Wealth tax payable treated as 'debt' for computation of net wealth of assessee

IT: Wealth tax payable by assessee is to be treated as debt for purpose of calculating net wealth

RBI/2013-14/323 A.P. (DIR Series) Circular No. 61 dated 10-10-2013

RBI/2013-14/323

A.P. (DIR Series) Circular No. 61

October 10, 2013

To

All Category - I Authorised Dealer Banks

Madam / Sir,

Overseas Foreign Currency Borrowings by Authorised Dealer Banks

Attention of Authorised Dealer Category I banks is invited to Regulation no. (4)(2)(i) of Notification No. FEMA 3/RB-2000 dated May 3, 2000 as amended from time to time and A.P.(DIR Series) circular no. 23 dated October 15, 2008 in terms of which, inter alia, AD Category - I banks may borrow funds from their Head Office, overseas branches and correspondents and avail overdraft in the nostro accounts up to a limit of hundred per cent of their unimpaired Tier I capital as at the close of the previous quarter or USD 10 million (or its equivalent), whichever is higher (excluding borrowings for financing of export credit in foreign currency and capital instruments).

2. With a view to providing greater flexibility to AD Category - I banks in seeking access to overseas funds, Reserve Bank has amended Regulation no. (4)(2)(i) vide Notification No.FEMA.288/2013-RB dated September 26, 2013 published in the Official Gazette vide G.S.R.No.668 (E) on October 1, 2013. Henceforth, authorised dealers may borrow from their Head Office or overseas branches or correspondents outside India or any other entity as permitted by Reserve Bank up to hundred per cent of its unimpaired Tier I capital or USD 10 million, whichever is higher, subject to such conditions as the Reserve Bank may direct. A copy of the amendment notification is placed as annex to this circular.


3. Accordingly, permission is hereby granted to AD Category I banks to borrow from international / multilateral financial institutions for a limited period up to November 30, 2013. Such borrowings should be for the purpose of general banking business and not for capital augmentation and shall be subject to the conditions stipulated in the A.P. (DIR Series) circulars no. 40, 2013 dated September 10, 2013 . Further, such borrowings shall be eligible for the concessional swap facility of RBI as per A.P. (DIR Series) circulars no. 40, 2013 dated September 10, 2013 and 54 dated September 25, 2013 .


4. 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 is without prejudice to permissions/approvals, if any, required under any other law.

Yours faithfully

(Rudra Narayan Kar)

Chief General Manager-in-Charge

Non-residents are eligible for the benefit of 10% tax rate on long-term capital gains under the Proviso to s. 112. The AAR should avoid giving conflicting rulings

The assessee, a company based in Scotland, sold 4,36,00,000 equity shares of Cairn India Ltd to Petronas International, Malaysia, for consideration of US$ 241 Million. The sale was not through a stock exchange and resulted in long-term capital gain of US$ 85 Million in the hands of the assessee after applying the benefit under first proviso to s. 48. The assessee filed an application for advance ruling in which it claimed that the said capital gains was chargeable to tax at the rate of 10% as per the proviso to s. 112(1). However, the AAR (337 ITR 131), departing from its earlier view in Timken France SAS 294 ITR 513 (AAR), held that the expression “before giving effect to the 2nd proviso to s. 48” in the Proviso to s. 112(1) presupposes the existence of a case where computation of long-term capital gains could be made in accordance with the formula contained in the 2nd proviso in s. 48 (indexation) and that as non-residents were not eligible for indexation, the lower rate of tax specified in the Proviso to s. 112 was not available. On a writ petition by the assessee to challenge the AAR’s ruling, HELD by the High Court reversing the AAR: It is not possible to decipher the exact legislative purpose behind the proviso to s. 112(1) in a categorical and unambiguous manner. However, if one squarely focuses on the words used in the proviso and interprets them without extracting or subtracting any phrase or word, a non-resident assessee is entitled to benefit of the said provision. The proviso to s. 112(1) does not state that an assessee, who avails benefits of the first proviso to s. 48, is not entitled to benefit of lower rate of tax @ 10%. The said benefit cannot be denied because the second proviso to s. 48 is not applicable. In case the Legislature wanted to deny the said benefit where the assessee had taken benefit of the first proviso to s. 48, it was easy and this would have been specifically stipulated. The fact that by this interpretation, a non-resident becomes entitled to double deductions by way of computation of gains in foreign currency under the first proviso to s. 48 and then the benefit of lower rate of tax under the proviso to s. 112(1) is no reason to interpret the proviso differently. Further, as the AAR had taken a view in Timkin France SAS which was followed in several cases over several years, it ought not to have taken an opposite view and brought about uncertainty in understanding the effect of the proviso to s. 112(1). There should be consistency and uniformity in interpretation of provisions as uncertainties can disable and harm governance of tax laws. The AAR should follow its’ earlier view, unless there are strong grounds and reasons to take a contrary view.

I-T finds tax evasion by NSEL borrowers

The income-tax (I-T) department has found tax evasion by National Spot Exchange Ltd (NSEL) borrowers, following its search on them in August. The amount of tax on that is yet being finalised by the various income tax circles could be around Rs 100 crore or even more. The tax evasion has been found from a few the borrowers based in northern part of India, especially in Delhi and Ludhiana.

The I-T department had carried out surveys on the premises of the 24 borrowers across states on August 23, just three days after NSEL could cough up just a little over half of the Rs 174 crore due in the first weekly settlement, which led to exchange defaulting. Borrowers are facing charge of borrowing Rs 5,572 crore from the investors using platform of the NSEL and when the exchange suspended trading they could not pay back.

These borrowers were borrowing money from the NSEL platform as that had become a fund-raising platform and commodities trading took back seat. Interest paid by these borrowers on the amount borrowed is allowable as business expense under the I-Tax Act, as borrowing was also for business. However, during the survey, some of the borrowers were found to have diverted money for use other than their business. Hence, interest paid on such borrowing will not be allowed as business expense and they will have to pay income tax on that with interest and penalty, said an I-T official.

According to an affidavit filed by NSEL’s former managing director Anjani Sinha last month, some of the borrowers with very high exposure were borrowing fresh money just to pay cost of interest and rolling over cost, which was running to 20-30 per cent of their borrowing and in absolute terms in the range of Rs 50-200 crore. Even part of these expenses not allowed as business expense there could be a huge tax recovery.

I-T has also wrote to 13,000 investors of NSEL to know if the money they had invested in NSEL-traded products was tax-paid money or not. Responses have started coming in and the investigation wing is passing on this information to the intelligence and criminal investigation wing (I&CI). This wing works to develop a robust database of financial information and aid the regular investigation wings of the I-T to undertake “specific and result-oriented” search and survey operations.

I & CI will maintain that as a data base for future investigation. According to an I-T official, from the data base of the NSEL investors, randomly some cases will be picked up and detailed inquiries will be done. One of the issues being raised not just that whether the tax was paid on the money invested in NSEL but also if they had such an income that allow them choice to put money in NSEL products that which are their other incomes and whether they pay proper tax on that.

Agency services to foreign co. for canvassing its products in Indian market are 'exports'

ST : Commission agent services provided to foreign company for canvassing their products in market in India amounts to 'export of service'

No penalty on failure to furnish TP docs as AO didn't mention docs which assessee failed to furnish

IT/ILT: Where order under section 271G did not mention which document or information mentioned in notice under section 92D(3) was not furnished by assessee, penalty under section 271G could not be sustained

Direct tax collections take a hit on eco slowdown

On the back of slowdown in growth, direct tax collections have fallen short of budget projections; a trend that is expected to continue in the second half of the fiscal, reports CNBC-TV18’s Aakansha Sethi. The government had, in the Budget, projected over a 19 percent increase in direct taxes. Actually, there has been only an increase of about 10.8 percent in the first half of this fiscal. It has led to a shortfall of about Rs 20,000 crore in direct tax collections. Also read: Slowing economy: Here are tips to spend money smartly The government is struggling to meet a 4.8 percent fiscal deficit target. The shortfall will only mean that more expenditure cuts. The disinvestment target is also far from being met and subsidies are likely to overshoot significantly. The tax department is going to rely more on arrears from previous years. The total target for arrears for this year is Rs 61,000 crore against total arrears of about Rs 1,90,000 crore. Around Rs 21,000 crore has already been received. The finance ministry hopes to focus on this over the second half. It is going to complete its assessments by December this year, unlike March every year so that they can crack down on evasions. It will also focus on non-filers of income tax returns. This is the income tax department’s (I-T) three-pronged strategy to ensure it covers up shortfall. If growth continues this way, in the second half, the IT department expects more shortfall in collections.

About Rs 600 cr service tax evasion detected by Finance Ministry

In its effort to check any leakage of indirect tax revenue, the Finance Ministry has detected service tax evasion of about Rs 600 crore between January and July this year.

As many as 569 cases were detected by various central excise and service tax formations across the country during the period. The amount of evasion involved in theses cases is Rs 589.40 crore, a Finance Ministry official said.

An analysis of these cases finds that renting of immovable property, work contract, general insurance, banking and other financial services are prone to service tax evasion.

Besides, business auxiliary services and construction of commercial and residential complex services were also prone to evasion of the indirect levy, he said.

The modus operandi being followed in these cases was wrongly availing cenvat credit, non-registration, short payment of service tax, wrong classification and undervaluation of services, the official said.

The Finance Ministry officials have termed service tax evasion as new focus area and decided to target about 12 lakh assesses who had stopped filing returns. There are 17 lakh registered assesses under the service tax.

The Ministry is also implementing a first-of-its-kind amnesty scheme for service tax defaulters. The Voluntary Compliance Encouragement Scheme (VCES), announced by Finance Minister P Chidambaram, has come into effect from May 10, this year.

It allows a service tax defaulter to pay due without any penalty or late payment charges. Under the scheme, a person may make a declaration to the designated authority on or before December 31, 2013.

As many as 1,400 declarations have been filed under the scheme so far by defaulters liable to pay Rs 650 crore to the government, according to a latest official data.

The Finance Ministry has set indirect tax collection target, comprising customs, excise and service tax, of Rs 5.65 lakh crore for 2013-14, up from Rs 4.73 lakh crore in the last fiscal.

There are over 100 services including restaurant, hotels, stock broking, mandap keepers, beauty treatment and outdoor catering which entails service tax.

Australia Seeks Early Closure Of Uranium Sale With India

Favouring an early closure of nuclear cooperation deal and sale of uranium to India, Australian Prime Minister Tony Abbott today said he was committed for stronger bilateral ties.

In his first bilateral meeting with Prime Minister Manmohan Singh in Brunei on the sidelines of ASEAN and East Asia Summits, Abbott said he was committed to closer engagements with India on various areas of cooperation including on uranium issue, top officials said.

Briefing the media about the meeting, Secretary (East)in External Affairs Ministry Ashok Kantha said Abbott also recalled his stay in India years ago at places like Hazaribagh and Bokaro (in Jharkhand). "Abbott said he is committed to cooperation on nuclear issue and other areas and he wants to bring this agreement to closure at an early date," Kantha said, while adding that a meeting in this regard may take place in December.

India and Australia held their first-ever talks on a civil nuclear partnership agreement in March this year after the Labour government of of former prime minister Julia Gillard decided to ease up on its stated policy of not conducting nuclear-related trade with India.

If the two nations go ahead with the deal, India will be the first customer of Australia that is not a signatory to the nuclear Non-proliferation Treaty (NPT). Australia holds about a third of the world's recoverable uranium resources, and exports nearly 7,000 tonnes a year.

Singh and Abbott also discussed issues like defence, security, joint naval exercise, Nalanda university, and student exchange programmes.

In another bilateral meeting with Japanese counterpart Shinzo Abe, Singh discussed various issues of strategic importance and cooperation in areas like Delhi Metro, Delhi Mumbai corridor, defence security cooperation, Kantha said. However, no new projects were discussed during this meeting and the discussions would be taken forward during the forthcoming India visits of Japanese Emperor and Prime Minister later this year and in early 2014, respectively, he added.

Officials, travelling with the Prime Minister on his 4-day tour to Brunei and Indonesia, said that relationships with ASEAN and other Asian countries are now moving towards more strategic partnerships as areas of cooperation have expanded from only economic issues to security, defence, intelligence sharing etc.

Even on trade, the relations would grow multi-fold after the FTA on services and investments is signed with ASEAN later this year and gets implemented by July 2014. Kantha said that ASEAN leaders now expect to strengthen the security dimension of cooperation with India.

The issue of maritime security was also discussed by various leaders in Brunei, while other areas where cooperation is expected to increase include counter terrorism measures, non traditional security threats and disaster mitigation and management.

On South China Sea dispute, India made its position clear that the freedom of navigation should be there as per international norms and an early resolution should be worked by first making early progress towards adoption of Code of Conduct norms.

Asked about a different approach taken by China on this issue, officials said India was very clear on its position irrespective of any other country's view. They said that there were certainly some differences among countries on the issue of sovereignty but India was firm on its stance that these issues should be resolved through consultations as per the international norms.

Source:- dnaindia.com

Share issue exp. remains a capital expenditure even if SEBI disapproves issue of shares; no sec. 37(

IT : Share issue expenses cannot be allowed as revenue expenditure even when shares could not be issued due to non-approval of SEBI

Motorbike co. won't be a dominant procurer of dealers in relevant market in presence of other player

Competition Act : A motorcycle company would not be a dominant procurer of service of dealers in relevant market of motorcycles when there were many motor cycle companies having dealers in that market

Jsw Steel, Marubeni Itochu Try To Reduce India’S Auto-Grade Steel Imports

10-Oct-2013

Auto-grade steel is one of the drivers of the Indian steel industry. Of late, some of India’s well-known brands in the steel sector are planning, or have already set into motion, plans to manufacture or process this type of steel, given the fact that India continues to rely, to a good measure, on imports.



Recently, one of Indian’s largest steelmakers by capacity, JSW Steel Ltd, announced it was setting up a second steel processing center with its JV partner, Tokyo-based Marubeni Itochu Steel Inc (MISI). The plant will come up in Pune in the state of Maharashtra.



The two partners already have another 50/50 joint venture, a similar steel processing center in Haryana state. The second venture is coming up in one of India’s major automobile hubs. Anyone who is in auto-grade steel has to have processing centers, and hence the decision of setting up the JV in Pune. Both JVs may be functional by early next year.



India’s automobile sector has not been faring well of late, impacting steel uptake, but the steel industry here sees this as only a temporary setback, faulting global economic conditions.



JSW Steel, too, seems unperturbed by the slowdown in the auto sector, and wants to expand its presence in the automobile manufacturing space. The new JV, to be set up at an approximate cost of $US 33 million, will have an output of 360,000 tons per year. The JSW Steel project will be divided into two equal phases of 180,000 tons per year each.



The joint venture company will be able to process flat steel products like hot-rolled, cold-rolled and coated products, much of which can be used by the automotive, white goods, construction and other value-added segments.



According to a report in Live Mint, JSW was also looking at setting up a third processing center in India’s southern state, Chennai. Such processing centers are service units set closer to factories of clients in order to help steel companies customize products such as auto body parts.



JSW Steel is the flagship company of $11 billion Indian conglomerate JSW Group. The latter has a presence in Steel, Energy, Infrastructure, Cement, and IT segments.



Indian steelmakers are seeking to compete with their foreign counterparts, and trying to cut down Indian manufacturers’ reliance on imports of auto-grade steel. India imported 7.9 million tons of steel in the fiscal year ended March 2013, of which auto-grade steel was about 3 million tons.



Tata Steel (like Tata Motors, a subsidiary of the Indian manufacturing conglomerate), has also decided to expand its portfolio by producing high-grade steel in India to replace imports. Recently, it announced plans of commissioning a continuous annealing line to produce these steels at an investment of about US$491 million.



JSW Steel’s Joint Managing Director and CFO Seshagiri Rao told Live Mint that the rapid growth of the Indian steel industry offered tremendous opportunity for supply of high-end processed steel.

Source:- agmetalminer.com

Apr-Sep Thermal Coal Imports Via 12 Major Indian Ports Up 44% On Year

10-Oct-2013

India's 12 major government owned ports handled 36.8 million mt of imported thermal coal during April-September, the first half of the 2013-14 fiscal year, up 44% year-on-year, according to the latest data from the Indian Ports Association published Wednesday.



The amount of coking coal imported into India was 16 million mt over the same period, 6% higher than the 15 million mt imported a year earlier.



Paradip port on the east coast received the highest thermal coal shipments of 12.8 million mt during fiscal H1, 47% higher than the 8.7 million mt imported a year earlier.



Visakhapatnam on the east coast received the largest volume of coking coal cargoes at around 3.53 million mt, up 2% from 3.45 million mt a year earlier.



The 12 ports are: Kolkata, Paradip, Visakhapatnam, Ennore, Chennai, VO Chidambaranar (Tuticorin), Cochin, New Mangalore, Mormugao, Mumbai, Jawaharlal Nehru Port Trust (JNPT) and Kandla.

Source:- platts.com

Palm Imports By India Seen Tumbling For Third Month On Harvest

10-Oct-2013

Palm oil imports by India, the world’s largest consumer, probably fell for the third month in September as traders trimmed purchases before the start of the main domestic oilseed harvest.



Shipments of crude palm oil and refined, bleached and deodorized palmolein fell 22 percent to 650,000 metric tons from 833,917 tons a year earlier, according to the median of estimates from five processors and brokers compiled by Bloomberg. Imports, including for industrial use, fell 12 percent to 880,000 tons, the survey showed. The Solvent Extractors’ Association of India will release data next week.



India is on the cusp of the biggest oilseed crop ever because of a potential increase in output of soybeans and peanuts, according to Atul Chaturvedi, chief executive officer of Adani Wilmar Ltd. Increased domestic supplies may cut imports and boost palm oil stockpiles in Indonesia and Malaysia, the biggest producers, amid a seasonal increase in output. World stockpiles are seen at a record by the end of 2013-2014 as production climbs, the U.S. Department of Agriculture estimates.



“We had less imports as the local crop is estimated to be good and everyone was expecting the crop arrivals to start early,” said Ashok Sethia, executive director at Sethia Oils Ltd. and a former president of the association. “Because of extended rains, harvest was delayed and the crop will arrive within the next 10 days.”

Monsoon Boost



The monsoon oilseed crop is estimated to be 23.96 million tons this year compared with 20.86 million tons a year earlier, the Agriculture Ministry said on Sept. 24. The crop makes up about 70 percent of the annual output. Farmers boosted planting after the nation got the highest rainfall since 2007 during the June-September monsoon season.



“Refined palm oil imports have come down on expectation that the import duty would be raised by the government,” Sandeep Bajoria, chief executive officer of Sunvin Group, said by phone from Mumbai.



Refined palmolein imports jumped 36 percent to 1.9 million tons in the 10 months to August this year, compared with a 7 rise in crude palm oil purchases to 4.8 million tons during the same period, according to the association. The government is considering an industry demand to revise the tariff on refined oils, Food Minister K.V. Thomas said Sept. 25. Processed oils currently attract a duty of 7.5 percent, while crude oil is taxed at 2.5 percent.

Monthly Loss



Palm for delivery in December climbed 0.9 percent to 2,391 ringgit ($749) a ton on the Malaysia Derivatives Exchange in Kuala Lumpur yesterday. Futures slid 3.5 percent in September, the biggest monthly decline since July. Inventories rose 7 percent to 1.78 million tons last month from August, the highest since May, the Malaysian Palm Oil Board yesterday.



India’s palm oil imports may increase 5 percent to 8.7 million tons in the year beginning Nov. 1 from 8.3 million tons this year, said Govindlal G. Patel, managing partner at G Patel & Nikhil Research Co., who has traded cooking oils for more than three decades. The country meets more than half its cooking oil demand through imports.



Vegetable oil purchases in the 10 months through August rose 8 percent to 8.79 million tons, association data show. Imports will surge to 10.6 million tons this year from 10.2 million tons a year earlier, Patel said.



Crude soybean oil imports probably more than doubled to 150,000 tons in September from 59,000 tons a year earlier, while sunflower oil purchases may have dropped to 50,000 tons from 80,000 tons, the survey showed.

Source:- bloomberg.com

India Plans 17.5% Duty On Wireless Equipment To Dissuade Imports

10-Oct-2013

To encourage domestic manufacturing of information technology (IT) products and reduce India’s import dependency, the government may impose customs duty up to 17.5% on certain wireless telecommunication equipment used for third and fourth generation mobile networks.



India is a signatory to the first Information Technology Agreement (ITA-1) under the World Trade Organization, under which customs duty was abolished on many technology products.



According to the finance ministry, however, the government believes certain telecommunication equipment was not covered under the agreement, and that it can levy customs duty on these.



Experts say while it may be possible for India to circumvent the ITA-1 restrictions, levying customs duty on such products will increase telecom rates for customers while doing little to encourage domestic manufacturing, at least for now. However, domestic manufacturing remains essential to curb India’s high dependence on electronics imports.



An inter-ministerial subcommittee in a meeting held last month identified telecommunication products such as dense wavelength division multiplexing, ethernet switch routers, gigabit packet optical networks and packet transport nodes for higher customs duty, according to an internal department of telecommunication (DoT) memo reviewed by Mint.



The ITA was first signed in 1996 by 29 WTO members to completely eliminate duties on IT products covered under it. India joined the group a year later but has refused to join the ongoing discussions for ITA-2, saying ITA-1 has not helped Indian manufacturing. Further, ITA-2 intends to cover non-IT products such as consumer durables as well.



In a meeting held in the finance ministry in September, the IT department suggested the imposition of 10-12% customs duty to encourage domestic manufacturing of such equipment, according to the minutes of the meeting reviewed by Mint.



The telecom department, however, had said the commitment under the WTO should not be breached and that due care should be taken in identifying products to levy duty. It also expressed concern that higher customs duty on telecom equipment would push up call rates, affecting consumers, the minutes show.



The commerce department said in the meeting that the IT products identified by the inter-ministerial sub-committee did not exist in 1997 when India signed ITA-1 and, therefore, customs duty could be imposed on these products without any fear of retaliatory measures. It suggested that duty on such products be imposed at 17.5%.



The revenue department has urged the IT department to take a legal view on the matter, according to the minutes.



Attempts to contact the telecom and IT ministries were unsuccessful.



Abhijit Das, professor and head of the Centre for WTO Studies under the Indian Institute of Foreign Trade, said the key question will be on the description and scope of the products included under ITA-1. “If the scope and description of the products do not extend to the identified products, we may impose customs duty on them,” he said.



Mohammad Chowdhury, leader-telecom, PricewaterhouseCoopers India, said levying customs duty on the products identified could result in higher tariffs for telecom customers.



“Indian operators typically operate on very thin margins, leaving very little room to absorb additional costs. While they may be able to insulate themselves from short-term increases in costs, like the rupee depreciation, longer-term costs like increased customs duty could have an impact (on rates), depending on the specific equipment and the proportion of the total capex that is being used for that equipment,” he said.



Chowdhury added that the manufacturing of such products in India may not be possible due to high capital investment requirements and the need for the technology transfer, among other reasons. “But domestic assembly is possible, as could be seen with the auto industry and mobile handsets that are assembled in India,” he added.



Currently, India imports $33 billion of electronic goods, behind only oil and gold. India’s electronics import bill is estimated to touch $320 billion by 2020, possibly exceeding that of crude oil, if domestic manufacturing is not encouraged at this stage, Kapil Sibal, minister of communications and information technology, said in January. Domestic demand for electronics is estimated to touch $400 billion by 2020.



According to US-based Ovum Research, the requirement of 3G (third-generation network) equipment is expected to be worth Rs.10,127 crore, and of 4G equipment Rs.12,659 crore in 2015-16. The demand for telecom equipment in India was Rs.76,940 crore in 2012-13.

The government has over the past two years introduced several measures to boost electronic hardware manufacturing under the National Electronics Policy 2011. The policy includes sops for setting up semiconductor fabrication units and industrial clusters for manufacturing electronics, apart from specifying standards for electronics imports to curb the entry of spurious goods into the country.



The cabinet last month gave in-principle approval to a proposal for setting up two semiconductor manufacturing facilities to reduce India’s dependence on import of electronic products, especially electronic chips. The investment envisaged for the two units is around Rs.25,000 crore and the level of government support for these units will be decided through negotiations with chip makers.

Source:- livemint.com

Gold Rebounds On Festive Demand; Silver Remains Weak

10-Oct-2013

Gold prices rebounded by Rs 190 to Rs 31,000 per ten grams in the national capital on Thursday on pick up in festive season demand.



On the other hand, silver dropped further by Rs 620 to Rs 49,050 per kg on lack of buying interest.



Traders said pick up in festive season and wedding demand amid a weak rupee against the dollar mainly led the recovery in gold prices.



Import of the dollar-priced gold became costlier as rupee fell against dollar. The local currency fell 25 paise to 62.22 per dollar at the outset in the forex market.



They said silver fell further on stocking selling against reduced offtake by industrial units and coin makers.



Gold of 99.9 and 99.5 per cent purity shot up by Rs 190 each to Rs 31,000 and Rs 30,800 per ten grams, respectively. It had lost Rs 120 on October 9. Sovereign added Rs 100 to Rs 25,200 per piece of eight gram.



However, silver ready dropped by Rs 620 to Rs 49,050 per kg and weekly-based delivery by Rs 650 to Rs 48,900 per kg after losing Rs 280 in the previous session.



Silver coins remained steady at Rs 85,000 for buying and Rs 86,000 for selling of 100 pieces.

Source:- timesofindia.indiatimes.com

Stable Rupee Boosts Rbi Confidence

The 50 basis point cut in the marginal standing facility points to a more confident Reserve Bank of India, which believes that the rupee has stabilised — at least in the near term.



This was well reflected when RBI governor Raghuram Rajan on Tuesday indicated that even the $70 billion target for the current account deficit was quite achievable thanks to the stable rupee. More significantly, the RBI and the finance ministry are confident the deficit will be financed without drawing down forex reserves this year. Part of the confidence comes because rupee has managed to claw back to 61.39 against the US dollar on Thursday, a gain of over 10 per cent since it hit a record low of 68.85 in late August. The other is the easing of liquidity. The cut in MSF rates — the second such move in less than a month, along with the decision to issue term repos of 7-day and 14-day tenor will give space to the banking system that will not only be welcome during the festive season but will also, to some extent, help the finance ministry's agenda of reviving growth by providing cheaper credit to borrowers. RBI data points that cash-starved banks have been borrowing steadily from the RBI's MSF window. On Monday, they borrowed Rs 67,821 crore from the MSF window for a period of one day, while on October 4 they had taken Rs 38,718 crore for a period of three days using the same facility.



What Rajan is doing is to cut the noise in the monetary system to focus on inflation targeting. So it's possible the central bank in its second quarter monetary policy review on October 29, may push the repo rate nearer to MSF. On Monday the factory production numbers will come while the US shutdown could continue to be a key concern for Rajan, the man whose preference for Chicago School's anti-inflation stance is clear. Surabhi is a special correspondent based in New Delhi

Source:- indianexpress.com

Avoid impulsive shopping to stay financially fit this festive season

Impulsive shoppers can bank on slightly cheaper credit to fund their coveted objects this festive season. Prodded by the finance minister, state-owned banks have started reducing interest rates on automobile and consumer durable loans since last week.

State Bank of India, the largest bank in the country, on Wednesday slashed interest rates on car loans by 20 basis points. It has also cut the processing fee. SBI is the fourth bank after PNB, OBC and IDBI Bank to marginally lower interest rates for loans to buy automobiles and consumer durables. PSU banks have started cutting rates a week after the government announced its intention to pump in funds to banks so that they can lower rates to boost demand in certain sectors.

Sure, the interest rate cut is not much to speak about, but the hoopla surrounding festive offers still may land some impulsive shoppers in trouble, fear financial advisors.

"It is not going to make a significant impact on people's behaviour, because there is no dramatic change in interest rates. The 20-25-bps drop in rates will translate into a saving of only a few hundred rupees in EMI," says Suresh Sadagopan, principal planner, Ladder7 Financial Advisories.

"But it could prompt some people who were waiting to make some purchase for some time. They would see the advertisement or read the news and may decide to go for it," he adds. Kartik Jhaveri, director, Transcend Consulting, also doesn't believe that the move is going to make any significant change in buying decisions this season.

"Even in the absence of 0% finance schemes, customers have many options before them if they want to make impulsive purchases. For example, credit card firms offer the facility of paying in installments on big purchases," says Jhaveri. He believes that 0% finance schemes-banned by RBI recently- had much more influence on shoppers.

Planning for Goals

Jhaveri says the most modest purchases during the festive season can be taken care of, if the person is not a spendthrift. "We always have some 10-15% money marked for miscellaneous expenses. If the person doesn't blow up this entire money every month, he may have enough to take care of a purchase of a mobile phone worth 40,000 or a TV for 50,000," says Jhaveri. However, he says one can always plan for holidays and big shopping during festivals in a systematic fashion. "These expenses don't come every month. So, you can always set aside a certain amount every month in a liquid fund. If you do it in a systematic manner, you would have enough to take care of expenses," he adds.

However, financial planners insist that it is always better to plan for big-ticket items as it help individuals meet their various life goals in a systematic manner. "Some people really have a tendency for impulsive spending, and it seriously hampers their financial health. Such people should always be careful during festive season discounts," says a wealth manager, who doesn't want to be named. He shares the example of a client, who would land up in his office every three months with some financial trouble. "One day it would be an unplanned holiday abroad or it could be some huge purchase on another occasion. It took a while for the person to realise that his impulsive decisions have serious financial consequences. It took a while for him to get used to the idea that every big expense needs proper planning," he adds.

Financial planner says it is always better to plan for an expense of over Rs 50,000. For example, you want to upgrade your existing TV. You know that the one you want to buy would cost around a lakh. Instead of opting for loan immediately, you can postpone the purchase and start saving for it in the mean time. For example, if you can save Rs 20,000 in a month, you will be able to make the purchase within five months. If you find it difficult to save that much, take a look at your expenses and try to cut down on unnecessary ones, say experts.

NR can claim benefit of first proviso to Sec. 48 along with Sec. 112 concessional rate; HC quashes C

IT/ILT : Proviso to section 112(1) doesn't deny benefit of lower tax rate of 10% on long-term capital gains from sale of listed securities to a non-resident investor availing benefit of exchange rate neutralization under first proviso to section 48. The said benefit of lower tax rate of 10% can't be denied on the ground that indexation benefit under 2nd proviso is not applicable. It is incorrect to say that 10% rate under proviso to section 112(1) applies only where indexation benefit under 2nd

Ministry issues clarifications to facilitate better understanding of amended SEZ Rules, 2013

SEZ : Clarifications on Implementation of The Special Economic Zones (Amendment) Rules, 2013

For TP study, comparable should have simple transactions and reliable data

IT/ILT : For analysing international transactions, less complex party to controlled transactions should be tested party, in respect of which more reliabled data is available

Guidelines on reporting of Key Persons; IRDA widens definition of Key Persons, issues forms for repo

INSURANCE : Guidelines on Reporting of Key Persons

SC: No income accrues on duty free import entitlements until actual import, no tax on hypothetical i

IT : SC tells Revenue to implement its litigation policy a little more practically and a a little more seriously

Hiring of cabs is liable to service-tax under 'Rent-a-Cab' category

ST: Hiring out motor cabs/maxi cabs at a price inclusive of charges for driver, fuel and maintenance charged on monthly basis and/or per Km. basis amounts to Rent-a-cab Services and is liable to service tax

SetCom Justified in estimating undisclosed income of builder as it failed to produce details of book

IT: Settlement Commission was perfectly justified in estimating undisclosed income of a builder and constructor when relevant details of on money receipts against booking of flats were not produced

Meal coupons availed by employees for usage outside office are neither perquisites nor liable for TD

IT: Assessee was not required to deduct tax at source in respect of payments made to its employees towards medical reimbursement and leave travel allowance

Filing online PF account transfer claims become a reality

NEW DELHI: The filing of online provident fund account transfer claims on changing jobs for subscribers of the retirement fund body EPFO has become a reality now.

The facility has been made available as the Employees' Provident Fund Organisation (EPFO) has launched its online transfer claim portal (OTCP) on October 2, 2013, as per an office circular said.

According to the circular to its field staff, EPFO's Central Provident Fund Commissioner K K Jalan has said, "..handling of transfer cases generates maximum bad publicity and it is expected that this issue shall be resolved after OTCP is made fully functional".

Jalan has also directed that after October 31, there shall be no physical movement of paper (either claims or Annexure "K") in transferring member accounts from one office to another.

Annexure K contains details of service period with an employer and the amount of funds deposited in the pension fund account of the subscribers who seek transfer of PF accounts.

The facility of online transfer of provident fund accounts will reduce the work load of the body substantially as over 13 lakh applicants files such claims every year.

EPFO has set up a central clearance house for this purpose and the body envisages to reduce the time for transfer of PF accounts to three days through the online service.

The EPFO started registering digital signatures of companies from July 25, a prerequisite for the facility.

At present over 30,000 employers or establishments have already registered their digital signatures with EPFO.

According to the information available, 80 per cent of the firms employing more than 500 workers have already registered their digital signatures with EPFO.

EPFO officials say that job changes are more frequent in big firms employing more than 500 workers, especially in sectors such as information technology. The body managed PF accounts of about 6.9 lakh establishments in 2011-12.

The officials say it's easier for companies in sectors such as IT to register digital signatures as they already maintain them to comply with Ministry of Corporate Affairs requirements.

During 2012-13, the EPFO settled 107.62 lakh claims, 88 per cent of which were processed within 30 days, as prescribed by the body's citizen charter.

The EPFO expects 1.2 crore claims in 2013-14, including around 13 lakh PF transfer claims, largely from tech-savvy companies from sectors like IT.

Instruction on minimum tax effect for filing of appeal won't apply on appeals filed before such inst

IT : Where assessee filed appeal prior to issuance of relevant instruction stipulating limit of tax effect required for filing appeal, but appeal got listed only after issuance of said instruction, said limit would not apply to appeal

No violation of Regulation 7 of Takeover Regulations as it came into force after alleged operations

SEBI: A broker could not be held guilty of violating substantive provisions of regulation 7 of Takeover Regulations which came into force on a later date when alleged violations took place

Delay in filing of return to claim sec. 80-IB relief can only be condoned by CBDT, says HC

IT: Delay in filing of return to claim section 80-IB relief can only be condoned by CBDT

Notification No 45 (RE-2013) / 2009-2014 dated 09-10-2013

Government of India

Ministry of Commerce & Industry

Department of Commerce

Udyog Bhawan

Notification No 45 (RE – 2013)/2009-2014

New Delhi, Dated : 9^th October, 2013

Subject: Amendment in Notification No 22(RE-2012)/2009-14 dated 18^th June, 2013 relating to export of edible oils.

S.O.(E) In exercise of the powers conferred by Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 (No.22 of 1992) read with Para 1.3 of the Foreign Trade Policy, 2009-2014 (as amended from time to time), the Central Government hereby amends with immediate effect serial no 4 of Notification No 22(RE-2012)/2009-14 dated 18^th June 2013 relating to Sl. No. 92 of Schedule 2 of ITC(HS) Classification of Export & Import Items.

2. Export of edible oils in branded consumer packs of upto 5 Kgs is permitted with a Minimum Export Price of USD 1400 per MT.


3. Effect of this notification:
   

   MEP on export of edible oils in branded consumer packs of upto 5 Kgs has been reduced to USD 1400 per MT. Earlier it was USD 1500 per MT.

   
   

(Anup K. Pujari)

Director General of Foreign Trade

E-mail: dgft[at]nic[dot]in

(Issued from F.No.01/91/180/774/AM10/Export Cell)

No sec. 68 addition merely on basis of partner's statement which was subsequently retracted HC

IT: Addition for 'on money receipts' by assessee construction firm, only on basis of partner's statement which was later retracted, was not sustainable