ST/ECJ : Tax is leviable on advance payments for services only if all relevant information concerning chargeable event, namely future delivery or future performance, is already known and services are precisely identified
Sunday 15 September 2013
Receipts for mobilization of deposits by a bank aren't FTS; no TDS on its remittance to overseas bra
IT/ILT : Where arrangers fee for mobilising deposits was received by assessee bank from another bank and same was remitted to its overseas branch, it was not in nature of fees for technical services under section 9(1)(vii), and hence, not taxable
Income of eligible business computed on presumptive basis if books are rejected by AO
IT: Where assessee, a civil contractor, declared net profit ratio of 5.64 per cent of gross contract receipts and Assessing Officer after rejecting book results determined total income by estimating net profit ratio of 15 per cent of gross receipts, income from contracting business be estimated by applying net profit ratio of 8 per cent of gross receipts
Film delegation to meet service tax commissioner
A film delegation led by Film and TV Producers Guild President Mukesh Bhatt will be meeting the service tax commissioner on Tuesday. Bhatt said, "I am going to ask the department to stop witch hunting filmmakers are not paying tax not because they don't want to but the process is so complicated that really need to educated on it. The department needs to engage instead of target us. There are so many other industries defaulting on paying service tax why only film industry names are being flashed in the media.'' |
Finance Ministry may form new anti-evasion, intel unit for service tax
Expecting an increase in revenue from service tax, the Finance Ministry may set-up a new anti-evasion and intelligence unit to check leakage of any indirect tax.
The issue of creating such a separate unit had come up for discussion during a recent meeting of Chief Commissioners and Directors General of Customs, Central Excise and Service Tax here.
It was recommended during the meet that the mandate of Directorate General (service tax), based in Mumbai, should be enhanced and it should be assigned the work relating to intelligence and anti-evasion, according to the minutes of the meeting.
A proposal in this regard has already been submitted to the Finance Ministry.
The Directorate General of Service Tax coordinates between the Central Board of Excise and Customs ( CBEC) and central excise commissionerates. It also monitors the collection and the assessment of service tax.
During the two-day meet, a group on 'Way Forward; Service Tax' had suggested creation of a separate service tax intelligence organisation and also creation of specialised groups under service tax commissionerates.
"Recommendations on administrative side include creation of four new service tax zones and 15 new service tax commissionerate and also audit and appeal commissionerate.
"The group also highlighted the high pendency of adjudications in the service tax commissionerate and recommended four posts of commissioners (adjudication)," it said.
Finance Minister P Chidambaram, who inaugurated the conference on July 17, had noted that service tax revenue is bound to increase in future as it has shown steady growth so far.
The proposed organisation, if comes into force, may be assigned a task of collecting intelligence related to service tax evasion and disseminate it among various field units and agencies, official sources said.
Indian Pharma Draws More Scrutiny As Us Exports Rise
September 15, 2013
Mumbai: US inspectors visiting a factory in India owned by drugmaker Wockhardt in March found torn data records in a waste heap and urinals that emptied into an open drain in a bathroom six metres from the entrance to a sterile manufacturing area.
And when an inspector asked about the contents of unlabelled vials in the laboratory glassware washing area, a plant worker dumped them down a sink and said the contents could not be determined, according to a July 18 letter from the US Food and Drug Administration (FDA) to Wockhardt, which makes sterile injectable drugs and various forms of insulin.
Habil Khorakiwala, chairman of Wockhardt, last week told shareholders that the problem at its Waluj plant "is an inexcusable lapse, but we have taken swift and definitive action, both corrective and pre-emptive", including appointment of a new quality chief and hiring of outside consultants.
India's drugmakers, battered by a rash of US regulatory rebukes including a record fine for Ranbaxy Laboratories, face closer FDA scrutiny as the agency ramps up its presence in the country.
Increased on-the-ground oversight reflects India's growing importance as a supplier to the US and should ultimately bolster quality and confidence in India-made drugs.
In March, India allowed the FDA, guardian of the world's most important pharmaceuticals market, to add seven inspectors, which will bring its staff in India to 19. India produces nearly 40 per cent of generic drugs and over-the-counter products and 10 per cent of finished dosages in the US.
"As more trade happens, as more drugs are approved and applications are submitted we will have to inspect more," Altaf Lal, the new FDA office director for India, told Reuters.
"Many Indian firms fairly well understand and they know good manufacturing practices. The problems we have seen with some companies are why we choose to make quality as one of our highest priorities," he said.
The FDA's stepped-up presence should also accelerate what some in the domestic industry hope is a more rigorous attitude towards compliance in a country whose cheap generics have made it the low-cost pharmacy to the world.
In the near term, it means Indian drugmakers could be more frequently hit by enforcement measures or inquiries, unnerving investors.
Shares of Ranbaxy, controlled by Japan's Daiichi Sankyo, fell as much as 42 per cent in the months after it pleaded guilty in May to US felony charges related to drug safety and agreed to $500 million in fines.
Ranbaxy, India's biggest drugmaker by sales, remains barred from making US shipments from its plants at Dewas and Paonta Sahib. Ranbaxy has said the implementation of a consent decree it signed in January 2012 with the FDA to restart shipments has "progressed as per plan".
While Ranbaxy shares have recovered, the case put a cloud over the industry.
"We all know how Indian companies function and issues such as Ranbaxy and other import alerts have brought us a very bad reputation globally," said Ajay Kumar Sharma, director of research at the Organisation of Pharmaceutical Producers of India.
The urgency to be first with a generic version of a drug coming off patent is the main reason for quality problems, Sharma said. The company that first launches such a drug enjoys a 180-day exclusivity period, which can be lucrative for the generic version of a commercial blockbuster.
"We need to be sincere towards quality issues rather than following procedures just for the sake of it," said Sharma. "We are doing things fast but then losing out on certain aspects and facing import alerts."
Source:-zeenews.india.com
Rupee Gains 69 Paise, Opens At 62.80 Vs Us Dollar
Mumbai: The Indian rupee opened with a gap up of 69 paise at 62.80 per dollar versus 63.49 Friday.
The dollar slides to 81 levels to hit a four week low after Lawrence Summer's exit from the race for Fed president. The euro retreats a tad after jumping to 1.33 vs US dollar and the yen trades at 99.3 vs US dollar.
Agam Gupta, Standard Chartered said, "Rupee will probably open between 63 and 63.20. The dollar has weakened against major EM currencies and hence we expect dollar weakness against rupee too. Expect exporters to sell on upticks. The range for the day is seen between 62.50-63.25 per US dollar."
Source:-ibnlive.in.com
Steel Exports Get Push From Weaker Rupee, New Markets
15-Sep-2013
Mumbai: Indian steel makers are tapping new markets, creating more value-added products and selling directly to clients as they try to export more to take advantage of a weaker rupee that is making Indian steel products more competitive in the global market.
India has traditionally exported only a miniscule portion of its 78 million tonne (mt) annual steel production. With the domestic market seeing lower demand, steel makers have made bigger inroads overseas and analysts are forecasting a substantial rise in exports this fiscal year.
“If we see the actual destinations where the stocks are going, India can cover nearly the entire world map,” said Prakash Duvvuri, head of research at metal and mining information website OreTeam. “Indian steel is in good demand, mainly due to its quality and competitive price.”
Duvvuri forecast a 25% jump year-on-year in steel exports at 6-7 mt in the year to March.
The rupee closed at Rs.63.495 to a dollar on Friday, a 13.39% fall from the beginning of 2013.
While steel companies said they had been selling steel at prevailing global prices, Duvvuri said 3-5% discounts were being offered on major orders.
One of the biggest gainers of the exports push is Essar Steel India Ltd with its port-based 10 mt steel plant in Hazira in Gujarat, where it also owns a bulk port to facilitate the import of raw materials and export of steel.
“There are three or four interesting opportunities that are emerging. One of them is Iraq where there is bound to be focus on infrastructure growth,” said Alok Gupta, president, sales and marketing, at Essar Steel. “The second market is the oil and gas segment. We are now approved by GASCO (Abu Dhabi Gas Industries Ltd). We are in the process of getting all the critical approvals and, therefore, one of the markets we are very focused on is the API (American Petroleum Institute) market for oil and gas.”
API provides standards for steel products that are used in the hydrocarbons industry.
Essar Steel is aiming to increase its exports by 20-25% this fiscal year from 1.1 mt in the year-ago period.
“Although steel demand is generally subdued in most major markets, some products have a relatively good demand in some countries,” said C.S. Verma, chairman of Steel Authority of India Ltd (SAIL). The state-owned firm is aiming to almost double its exports this fiscal year to 700,000 tonnes. Worldwide, hot-rolled steels, plates, cold-rolled coils and galvanized steels constitute the bulk of the products traded, according to Verma.
India’s GDP is seen growing at 5.3% in 2013-14 from the actual growth of 5% in the preceding fiscal year. For the steel industry, where growth mirrors GDP, this means fiscal year 2014 may be another year of muted local demand. Export markets, therefore, may provide some comfort, despite the competition from Chinese and Taiwanese steel makers.
Moreover, the weak Indian currency has also raised the cost of importing coking coal for steel companies, and exports are helping clear some inventory that has resulted from the big capacity expansions.
Steel makers said the mantra for success in the exports market, other than new segments (such as Iraq and oil and gas), is value-added steel that fetches higher margins and direct contact with buyers that ensures stickiness.
“Fifty per cent of our exports go directly to customers and the rest goes to trading houses that buy from us and sell to users,” said Jayant Acharya, director, commercial and marketing, JSW Steel Ltd.
JSW Steel, with clients in 90 countries, expects to export more than 3 mt of steel in this fiscal year from a total targeted sale of 11.55 mt, Acharya said.
Current international prices of steel range from $570-$580 a tonne, higher than $525 last year in September, according to Gupta of Essar Steel. Value-added steel, he said, fetched 1.5 times more on base steel prices and, therefore, the company is exporting more of these.
While India’s traditional steel markets have been in the neighbourhood—Sri Lanka, Middle East and Far-East Asia—the new markets have stretched up to Australia and Central America, Essar’s Gupta said.
“Our focus is to own the last mile by building a relationship with the end user,” Gupta said, underscoring the strategy to reduce dependence on agents.
While the move to increase exports is a good one, it may not necessarily lead to a significant boost in the net profit of the companies, said an analyst at Centrum Broking Ltd.
“The rupee’s depreciation has helped exports, but costs have also been increasing because coking coal is imported. Plus globally, steel prices have been under pressure,” said Abhisar Jain, vice-president, institutional research at Centrum Broking. “Steel export is an opportunistic kind of a trade at this time…it may have a mitigating impact on volumes (inventories).”
SAIL said the bigger role of the exports was to hedge the company against the volatility of the currency.
“Exports’ contribution in terms of turnover was 2.4% of total turnover of SAIL during 2012-13. Based on the export plan for the current year, this is likely to go up to more than 4% of our turnover during 2013-14,” SAIL’s Verma said. “Keeping in view the weak rupee, and our exposure to imports of coal, higher export turnover is likely to insulate us better from the vagaries of currency volatility.”
Source:-www.livemint.com
Government Further Cuts Import Tariff Value Of Gold, Silver
15 Sep, 2013
NEW DELHI: In the wake of falling global prices of precious metals, the government has further slashed the import tariff value of gold and silver to $432 per 10 grams and $736 per kg, respectively.
Tariff value is the base price at which the customs duty is determined to prevent under-invoicing.
Till last week, the tariff value of gold was at $458 per 10 grams and silver at $783 per kg.
The notification in this regard has been issued by the Central Board of Excise and Customs ( CBEC).
Besides bullion, the government has cut the import tariff value of brass scrap to $3,717 per tonne and crude palm oil to $827 per tonne, from $3,748 per tonne and $833 per tonne, respectively, prevailed till last week.
However, the import tariff value of poppy seed has been raised to $2,717 per tonne, crude soyabean oil to $963 per tonne and RBD palmolein to $883 per tonn.
Earlier, the tariff for import of poppy seed stood was $2,763 per tonne, crude soyabean oil at $951 per tonne and RBD palmolein at $882 per tonne.
The tariff for import of arecanut has been kept unchanged at $1,870 per tonne.
Government has reduced the import tariff value of gold keeping weak global prices trend in precious metals. In New York market, gold were ruling down by 1.7 per cent at $1,308.60 per ounce last week.
Similarly, gold in the national capital was ruling lower by Rs 450 at Rs 30,300 per 10 grams.
In August, the country's gold imports had declined to $650 million from $2.2 billion in the previous month, on account of a slew of steps taken by government to curb inbound shipments of the precious metal.
However the World Gold Council (WGC) has projected the country's overall gold demand to touch a record 1,000 tonnes in 2013 calendar year. This may damage the government's efforts to curb imports and check trade deficit.
Source:-economictimes.indiatimes.com
Import Duty On Refined Edible Oil May Rise To 10 Per Cent
NEW DELHI: The government is expected to raise import duty on refined edible oil to 10%, from 7.5% at present to protect the domestic oil refining industry.
A Cabinet note regarding this has already been circulated by the Food Ministry, sources said. The move is aimed at protecting domestic players who are into refined edible oil business, they added.
Currently, the cost of imported refined edible oil is lower than that of crude edible oil due to inverted duty structure adopted by exporting countries like Indonesia and Malaysia. These exporting nations are giving export duty benefits for finished products to their traders. Inverted duty structure impacts the domestic industry adversely as it has to pay a higher price for raw material in terms of duty, while the finished product lands at lower duty and costs low.
Import duty on crude edible oil is about 2.5 %, while on refined oils is 7.5%. "The food ministry has circulated a note for the consideration of the Cabinet Committee on Economic Affairs. Increase in import duty on refined oil is always good for domestic players who import crude oil," a source in the commerce ministry told PTI.
Due to such inverted duty structure, Indian traders favoure import of refined edible oil rather than of crude oils, the source said. India, the world's second-largest cooking oil importer, purchased 2.78 million tonnes of edible oil from the global market between November 2012 and January, this year.
The Solvent Extractors Association has been demanding a hike in import duty of refined oils to 12.5% to curb imports and protect domestic refineries. In January this year, the government imposed a duty of 2.5 % on crude oil from zero duty earlier. According to media reports, the share of crude oil in the overall vegetable oil imports of the country has declined from 84% to 58% during the last two months.
Source:-economictimes.indiatimes.com
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