of the rupee against the dollar.
"Definitely, there is going to be a hike in prices of imported bicycles in view of the weakening of rupee. There will be a 10 per cent increase in prices of bicycles," LA Sovereign, MD, Rohit Kalra told PTI.
Expressing concern over the Centre's policies for not being able to contain spiralling increase in dollar versus rupee, Kalra said his company had to make payment at the current rate of 63-64 for orders, which were booked when the rupee was 55 against dollar.
LA Sovereign Bicycles is one of the largest importers of bicycles which imports from China, Thailand and Sri Lanka. Price range starts from Rs 6,000 and goes up till Rs 2 lakh a bicycle.
Bicycle importers said the price hike may affect the demand of bicycles which are priced below Rs 10,000. "There will not be any effect on demand for bicycles which are priced above Rs 10,000," Kalra said.
"We will again raise prices of imported bicycles in the range of Rs 500-1,000 a unit because of wide currency fluctuations," Hi-Bird Cycles, MD, R D Sharma said while adding that company last month raised prices by Rs 500-600 a bicycle.
India is gradually becoming a growing market for imported bicycles in the wake of increase in demand for high end bicycles. The market for high-end imported bicycles is pegged at 1 lakh units in the country, said industry insiders.
Importers source high-end aluminium or carbon-based bicycles from countries including China and Taiwan. Besides, several bicycle components like basket, spoke, hub-cup, steel balls, free wheel, brakes etc are also imported.
The country's annual import of bicycles and bicycle parts is estimated to be Rs 1,200 crore, as per bicycle makers.
However, industry experts see weakening of rupee as an opportunity for domestic bicycle manufacturers, saying that high cost of import would force importers to source bicycle parts from local sources only.
"Industry should take it as an opportunity and step up efforts to meet the requirements of importers here by producing cost effective items," said Satish Dhanda, Convener Bicycle Panel, Engineering Export Promotion Council ( EEPC).
Notably, last year the Centre raised the basic custom duty on bicycles from 10 to 30 per cent and on bicycle components from 10 to 20 per cent on to discourage imports.
Ludhiana is major hub of bicycle cluster as it caters to country's over 90 per cent bicycle and bicycle parts needs.
Source:- timesofindia.indiatimes.com
Shine Off India's Apple Imports: Usda
25-Aug-2013
NEW DELHI: Apples, the most heavily consumed imported fruit in India, may lose their shine as the rupee's depreciation affects imports, a report said.
"A continued decline of the rupee against the dollar could affect importer and consumer appetites for imported fruit (apple) during 2013," the US Department of Agriculture (USDA) said in its latest report.
India, the world's third-largest producer of apples, faces a local supply gap due to seasonality, geographical separation and limited infrastructure amid rising demand from an expanding middle class. The US agency also projected that the production of apples in India may come down in 2013.
Depreciation in the rupee, which hit an all-time low of 65.56 against the dollar last week, makes imports costlier.
India's apple imports have increased ninefold to 1,86,387 tonnes last year from 20,093 tonnes 10 years ago. Imports in 2012 were valued at $ 196 million, the USDA report added.
Assuming normal weather conditions, USDA forecasts India's apple production at 1.85 million tonnes in 2012-13 compared with last year's 2.2 million tonnes.
Apple production in the country is limited to the hilly states of Jammu & Kashmir, Himachal Pradesh and Uttarakhand. India imports the fruit from the US, China, Chile, New Zealand, Italy, Iran and Afghanistan, among others.
Source:- economictimes.indiatimes.com
China Corners Cheap Ovl, Gail Gas From Myanmar, India Cut Out Of Deal
25-Aug-2013
It is a paradoxical situation. Even as India frets over the rising cost of fuel like imported liquefied natural gas (LNG), two of the country’s public sector companies are able to sell gas at a much lower price to China. State-run ONGC Videsh (OVL) and GAIL India along with its international partners are selling gas from two of their Myanmar blocks — A1 and A3 — to Chinese consumers at $9/million metric British thermal unit (mmBtu). In comparison, India pays $12-15/mmBtu for spot LNG cargoes at present.
Gas from the two Myanmar blocks are transported though a 870-km cross-border pipeline to China. Since late July, energy-hungry China has been buying natural gas from the A1 and A3 blocks.
The price of $9/ mmBtu for the Myanmar gas is comparable to domestic gas prices in China that have recently been hiked for non-residential consumers by about 15.4% to an average of 1.95 yuan per cubic metre or about $8.90/mmBtu. Pipeline imports from neighbouring countries like Turkmenistan and Uzbekistan are higher at around $10/mmBtu.
For India, this signifies a missed opportunity. OVL and GAIL officials say though they had proposed to import this gas into India through northeastern states, Beijing prevailed upon Naypyidaw to sign an agreement to supply gas exclusively to it. India now imports LNG from countries like Qatar and Australia.
Asian importers like India, China, Japan and South Korea along with Latin American countries like Brazil pay the highest prices for LNG at around $13-16/mmBtu, according to the US Federal
source:- financialexpress.com
Rice Import Doubles Despite Food Surplus
25-Aug-2013
Though food surplus stood at over 400,000 tons in fiscal year 2012/13, Nepal´s rice imports doubled during the year. Nepal imported rice worth Rs 8.45 billion during the review period.
Nepal mainly imports rice from India.Despite drop in cereal production by 7.6 percent to 8.74 million tons compared to last year´s total output, the Ministry of Agriculture Development (MoAD) has estimated that country enjoyed surplus of 408,000 tons of food in 2012/13. In 2011/12, Nepal had enjoyed food surplus of 886,000 tons.
“Technically we are in a food surplus situation. But the increasing consumption of rice means we are facing deficit of rice,” Prabhakar Pathak, spokesperson for the MoAD, told Republica on Sunday. “We, however, enjoy surplus on maize and wheat.”
According to Pathak, Nepal faces deficit of 900,000 tons of rice even though it has 262,000 tons and 1.05 million tons of rice and wheat, respectively, in surplus.
Out of total per capita food consumption of 191 kg, rice covers more than 122 kg, followed by maize (41 kg), wheat (17 kg), millet (9 kg) and other foods (2 percent).
According to MoAD estimates, total requirement of food for people across the country stands at 5.24 million tons a year.
“Surplus in overall cereal crops can´t contain imports of rice in the country,” said Pathak.
However, rice expert Bhola Man Singh Basnet said consumption of food might have gone up sharply from the estimated per capita consumption of 191 kg, leading to increasing import of rice. “Increasing import of rice at a time when the country is in a food surplus situation means our calculation on food consumption is wrong,” said Basnet.
Total production of paddy, wheat, maize, millet, barley and buckwheat combined reached 8.74 million tons this year, down from 9.46 million tons recorded last year. Production of paddy, which makes up 52 percent of the total crop production, dropped by 11.3 percent to 4.50 million tons, thanks to drop in plantation area by about 110,000 hectares.
Similarly, production of maize, which makes up for 23 percent of the total crop production, declined by 8.3 percent to 1.99 million tons.
The MoAD had recently put eight more districts, including five in Tarai, in the list of food deficit districts. Saptari, Siraha, Mahottari, Sarlahi and Rautahat in Tarai, which are among the key producers of paddy, joined the list of food deficit districts this year. Similarly three hilly districts -- Udayapur, Panchathar and Kaski - entered the list for the first time. With this, the number of districts with food deficit has reached 33 compared to 27 of 2011/12.
According to data compiled by Nepal Rastra Bank, import of vegetables jumped by a whopping 75.7 percent to Rs 4.54 billion in 2012/13. Commercialization of vegetable production has been limited to handful of districts that resulted in growing supply deficit and subsequent rise in its import. Imports of fruits and live animals during the review year rose by 52.1 percent and 137.9 percent, respectively, to Rs 1.3 billion and Rs 1 billion respectively. Similarly, Nepal imported tea and tobacco worth Rs 50 million and Rs 2.06 billion during the year, up by 72 percent and 7.9 percent compared to the amount recorded in the last fiscal year.
Source:- myrepublica.com
Cotton Production Likely To Witness 30% Rise
Happy days are here again for cotton farmers in Gujarat as owing to good monsoon production across the state is expected to rise by 30% in 2013-14.
For the cotton season starting from October 1, output of the crop is estimated to be around 115 lakh bales of 170kg each. However, nationally the cotton production is expected to rise by less than 10%. Cotton acreage across the country is expected to remain around 115 lakh hectares including 26 lakh hectares in Gujarat.
With 115 lakh bales of cotton production, Gujarat will contribute to almost one third of national yields. Last year, cotton sowing area in Gujarat was less than 24 lakh hectares with cotton production of around 85 lakh bales.
Currently, the Cotton Advisory Board (CAB) has not released its production estimates for 2013-14 but the cotton traders association is expecting up to 10% rise in national cotton production for the year. Cotton Association of India (CAI) estimates that cotton crop for 2013-14 will see total production of 372 lakh bales against 356 lakh in 2012-13.
The association also estimates that Gujarat the largest cotton producing state is expected to grow up to 115 lakh bales in 2013-14.
“Timely rains will result in higher yields. Gujarat, the highest yielding state in India, has seen an increase of more than 10% in acreage on the back of a good monsoon compared to drought like conditions in 2012-13,” said president of CAI, Dhiren Sheth.
The cotton brokers are more optimists on yield this year.
“We are expecting cotton production to be around 120 lakh bales in Gujarat from total sowing area of 26.50 lakh hectares,” said a city-based cotton broker, Arun Dalal.
The report released by Dalal says that India will have total cotton production of around 375 lakh bales. “Compared to last year, we are expecting 9% rise in cotton production in India. Of the total, Gujarat will lead with 120 lakh bales followed by Andhra Pradesh and Maharashtra,” said Dalal.
Source:- dnaindia.com
Taxpayer can't plead as an 'aggrieved assessee' if no tax payable by him even after order of CIT(A)
IT/ILT: When no tax was payable by assessee, a Netherland Company, as a result of order of Commissioner (Appeals), it could not be termed as 'assessee aggrieved' as envisaged in section 253(1)
India To Import Onions For First Time Since 2011
India is preparing to import onions for the first time in two years, as a surge in prices threatens to trigger a backlash against Prime Minister Manmohan Singh before next years elections.
Prices of the vegetable have almost quadrupled in three months in New Delhi, as the government struggles to tackle the highest inflation among the biggest emerging markets. State-run trading company PEC Ltd this week sought overseas suppliers to deliver as much as 300,000 tonnes of onions, while National Agricultural Cooperative Marketing Federation of India Ltd said the country may buy from China, Iran, Egypt and Pakistan.
The government has to address this issue urgently and imports are the only solution in the short term, said Madan Sabnavis, chief economist at rating company Credit Analysis and Research Ltd in Mumbai. Onions are a nasty thing politically and parties have lost elections in the past over this issue, he said.
With the rupees plunge threatening to fuel inflation in a country where a gauge of gains in consumer prices has averaged 10 per cent, a surge in the cost of onions is the last thing Singh needs before he faces polls by May. Already embattled in the face of decade-low economic growth and twin budget and current-account deficits, his government is counting on the inbound shipments to address shortages caused by droughts, hoarding and distribution bottlenecks.
Politicians have won and lost elections in the South Asian country over the cost of the key ingredient used to make spicy masala that goes into dishes from curries to biriyani.
Former Prime Minister Indira Gandhi, defeated after she suspended democracy from 1975 to 1977, swept back into power in 1980 by turning the price of onions into a populist rallying cry. Waving garlands of onions at political gatherings, she assailed the incumbent government for its failure to control prices.
Inflation of more than six per cent between 1994 and 1996 helped oust Prime Minister P V Narasimha Rao. His Congress party-led government lost to the BJP, which was voted out in May 2004 after prices rose in eight of the 12 months that preceded the polls.
The price of onions could become a political game changer, said Satish Misra, an analyst at the Observer Research Foundation, a policy group based in New Delhi. The government needs to check the prices of essential commodities, particularly onions, otherwise it could really harm its chances of winning the next elections.
$5 wage
Food inflation accelerated to 11.91 per cent last month, the highest rate since January, the commerce ministry said last week. Onion prices in Delhi surged to Rs 60 (93 cents) a kg (2.2 pounds) from Rs 16 three months ago. Potatoes have rocketed to Rs 20 a kg from Rs 12 in six months, while tomatoes quadrupled to Rs 56 in July compared with January, according to data from the ministry of consumer affairs.
Arvind Kumar Singh, who earns $5 a day as a carpenter at a metro project in New Delhi, says the wage is too little to feed his family of five back home in Bihar. Now he cant even afford onions, a staple in Indian food.
Everything is expensive here, not only onions, said Singh, 32, who shares a bedroom with six other men in the nations capital. Somehow or the other, we are managing. This is not a good life that I aspire for.
Biggest worry
The bulbous flavonoid-rich root may be the only source of nutrition for the poor who use it as a raw side dish with flattened bread in many of the northern states from Rajasthan to Bihar. Of the 1.2 billion people in the country, about two- thirds live on less than $2 a day, according to the World Bank.
About 40 per cent of the respondents in an opinion poll published by the CNN-IBN television channel and the Hindu newspaper last month said that inflation was the biggest worry, three times higher than the next answer.
The main opposition Bharatiya Janata Party has seized on the issue and is attacking the ruling Congress party for failing to deliver an effective government. It has opened stalls selling onions at a third of the market price and gave them out as gifts on a national holiday earlier this week.
Escalating onion prices will only add fuel to the fire, said Arun Singh, an economist at Dun & Bradstreet Information Services India Pvt in Mumbai. Its a very challenging situation when the rupees decline is adding to already high inflation. High food costs, if uncontrolled, will have a significant toll on the economy.
Rupee slide
The $1.8 trillion economy expanded five per cent in the year to March 31, the slowest pace since 2003, while the current-account deficit widened to a record 4.8 per cent of gross domestic product. The rupee has dropped 15 per cent this year and touched an all-time low of 65.56 yesterday.
To stem the currencys slide, the Reserve Bank of India unexpectedly reversed a bias for policy easing starting mid-July by tightening cash availability in the financial system, causing benchmark 10-year bond yields to reach a 12-year high this week.
About 40 percent of Indias fruit and vegetables rot before they can be sold because of a lack of cold storage facilities and poor transport infrastructure, according to the government.
The price of onions has risen because of a fall in production and because the area under cultivation has been reduced. Indias onion production was 16.65 million tons in 2012-13, down 4.8 percent, from 17.5 million tons a year earlier, according to data from the farm ministry.
In a sign of the growing value of onions, robbers hijacked a truck carrying 40 tons of the vegetable this week traveling between Delhi and Jaipur, according to the Indian Express newspaper.
In the southern city of Chennai, prices have tripled to 75 rupees a kilogram. Devaki, 40, who goes by only one name and earns $85 a month as a garbage collector, says her family of five uses only two onions per meal.
Singh, the laborer working on the Delhi metro, says he has stopped eating onions altogether because they are so expensive. Instead he is buying cabbage as a cheaper alternative because he needs to send some savings home to support his parents, wife and two children, he said.
Source:- business-standard.com
Thailand In Favour Of Lifting Ban On Gold Exports To India
Thailand has set up a committee of senior government officials and trade representatives to discuss the trade barriers in gold jewellery exports with India.
Talking on the sidelines of the Thailand Shopping Festival-2013 here on Sunday, Adul Chotinisakorn, executive director and consul (commercial), Thai Trade Centre, said: “We are concerned about India’s trade deficit, but we want India to open up gold jewellery import from Thailand, accompanying with the certificate of origin as per the guidelines set in the free trade agreement between the two countries.”
Chotinisakorn said Thailand was extremely serious about 20 per cent value addition norm set in the FTA in gold jewellery in the country of origin. But the FTA signed between the two countries include the term that even gold jewellery, along with the certificate of origin, can be exported at concessional duty to India without any hesitation.
India had in February this year banned import of gold jewellery from Thailand to control widening current account deficit (CAD) after the Directorate of Revenue Intelligence found in various raids on jewellers that the rules of bilateral trade were violated. India – Thailand FTA allows gold jewellery imports at a concessional duty of one per cent as against the prevailing high rate from other origins. Interestingly, jewellery importers use Thailand route to import gold ornaments even from other origins.
But Thailand’s move assumes significance in the wake of India’s continuous effort to restrict gold import, which the government feels is extremely necessary to control CAD.
The bilateral trade between India and Thailand was recorded at $8.6 billion in 2012, which is likely to remain around the same level in 2013. “India imports only four per cent of its gold demand from Thailand. The remaining comes from Dubai. Hence, the import from Thailand is not so significant which calls for ban,” said Chotinisakorn.
India, the largest consumer of gold, imported $38 billion worth of gold and jewellery in the financial year 2012-13, 4 per cent of which constitutes around $1.52 billion from Thailand.
Over 60 companies showcased their innovative products in Thailand Shopping Festival 2013 especially in jewellery, decorative articles, food and leather products.
Entire quantity of polished diamond required by jewellery manufacturers in Thailand is met through exports from India.
Source:- business-standard.com
Rupee Slips Against Dollar In Early Trade
The rupee on Monday slipped against the dollar, struggling to retain the gains seen on Friday, when the Indian currency rebounded sharply ending a five-day losing streak.
The rupee opened at 63.69 per dollar, down 0.54% from its Friday’s close of 63.35.
On Saturday, finance minister met foreign institutional investors (FIIs) and top bankers to discuss present market conditions and steps taken by the government to contain the fiscal and current account deficits.
The rupee had rebounded on Friday primarily due to the assurance of finance minister P. Chidambaram that the government was in control of the fiscal situation and had no intention to impose capital controls.
At 9.13am, the local currency was trading at 63.86 per dollar, down 0.79%, while India’s equity benchmark Sensex was trading at 18,602.56 points, up 0.45%.
Source:- livemint.com
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