IT : Creation of provision for bad debt under different nomenclature would not disentitle co-operative bank from claiming deduction under section 36(1)(viia)
Wednesday 2 October 2013
Scrutiny assessment could be challenged even if request for rectification of sec. 143(1) order was r
IT: Where assessee's appeal against scrutiny assessment for claiming refund, was rejected only because its rectification application against section 143(1) had previously been rejected, matter was to be remitted back
Adjournment application supported by unavoidable reasons can't be denied, rules HC
ST: Where, due to unavoidable reasons, adjournment application is made, opportunity of hearing cannot be denied and matter cannot be decided ex parte by terming ground of adjournment as flimsy except where assessee is found indulging into dilatory tactic or forum shopping.
Mandatory registration of a Co. with SEBI if it sells proportionate indivisible share of land to var
CL : Where appellant-company, under pretext of real estate business, sold proportionate undivided share of certain land to customers assuring high returns in form of profits which may be immovable property; money received from customers was pooled and utilised for all land owned by appellant in general; and management of property was exclusively in hands of appellant, it was under an obligation to apply for registration with SEBI as per requirements laid down in CIS Regulations and SEBI Act
Institution-wise governmental aid of about 45% entitles a society for sec. 10(23C) exemptions
IT : For computing 'substantial government aid' so as to avail section 10(23C) exemption, receipts of individual institution are to be considered, not aggregate receipts of various institutions run by a society; 45 per cent government aid is substantial for such purpose
India Opens Talks With Iran On Payments For Import Of Crude Oil
02-Oct-2013
Following Tehran’s decision of not accepting rupee payment beyond 45 per cent margin for purchase of crude oil, India has opened negotiations with the new government in Iran to explore and work out other mechanisms, including payment in other currencies that could include rouble or yen.
Petroleum and Natural Gas Secretary Vivek Rae said that following the U.S. and EU sanctions against Iran, payment routes were blocked for India. India managed to get Tehran to accept 100 per cent rupee payment mechanism but the change in government changed this equation and Iran had raised a few invoices for oil it sold to India in rupees but stopped doing so soon after. Now, Iran is seeking payments in rouble, yen or yuan which is what is being worked out.
A team from India, consisting of officials from the Finance Ministry, Ministry of External Affairs, Petroleum Ministry and Reserve Bank of India (RBI), is likely to visit Tehran soon to engage with their counterparts and resolve the impasse.
Mr. Rae said India was targeting 13 million tonnes of oil import from Iran in 2013-14 fiscal. It had already imported around 2 MT and wanted to import another 11 MT in the rest of the fiscal. Petroleum Minister Veerappa Moily had proposed to Prime Minister Manmohan Singh that India could save $8.47 billion in forex by importing 11 MT of oil in the rest of fiscal from Iran.
Mr. Rae said Mangalore Refinery and Petrochemicals Ltd and Essar Oil Ltd plan to import 4 million tonnes each from Iran, as against about 5 million tonnes each they imported in 2012-13. State-run Indian Oil Corporation, which imported 1.566 million tonne oil from Iran in 2012-13, has entered into a term contract for importing 1.2 million tonne crude oil from Iran this fiscal. Since July 2011, India had paid in euros to clear 55 per cent of its purchases of Iranian oil through Ankara-based Halkbank. The remaining due amount was remitted in rupee form in accounts of Iranian National Oil Company in Kolkata-based UCO Bank. Payments in euro through Turkey ceased from February 6 this year but the rupee payments for 45 per cent of the purchases continued through the bank. Iran later agreed to take all of the payments in rupees.
There is also pressure to put in place a mechanism for utilisation of the accumulated rupee balances in the Iranian accounts with the same bank, which are of the order of Rs. 20,000 crore. This could be in the form of increased exports to Iran, given that the bilateral trade between the two nations is overwhelmingly weighted in favour of the Gulf country, or having the Iranian government invest in infrastructure projects in India.
Source:- thehindu.com
‘Broken’ Rice Exports
The fortunes of local rice exporters have once again taken a turn for the worse as higher prices relative to the low quality of Pakistani rice continue to erode its demand in the international markets.
Subsequently, the export quotes for both the benchmark—5 percent broken and the 25 percent broken have taken a hit, with the prices having fallen below the Indian varieties and at par with Vietnam—which has historically been the cheapest sourcing destination for Indian rice in the Asian bloc.
This time last year, Pakistani rice—both white and Basmati—was selling at an easy premium over Indian varieties, with the non-Basmati 5 percent broken being considered as one of the better alternatives to the higher quality Thai rice which had become too expensive post the Thai government’s paddy pledging scheme.
However, in the space of one year, India has managed to pretty much out-manoeuvre Pakistani exporters, clawing back the crucial Iranian market share and gaining entry into new geographical arenas.
Where regional demand has hit a plateau, Indian rice exports to Africa, Middle East, Nepal, Singapore and the UK have increased significantly over the last 10 months, with the country having exported upwards of 6 million tons of rice since January.
This is despite the fact that India’s government raised the minimum price it pays to growers to a record last year, making supplies from the country more expensive amid a global glut. The accompanying graph shows a clear convergence of export prices of Indian rice with the prices of the much superior Thai 5 percent broken, whereas prices for the same varieties from Pakistani and Vietnamese origin remain depressed.
Albeit better branding and sustained quality have consistently set Indian rice apart within the region, sources report that a major factor tipping the scale in India’s favour is the fact that international buyers are rapidly losing faith in the quality certification of rice from Pakistani origin.
Talking to BR Research, a number of rice millers and exporters said after TDAP took control over the QRC (quality review committee) from REAP, international buyers have been wary of the bureaucratic involvement in the certification process. Additionally unnecessary demands and the new ill-devised and winding SOPs set in place by TDAP have also reportedly led to delayed and missed shipments, causing domestic exporters to lose orders worth millions of Rupees in the last few months.
The mistrust at the buyer’s end has also been exacerbated by the discovery of Khapra beetles in a dispatch of Pakistani rice sent out to Mexico. After the incident, both Mexico and USA have banned the entry of Pakistani rice into their ports and there has been visible dwindling of orders from the EU and some African nations, report sources.
All of this has led to a significant drop in orders over the course of the last few months, as exhibited by the data released by the PBS showing Pakistan’s rice exports for the month of August at around 182,805 tons, down about 37 percent from the previous month. Although this number has improved year on year, the market dynamics should have dictated better demand for Pakistani rice at the tail end of the season (July-Aug) when domestic supplies are historically low and overseas demand peaks.
In the meantime, things just keep improving for India. The recent slide of the Indian Rupee has allowed for some softening in the export quotes for Indian rice and following the intervention of Commerce and Industry Minister Anand Sharma during his visit to ASEAN Ministerial meeting in Brunei last month; Russia has lifted the ban on import of non-Basmati rice and oilseeds from India, a move likely to give further boost to these exports.
Going forward, rice prices within the region will likely stay under pressure as uncertainties over the continuity of Thailand’s paddy purchase programme compounds the downward pressure exerted by a weak external demand.
However, prices in the Indian quarter are expected to remain steady, so there are some expectations that the slide of the downtrodden Pak rupee against the greenback may help take down prices to a level where they become attractive to buyers once more.
Source:- brecorder.com
Australia Raises China Iron Ore Import Forecast
02-Oct-2013
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Australia’s official commodities forecaster has increased its expectations for Chinese iron ore imports, which it sees reaching 1bn tonnes by 2018.
In its latest quarterly report, the Bureau for Resources and Energy Economics said it expected China to import 872 tonnes of the steelmaking material in 2014, an 8.3 per cent increase on its previous forecast made in June.
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“Demand is being propelled by the high level of steel production due to the growth in commercial and residential construction,” BREE said in the report.
In spite of strong demand from China, iron ore prices were unlikely to rise excessively because of increased supply from Australia, the world’s biggest exporter of seaborne iron ore. As new supply from Western Australia comes on stream the government forecasting agency expects Australia exports to rise 17 per cent to 669m tonnes.
“Australia’s iron ore exports are projected to increase at an average rate annual rate of 8 per cent a year between 2014 and 2018 to total 847m tonnes in 2018,” BREE said. “The strong growth is being supported by many of the mines in the Pilbara region of Western Australia being at the lower end of the cost curve.”
Mining companies BHP Billiton, Fortescue Metals Group have ploughed billions of dollars into new projects to boost output of the commodity. On Wednesday, Rio opened new port facilities in the Pilbara, part of an US$11.6bn project to lift annual iron ore output from 220m tonnes to 290m tonnes.
Andrew Harding, the head of Rio Tinto’s iron ore business, said the company was very confident about Chinese demand and the transition from low-rise accommodation to more “steel-intensive structures like skyscrapers”.
Benchmark iron ore prices have rallied 20 per cent to $130 a tonne since June as Chinese steel production surged on the back of stimulus aimed at stabilising the economy. Analysts now expect annual Chinese steel output to reach 755m tonnes in 2013, up from expectations of 700m-725m tonnes at the start of the year.
Over the three months to September the iron ore spot price averaged $122 a tonne, up from $118 in the previous quarter. “This rebound in spot price is contrary to what has happened in recent years, and primarily reflects lower port inventories of iron ore in China,” BREE said in the report.
Colin Hamilton, analyst at Macquarie, said concerns about supply outpacing demand in the iron ore market had been overplayed.
“We know there is a lot of supply coming but stocks in China are also relatively low,” he said, adding a key meeting on Chinese economic policy in November could also boost the price.
“There’s a greater chance of the price hitting $150 than $100 before the end of the year,” he said. Chinese stocking cycles are the biggest short term driver of iron ore prices and right now they are low and we think steelmakers will be looking to build up.”
BREE also forecast Australia’s thermal coal exports to increase at an average rate of 8 per cent a year to 271m tonnes in 2018. “The growth is expected to be supported by increased demand for exports from China in the short term and then from India later,” it said. Iron ore and coal are Australia’s two largest export earners.
Source:- ft.com
Indian Jewellers Face Long Road To Export Growth
02-Oct-2013
Indian jewellers, long spoiled by access to the world's largest group of gold consumers, must seek expansion overseas after the authorities tied gold imports to exports. But the path will not be easy.
India has hiked import duty for gold, its biggest non-essential import, this year from 4 percent to 10 percent -- 15 percent in the case of jewellery -- in a bid to cut imports and close its record current account deficit.
It has also linked imports to export volumes -- at least 20 percent of bullion imported must now be exported. Pressure on the industry to increase gold exports is helping to push Indian jewellers towards overseas markets.
"Just to secure domestic supplies, (jewellers) have to export," Mayank Khemka, managing director of jewellery wholesaler Khemka Group, said on the sidelines of the London Bullion Market Association conference in Rome. For his company, Dubai, Hong Kong and Singapore will be the primary markets to target, he said.
C.K. Venkataraman, chief executive of the jewellery division of Titan Company Ltd, told Reuters at the conference that his company was looking at building up its exports as a part of its long-term growth strategy, targeting in particular Indian consumers living overseas.
"I don't think India has ever looked globally for gold jewellery sales," he said. "Over the next decade, we should expect that to change."
But for all jewellers may want to sell overseas, the path to boosting exports is unlikely to be smooth. Exports have dropped 60 percent between April and August this year as confusion over the new regulations, tough competition from other manufacturers like Thailand, and slack demand from major consumer the United States led to a virtual suspension of imports into India.
The country is historically the world's biggest consumer of gold, with imports hitting 850 tonnes last year. Only 8 percent of that was exported.
Indian jewellers face tough competition from lower-cost producers, and will have to sharpen their design and manufacturing skills to move away from the heavy, yellow-gold pieces popular in India but less marketable overseas.
"Our machine-made products have been facing huge competition from Thailand, Malaysia and Indonesia, and since we were unable to export in the last five weeks, our image has been hit in the international market," Konal Doshi, partner at Modern Impex, a gold jewellery exporter said.
Supply tightness due to the import restrictions has made jewellers unwilling to ship material.
In addition, jewellers unused to selling outside their own borders will have to familiarise themselves with export procedures and build up relationships with overseas retailers to the point where they are willing, for example, to send expensive samples overseas for approval.
"Exporting isn't something that can be started overnight, Khemka said. "You need to give people time."
INCENTIVES FOR EXPORTERS
Pankaj Kumar Parekh, vice chairman of the Gem & Jewellery Export Promotion Council, said the jewellery industry has already met the Reserve Bank of India to push them to include the jewellery industry in its interest rate scheme, which facilitates loans at below normal lending rates.
The commerce ministry is expected to announce financial incentives for jewellery exporters by end-October.
At present, the disruption to imports caused by the new import duty regime -- shipments of gold into India have been virtually halted for two months pending clarification of the new rules -- is stalling potential jeweller forays into exporting.
"We saw a huge decline in exports as shipments of coins and medallions, which used to contribute to a lot of exports, were stopped. Prices of gold also dropped from last year, and the third reason was unavailability of gold," Konal Doshi said.
"There were no agencies doing imports in the last five weeks, so how do you expect anyone to export?"
Once that situation is alleviated, jewellers will likely get things moving again, he said.
"In a week's time imports should start all across the country. By the end of October things would be in motion," said Doshi, adding "Orders for supplies for the peak U.S. season are already with us, and it is looking promising." Doshi declined to give any details on his U.S. orders.
Estimating 40 tonnes of exports for the six months to March could leave the domestic market with 160 tonnes of gold in the peak festival and wedding season, about half its requirement, Parekh said.
India has already imported 393.68 tonnes of gold from April to September 25, and the finance ministry expects 750-800 tonnes of gold imports in the fiscal year to March 2014.
Shekhar Bhandari, executive vice president at Kotak Mahindra bank in Mumbai, said he believes the jewellery industry in India has the tools and the will to boost its export activity.
"Many people are moving towards exports... The jewellery industry is ready to do that now," he said. "Until now, they felt there was easy money in imports. But when you realise you have limited room (to grow), you will take those steps."
Source:- financialexpress.com
China To Boost Imports From India, Bridge Trade Deficit
India can expect some pruning of the massive trade deficit it has run up with China as the world's largest exporter is looking to boost its imports, in part to help stimulate economies around the world.
"China is taking new policy measures to facilitate the importing process. It will further eliminate non-tariff measures, simplify import management measures and shorten import procedures," Jia Guoyong, vice-director general of China's Trade Development Bureau, told IANS in an interview here.
Jia was in India last week leading a 50-strong business delegation, members of which signed 15 memoranda of understanding (MoUs) with various Indian companies for imports worth $330 million to China. The delegation's visit was an outcome of Chinese Prime Minister Li Keqiang's trip to India earlier this year.
In view of the global economic slowdown, China, Jia said, had been trying to increase its imports, which help the countries.
"While exports create wealth directly, imports generate long-term interest and give impetus to industrialization and are just as important as exports," Jia said.
China's foreign trade policy has in recent years been moving away from its overwhelming accent on exports towards a balance, by upgrading the mechanism for promoting and adjusting imports.
"By importing more consumer products, for instance, to satisfy the domestic market, China will not only hasten economic recovery but also improve trade imbalances and reduce trade frictions," Jia said.
India's trade deficit with China in the last fiscal was around $39 billion that Indian officials describe as "unsustainable" in the long run. India's exports to China in 2012-13 were worth $13.53 billion, while imports stood at $52.24 billion.
An important import promotion measure consists of continually encouraging Chinese business delegations to explore overseas markets for procurement, like the delegation that Jia has led to India.
A majority of Chinese exporters import raw materials and semi-manufactured goods, and then produce these for overseas markets.
"A priority for us is optimising the import structure by stabilising and guiding the import of bulk commodities, increasing imports of hi-tech equipment as well as of consumer goods," said Jia.
China's imports are of three major kinds. Fifty percent are mechanical and electrical products, 30 percent are high technology items and about 20 percent are bulk commodities.
Jia said while China has a long-term strategy to enhance trade with India, the new import promotion policies were directed at improving the situation with its various trading partners.
"We can now import more consumer products to satisfy the domestic market. It is not that we did not require to import earlier, but now we have more means and money to import that were lacking earlier," Jia said.
Figures from financial service firm Morgan Stanley in September showed Chinese demand for commodities is surging again, confirming the improved recent economic data from China and that the country was stepping up investment in infrastructure. This will be good news for markets supplying commodities to China.
"China will facilitate market access, increase its import capabilities, promote balanced trade and will contribute to the promotion of China-India bilateral trade," added Jia, signing off.
Source:- newindianexpress.com
National Textile Corporation To Launch 300 Retail Stores
2-Oct-2013
State-run National Textile Corporation (NTC) plans to launch 300 retail stores in the next two years. The corporation plans to launch over 100 showrooms by March 31, 2014 and 300 stores by the end of March 2015, either on its own or using the franchise route, its CMD R K Sinha said at the launch of retail chain outlet 'Indian Republic' here today. Union Textiles Minister K S Rao unveiled the logo of 'Indian Republic' here in the presence of Union tourism minister K Chiranjeevi.
As part of its marketing strategy, NTC plans to launch 300 retail stores during phase one, which would enable NTC to sell 2.6 million metres of garments. It is making efforts to provide quality products at affordable prices in the range of Rs 399 and Rs 1499, NTC officials said.
NTC's turnover during the year before last was Rs 700 crore and the effort is to take it to around Rs 1400 crore. Investment on advertising the initiative on an annualised basis would be around Rs 20 crore, while funding arrangements are in place for franchising, cloth and materials.
Turnover is expected to touch around Rs 250 crore when 300 retail stores are set up, company officials said, adding that NTC also plans to launch women's garments soon.
Replying to a query, officials said that the company's exports are expected to touch Rs 100 crore this year and it has been profitable for about five years.
Talking to reporters, Rao said that efforts are on to attract investments to the tune of about Rs 3,000 crore to Andhra Pradesh.
The government is ready to permit setting up of around four textiles parks in AP for which proposals have been received and the NTC plans to set up a weaving unit in the state at an investment of about Rs 500 crore, he said.
Source:- timesofindia.indiatimes.com
Trade Gap To See Huge Improvement On Lower Imports: Experts
India's Current Account Deficit is likely to narrow during 9 months (July-March) of the current fiscal to touch a low of 1.5 percent of GDP because of lower gold imports, higher overall exports and a drop in imports due to tapering domestic demand, analysts say.
"CAD will be less than USD 10 billion in Q2 (July- September), which will be 1.5-1.7 percent of GDP, and for the whole year we maintain that CAD will be around 3.8 percent of GDP or USD 67-68 billion," a State Bank research report said today. CAD, which indicates imports of goods services and transfer are higher than their exports, widened to 4.9 percent of GDP, or USD 21.8 billion, in Q1 of FY14 as against 4 percent of GDP, or USD 16.9 billion, in the year-ago quarter.
Also Read: Emerging market firms to reshape corporate world, says Report Widening of Q1 CAD was on account of rise in imports by 4.7 percent and decline in exports by 1.5 percent. "The current account gap will exhibit an improvement in the coming quarters due to the curbs on gold imports, a weak rupee benefiting exports and a sharp slowdown in domestic demand pulling down consumption and investment good imports." credit rating agency Crisil said. During July-August, exports grew 12.3 percent, while imports fell 3.6 percent, Crisil noted.
Gold imports have already come down with July-August figure nearly 300 tonne lower over the first quarter, it said. "Nonetheless, indications are that the CAD shortfall has peaked and is poised to witness some improvement here on," DBS Bank said in a report. Analysts felt exports are likely to pick up as the US economy is expected to grow at 1.7 percent and there are signs of improvement in the European Union. "An increase in exports would be further aided by the recent rupee fall, which has enhanced export competitiveness of India's goods and services," India Ratings said. Crisil said narrowing CAD and higher capital inflows in the second half of the fiscal will help stabilise the rupee.
"In the second half of the fiscal further easing of CAD and some pick-up in capital inflows - if the RBI and Government's measures at bringing in foreign capital yields fruit - could stabilise the rupee." The rupee fell to a life-time low of 68.85 against the US dollar on August 28. However, it has recovered more than 10 percent in September.
Source:- moneycontrol.com
[Indian Custom Non-Tariff Notification] : Appointment of Common Adjudicating Authority
F.No.437/66/2013-Cus-IV
Government of India
Ministry of Finance
(Department of Revenue)
Central Board Excise & Customs
*****
New Delhi, dated the 30th September, 2013.
ORDER
In terms of Notification No.15/2002-Customs (N.T.) dated 07.03.2002 ( as amended) issued under sub-section (1) of section 4 of the Customs Act, 1962 (52 of 1962), the Board hereby assigns the Show Cause Notice F. No. DRI/MZU/ E/13/2012/5518 to 5523 dated 23.07.2013 issued by Additional Director General, Directorate of Revenue Intelligence, Mumbai. Zonal Unit, Mumbai in the case of M/s Sun TV Network Ltd., Murasoli Maran Towers, 73, MRC Nagar Main Road, MRC Nagar, Chennai-600028 to the Commissioner of Customs (Imports & General), IGI, Airport, New Delhi for the purpose of adjudication.
(M.V. Vasudevan)
Under Secretary to the Government of India
Copy to:-
1. The Additional Director General, Directorate of Revenue Intelligence, Mumbai Zonal
Unit, UTI Building, 13, Vithaldas Thackersey Marg, New Marine Lines, Mumbai-400020.
2. The Commissioner of Customs (Imports & General), IGI, Airport, New Delhi
3. The Commissioner of Customs (Import), Cargo Unit, AI Airport, Chennai.
4. The Commissioner of Customs (Import), Air Cargo Complex, Sahar, Andheri (E),
Mumbai.
5. Webmaster.cbec@icegate.gov.in
No sec. 144C order if DRP permits assessee to withdraw his objections and assessee opts for normal p
IT/ILT : Where assessee opted for normal appellate channel to challenge draft order after withdrawing objection filed before DRP, no assessment order under section 144C(13) could be passed pursuant to DRP's permission to withdraw objection
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