IT: Claim made in return filed within due date is sufficient for exercising option of higher rate of depreciation at 80 per cent on windmills, as required under second proviso of rule 5(1A)
Wednesday, 4 September 2013
HC condoned delay of 791 days in filing of appeal with ITAT on furnishing sufficient reasons for del
IT: Where assessee filed appeal belatedly alongwith application seeking condonation of delay, in view of fact that matter was old and, thus, assessee could not trace relevant papers in time, moreover, assessee had also paid requisite fee, a case for condonation of delay was made out and, thus, appeal was to be admitted for disposal on merits
RBI/2013-14/227 A.P. (DIR Series) Circular No. 36 dated 04-09-2013
RBI/2013-14/227
A.P. (DIR Series) Circular No. 36
September 4, 2013
To
All Category - I Authorised Dealer Banks
Madam/ Sir,
Risk Management and Inter Bank Dealings
Attention of Authorised Dealers Category-I (AD Category-I) banks is invited to the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 dated May 3, 2000 (Notification No. FEMA/25/RB-2000 dated May 3, 2000 ) as amended from time to time and A.P. (DIR Series) Circular no. 58 dated December 15, 2011 and A.P. (DIR Series) Circular no. 13 dated July 31, 2012 .
- Under the extant regulations, the facility of cancellation and rebooking is not permitted for forward contracts, involving Rupee as one of the currencies, booked by residents to hedge current and capital account transactions. However, exporters are allowed to cancel and rebook forward contracts to the extent of 25 percent of the contracts booked in a financial year for hedging their contracted export exposures.
- On a review of the evolving market conditions and with a view to providing operational flexibility to exporters and importers to hedge their foreign exchange risk, it has now been decided to:
- allow exporters to cancel and rebook forward contracts to the extent of 50 percent of the contracts booked in a financial year for hedging their contracted export exposures, and
- allow importers to cancel and rebook forward contracts to the extent of 25 percent of the contracts booked in a financial year for hedging their contracted import exposures.
- AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers.
- The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law.
Yours faithfully,
(Rudra Narayan Kar)
Chief General Manager-in-Charge
Service of commission agent for procuring sales order is an input service
ST: Services of commission agent for procuring sales orders for a manufacturer on commission is covered by definition of input service and is eligible for credit
No TP adjustments if sum paid under an agreement entered into before establishment of relationship o
IT/ILT: Where agreement for payment of royalty existed since 20 years when company was not even assessee's associate enterprise, adjustment could not be made, holding agreement as a mere paper document
Employee deemed as Government employee for perquisite valuation as his employer working under contro
IT : Where assessee-board was given special statutory status and it worked under overall supervision and control of Central Government, its employees were to be treated as Government Employees for purpose of valuation of perquisite of rent free accommodation
Indian Apparel Exports Surge 19% In July
4-Sep-2013
Dr A Sakthivel, Chairman AEPC releasing the garment exports data for the month of July 2013 stated that, “Apparel exports were to the tune of USD 1279 million in July 2013-14 with increase of 19 per cent against the corresponding month of last financial year. In rupee terms, the exports have increased by 28 per cent in July 2013-14 over the same month of previous FY.”
Export in dollar terms for April-July of the FY 2013-14 has increased by 13 per cent over the same period of previous FY and reached to USD 4841 million however, in rupee terms exports increased by 18 per cent compared to same period of last FY. In April-July 2013-14 in rupee terms apparel export of India was to the tune of Rs. 27538 crore compared to Rs. 23300 crore in April-July 2012-13, he added.
Chairman AEPC congratulated garment exporters for showing good performance amidst this tight and fast changing economic landscape. Apparel exports have registered consecutive growth of almost 11 percent since the last four months. I appreciate all help provided by the Government to this employment generating sector.
In the FY 2012-13 exports in dollar terms declined by 6 per cent from previous FY and totaled USD 12923 million in April-March 2012-13.
Commenting on the US market Dr. Sakthivel said, “Apparel imports of the United States witnessed increase of 3.7 per cent in the Jan-May of 2013 from the previous year and amounted to 30.6 billion dollars. In the Jan-May 2013, US imports of apparel from India declined by -.1 % per cent and reached to USD 1499 million against USD 1500 million in Jan-May 2012. US imports saw increase from all major suppliers in Jan-May 2013 over the corresponding period of last year except for Mexico and India. In Jan-May 2013 India was at 6th position. India exported US$ 285 million apparel in May 2013 with increase of 3.3 % over the same month of previous year.”
On the EU market Chairman AEPC informed that, “EU’s apparel import accounted for USD 32.8 billion for the Jan.-May 2013 with a decline of -.6 per cent over the previous year. India’s export to EU for the Jan-May 2013 amounted to USD 2.5 billion with a decline of -1.1 per cent compared to same period of previous year.”
Chairman AEPC further said that to keep this rate of growth for garment sector, RBI must announce separate chapter for exports in the banking sector. I thank the officials of Commerce & Finance Ministry for taking up the matter and now the ball is in RBI court, I am hopeful they will announce this soon; looking into the fact that most of the exports are SME and this sector is job critical.
Therefore, it is requested that RMG export sector, which is the largest employment generator after agriculture, should be considered under priority sector lending. With this, the bank’s commitment to RMG sector lending would be prescribed for ensuring adequate flow of credit to RMG export sector. It is also requested that a flat rate of 7.5%, as priority sector export credit to RMG export sector may be prescribed as pre-shipment and post shipment export credit.
Source:- fibre2fashion.com
Banning Coal Simplistic, Unreasonable And Unwise
4-Sep-2013
Poor coal. It’s the mineral not even a mother could love. It’s the orphaned rock, dirty to burn and easy to hate. Vancouver was cheered recently for banning coal, even though it had no coal to ban. Oppose coal and you’re a rock star. Support coal and you’re booed offstage. Surely opposing West Coast coal exports to Asia is the smart, environmentally and morally right thing to do.
First, despite the current trend away from coal to cheap gas, China and other developing countries will need coal for the foreseeable future. The morality of denying them access to it is questionable. For hundreds of millions in China and elsewhere, consuming coal for electricity and heat is not a choice. Removing North American coal supplies from the market will not reduce consumption, but will likely increase prices. It will also encourage coal mining in less safe jurisdictions. Is it right for us to impose such hardships on our fellow human beings while presenting no current practical alternatives?
Second, the intelligence of actively choking off coal exports is suspect. The robust emerging economies of China, India and Southeast Asia are crucial to our own economic well-being. Stock markets tremble at even the hint of a slowdown in China. Consumer confidence here lives in simpatico with Asia. How smart is it to put our foot on the brakes of those economies by increasing their energy costs?
One way some pundits make such imprudence look clever is to style natural resource wealth as a handicap, as if knowledge-based sectors falter when resource extraction thrives. But this is a false argument because the extractive sectors are knowledge-based and already rich with intellectual capital. Just ask any geologist, engineer, or GIS software designer. Resource wealth drives innovation, not the opposite.
Another inconvenient reality is that poverty in the developing world will worsen if we manipulate energy supplies. Industrialization reduces poverty by releasing agrarian families from mere subsistence. It creates higher paying jobs, enabling increased education for children and autonomy for women. Over the long term, this results in a more affluent, service- and knowledge-based economy. The energy driving this gradual process is coal. Blocking North American coal supplies to Asia risks driving up the cost of living for the world’s poor.
Making life harder for the poor through our energy agenda is not something we in the West like to contemplate. Instead, we romanticize the notion of the noble peasant farmer, living off the land with a minimal environmental footprint. Subsistence farming is not poverty, we reason, it’s a cherished traditional lifestyle we should admire. Of course, most of us don’t live those ideals ourselves, choosing rather to educate our children for knowledge-based careers in the city. The dissonance is so real we pat ourselves on the back for paying a few cents extra for fair-trade coffee, as if that rights all the wrong we are doing.
Yes, the negative environmental, health and safety impacts of coal mining and use are significant. Poor countries are not oblivious to coal’s negative impact, but they need it at present to better the standard of living for their citizens. Why not provide these countries with North American coal that’s mined according to tough environmental and safety guidelines, creating well-paying jobs and prosperous communities on this side of the Pacific?
And why not encourage them to use the latest coal burning and scrubber technologies to reduce air pollutants?
The problem with public discourse on coal is that simplistic answers are preferred over holistic, well-reasoned and defensible solutions.
Coal adds to global warming and therefore we should ban it, they say. But the truth is we can’t ban coal. Australia will be more than happy to rake in the billions we will be leaving on the table for them.
Then there’s the “leadership” argument. If we “take a stand” and “send a message” that coal is bad, we do ourselves proud. But such hectoring from one of the world’s wealthiest cities is at best sanctimonious and at worst pure, selfish NIMBYism.
Coal is not just a much-loathed rock we can toss aside; it’s part of the fabric of our human existence. We have a complex relationship with coal built over millennia. We can’t rashly break it off over night. Coal needs a little love too.
Source:- vancouversun.com
Iron Ore Production, Export Outlook: India’S Falling Downhill Fast
4-Sep-2013
Different views prevail among industry experts over why India’s exports of iron ore had dropped so drastically over the last few years.
The country’s Steel Minister Beni Prasad recently gave out figures in Parliament saying iron ore exports had fallen by nearly 70 percent in the last fiscal year, 2012-13. In that year, India had exported merely 18.37 million tons (MT) of ore as compared to 61.74 MT in 2011-12, Verma said.
Exports had, however, been much higher in 2009-10 at 117.3 MT and stood at 101.5 MT in 2010-11. Production, too, the minister said, had fallen between 2009-10 and 2012-13.
The one question that everybody in India connected with the iron ore sector is now asking – what went wrong with India’s iron ore story? After all, until a few years ago, India was the world’s third largest iron ore exporter.
Two strong reasons that have been cited (and should be familiar to MetalMiner readers over the past year): the court-imposed bans on the mining of the iron ore in some of the Indian states such as Karnataka, and the increase in export tax to 30 percent.
One section of analysts believes the legal bans squeezed the iron ore sector so much that not only exports, but even production came down. The other believes the export tax is to be solely blamed.
While there may not be a clear answer to this, there seems to be some good news for this sector on the horizon. A report filed by Reuters noted that India was likely to drop the duty on iron ore exports to 20 percent from the existing 30 percent. Quoting government officials, the report stated that this could double shipments of the steelmaking ingredient in the current year.
Even if iron ore mining remains banned in Goa, a tax cut would boost exports to 20 million tons by end of the current year. The decline in India’s exports has allowed top suppliers Australia and Brazil and smaller producers from South Africa and Iran to step into the gap.
If the duty is reduced soon, a bulk of the exports may come from the eastern state of Odisha, the biggest producer of iron ore and whose output is forecast at 65 million tons for the current fiscal year. In Odisha and Jharkhand, there were about 80 MT of iron ore fines lying in mines.
Source:- agmetalminer.com
Domestic Steel Companies To Step Up Exports
Domestic steel companies are increasingly targeting a substantial chunk of their production for exports to reap the benefits of a falling rupee and offset dwindling margins in a dull domestic market.
This could perhaps also mark the first time that Indian steel companies are embarking on decisive export marketing strategies. While the rupee fall and slow demand at home is acting as an immediate trigger, a more compelling reason for exports could be to find alternative markets for their expanded production capacity and a more enriched product basket.
Taking advantage of its shore-based location Rashtriya Ispat Nigam Ltd (RINL), which runs Vizag steel plant, said it has drawn up a decisive marketing strategy to beat the prolonged slowdown in steel market at home. While one leg of it rests on targeting 25% of RINL output for exports and opening up new geographical market segments, the other part depends on enriching its product basket with customised high-end products to a develop niche market. For the first time ever, RINL has created an International Marketing Division (IMD) headed by a general manager.
"The company's first international marketing office will open at the World Trade Centre in Colombo which will also be RINL's export hub," TK Chand, director (commercial) said. RINL wants to create a market presence in South Asia, South East Asia, Central Asia, Middle East Asia and African countries. Apart from Nepal and Myanmar, the company also hopes to export high value oil & gas sector products like API rounds and seamless tubes to Iraq. A leading exporter of pig iron, it hopes to emerge as a top exporter of long products in steel.
The country's largest steel company, Steel Authority of India Limited (SAIL) is also aiming to nearly double export volumes to 7 lakh tonne this year. Export revenues, too, are likely to double to Rs 2,500 crore in FY14, CS Verma said recently. JSW SteelBSE 2.09 %, the largest private steel player, is planning to export nearly 3-4 million tonne (mt) of steel in the current fiscal.
Last year, JSW had exported 1.9 mt. "Fall in rupee and product mix of Indian companies have made them much more competitive in international markets," JSW Steel's joint MD and group CFO Seshagiri Rao said.
JSW has added new markets like China, Japan, South Korea and US to its export basket in recent times. Earlier, it used to sell its products to Middle East, South-East Asian and African countries, he added. Essar Steel, one of the largest exporters from India, said it plans to step up exports 20-25% this year.
Source:- economictimes.indiatimes.com
Toyota To Export More Cars From India
4-Sep-2013
The Indian subsidiary of Japanese Toyota Motors Wednesday said it will increase exports from the country by another 5,000 units this year.
"We will be exporting over 25,000 vehicles this year. Last year we exported around 20,000 vehicles. Our exports comprise mainly of Etios and Liva," said Sandeep Singh, managing director and chief operating officer, Toyota Kirloskar Motor, on the sidelines of the Society of Indian Automobile Manufacturers (SIAM) annual summit here.
"We are focusing on exports. But opportunities in the emerging markets are not good, as currency depreciation has happened there as well."
The company currently exports to South Africa. It dispatched the first consignment to Indonesia recently.
"We have sent a pilot batch to Indonesia which will be a new market for us. We have got orders for around 2,200 vehicles," Singh said.
In terms of price hikes, Singh said that if the current depreciation in rupee continued than the company might pass on the cost to customers.
"We have taken a price increase on Fortuner and Camry of one percent recently. If the rupee continues to slide like this then we may have to take a price increase from October onwards," Singh said.
He expressed optimism over a pick-up in sales for the upcoming festive season by eight-ten percent over the previous months.
The company's sales during the last month fell 6.3 percent and stood at 15,201 units from an off-take of 16,225 units in the corresponding period last year.
Source:- business-standard.com
Indian Textile Exporters Ponder Benefits Of Rupee Fall
4-Sep-2013
While Indian rupee has become all-time low against the US dollar, the textile and apparel exporters of the country are pondering on benefits of sharp fall in rupee on the industry.
The Indian rupee was marked at Rs. 61.66 on August 18, 2013 against the US dollar and has declined to Rs. 67.06 on September 04, 2013.
According to the industry representatives and analysts, the sharp decline of rupee would benefit Indian textile and clothing exporters by making the products more competitive in the long run.
Speaking to fibre2fashion, secretary of Confederation of Indian Textile Industry (CITI), Mr. DK Nair said, “The sharp decline of rupee has improved the export earnings of our textiles and garment sector by at least 4 percent because this sector uses negligible imported goods and exports over one third of its production.”
“Though rupee depreciation would always help this sector in the short run, over a period of time, production costs may catch up, diluting the advantage,” he opines.
Agreeing with him, Mr. Harminder Sahni, managing director of Wazir Advisors, says, “The rupee fall is a good news for garment exporters as it makes them earn better margins since it makes the process more competitive as compared to other exporting nations and thus more business may come to India.”
However Mr. Rahul Mehta, president of Clothing Manufacturers Associations of India (CMAI), says, “I do not think the sharp fall in rupee will improve margins very much.”
“Firstly, most exporters would have fully or partially covered their dollars in advance hence higher margins would not really apply. Secondly, even if exporters get the full benefit, it would not be long lasting as most buyers would try to renegotiate the contracted prices. What it will do is to make our products more competitive,” he concludes.
Last month, Government of India raised the textile and garment export target for the ongoing fiscal year 2013-14 to US$ 43 billion, from the earlier US$ 36 billion. In the last fiscal year, India’s overall textile exports stood at US$ 31.71 billion, of which the apparel exports contributed US$ 12.923 billion.
Source:- www.fibre2fashion.com
Gold Buyers Rush To Order As Import Rules Clarified
4-Sep-2013
Gold buyers lined up to restart imports on Wednesday as the customs department clarified new rules, putting the world's biggest bullion buyer back in the market after a six-week gap and threatening government efforts to underpin the rupee.
About a quarter of a tonne of gold waiting at Mumbai airport should head to India's biggest gold market, Zaveri Bazaar, where sales are nearly $10 million a day, and jewellers said they would place fresh import orders as early as Thursday.
"Around 250 kg of gold, which is stuck at the airport, will get released after the order. New shipments could start within the next 2-3 days," said Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation.
The Reserve Bank of India (RBI), in a bid to help the government stem the tide of gold imports which had pushed the current account deficit to a record high, told importers on July 22 that a fifth of their purchases would have to be turned around for export.
But the rule's sketchy details caused buyers to hold off and instead use stocks that had piled up in April and May when record imports of 304 tonnes provoked the government into hiking duty to an all-time high of 10 percent.
On Wednesday, the Indian customs department issued its guidelines on how the central bank's call for gold imports to be split 80 percent for domestic use and 20 percent for export would be monitored.
The move aims to boost exports but could also rein in imports to around 30 tonnes a month - about half average volume - and keep India on track to meet the government's target of 845 tonnes in the 2012/13 fiscal year.
But domestic buying could surge later this year as a better than expected monsoon is expected to increase disposable incomes of farmers in rural areas, who make up about 60 percent of Indian gold demand.
"My export orders are pending since last month, I'll request my bank to place an order for 20 kg tomorrow morning," said Kumar Jain, proprietor of Umed Exports, which ships jewellery to the United States, Europe and the Middle East.
In a more than 40-clause document, the customs department laid out details on authorised importers, bonds to be given by importers over duty payments and "surprise audit or checks" by custom officers to ensure compliance.
And in a clause that may cause problems it said importers would not be able to make a third order until they had evidence of payment to exporters in the form of an inward remittance certificate, which can take nine months.
"This will make our life difficult at the time of the third import," said Pankaj Kumar Parekh, vice-chairman of the Gems and Jewellery Export Promotion Council (GJEPC).
Imports by special economic zones, which export about 20-30 tonnes a year, will not be included in the import restrictions. Domestic jewellery exports outside these areas are about 60-70 tonnes a year.
Source:- in.reuters.com
Govt Gets Desperate To Slash Oil Import Costs
India's top oil official is grasping at desperate measures to cut the country's oil costs by nearly $20 billion after the rupee's slide to record lows has left India facing an oil bill potentially 50 percent higher than on May 1.
Oil Minister M. Veerappa Moily has suggested pricking the ballooning oil bill with everything from a street theatre campaign encouraging lower fuel use, to shutting fuel stations, to increasing imports from Iran.
India's crude import bill was $144 billion last fiscal year - the largest part of its overall import costs. India, Asia's third-largest economy, imports about 80 percent of its oil, which accounts for about 30 percent of its energy needs.
That has hit India hard over the last four months as the rupee fell 20 percent to record lows near 70 to the dollar. The economy is struggling with decade-low growth, a record current account deficit and a steep fiscal shortfall.
International oil prices have gained about 15 percent over the same period. In rupee terms, the Brent oil benchmark has gained nearly 50 percent since May 1, when faith in emerging market growth began to falter just as the U.S. Federal Reserve started signalling it might wind down its monetary stimulus.
Economist have long pointed to India's fuel subsidies as an area where it could save money, but raising retail oil prices is a political problem when few of the nation's consumers have ever paid market rates for the fuels they use. And elections are coming up by May 2014.
"Subsidies are something they can do something about and that is clearly something that they should address ... but you get into this whole issue about elections and public anger," said Praveen Kumar, who leads the South Asia oil and gas research team at FGE in Singapore.
"People are angry with all that's happening with the economy and the rupee crashing. I don't see this situation can continue for too long," he said.
One step that could save $4.3 billion in oil costs, according to Reuters calculations, would be a hike of around 5 rupees per litre, or about 10 percent, in diesel prices. An oil ministry source has suggested such an increase might come after September 6, when the current parliament session ends.
"The rupee depreciation has left us with no alternative but to pass on costs to customers," said an Indian oil company official, although noting that demand has edged lower with the higher oil prices and slower economic growth.
State-owned retailers sell diesel at subsidised prices that are currently about 10 rupees per litre below estimated true market levels.
However, total subsidies for LPG, kerosene and diesel amount to about $25 billion a year, according to FGE's Kumar, and "there's no way they can dismantle that over night."
India consumed about 1.4 million barrels per day (bpd) of diesel in 2012/2013, making up over 40 percent of the country's total fuel demand.
IRAN REVERSAL
Nearly half of Moily's targeted savings - $8.5 billion - are supposed to come from increasing imports from Iran, which are paid for in rupees because Western sanctions make payment in dollars impossible. Moily is targeting raising imports to around 260,000 bpd, only about 6,000 bpd lower than the average for fiscal 2012/2013.
Boosting imports to that level would virtually wipe out cuts by India that have won it a waiver from Washington's sanctions.
"Frankly there is not much room there because they have to show that they slashed Iranian crude imports by another 15 percent or risk sanctions from the U.S.," Kumar said.
India's July imports from Iran were just 35,500 bpd, down 82 percent from a year ago because of problems with shipping and refinery insurance coverage due to the sanctions, which aim to force Iran to curb its nuclear ambitions.
Boosting Iranian imports would also depend on whether Tehran was willing to continue to be paid in rupees, which are not only falling against the dollar but also cannot be traded freely on global markets. The two countries already cannot balance their trade.
Buying oil in dollars is putting huge pressure on the rupee and the RBI has now told state-run oil refiners they must buy their dollars from it, effectively taking 10 percent of daily demand, or some $500 million, out of the spot currency market.
These dollar swaps can be for up to six months, leaving the risk of further depreciation with the refiners, who must hope the rupee gains before they have to pay back the Reserve Bank of India.
"Our people (refiners) are not happy. They feel that if they had done it directly, they could have got a slightly better deal or could have hedged their foreign exchange risk to some extent," said an oil ministry source.
The state refiners have asked for a cap on possible losses or the chance to roll over the swaps if the rupee moves against them.
State refiners, who also sell petroleum products domestically, include Indian Oil Corp Ltd , Hindustan Petroleum Corp and Bharat Petroleum Corp.
STREET THEATRE
Other measures suggested by Moily in letters sent to the prime minister and the finance ministry included a $2.6 million public relations campaign that would use "street theatre" to promote lower fuel usage, which he said could save about $2.5 billion.
On Sunday, Moily also suggested that petrol stations could be shut at night to curb demand - but this was dropped after an outcry from the opposition.
India's overall crude imports rose 10.3 percent in the first seven months of the year, according to trade data, as New Delhi tries to keep the lights on to power faltering growth in Asia's third-largest economy.
India is the world's fourth-biggest energy consumer after the United States, China and Russia but about a third of its population still lacks electricity.
Source:- profit.ndtv.com
Rupee Up At 65.54 Per Dollar On Rajan's Steps, Sensex Soars 550 Points
The Indian rupee jumped over 2 per cent against the U.S. dollar and the BSE Sensex surged around 550 points on Thursday after new Reserve Bank governor Raghuram Rajan announced a spate of measures to defend the currency.
Traders and analysts were optimistic that Dr Rajan will unveil a new strategy for the rupee, which has plunged 20 per cent this year. Analysts said they had expected the 50-year-old academic and celebrated economist to do his homework, but had not expected him to detail so comprehensive a plan.
The rupee opened higher and extended gains. As of 09.25 a.m., the partially convertible rupee traded at 65.53 per dollar as against Wednesday's close of 67.06.
The sharp gains in the rupee triggered buying in banking stocks, which have suffered the most since the rupee started its downhill journey against the greenback.
The Bank Nifty, the barometer for banking stocks, jumped 9 per cent. The BSE Senesx scaled the 19,000 mark and the broader Nifty traded above the key 5,600 levels.
In his first address, Dr Rajan outlined plans to attract more funds from overseas to support the rupee. He said the RBI will attract more funds from non-resident Indians (NRIs) as part of a broader push to lure inflows. Under the plan, the central bank will offer a swap window to banks for fresh dollar deposits mobilised from non-resident Indians.
The central bank will also offer forex swap into rupees at a concessional rate below market levels for banks that raise dollar funds through overseas borrowings, Dr Rajan said.
The RBI will look to liberalise markets, including pushing for more rupee trade settlement, introducing new financial products such as overnight interest rate swaps and removing curbs on opening new branches by Indian banks, he added.
Source:- profit.ndtv.com
DLF Recreational Club can't be said to have dominance in market in presence of other players, CCI sa
Competition Act: Where there were many clubs in relevant market which were available to consumers as per their choices, opposite parties-developers could not be said to be in dominant position in managing clubs
RBI/2013-14/225 A.P.(DIR Series) Circular No.35 dated 04-09-2013
RBI/2013-14/225
A.P.(DIR Series) Circular No.35
September 04, 2013
To,
All Authorised Persons, who are Indian Agents under Money Transfer Service Scheme.
Madam/ Dear Sir,
Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT) Standards - Cross Border Inward Remittance under Money Transfer Service Scheme
Please refer to our A.P.(DIR Series) Circular No. 102 dated May 02, 2013 on risks arising from the deficiencies in AML/CFT regime of certain jurisdictions.
- Financial Action Task Force (FATF) has updated its Statement on the subject and document 'Improving Global AML/CFT Compliance: on-going process' on June 21, 2013. The statement /document can be accessed from the following URLs :
http://www.fatf-gafi.org/topics/key/public-statement-june-2013.html and
http://www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/documents/compliance-june-2013.html - Authorised Persons (Indian Agents) are accordingly advised to consider the information contained in the enclosed statement.
- This, however, does not preclude Authorised Persons (Indian Agents) from legitimate transactions with these countries and jurisdictions.
- These guidelines would also be applicable mutatis mutandis to all Sub-Agents of the Indian Agents under MTSS and it will be the sole responsibility of the APs (Indian Agents) to ensure that their Sub-agents also adhere to these guidelines.
- Authorised Persons (Indian Agents) may bring the contents of this circular to the notice of their constituents concerned.
- Please advise your Principal Officer to acknowledge receipt of this circular letter.
- The directions contained in this Circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and also under the, Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009 and Prevention of Money-Laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005 as amended from time to time and are without prejudice to permission/approvals, if any, required under any other law.
Yours faithfully,
( Rudra Narayan Kar )
Chief General Manager-in-Charge
RBI/2013-14/224 A.P. (DIR Series) Circular No.34 dated 04-09-2013
RBI/2013-14/224
A.P. (DIR Series) Circular No.34
September 04, 2013
To,
All Authorised Persons
Madam/ Dear Sir,
Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT) Standards - Money changing activities
Please refer to our A.P.(DIR Series) Circular No. 101 dated May 02, 2013 on risks arising from the deficiencies in AML/CFT regime of certain jurisdiction.
- Financial Action Task Force (FATF) has updated its Statement on the subject and document 'Improving Global AML/CFT Compliance: on-going process' on June 21, 2013. The statement /document can be accessed from the following URLs :
http://www.fatf-gafi.org/topics/key/public-statement-june-2013.html and
http://www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/documents/compliance-june-2013.html - Authorised Persons are accordingly advised to consider the information contained in the enclosed statement.
- This, however, does not preclude Authorised Persons from legitimate transactions with these countries and jurisdictions.
- These guidelines are also applicable mutatis mutandis to all agents/ franchisees of Authorised Persons and it will be the sole responsibility of the franchisers to ensure that their agents / franchisees also adhere to these guidelines.
- Authorised Persons may bring the contents of this circular to the notice of their constituents concerned.
- Please advise your Principal Officer to acknowledge receipt of this circular letter.
- The directions contained in this Circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999)and also under the, Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009 and Prevention of Money-Laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005 as amended from time to time and are without prejudice to permission /approvals, if any, required under any other law.
Yours faithfully,
( Rudra Narayan Kar )
Chief General Manager-in-Charge
TP adjustments upheld as no materials were produced to support claim for AMP exp. and other provisio
IT/ILT : Where in course of transfer pricing proceedings relating to telecommunication services, TPO made certain adjustment to ALP determined by assessee, in view of fact that there was no material on record relating to assessee's claim of deduction in respect of AMP expenses, provision for warranty and prior period expenses, impugned adjustment was to be set aside and, matter was to be remanded back for disposal afresh
RBI/2013-14/223 A.P. (DIR Series) Circular No. 33 dated 04-09-2013
RBI/2013-14/223
A.P. (DIR Series) Circular No. 33
September 04, 2013
To
All Category - I Authorised Dealer Banks
Madam / Sir,
Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No.26 dated August 14, 2013 , wherein the Rupee value of the Special Currency Basket was indicated as Rs.83.45023 effective from August 12, 2013.
- AD Category-I banks are advised that a further revision has taken place on August 20, 2013 and accordingly, the Rupee value of the Special Currency Basket has been fixed at Rs.86.857663 with effect from August 23, 2013.
- AD Category-I banks may bring the contents of this circular to the notice of their constituents concerned.
- The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(C.D. Srinivasan)
Chief General Manager
CIT can't exercise revisionary power to complete assessment as per his sweet will
IT: Where both Assessing Officer and Commissioner rejected assessee's books of account, Commissioner could not exercise revisionary power to simply apply different gross profit rate, holding Assessing Officer's order as erroneous and prejudicial to interest of revenue.
INCOME TAX APPELLATE TRIBUNAL :NEW DELHI BENCHES:NEW DELHI ALL BENCHES ARE CANCELLED FOR ONE WEEK I.E FOR 02.09.2013 TO 06.09.2013
[unable to retrieve full-text content]INCOME TAX APPELLATE TRIBUNAL :NEW DELHI BENCHES:NEW DELHI ALL BENCHES ARE CANCELLED FOR ONE WEEK I.E FOR 02.09.2013 TO 06.09.2013 {ad} For more information...
House-Keeping, event management and legal services are input services
ST: Housekeeping services for cleaning factory shed, event management services for organizing function for rewarding employees and legal services in connection with tax disputes are eligible for input service credit
Registration to a trust denied as general public services offered by it in lieu of a sum were not ch
IT: Where assessee society was engaged in providing services to public to facilitate them in obtaining different kinds of licences, ration card, marriage certificate etc., in view of fact that for said purpose assessee was charging service fee from its customers over and above prescribed amount, assessee's activity could not be considered as charitable in nature under section 2(15) and, therefore, its application seeking registration under section 12A was to be rejected
ADs can become guarantors for an Indian party setting-up or promoting a JV or WOS outside India
FEMA/ILT : FEM (Guarantees) (Fourth Amendment) Regulations, 2013 - Amendment in Regulation 5
RBI goes lenient towards foreign students; allows to open bank account on passport basis temporarily
BANKING : Foreign Students Studying in India - KYC Procedure for Opening of Bank Accounts
RBI gives flexibility to banks to revise Base Rate Methodology within a year of commencement of oper
BANKING : Base Rate - Revised Guidelines
Mere furnishing bank details of creditors doesn't prove genuineness of a transactions; sec. 68 addit
IT : Where in support of loan transactions, assessee merely filed bank account details of alleged creditors, it could not be concluded that identity and capacity of creditors and genuineness of transactions were duly proved and, thus, addition made under section 68 in respect of loan amount was to be confirmed
Winding up petition filed after amalgamation of petitioner with lender Co. was maintainable
CL : Winding up petition filed by petitioner after its amalgamation with lender company would be maintainable
Order passed by AO without considering the amended partnership deed was an erroneous one
IT : Where original partnership deed and amended deed were before Assessing Officer and he without going into amended deed accepted claim of assessee that it was a partnership firm and also allowed salaries paid to partners, assessment order was an erroneous one
Refund of Cenvat credit arises only if credit is otherwise available to assessee
ST/ECJ : Amount of refund under rule 5 has to be adjusted by reference to transactions which would give rise to a right to input credit
RBI/2013-14/220 A.P. (DIR Series) Circular No.30 dated 04-09-2013
RBI/2013-14/220
A.P. (DIR Series) Circular No.30
September 04, 2013
To
All Category-I Authorised Dealer Banks
Madam / Sir,
Overseas Direct Investments – Rationalization/Clarifications
Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to the A.P. (DIR Series) Circular No. 23 dated August 14, 2013 and the Notification No. FEMA.120/RB-2004 dated July 7, 2004 , as amended from time to time. In this connection, Reserve Bank has been receiving queries from various stakeholders including Authorised Dealers and Indian companies. All such queries have been collated and are annexed to this circular along with the answers / clarifications.
- It is clarified that all the financial commitments made on or before August 14, 2013, in compliance with the earlier limit of 400% of the networth of the Indian Party under the automatic route will continue to be allowed. In other words, such investments shall not be subject to any unwinding or approval from the Reserve Bank.
- Attention of Authorised Dealer Category - I (AD Category - I) banks is also invited to the provisions under Regulation 6 of the Notification ibid, in terms of which the limit of financial commitments for an Indian Party (presently 100% of its net worth) shall not apply to the financial commitments funded out of EEFC account of the Indian Party or out of funds raised by way of ADRs / GDRs by the Indian Party, as hitherto.
- It has been decided further to retain the limit of 400% of the net worth of the Indian Party for the financial commitments funded by way of eligible External Commercial Borrowing (ECB) raised by the Indian Party as per the extant ECB guidelines issued by the Reserve Bank of India from time to time.
- AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
- Necessary amendments to the Notification, ibid, shall be notified separately.
- The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(C.D. Srinivasan)
Chief General Manager
Encl: Annex
[Annex to A.P.(DIR Series)
Circular No.30 dated 04.09.2013
Clarifications on Overseas Direct Investments
| S. No. | Query | Answer / Clarification |
| 1. | Whether an Indian Party (IP) can make fresh financial commitments in a JV/WOS already set-up/ acquired on or before August 14, 2013 [i.e. date of issue of A.P. (DIR Series) Circular No. 23]? | An IP can make fresh financial commitments in the existing JV / WOS (including for the purpose of setting up of/acquiring step down subsidiaries outside India) only up to the revised limit of 100%, under the automatic route. Any financial commitment beyond the 100% cap shall require prior approval of the Reserve Bank under the approval route for ODI. |
| 2. | What happens if the fresh financial commitments, which are up to the earlier limit of 400%, have been committed on or before August 14, 2013 by the Indian Party? Would such cases attract the provisions of the present circular? | In case of an already contracted/committed financial commitment for an existing JV/WOS, the earlier limit of 400%, under the automatic route, would apply. The onus of ensuring the veracity/authenticity of the contract/commitment before permitting remittances will lie with the designated AD bank. Such cases should be immediately reported post facto to RBI by the AD banks. |
| 3. | For setting up or acquiring a new JV / WOS, for which contract / agreement has been put in place on or before August 14, 2013, whether the new directions of 100% shall be applicable or the existing 400%? | In this case also the dispensation given in 2 above would apply i.e. applicability of automatic route upto 400% of net worth and post facto reporting of such cases to RBI immediately by the AD banks. |
| 4. | What will be the status of an application, for financial commitment in a JV / WOS, which are already forwarded to the AD / RBI, on or before August 14, 2013, under the automatic route / approval route of 400%? | All applications received by the Reserve Bank or/and an AD bank on or before August 14, 2013 would be examined and dealt with by the Reserve Bank or/and an AD bank under the earlier guidelines only, i.e., guidelines prior to August 14, 2013. |
| 5. | How will the 100% limit be calculated for new JV/WOS? Will the earlier investments made by the Indian Party be also reckoned towards this 100% or not? | Yes, it will be reckoned, subject to the answers/clarifications given in this Annex. |
| 6. | Whether an Indian Party, making fresh financial commitment in an existing overseas JV / WOS of another Indian Party (either by way of transfer of existing stake or by way of fresh contribution), shall qualify for 100% limit? | Yes. This would be treated as fresh financial commitment by the new Indian Party and it would have to be within the revised limit of 100%, under the automatic route. |
| 7. | In para 3 of the Circular, term ‘Government of India’ has been prescribed. Keeping in view that all the proposals of ODI by Navratna PSUs / OVL / OIL are not approved by the GoI, whether all the proposals need to be approved by the GoI for being eligible under the automatic route without any limit? | The term ‘Government of India’ may be considered to read as the 'Competent Authority’. ‘Competent Authority’, depending on the amount involved, would be (1) Board of Directors of the respective PSU, (2) Empowered Committee of the Secretaries (ECS); and (3) Cabinet Committee on Economic Affairs (CCEA) as laid down in paragraph 2 of A.P. (DIR Series) Circular No. 59 dated May 18, 2007 . |
Note : Overseas Direct Investment by an Indian Party (IP) for the purpose of A.P. (DIR Series) Circular No. 23 dated August 14, 2013 and this Circular would mean the total financial commitment as laid down in Regulation 2 (f) of Notification No. FEMA.120/RB-2004 dated July 7, 2004 , as amended from time to time by an IP and includes investment in equity, loan, corporate guarantee or bank guarantee [backed by a collateral or guarantee by the IP], performance guarantee (upto 50% of the performance guarantee), creation of charge over movable and immovable assets, pledge of shares, etc.
RBI/2013-14/221 A.P. (DIR Series) Circular No.31 dated 04-09-2013
RBI/2013-14/221
A.P. (DIR Series) Circular No.31
September 04, 2013
To
All Authorised Dealer Category-I Banks
Madam / Sir,
External Commercial Borrowings (ECB) from the foreign equity holder
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to the A.P. (DIR Series) Circular No. 5 dated August 1, 2005 , as amended from time to time, relating to the External Commercial Borrowings (ECB).
- As per the extant ECB policy, borrowings in the form of ECB cannot be utilized for general corporate purpose.
- On a review, it has been decided to permit eligible borrowers to avail of ECB under the approval route from their foreign equity holder company with minimum average maturity of 7 years for general corporate purposes subject to the following conditions:
- Minimum paid-up equity of 25 per cent should be held directly by the lender;
- Such ECBs would not be used for any purpose not permitted under extant the ECB guidelines (including on-lending to their group companies / step-down subsidiaries in India); and
- Repayment of the principal shall commence only after completion of minimum average maturity of 7 years. No prepayment will be allowed before maturity.
- The above modifications to the ECB guidelines will come into force with immediate effect. All other aspects of extant ECB guidelines shall remain unchanged.
- A.D. Category-I banks may bring the contents of this circular to the notice of their constituents and customers.
- The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Rudra Narayan Kar)
Chief General Manager-in-Charge
RBI/2013-14/222 A.P. (DIR Series) Circular No.32 dated 04-09-2013
RBI/2013-14/222 September 04, 2013 To All Authorised Dealer Category-I Banks Madam / Sir, Liberalized Remittance Scheme – Clarifications Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to the A.P. (DIR Series) Circular No. 24 dated August 14, 2013 . In this connection, Reserve Bank has been receiving queries from the various stakeholders and Authorised Dealer banks. All such queries have been collated and are given at the annex together with the answers/ clarifications.
Yours faithfully, (C. D. Srinivasan) [Annex to A.P.(DIR Series) Clarifications on Liberalized Remittance Scheme (LRS)
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