IT : Where assessee had written off amount of bad debt in its books of account, deduction was allowable under section 36(1)(vii)
Sunday, 29 September 2013
Limitation for revisionary order reckoned from date of assessment if additions weren’t dealt with in
IT: Limitation for passing revisionary order is to begin from date of original order instead of reassessment order, where subject matter of additions made in revision are not dealt with in reassessment
Exhibition of films in private cubicles are not entertainment events; liable to ST
ST/ECJ : Payment made by a customer so as to be able to watch on his own one or more films, or extracts from films, in private cubicles does not fall within concept of admissions to 'exhibition of cinematographic film' under section 66D(j) read with section 65B(24) and is liable to service tax
Sale proceeds of flat obtained in a 'Development Agreement' shall be taxable as 'Capital Gains'
IT: Where assessee got a multi-storied building constructed on his land under development agreement by giving 50 per cent of constructed area to developer as cost of construction and thereafter sold two flats out of his share of constructed area, income from sale of flats would be assessed as capital gain
Sec. 234B interest couldn't be levied on NR if his income was subject to TDS but payer failed to ded
IT/ILT: Where payer failed to deduct tax at source while making payments to non-resident assessee, it was not permissible for revenue to charge any interest from assessee under section 234B
Service tax refund rejections choking IT cos' cash flow
The high rejection rate of service tax refund claims by the income tax department has placed Indian IT firms firmly on the backfoot. According to a wide cross section of top IT officials and industry consultants, service tax refunds to the tune of Rs 4,000-5,000 crore are pending on various grounds, largely flimsy.
The IT industry is eligible for refund on the service tax inputs for units operating under the ambit of Software Technology Park (STP) regulations but over the last couple of years their claims have seen a high rejection rate. Of this, Bangalore accounts for the lion’s share given that the city is the sector’s hub.
Infosys board member and former CFO V Balakrishnan admitted that service tax refunds have become a huge concern for the industry and the delay in settling of claims has a bearing on the cash flow.
According to executives, the provision of refund on service tax was introduced during 2005-06 but since then it has been an uphill task for the companies to get approval on their claims. For many, though, the reasons for delay are not very clear.
“Nothing much has changed in the last two-three years and even the refund one receives is not 100%,” a senior executive said on the condition of anonymity. The delay or rejection in refund of service tax has been attributed to high internal revenue targets to be met by the I-T department.
The alternative route for getting the claims through litigation is a lengthy and costly process.
Manipal Global Education chairman and former Infosys board member TV Mohandas Pai said, “Even if a company goes on appeal there is no guarantee that there would be any refund and the entire process would take a very long time.”
PricewaterhouseCoopers executive director Pramod Banthia said, “There has been outright rejection of claims in most of the cases with many of them on untenable grounds.” The delay in refund has a higher impact on smaller companies, given the size of their profitability, while larger entities are able to offset this delay due to their deeper pockets.
Central Board of Direct Taxes extends deadline for electronic tax returns
After facing severe opposition for last minute changes in the utility tool for filing income tax returns for the assessment year 2013-14, Central Board of Direct Taxes (CBDT) has extended the deadline for filing returns to October 31, 2013 from September 30. However auditors, who are made responsible for filing returns of individuals or companies will have to file the report physically before September 30 to acoid penalties. The decision added to the confusion of CAs and auditors as two of the four days left till the deadline are a weekend. There is no clarification by the Income Tax department on whether the office will work this weekend or not. Auditors and CAs fear long queues for filing physical audit reports because of this. CA Ajit Shah says, "We expected an extension for filing audit reports both manually and electronically. CBDT has granted relaxation only in the date for filing electronically. Taxpayers and auditors who prefer filing returns on the last day will face a severe rush as on 28th and 29th, the I-T office will be shut for the weekend." The penalty for missing the date is 0.5% of turnover, to a maximum of Rs 1.5 lakh. Taxpayers under the ITR 4,5,6,7 which includes charitable and religious trusts, news agencies, research institutions, partnership firms, companies with turnovers over Rs 1 crore and individual professionals earning more than 25 lakh per year will be affected by the announcement. |
Pakistan Turmoil Takes Toll On Indian Tea Exports
COIMBATORE : Indian tea exports to Pakistan have been hit in view of turmoil in the neighbouring country, a senior Tea Board member said here.
After the visit of a tea trade delegation from Pakistan last year, there was a spurt in the exports from India, R Ambalavanan, executive director, Tea Board, told reporters here on Saturday night.
However, subsequent disturbances there have seriously affected the exports, he said.
Ambalavanan, who was here to attend the 31st Annual General Meeting of Tea Traders Association of Coimbatore, later said that there were no immediate plans to invite tea delegations of different countries to India. "At least not for now," he said.
The association had made an appeal to the board to initiate major measures to bring in tea delegations especially from Poland and Russia, to capture the lost market share, since export from India dropped to 201 million kg in 2012 as against 215 million kg in 2011. With regard to setting up of Tea Park, Ambalavanan said about 9 acres of land has been identified near Mettupalayam and other modalities are being worked out, since it was a special purpose vehicle, having various stakeholders, with funding from the Centre and state governments.
Source:-economictimes.indiatimes.com
Iran Rejects India’S Plea For Full Rupee Payment For Oil Import
In a setback for the government’s grand plan to cut down the current account deficit (CAD), through containing the outflow of dollars and saving around $8.47 billion on crude oil imports from Iran, the Persian Gulf country has turned down India’s request for accepting full rupee payment for oil imports.
Highly placed sources in the Oil and Natural Gas Ministry said that Iran’s Petroleum and Energy Minister Bijan Zangeneh has conveyed to the Indian government that they would not accept full rupee payment for crude oil imports, as agreed in July this year, and India would have to explore paying the rest of the amount through euro currency. In addition to this, Iran has also conveyed through Indian diplomats in Tehran that it was also withdrawing the offer of production sharing contract (PSC) for the development of Frazad-B gasfields to Oil and Natural Gas Corporation Videsh Limited (OVL)-led consortium as the present conditions were not acceptable to the new government.
Petroleum Minister Veerappa Moily had rolled out a plan for saving around $8.47 billion in crude oil imports by stepping up imports from Iran. “Iran has stopped issuing invoices for full rupee payment to oil companies for import of crude oil and now has reverted to the 45 per cent rupee payment system. It wants India to explore rest of the 55 per cent payment through the euro of some other currency mechanism. India will not come under strain on this account as Iraq has offered to fill in the gap for supply of crude oil but then outflow of dollars will happen. This development is totally unexpected for us,” a senior official of the Petroleum Ministry said.
Under the PSC, an operator gets a share of production or revenue in proportion to its investment. In the normal service contract that Iran offers, the OVL consortium would get a flat 15 per cent return on the investment for developing the field.
In fact, the Petroleum Ministry even moved a Cabinet note for the Cabinet Committee on Economic Affairs (CCEA) to float a new company to do oil and gas business in Iran, especially for the Farzad-B fields in the Farsi offshore block to avoid U.S. and EU sanctions on the existing oil companies. OVL is keen to develop the Farzad-B gas find in the Farsi offshore block in Iran. The field is estimated to hold in-place reserves of up to 21.68 trillion cubic feet (tcf), of which 12.8 tcf of gas and 212 million barrels of condensate may be recoverable.
Officials in the Petroleum Ministry said about two million tonnes had so far been imported from Iran. Import of an additional 11 million tonnes would help cut the foreign exchange outgo by $8.47 billion (given that crude rules at $105 a barrel). Because of the sanctions, India pays Iran in rupee through a UCO Bank branch in Kolkata. Since July 2011, India had been paying Iran through the Ankara-based Halkbank in euro for 55 per cent of its oil purchases. The rest was remitted in rupee in the accounts of the National Iranian Oil Company in UCO Bank. However, payments in euro ceased on February 6.
Iran was India’s second biggest oil supplier after Saudi Arabia in 2010-11. However, during 2012-13, it supplied only 13.1 million tonnes, lagging behind Saudi Arabia, Iraq, Venezuela, Kuwait and the United Arab Emirates. In 2011-12, Iran stood third with 18.1 million tonnes, against 32.5 million tonnes from Saudi Arabia and 24.1 million tonnes from Iraq.
In 2009-10, it supplied 21.2 million tonnes; in 2012-13, supplies accounted for 7.2 per cent of oil imports, down from 10.5 per cent during 2011-12.
Source:-www.thehindu.com
Leather Exports Up 15%, To Touch $5.75 Bn This Fiscal
September 29, 2013
Leather exports from India is expected to touch $5.75 during the current fiscal, though it is an increase of around 15% it is the original target which set by the industry. Exporters from this industry, which is among the top 10 foreign exchange earners, said they are now looking at new markets including Africa and South America as part of de-risking strategy.
M Rafeeque Ahmed, president, All India Skin and Hide Tanners and Merchants Association said that export of leather and leather products exports are expected to touch around $5.75 billion during the current fiscal, although the target is $6 billion.
Earlier, in his presidential address at the 96th Annual General Body Meeting of Association, Ahmed said that leather exports in 2012-13 rose by around 3% to touch around $5 billion, while originally it was expected to touch by $5.4 billion.
“Though I am not happy at the shortfall, I feel despite the turbulence in the global finance, we have done reasonably well on the export front,” he said.
Exports to the traditional markets like Germany, Italy, Spain and Russia have recorded more than 10% decline. However USA and Denmark have reported an increase of around 20% with UK coming next with 10%.
Ahmed said, the industry would look at East and African and South American countries for a huge push in exports as those countries have great potential. He added, domestic market is also encouraging and entrepreneurs are paying more attention the domestic market.
Speaking about the Rupee depreciation, during June to August 2013, the currency depreciated from a value of Rs 50 plus to an extent of Rs 68 against the US Dollar and Rs 100 against the British Pound. These are the industry's main markets. The depreciation may have benefited a few exporters for a short period but it is an ominous sign.
He further said, raw material shortage is a nagging problem facing the industry as large quantities of semi-finished leather are being exported to China and Italy. The recent decision of the Government of India accepting the views for Leather Exports (CLE), making certification by Central Leather Research Institute (CLRI) mandatory for leather exports so as to conform to the regulatory policies of the Government will prevent clandestine exports and Ahmed hoped that as a result make more raw hides and skins available for tanneries.
While stressing about revisit strategies with countries where Free Trade Agreement (FTA)/ Comprehensive Economic Partnership (CEPA) have been signed, Ahmed said, the idea of FTA is to boost exports by taking advantage of tariff concessions. Exports to countries with which India has trade pacts have naturally declined as seen from the India Exports to Association of Southeast Asian Nations which went down to $14.66 billion in the first six months of 2012-13, compared with $36.74 billion in the same period in 2011-12.
He suggested that such countries in the region should be put under the Focus Market Scheme to dovetail exports, conscious attempts should also be made by exporters to avail of the tax concession benefits and step up exports substantially.
Source:-www.business-standard.com
Import Curbs, Export Spurt Mean Cad Peaked Out In June
Deficit likely to narrow here on given that gold imports in July and August fell 40% and 74% on-year; export growth back in double digits.
current account deficit (CAD) is expected to print the worst figure of this financial year in the quarter ended June because of high gold imports.
However, given the curbs on imports and a rise in exports, economists expect the number to improve from the current quarter.
The numbers are due to be announced today.
After cooling off to 3.6% of gross domestic product (GDP) in the quarter ended March, CAD is expected to have crossed the 5% mark in the following three months.
The deficit was at 4% of GDP in the first three months of the last financial year.
Shubhada Rao, chief economist at YES Bank, sees CAD coming in at $24 billion, or 5.3% of GDP, in the first quarter.
“The first quarter data would be the worst point of stress this fiscal,” she said, adding that the sharp escalation in gold imports in April and May would be the key driver.
India is the world’s top consumer of gold.
The frenzied gold rush pushed trade deficit to over $50 billion in the first quarter of this financial year, higher than the $43.8 billion seen in the corresponding period last fiscal.
“After the quantitative restrictions, gold imports in July and August plunged by 40% and 74% as compared to last year,” analysts Tirthankar Patnaik, Prerna Singhvi and Saloni Agarwal of Religare Securities noted.
This, along with easing demand, should restrict the trade deficit to $12-13 billion per month through the fiscal, they said.
Anubhuti Sahay, economist at Standard Chartered Bank, said, “CAD in the second quarter may be much less than $20 billion.”
She expects CAD to peak out at $28 billion in the first quarter.
Growth in exports, which is back to double digits in the second quarter, would also help reduce the current account gap.
The government has pegged current account deficit at $70 billion, or 3.7%, of GDP for the current financial year, lower than $87.8 billion, or 4.8%, of GDP attained in 2012-13.
“Numbers could be better as gold imports have really collapsed. We have to see petrol and diesel prices, whether
there is a pick-up or not. If not, then there is a downward bias,” said A Prasanna, chief economist, ICICI Securities Primary Dealership.
Prasanna sees CAD printing at $22 billion in the first quarter.
The government and the Reserve Bank of India have taken a number of measures to curb the demand for gold in the past few months.
These include hiking of import duty on gold three times to 10% this year.
Recently, the import duty on gold jewellery was also increased from 10% to 15% in order to protect the interests of domestic artisans.
Source:-www.dnaindia.com
Official Liquidator not liable to indemnify buyer for inadequate measurement of property sold of liq
CL: Where tender notice specifically mentioned that purchaser should accept tenure of land as existing on date of confirmation of sale and there was no representation by Official Liquidator regarding area, it was not open for purchaser to demand refund for short delivery
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