IT: Books of account to be rejected on ground of manipulation where assessee had failed to explain entries in books of account
Thursday 26 September 2013
Transactions in shares carried on systematically deemed as business and resultant profit business in
IT :Profit on sale and purchase of shares would be assessed as business income where involvement of assessee in share transactions was its only activity carried on regularly in a systematic and organized manner
Non-profit entity arranging services for non-members are chargeable to service tax
ST/ECJ : If a non-profit entity arranges exempt services for non-members, then, it cannot claim exemption under Entry 28(b) of Notification No. 25/2012-ST and reimbursement/share in contribution received by it would be liable to ST
RBI/2013-14/294 A.P. (DIR Series) Circular No. 55 dated 26-09-2013
RBI/2013-14/294
A.P. (DIR Series) Circular No. 55
September 26, 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.49 dated September 20, 2013 , wherein the Rupee value of the Special Currency Basket was indicated as Rs.90.052266 effective from September 04, 2013.
- AD Category-I banks are advised that a further revision has taken place on September 10, 2013 and accordingly, the Rupee value of the Special Currency Basket has been fixed at Rs.86.903352 with effect from September 13, 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
Some additional services rendered to AEs along with routine services are also subject to TP adjustme
IT/ILT: Where assessee-media company, being a marketing agent of a channel, also undertook channel promotion activities, a mark up was required to be added for rendering such specific services
Employer is not at default for not deducting tax from LTC and medical allowance paid before its incu
IT: Assessee-company could not be held to be in default for not deducting tax at source on LIC and medical reimbursement paid to employees by treating it as as exempt before actual incurring of such expenses, where bills/evidence to substantiate subsequent incurring of expenditure by its employees was maintained by assessee
Sugar Industry Crushed By Policies
September 26, 2013
The sugar industry has been passing through tough times owing to lower realisation and pressure on profits the last few years, says O. P. Dhanuka, Chairman and Managing Director, Riga Sugar Company Ltd.
Sugar makers, especially those from North India, have been incurring “huge losses” due to a growing disparity between cane and sugar price in the market and a substantially higher input cost, according to him.
Riga Sugar, a Kolkata-headquartered company which operates a sugar factory in Bihar, feels the pinch as much as its counterparts.
Cane price and recovery
“Though the production cost stands at Rs 3,600 a quintal of sugar, the ex-factory sugar price is ruling at Rs 3,100. So, we are losing about Rs 500 on each bag of sugar. How can the industry survive?” Dhanuka asks.
He feels sugar producing companies that have already diversified into power generation and other ancillary businesses are performing better. “However, their sugar businesses in particular is not doing well,” Dhanuka adds.
Cane prices in North India have gone up from Rs 160 a quintal to Rs 250 over the last two-three years. In addition, sugar recovery has dipped below 9 per cent due to bad weather.
“Heavy rainfall in the region impacts both cane production and sugar recovery. Currently, we are able to recover close to 9 per cent,” Dhanuka points out.
Implementation of unfavourable price policies by the State governments also results in a price mismatch in the sugar industry.
Unlike Karnataka, Maharashtra and Gujarat, which keep the cane price low to support the sugar industry, North Indian States make it a point to increase the cane price in “an unscientific manner”.
Sugar factories are supposed to buy cane at the fair remunerative price (FRP) fixed by the Union Government and the price may go up for every 0.1 per cent if the recovery is above 9 per cent.
While Karnataka, Maharashtra and Gujarat enforce buying cane at FRP, despite a better recovery (up to 12 per cent), sugar producers in North India have been paying a State Advised Price, which is much higher the price set by the Centre. “For these three States, cane cost becomes lower compared to the North Indian States,” Dhanuka adds.
Export-import losses
According to the CMD of Riga Sugar, the Union Government’s efforts to promote sugar import by reducing duty from 60 per cent to 10 per cent is turning out to be a major dampener for the domestic industry.
“Despite sitting on stocks of around 80 lakh tonnes, India imported 24 lakh tonnes of sugar between October 2012 and May 2013. Actually, we could have exported the same quantity of sugar,” Dhanuka points out. According to him, India is draining out thousands of crores worth of foreign exchange by importing sugar and piling the domestic stock.
Source:-www.thehindubusinessline.com
Rupee Fall Could Push Fiscal Deficit To Over 5%
COIMBATORE: The recent depreciation of the rupee could increase oil subsidy by 0.1%- 0.4% of GDP ( gross domestic product) in 2013-14 and this alone could push the fiscal deficit to over 5% of GDP against the budgeted 4.8%.
"Rupee depreciation has resulted in a sharp increase in Indian crude basket prices. Despite the 50 paise per litre monthly hike in diesel prices, under-recovery of three controlled fuels - diesel, liquefied petroleum gas and kerosene oil - is threatening the government's fiscal arithmetic," India Ratings said.
"Unless the price of diesel is hiked steeply or those of the three controlled petro products are hiked moderately, the government's fiscal deficit is likely to cross 5% of GDP," said Devendra Kumar Pant, chief economist and head - public finance, India Ratings.
In the 2013-14 budget, Rs 65,900 crore and Rs 65,000 crore were set aside for the fertiliser and oil subsidies, respectively. When these amounts were allocated, the rupee was fluctuating between 53 and 54 to the dollar. A sharp depreciation in the rupee since May this year has however substantially altered the budget's fiscal arithmetic.
India's annual fertiliser consumption is around 53 million metric tonnes and over 30% of this is met by imports. However, global fertiliser prices have declined in the range of 11.3% year-on-year (y-o-y) (for rock phosphate) to 23.9% y-o-y (for urea) between April and August 2013. The rupee depreciated by only 6% y-o-y during this period.
Based on the trend of global fertiliser prices, India Ratings does not expect any significant slippage in fertiliser subsidy on account of rupee depreciation in 2013-14. The situation with respect to oil, however, is different.
The price of Indian crude basket has increased 28% between the first fortnight of April 2013 and the first fortnight of September 2013. As a consequence, the daily under-recovery of oil marketing companies (OMCs) increased to Rs 461 crore in the first fortnight of September 2013 from Rs. 349 crore during the first fortnight of April 2013. OMCs' daily under recoveries of diesel alone shot up to Rs. 14.5 per litre as on September 16.
Although the rupee has appreciated between end-August and mid-September 2013, it is unlikely that it will rise to the level witnessed when the 2013-14 budget was prepared, India Ratings, which is part of the Fitch Group, said.
The agency expects the rupee to appreciate to 59-61 per dollar by the end of 2013-14 pushing the oil subsidy higher. "OMCs' under recovery will increase by Rs. 150 crore every day if Indian crude basket price rises by Rs. 1000 per barrel," said Sunil Kumar Sinha, director - public finance, India Ratings. "This would translate into an increase of around Rs 34,000 crore in the government's oil subsidy burden," he said.
Source:-timesofindia.indiatimes.com
Gold Eases From One-Week High; Some Banks Re-Start Imports
26-Sep-2013
Gold futures eased slightly from their highest level in a week in line with overseas market, and on a firm rupee, while some banks re-started imports after a gap of two months.
At 3.59 pm, the most-actively traded gold for October delivery on the Multi Commodity Exchange (MCX) was 0.29 percent lower at 30,128 rupees per 10 grams, after hitting a high of 30,290 rupees on Wednesday, a level last seen on September 20.
"They've cleared consignments of banks at Kolkata airport, and most banks are waiting for them to clear lots in Mumbai," said a dealer with a private importing bank in Mumbai.
Some banks, which are primary dealers of bullion, re-started imports for exports, after the customs department gave a green signal to some lots.
"Our shipment (for exports) just landed today in Mumbai. It is yet to be cleared by the custom. For other locations, where we have domestic business, we are yet to figure out how to deal with the 80/20 rule," said a dealer with a state-run bank in Mumbai.
Imports had virtually stopped after the so called 80/20 principle, which tied exports with domestic consumption, creating confusion among government officials, and prompting the commerce ministry to call a high level meeting to break the dead lock.
Restart of imports could be timely just ahead of the peak Christmas season for exporters, and the wedding and festival season for local dealers, when demand for the metal goes up.
Source:-in.reuters.com
Opec To Boost Exports Before Refinery Halts, Oil Movements Says
26-Sep-2013
The Organization of Petroleum Exporting Countries will increase crude shipments by 1 percent next month as they maximize flows before refineries are shut for maintenance, according to tanker tracker Oil Movements.
OPEC, which supplies about 40 percent of the world’s oil, will raise exports by 230,000 barrels a day to about 23.9 million a day in the four weeks to Oct. 12 compared with the period to Sept. 14, the researcher said today in a report. The figures exclude two of OPEC’s 12 members, Angola and Ecuador.
“It’s what you’d expect to happen at this time of year as we start to get into refinery maintenance season,” Roy Mason, the company’s founder, said by phone from Halifax, England. “It’s boring old seasonality and exports are likely to drift downward until the end of October or start of November.”
Refiners typically trim imports at the end of the third quarter while performing maintenance as summer demand in the northern hemisphere for gasoline and diesel dwindles. Brent crude was at $108.78 a barrel as of 3:17 p.m. today on the ICE Futures Europe exchange in London. It has risen 6.4 percent so far this quarter.
Middle Eastern shipments will climb 2.4 percent to 17.72 million barrels a day to Oct. 12, compared with 17.31 million in the month to Sept. 14, according to Oil Movements. Those figures include non-OPEC nations Oman and Yemen.
Crude on board tankers will increase 0.7 percent to 483.79 million barrels on Oct. 12, data from Oil Movements show. The researcher calculates volumes by tallying tanker bookings, and excludes crude held on vessels for storage.
Source:-www.bloomberg.com
Rupee Opens Higher At 61.90 Per Dollar
Mumbai: The Indian rupee on Friday opened higher at 61.9050 per dollar against its Thursday’s close of 62.0788 on positive sentiment in the domestic stock market.
The dollar index, which measures the US currency’s strength against major currencies, was trading higher at 80.526, up 0.01% from the previous close of 80.523.
Yield on the 10-year bond was at 8.745% compared with its Thursday’s close of 8.731%.
At 9.05am, the Indian currency was trading at 61.9613 per dollar, up 0.19%. India’s equity benchmark Sensex was trading at 19,934.15 points, up 0.2%.
Source:-www.livemint.com
India Withdraws Export Incentives For Cotton, Yarn
India has withdrawn incentives for exports of cotton and yarn, a value-added product used by textile mills, an official order said, a move that could cut exporters' margins in the world's second-biggest exporter of the fibre.
The Directorate General of Foreign Trade (DGFT), a unit of the trade ministry, did not give any reason for withdrawing the incentives. To see the official order, click here
Together the benefit of the government's Focus Market Scheme and Incremental Export Incentivisation Scheme on cotton yarn comes to around 4 percent of the free-on-board value of exports, according to Industry body the Confederation of Indian Textile Industry (CITI).
Currently there is no cap on cotton and cotton yarn exports but exporters need to register shipments with the DGFT.
CITI urged the government to restore export benefits.
"India is the most competitive yarn producer in the world at present and, therefore, there are increasing export opportunities opening up for our cotton yarn," Prem Malik, chairman of the CITI, said in a statement.
Despite the withdrawal of incentives for overseas sales, buoyant demand for cotton yarn would offset any fall in export margins, said M.B Lal, managing director of Shail Exports, a Mumbai-based exporter.
Trade commitments for cotton yarn exports rose more than 26 percent in August from a year earlier, data from the DGFT showed, mainly due to rising demand from China, India's biggest client.
However, exports of raw cotton are seen down at 10 million bales in 2012/13 from 12.9 million bales a year ago.
India, also the world's second-largest cotton grower, is forecast to produce a record 35.3 million bales, against 34 million bales a year ago.
Source:-in.reuters.com
Daimler India Sees Export Earnings Rise On Falling
CHENNAI: The sharp decline in the value of the rupee has helped boost the profitability of Daimler India Commercial Vehicles (DICV) thanks to increased export earnings.
According to a top company official, the Indian truck subsidiary of the German automobile major, which has been in the Indian market for a year now, is stepping on the gas in terms of localisation to neutralise the currency pinch on imported parts.
Marc Llistosella, MD & CEO, DICV, said: "Thanks to the currency slide, our export earnings have gone up which has helped improve our profitability. However there's a flip side to the currency issue. Right now our trucks have 15% imported parts which is hurting us and we have to increase local content quickly. But thanks to the currency, our cost and quality proposition in the world market is huge both for completely built units as well as for global sourcing of parts," he said.
DICV is part of Daimler Trucks Asia, under which it has charted out an aggressive export strategy. "In export markets, DICV- built trucks are being sold under the Fuso brand with only 26 parts changed," said Llistosella. "The currency helps but only because the product is accepted. Currency windfalls come and go but you can't build a business on that. For India the deceleration in the rupee is also an opportunity. For us our entire business case and export plan was calculated on an exchange rate fixed three years ago. Imagine what it means in today's calculations. But it only works on the back of localisation," he said.
Source:-timesofindia.indiatimes.com
Imports Up 8.7% In July On Electronics Rebound
September 26th, 2013
The country’s imports rebounded in July from a year ago after a slump in the two previous months as global demand for electronics improved.
The increase in imports for July substantiated earlier projections that purchases by key export markets would improve in the second half as the global economy continued to go through the recovery process.
The National Statistics Office reported Wednesday that imports grew by 8.7 percent year on year to $5.49 billion in July.
Electronics, which accounted for nearly a third of the country’s import bill, led the gain as sales to foreign markets amounted to $1.63 billion, up 33 percent from a year ago.
“This reflects the broadly upbeat prospects for the country’s export-oriented electronics industry for the remaining months of the year,” Neda Deputy Director General Rolando Tungpalan said in a statement.
Imports in July brought the total for the first seven months of 2013 to $35.1 billion, which was still lower by 2 percent from a year ago.
With exports for the same seven-month period at $30.42 billion, the country’s balance of trade as of July settled at a deficit of $4.68 billion.
Mineral fuels, lubricants and related materials were the second-biggest imports for July, with receipts amounting to $1.03 billion. Unlike electronics, however, imports of items in this group registered a 14-percent contraction from a year ago.
Source:-business.inquirer.net
As Investors Seek Silver Lining, Metal's Import Up 311%
September 26, 2013
While the government has put a series of restrictions to curb gold imports, it is silver that is ruling the roost. During the April-June quarter, import of silver rose 311 per cent to $1.78 billion, compared with $433.8 million in the corresponding period of last year due to a surge in demand.
According to traders and economists, restrictions on gold have drifted the general sentiment towards silver as they feel it is the closest substitute for gold. "Ever since the government has started putting measures to curb gold imports, demand for silver has seen a sudden surge. Moreover, there is a general scare in the market that the government might soon start curbing silver imports also, as a result, traders are stocking up silver," said Monal Thakkar, president of Amrapali Industries, a leading Ahmedabad-based stock and commodity broking house.
Thakkar added such a staggering rise in silver import could also be attributed to a substantial rise in demand for silver jewellery as well silver crockery. "People are buying silver as a viable investment option," he added.
According to Sudheesh Nambiath, analyst at Thomson Reuters GFMS, India's total silver imports have more than doubled from last year, crossing 4,000 tonnes in the first eight months of 2013 compared to 1,900 tonnes in the whole of 2012. "Because of the restrictions on gold, traders shifted towards silver," Nambiath said.
He added that even by mid of the year manufacturers already had full order books through to December, a clear indication of stocking and also higher demand expectation from fabricators. Indian imports had increased at a fast pace taking advantage of lower prices, however imports dropped to just over 300 tonnes in August. It suggests that investors and bullion traders were refraining from further imports after price crossed Rs 55,000 a kg. Also delivery of near 75 tonnes to the MCX together in the July and Sept contract, only reaffirms the strong participation from investors and traders this year.
This level of delivery on futures exchange is considered very good.
Anis Chakravarty, senior director, Deloitte India said silver import was basically offsetting the demand for gold as it was a safer option.
An industry veteran who is active in exports, however, said with RBI's restrictions on gold imports, round tripping of gold has come to a halt and some players, mainly export houses, who were active in gold round-tripping, seem to have shifted to silver.
Round-tripping means re-exporting silver without much value addition and export houses do so to maintain higher export volumes which allow them to retain status of a star trading house.
Source:-www.business-standard.com
Winding up petition admitted on failure to pay admitted rent liability even under an unregistered le
CL : Winding up petition would be maintainable if tenant admitted its liability to pay rent, even though lease deed under which rent was payable was an unregistered document
GAAR Rules notified; transactions up to 3 crores, FIIs and Cap Gains from investments prior to 30-08
IT/ILT : Income-Tax (Seventeenth Amendment) Rules, 2013 - Insertion of Rules 10U, 10UA, 10UB & 10UC and Form NOS.3CEG, 3CEH & 3CEI
RBI reduces minimum maturity period on overseas Forex borrowings by banks
FEMA/ILT : Overseas Foreign Currency Borrowings by Authorised Dealer Banks - Enhancement of Limit
‘Right to Equality’ under article 14 of Constitution should be respected while granting service tax
ST/ECJ : In granting full or partial exemptions, Government must respect principle of fiscal neutrality, which precludes treating similar supplies of services, which are thus in competition with each other, differently for tax purposes
Revenue to return seized cash on furnishing of bond and undertaking to re-deposit seized cash, if re
IT: There was no infirmity in interim order directing to return cash seized to assessee on condition of depositing same in Court as and when required
An appeal for rectification of mistake can't be filed on basis of an issue not raised earlier before
ST : Where there was no claim made by assessee as to a fact/legal-point at any stage before lower authorities and also in hearing before Tribunal, it cannot be said that there was an apparent error or mistake in order of Tribunal
RBI permits residents to borrow from NRs for further lending to infra sector and for investment in F
FEMA/ILT : FEM (Borrowing and Lending in Rupees) (Amendment) Regulations, 2013-Amendment in Regulation 6
For selection of comparables 'RPT' filter to be applied on standalone basis and not on consolidated
IT/ILT : Before selecting a company as comparable on basis of information obtained under section 133(6), TPO has to necessarily furnish such information to assessee and take its submissions thereon
No reassessment on short reporting of income if AO had earlier examined all receipts on which tax wa
IT: Assessing Officer having examined entire receipts of assessee on which TDS was deducted, could not re-open assessment on ground that assessee returned less income as compared to TDS certificates
No ad hoc additions for unexplained exp. without assigning reasons even if stock valuation found inv
IT: Where Tribunal found working of valuation of work-in-progress was not accurate, but determined unaccounted expenditure merely on estimated basis without assigning any reason, same could not sustain
Price band fixed for sale of equity shares is reasonable if ICDR Regulations and valuation methods a
SEBI: Price band fixed for sale of equity shares after following ICDR Regulations and on taking into consideration relevant methodologies of valuation could not be said to be unreasonable
Service tax on skill development companies rolled back
In a big relief for youth pursuing vocational training courses to land a job, Finance Minister P Chidambaram has rolled back the 12.36% service tax on skill development and training firms imposed in the Finance Bill of 2013-14. Experts had warned that the service tax introduced this year on all training firms working in tandem with the National Skills Development Corporation (NSDC) could jeopardise the government's ambitious goal of training 500 million people by 2022 by raising the effective fees payable by students. The NSDC, set up by the finance ministry as a public private partnership , has been assigned the task of fostering and funding private sector skill development initiatives to 150 million people. The government has set a target of skilling 9 million youth this year. The finance minister, who had addressed the National Skills Development Corporation board in June, personally ensured that a fresh notification was issued earlier this month to correct the anomaly. As per the new notification, service tax is not payable on any services provided by the National Skills Development Corporation or any training institutes, assessment agencies and sector skill councils approved by it. "This has resolved the uncertainty about service tax being levied on the course fees charged by our training partners for skill development programmes and related activities," Dilip Chenoy, chief executive officer and managing director of NSDC, told ET. "The government must exempt training initiatives from all taxes, including income tax for five to ten years, offer incentives to create skill institutions and focus on their outcomes and impact," said Mishra, stressing that skill development is not just critical for school dropouts, but also for the formally educated who acquire no employable skills from their exambased degrees. |
Question of law should be first raised before ITAT before raising it in the Supreme Court
IT : Questions of law being raised first time before Supreme Court, should be decided by Tribunal first
Time-limit for filing of an appeal commences with date of service of order as per section 37C of Cen
ST : Where service of adjudication order via registered post, as per section 37C of Central Excise Act, 1944, was completed only on 13-12-2011, appeal there against filed on 16-12-2011 was within time-limit
Employees contribution to PF is deductible if deposited before due date of filing of return of incom
IT : Employee's contribution to PF, etc. deposited prior to due date of filing return, would be deductible
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