Sec. 80G approval withdrawn as sum collected by trust in guise of charity was diverted in commercial

IT : Where under guise of carrying out charitable activities after obtaining exemption under section 80G, trust had, in fact, diverted a major part of donations received by it in constructing a shopping complex and amount spent for charitable purpose was very negligible, approval under section 80G(5) was rightly denied to assessee

No tax on income from operation of ships in International waters under India-Denmark DTAA

IT/ILT: Where receipts pertaining to four ships operating in international traffic fell within India - Denmark DTAA, same would not be taxable under Indian tax law

Inevitable TDS obligation even if deduction for impugned exp. is not claimed, Cochin ITAT says

IT: Assessee is liable to deduct tax at source on interest payments, even if it has not claimed same as deduction while computing its total income

Exports Grow Fastest In Two Years

Exports clocked their fastest pace of growth in two years, rising 13.5% to $27.3 billion during October, as demand for goods picked up in the US and Europe and Indian exporters gained from a sharp depreciation of the Indian rupee.



Gold and silver imports fell almost 80% to around $1.4 billion compared to $6.9 billion in October 2012, resulting in trade deficit narrowing to around $10.5 billion, nearly half the level seen a year ago. Oil imports too provided some comfort, rising 1.7% to $15 billion.



Trade deficit has been a major policy headache for the government and investors have raised concerns over financing the huge gap. In recent months, however, with a fall in imports and resurgence in exports, trade deficit is seen to be more manageable, prompting finance minister P Chidambaram to lower the annual estimate for current account deficit to $60 billion or lower, compared to $70 billion projected earlier.

Source:- timesofindia.indiatimes.com

India Sugar Export Sales Near 500,000 Tonnes

11-Nov-2013

India has sealed deals for the export of almost 500,000 tonnes of sugar from its new 2013/14 crop with shipment to be made by the end of January, said M. G. Joshi, managing director of the National Federation of Cooperative Sugar Factories (NFCSF).



He added that the country's aim is to export 3 million tonnes of domestically produced sugar in 2013/14 and advance sales of nearly half a mln tonnes that have already been done.

Source:- blackseagrain.net

India's Cotton Exports May Drop 9% This Yr: Usda

11-Nov-2013

India's cotton exports are expected to drop by 9 percent to 9 million bales in the 2013-14 marketing year on sluggish demand and high prices compared to the global market, a report said.



India had shipped 9.9 million bales in the 2012-13 marketing year (August-July), it added. One bale contains 170 kg of cotton.



"The 2013-14 export estimate is unchanged at 9 million bales. Indian prices have been high relative to international prices over the past few months... Demand from China has also been weak. As reported previously, much will depend on China?s cotton policies," the US Department of Agriculture (USDA) said in its latest report.



However, if India resumes its position as one of the more competitively-priced cotton origins, the pace of exports could accelerate to the extent that there is demand, it noted.



In the last three months, 4,92,565 bales of cotton has been exported, the report added.



On the price front, the USDA said domestic rates have begun to drop with the increase in the pace of arrivals.



The country's cotton output is estimated to be a record 37.2 million bales this year, as against the consumption of 29.5 million bales for the same period, the USDA said.



The report mentioned that the Indian government is working to improve cotton data collection and has issued several notices over the past year concerning mandatory reporting requirements.

Source:- zeenews.india.com

Supreme Court Lets Sales Of Iron Ore Resume In Goa

11-Nov-2013

The Supreme Court gave the go-ahead on Monday for the auction of around 11.46 million tonnes of iron ore already mined in Goa, potentially doubling the country's exports this year to top market China if overseas sales are allowed.



The court also said it would set up a panel to decide on a cap for Goa's iron ore output and this should submit an interim report by February 15, 2014, leaving mining still on hold.



"We are setting up a six-member expert committee to study the cap on production based on carrying capacity of roads and such," Justice A.K. Patnaik said in the Supreme Court.



He did not specify whether the iron ore could be exported after auction. The Supreme Court imposed a ban on exports and production in Goa last year in a crackdown on illegal mining.



The move to allow the sale of mined ore, and the potential export of the same, is unlikely to have any significant impact on the global iron ore supply chain and prices, with the mining ban in Goa remaining for now.



While analysts expect a gradual recovery in Indian exports over the next two years, the pace is likely to be modest and far from the record high of more than 117 million tonnes set in the fiscal year through March 2010.



Spot iron ore prices have fallen about 15 percent from this year's peak of near $160 a tonne as a slower economy curbs Chinese demand while top miners Rio Tinto (RIO.AX) (RIO.L) and BHP Billiton (BHP.AX) (BLT.L) continue to ramp up output.



India used to be the world's third-largest exporter of iron ore, shipping out ore worth more than $7 billion per year, with much of that from Goa state. But restrictions in Goa and neighbouring Karnataka have slashed output and exports.



India's shipments to China have slowed to a trickle at just over 8 million tonnes from January to September, down 75 percent from a year before.



Most of Goa's iron ore goes to China, fetching about $75 per tonne for low-grade ore of less than 52 percent iron content. But domestic steelmakers are also eager for supplies.



Sesa Goa Ltd (SESA.NS), India's top private-sector mining company and a unit of London-listed Vedanta Resources Plc (VED.L), would be the biggest beneficiary if mining resumed in Goa, as it is the largest producer in the state.

Source:- in.reuters.com

Mideast, Africa Drug Importers Seek Discounts After Price Cuts In India

Many small and medium drugmakers are under pressure from buyers in key foreign markets to cut prices, in line with government-mandated price reductions in India.



In May, the government's Drug Price Control Order set price caps on 151 of 348 "essential" medicines amid resistance from the industry.



Now importers in the Gulf region as well as some African nations are demanding that they be given drugs at reduced prices too. As a result, many small and medium Indian drugmakers are finding it difficult to execute export orders. India exported medicines worth $1 billion (about Rs 6,300 crore) to the Gulf and over $2.6 billion (Rs 16,400 crore) to the African region in 2012-13.



The total value of drugs exported during the year was $14.5 billion (Rs 91,600 crore). "We can understand the compulsions of the Indian government to reduce medicine prices for the domestic consumers, but the fact is that it is affecting our drug exports," said PV Appaji, director-general of Pharmaceuticals Export Promotion Council (Pharmexcil).



Rajesh Madan, executive director of Delhi-based Medicamen Biotech, said clients in Saudi Arabia and Ethiopia are asking that they be given discounts for drugs such as Amoxicillin, Ampicillin, and Ibuprofen. "They are demanding that the export prices should not be more than what they are in India,'" he said.



This demand would be difficult for Indian drug companies to meet as there are more compliance and packaging requirements for exports. Under the new DPCO, prices of essential drugs have gone down by as much as 60%.



While large Indian companies with deep pockets have the ability to cut prices, smaller manufacturers are finding it difficult to meet the demands. "We are currently unable to quantify the exact impact of price revision on our bottom line... We urge the government to initiate measures to safeguard Indian pharma exports," said BR Sikri, managing director of Next Wave India, a Himachal Pradeshbased drug manufacturer.



A March report by Alpen Capital on the Gulf pharmaceutical industry estimated the total market size in the region at $8.5 billion (Rs 53,700 crore) in 2012 with Saudi Arabia having a lion's share at about 59%, followed by United Arab Emirates at over 18%.



"The demand from the Gulf Cooperation Council to reduce price is probably the consequence of the drug price standardisation mechanism that is to be introduced in GCC countries by 2014," said Utkarsh Palnitkar, head of pharma and life sciences division at KPMG India. "The report by the GCC essentially claims that the mechanism will standardise drug import prices across the region," he added.



A senior official in the union commerce ministry, who did not want to be identified, said the government is considering measures to safeguard Indian drug exports. "Commerce minister Anand Sharma has brought this issue to the notice of a Group of Ministers."



Next Wave's Sikri said the government should reach out to the drug importing nations and explain the price cuts to them. It should also point out why it was not possible for pharma companies to reduce prices for exports. Medicamen's Madan feared that his could set off a trend. "Not only Gulf countries, but I am also receiving requests for price cuts from certain Latin American nations, such as Brazil."

Source:- economictimes.indiatimes.com

India’S Plans For Gas Export To Pakistan Runs Into Price Issue Wall

With India expressing its willingness to export gas to Pakistan and the state-run GAIL India terming it as a feasible project, Pakistan has asked India to re-consider the high gas price it is asking while India has sought sovereign payment guarantees before entering into any contract.

Officials in the Petroleum Ministry said that while Pakistan is ready for import of gas from India through a 110-km pipeline, it has asked India to re-consider the price of gas. India has expressed its willingness to export 400 million cubic feet of gas per day to Pakistan.

Currently, things are on the backburner in view of the freeze in India-Pakistan relations due to recent incidents on the LoC.

“Negotiations on various commercial aspects of the gas export as well as pricing of gas are being negotiated by both sides. Hopefully, things would be resolved soon,” a senior Petroleum Ministry official remarked.

LNG imports into India are currently in the range of $13-14 per million British thermal units and after including customs or import duty, pipeline transportation charges and local taxes, the delivered price will be close to $21. LNG would be gasified by the Indian side as Pakistan does not have an LNG import facility.

For its part, India has sought sovereign payment guarantees from Pakistan before signing an export contract. The pipeline would start from Jalandhar in Punjab leading through Attari. “We want Pakistan to provide payment guarantees before GAIL India enters into a gas supply contract with any Pakistani entity. We want sureties for three months payment and advance termination commitments,” the official added.

Both India and Pakistan have till date held five rounds of negotiations and it has been found technically feasible to export gas into Lahore.

GAIL India officials said gas in its liquid form (liquefied natural gas, LNG) will be imported through terminals in Maharashtra or Gujarat and then moved through GAIL’s existing pipeline network till Jalandhar.

Pakistan is faced with a serious energy deficiency and is keen on importing gas from India to meet its rising energy needs. This deal has become crucial as there is uncertainty over the completion of the Iran-Pakistan gas pipeline due to U.S. pressure. Islamabad plans to take 1-1.5 million tonnes of LNG. Pakistan, with a total electricity generation capacity of about 20,000 MW, faces a huge power deficit as well.

The pipeline project is also looked upon as a feasibility study for the Turkmenistan-Afghanistan-Pakistan-India pipeline through which both Pakistan and India propose to import natural gas from the Central Asian nation.

Source:- thehindu.com

Analysts Happy With Fall In Imports By India, Growing Exports

11-Nov-2013

India’s exports kept up the pace for the fourth straight month by expanding at 13.5% -a 24 month high. Imports too declined in Oct’13, though the pace slowed down a little. Non-oil imports declined by 22.8%, with oil imports posting a marginal pick-up in growth. Cumulative trade balance was at $90.7 billion during Apr-Oct’13.



"The good thing is that gold imports did not show a significant turnaround in Oct’13, though on a sequential basis such imported jumped by 71.3%. Also, India has gained in market share in apparel exports to USA in current fiscal, an encouraging development," said State Bank of India in a note.



India’s exports registered a growth of 13.5% in Oct’13 to $27. 3 billion from $24. 0 billion in corresponding month of last year. This is the fourth straight month of double-digit growth in exports and pace of growth in Oct’13 is the highest in last 24 months. Cumulative value of exports for the first seven months of FY 14 (Apr-Oct) were valued at $179. 4 billion as against $138. 7 billion, registering a year on year growth of 6.3%.



If Oct’12 export figures were not revised, export growth would have been lower at 9.5%.



Imports during Oct’13 were valued at $37.8 billion, a negative growth of 14.5% over the level of imports valued at $44. 2 billion in Oct’12. Oil imports in Oct’13 were valued at $15. 2 billion, 1.7% higher than $15. 0 billion in the corresponding period last year. Provisional data showed that gold import increased to $1.4 billion in Oct’13 from unrevised $800 million a month earlier, a growth of 71%. However, the good thing is that Oct’13 gold import is still 80% lower in value terms against the gold import of the same period last year.



"We continue to maintain a trade deficit at $170 billion for FY14, with a CAD at $55 billion / 3. 1% of GDP, with downside," it added.



"A significant decline in gold imports and weak capital and consumption goods’ imports, due to subdued domestic demand, will help lower growth in non-oil imports during rest of this year," predicted CRISIL Research. "Improvement in exports due to a weak rupee, low base and improved global demand, will also aid in lowering trade deficit in 2013-14. Lower merchandise trade deficit, along with a healthy growth in IT/ITes exports, create downside to our forecast of current account deficit at 3.9 per cent of GDP for 2013-14," it said.



"We expect the current account deficit to moderate to USD 54bn in FY14 (year ending March 2014) from USD 88.2bn in FY13 due to better exports, weak domestic demand and a policy-driven reduction in gold imports," said brokerage Nomura. "Large inflows under the FCNR(B) deposit scheme and the delayed QE taper have led to a surge in capital inflows since September. However, with the FCNR (B) deposit window to close soon (by end-November), oil marketing companies’ demand gradually being shifted back to the market and changing expectations around the US QE taper (our US economists now assign a higher probability to a taper in January 2014 relative to March 2014), financing may remain a challenge," it added.



“The EXIM Trade Data released today reaffirmed the reversal of negativity," said Sanjay Budhia, Chairman of CII's National Committee on Exports & Imports. "Exports since last 3 months, from August , September and October 2013, have come to positive growth trajectory due to stability in the global market, particularly with our large trading partners like US and Europe.



"Also the timely Intervention by the Commerce Ministry in terms of expanding Focus Product and Focus Market Scheme have helped Indian Exporters to withstand the vagaries of tough competition. CII strongly recommends restoration of Duty Drawback Rates which have been reduced drastically last month. This will further help in gaining and maintaining India’s Share in Global Market," he added.



SBI noted that the incremental share of price sensitive items in Indian exports has been higher in current fiscal, though the pace has slowed down a bit in recent months.



The bank's research team has an export target of $320 billion for this year, nearly matching the Government target.



"In principle, coming festive season would further boost export demand in the developed economies aiding trade deficit to narrow down to a comfortable zone," it said.



However, cumulative oil imports in Apr-Oct FY14 were $98. 1 billion, 3.3% higher than the oil imports of the corresponding period last year. Meanwhile, non-oil imports contracted for the fifth consecutive month in row to $22.6 billion at 22.8% lower compare to Oct’12. H owever, tracking the trade deficit on a month on month basis, trade deficit increased in Oct’13 after having declined to a two-and-a-half-year low the previous month.



The deficit widened to $10.6 billion from $6.8 billion in Sep’13. A year earlier, the gap was $20.2 billion. Widening trade deficit in Oct’13 was aided by higher oil and gold demand. India’s share in the US textile import has remained promising. In the first eight months of 2013 (Jan- Aug) , India’s share has increased to 6.2% f rom 5.8% in 2012 and 5.9% in 2011. Further recovery in the US would add to the domestic export revenue.



"Imports contracted 14.5% y-o-y in October compared with a decline of 18.1% in September, which reflects continued weakness in domestic demand.Overall, global demand is improving, but higher imports (of oil, gold and others) have led to the deterioration in the trade deficit. The rise in imports is due to seasonality, as imports tend to rise ahead of the festival season. On a seasonally adjusted basis, we estimate that the trade deficit narrowed to USD7.3bn in October from USD7.5bn in September," Nomura said.

Source:- rtn.asia

Gold, Silver Imports Up 62.5% To $1.3 Bn In October

After recording significant decline in September, gold and silver imports jumped by 62.5 per cent to $1.3 billion in October this year.



In September the imports fell by over 80 per cent year-on-year to $0.8 billion. In October 2012, the imports stood at $6.8 billion.



The RBI's 80:20 scheme for gold imports had left many confused, leading to imports being held up at customs.



"Gold and silver imports in October was high due to the confusion over 80:20 issue," Commerce Secretary S R Rao said.



During the first seven months of this fiscal, however, gold and silver imports declined by 12.86 per cent to $24 billion from $28 billion in the same period last year.



The inbound shipments grew mainly due to the festival season and clearing of air on a RBI norm for gold imports.



Increase in the gold and silver imports have pushed the trade deficit to $10.5 billion in October, the second lowest during the year, from $6.76 billion in September 2013. But the trade gap is low as compared to October 2012 when it was $20.2 billion.



The current account deficit (CAD) touched a historic high of 4.8 per cent of GDP in the last fiscal. The rise in CAD was mainly attributed to high imports of gold and petroleum products.



The high level of CAD puts pressure on the rupee, which has depreciated by about 15 per cent since April 30, exposing the economy to balance of payments problems.



The government had recently hiked import duty on gold for the third time in a year to 10 per cent from 8 per cent and also banned imports of gold coins and medallions.



Further, the RBI also restricted import of gold to a consignment basis by banks.



India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry. Import of the precious metal stood at 845 tonnes in 2012-13.

Source:- economictimes.indiatimes.com

India Assures Japan To Augment Port Infrastructure

11-Nov-2013

India today assured Japan to augment its port infrastructure, particularly at Ennore and Chennai to facilitate import of automobile components and cars from Japan and at the same time, evinced interest in seeking assistance for its port projects.



The development comes in the wake of Shipping Minister G K Vasan leading a delegation to Japan, which met Minister of Land, Infrastructure, Transport and Tourism, Japan, Akihiro Ohta.



"Vasan discussed several issues relating to logistics, infrastructure and development of port sector in India. He explained the developments that were taking place in India in the ports sector and assured Ohta that concerns regarding infrastructure and connectivity of ports are being addressed expeditiously, " an official statement said here.



Various Japanese Companies have been evincing a lot of interest in enhancing their use of the Ennore Port and Chennai ports.



Assuring to further develop these ports, Vasan said: "Ports in Ennore and Chennai are catering to Japanese car exporters like Toyota and Nissan who have exported about 42,000 and 3 lakh cars, respectively."



Vasan also wanted to know the "possibility of JICA (Japan International Cooperation Agency) assistance to VOC port at Thoothukudi for the upcoming Outer Harbour Project, while thanking the Japanese government for its support to infrastructure projects.



Outer Harbor Project of VO Chidambaranar port was announced in the Budget at an estimated cost of Rs 7,500 crore to be taken up in phases for completion by 2021.



In the phase-I of the project, five berths are proposed to be constructed at an estimated cost of Rs 5,421 crore, resulting in capacity addition of 43.30 million tonne per annum.



With the completion of this project VOC Port will move closer to fulfilling its goal of becoming a hub port.



"Ohta, while acknowledging the existing cordial relationship between India and Japan, assured that Japan will carry forward the momentum. He...expressed Japan's interest in shipbuilding and recycling industries in India," the statement said.



Both the Ministers stressed the importance of a long-term understanding and cooperation in the maritime sector as part of the overall robust bilateral relations, it said.



Japanese automobile manufacturing companies like Toyota, Mitsubushi, IsuzuBSE -0.80 %, Nissan and Toshiba have been using Chennai Port for importing automobile components for their factories located in Chennai.

Source:- economictimes.indiatimes.com

Transferee to prove his title on pledges shares to get them registered in his name if they are free

CL : Where transferee got shares by way of pledge and company refused to transfer shares on ground that order of attachment of shares which were standing in name of transferor had been received, transferee should prove its title based on pledge before DRT and once shares were made free from attachment company would required to register transfer of shares

Valuation method consistently followed couldn’t be rejected all of a sudden without cogent reasons

IT : Where assessee's method of extracting yield of oil from groundnut seeds was consistently accepted in past, in absence of bringing on record any cogent reasons for rejecting same, addition made by Assessing Officer merely on basis of its own estimation of production, was not sustainable

HC upheld ad hoc additions as assessee failed to explain causes for falling rate of gross profit

IT: Where consumption decreased and wastage increased and there was no explanation for fall in gross profit rate, ad hoc addition was sustainable

Mere denial of sec. 10B relief doesn’t invoke concealment penalty, rules HC

IT: Assessee was not liable for penalty merely because claim for deduction was denied

Delay in passing review order by Committee of Commissioners couldn’t be condoned

ST: If review order of Committee of Commissioners/Chief Commissioners, directing adjudicating authority to file appeal, is passed beyond prescribed period, such delay in passing of review order cannot be condoned and any appeal filed in pursuance thereof is not maintainable