CL: Where petition filed under section 397 made only directorial complaint and did not allege any act of oppression and mismanagement which infringe petitioner's right as shareholder, same would be liable to be rejected under Order 7, rule 11(a) of CPC
Monday, 25 November 2013
Assistance in financial and risk management decision is a ‘technical service’; FTS under India-US DT
IT/ILT : Where assessee-company was making use of advice, input experience, experimentation and assistance rendered by USA based company in its decision making process of financial and risk management, etc., services so rendered being technical in nature as mentioned in clause 4(b) of article 12 of India-US DTAA, assessee was liable to deduct tax at source while making payments for said services
Charge sheet against an IRS for dishonest deeds not maintainable if it hasn’t been approved by Finan
Service Matter: Where Additional Commissioner of Income-tax was served with a charge sheet alleging that he failed to maintain integrity and exhibited a conduct which was unbecoming of a Government servant, charge sheet having not been approved by disciplinary authority, i.e., Finance Minister, was non est in eye of law
Exports May Get Priority Lending Status Shortly, Says Fieo Chief
Exports sector may soon get the priority sector lending status from the lenders as the discussions at the finance ministry and Reserve Bank of India (RBI) on the issue are now at an advanced stage, says top official.
Disclosing this to ET, the president of Federation of Indian Export Organizations (FIEO) M. Rafeeque Ahmed said the Federation was requesting the government to fix at least 5% in the current priority sector cap of 40% for exports.
"The idea is to ensure credit flows to the exports sector. Banks will be compelled to lend to exporters with priority sector lending status. I hope the lenders will give priority sector status to exports and I am sure something will come up in the next couple of months," said Rafeeque.
He said a high-level delegation of exporters led by FIEO was planning to meet the RBI Governor this month-end to discuss the issue. Rafeeque was in Hyderabad on Monday visiting the Andhra Pradesh Trade Promotion Corporation (APTPC), where the Corporation's managing director Sadhu Sundar made a presentation on the export performance of Andhra Pradesh. The APTPC MD said the state expects to report a growth of 16% this fiscal over last year's exports of Rs 1.33 lakh crore.
Rafeeque said the Indian merchandise exports during the second half were expected to see a growth of 12-15%. "The government of India has fixed a target of $325 billion exports for this year. We are sure that this year we will be able to make that number and even exceed it. We see it between $330-350 billion."
The FIEO president said all the items in the export basket were doing well now. In the beginning of the year, gems and jewellery, oil, electronics and engineering goods suffered slowdown but they picked up momentum subsequently. Textiles, pharmaceuticals and leather were doing very good among the better performing sectors.
"The US economy has stabilized and the confidence level is very good. That is what is giving us a biggest growth. And also lately, the European Union has also stabilized. While emerging markets such as Latin America and others are also providing big opportunities, the only worrying thing for us now is China that is not picking up well. Our imports from China are much higher than our exports," said Rafeeque Ahmed.
The FIEO president said the dollar to rupee at 60-62 would help Indian exporters to compete better in the market. The Federation expects the dollar to rupee will hover at around 62-64 over the next 3-4 months.
Source:- economictimes.indiatimes.com
Belgium Raises Issue Of 2 Percent Duty On Diamond Imports By India
Belgium today raised the issue of imposition of 2 per cent duty on imports of polished and cut diamonds by India during a meeting with Commerce Minister Anand Sharma.
Diamonds account for a large part of trade between India and Belgium.
The diamond duty issue was discussed at the meeting of Sharma with Princess Astrid of Belgium and its Deputy Prime Minister Didier Reynders here.
According to an official, Sharma conveyed to the visiting side that the measure was necessitated due to economic reasons and the tax is applicable for imports from all the countries - not targeted specifically at diamond imports from Belgium.
"The Belgian side discussed the consequences of the recent special import tax of 2 per cent re-instituted by India on exports of polished and cut diamonds," the official said.
Of the world's polished diamond market, India's share is 60 per cent in terms of value, 85 per cent in terms of volume and 92 per cent in terms of pieces.
Eleven out of every 12 cut and polished diamond set in jewellery worldwide are processed in India. The cutting and polishing of diamond employs a million people in the country.
Antwerp in Belgium on the other hand is the key destination for rough diamonds.
More than 80 per cent of the world's rough diamond volume is traded through Antwerp. About 40 per cent of the world's natural industrial diamonds pass through the city.
Sharma also conveyed satisfaction over the signing of MoU between the two sides for exchange of information/data sharing on Kimberley Process.
KP is a joint initiative by governments, industry and the civil society to stem the flow of conflict diamonds - rough diamonds used by rebel movements to finance wars against legitimate governments.
Source:- economictimes.indiatimes.com
Hc Stays Govt Order Banning Potato Export
The Calcutta High Court Monday stayed a notification issued by the West Bengal government, which banned inter-state trading of potato. Delivering the order Justice Sanjib Banerjee also directed the state to file its reply within next three days. The case will come up for resumed hearing on December 3.
The state government notification dated October 23 stated that no West Bengal trader would be allowed to export potato to other states. The traders were told to take permission from the government at least seven days before exporting potato to other states.
The petition moved by Madhusudhan Sen, a potato merchant, alleged that the notification was illegal and unconstitutional as the President's assent was required to issue such order.
For the petitioner, Advocate Arunav Ghosh pleaded that the notification was interference into the right to the free trade of the traders. He said the notification violated the article 301 of the Indian Constitution.
For the state, Advocate General Bimal Chatterjee argued that the state government imposed the restriction under Article 304 of the Indian Constitution. Justice Banerjee, however, pointed out that based on the Article 304 no such restriction can be introduced by a state government without the previous sanction of the President.
The court said that prima-facie the notification was unconstitutional, Ghosh later told the reporters.
Source:- indianexpress.com
No reassessment on mere allegation of bogus entries as AO failed to identify culprits for such entri
IT : Where assessment was reopened on ground that assessee was involved in bogus entries but reasons recorded for reopening did not mention who had given bogus entries, reopening of assessment could not be sustained
Iran Deal To Help India's Oil Imports; Boost Bilateral Trade
The country's corporates today said the deal between Iran and six world powers, including the US, will help in sourcing of oil imports from the Persian Gulf state and boost trade with India.
"India has maintained strong historic links with Iran and any step that makes it easy for Iran to engage economically with the rest of the world would help us in sourcing of oil imports from Iran," Ficci President Naina Lal Kidwai said.
"We will see possibilities for exporting our manufactured goods to Iran including pharma, IT, electronics, automobile spare parts and food processing. This relief will benefit Indian companies in promoting bilateral trade between India and Iran which at present is around USD 15 billion," she said.
Capping four days of negotiations, representatives the US, the UK, Russia, China, France and Germany (P5+1 group of nations) reached an agreement with Iran in Geneva yesterday.
Under the deal, Iran agreed to give better access to inspectors and halt some of its work on uranium enrichment. But Iranian negotiators insisted they still had a right to nuclear power.
In return, there will be no new nuclear-related sanctions on Iran for six months.
"The deal would not only reduce India's import bill as energy prices ease, but also make a big difference to inflation, which has remained bane of the Indian economy for the last six years, more so at the retail level," Assocham President Rana Kapoor said.
Iran will also stop enriching uranium beyond 5 per cent, the level at which it can be used for weapons research, and reduce its stockpile of uranium enriched beyond this point.
Iran will also receive sanctions relief worth about USD 7 billion on sectors including precious metals.
"The deal will go a long way in augmenting India's trade with the Persian country. Exporters were fighting shy of dealing with the Iranian buyers even in regard to the items beyond sanctions, largely because there was so much uncertainty over the payment transfer in the backdrop of sanctions," EEPC India Chairman Anupam Shah said.
India can export a large number of items to Iran , if unhindered access is provided in that market, including high-tech machinery, automobiles, components besides the agri products, Shah said.
The agreement -- described as an "initial, six-month" deal -- includes "substantial limitations that will help prevent Iran from creating a nuclear weapon," US President Barack Obama said in a nationally televised address.
India is likely to resume paying Iran in Euros after a historic accord between western super powers and the Persian Gulf state made it easier to import crude oil from one of its biggest suppliers.
India's total exports to Iran were merely USD 3.7 billion in 2012-13, much less than potential, under the impact of sanctions.
Source:- economictimes.indiatimes.com
Ban Import Of Cars Not Roadworthy: Pil
Angered by the malfunctioning of a luxury car, a private company is suing the government for allowing import of vehicles not suited for Indian roads.
Embassy Property Development Limited, a Bangalore-based company, has filed a public interest petition before the Karnataka High Court after a luxury SUV it had imported suddenly locked itself up and caused a four-hour jam on MG Road.
The petition alleges the Heavy Industries and Public Enterprises Ministry, the Karnataka government, the Automotive Research Association and other government bodies are not checking the roadworthiness of imported cars.
The realty company had spent `71.25 lakh in 2010 and imported a BMW X5 Sports Utility Vehicle for its CMD Jitu Virwani. On April 19, the SUV reportedly jerked to a halt and locked itself. The driver was unable to even open the windows and doors as they were jammed. The incident occurred during peak hours, and inconvenienced hundreds of road users.
The petitioner sent legal notices to the BMW group in Germany, BMW Asia (Singapore) and BMW India, asking them to return the full amount paid for the vehicle along with interest of 36 per cent from September 9, 2010. It has also sought `5 crore for putting the life of its chairman in danger.
Forbes magazine reports that BMW had recalled 1.3 lakh vehicles in 2010 and is now recalling 5.69 lakh vehicles sold between 2007 and 2012 in the US and Canada. Top BMW officials in India failed to reply to emails and to this reporter’s calls seeking to know if the vehicle in question was from any batch that had been recalled.
The petitioner has urged the court to direct automobile manufacturers to recall all imported vehicles that are not roadworthy.
“Due to the failure of the authorities, the right to life and liberty of the citizens of India is in danger,” the petition states.
The High Court directed the petitioner to seek necessary particulars under the RTI Act.
Advocate Aijth Kumar, who also owns a imported vehicle, said foreign cars are unable to run properly on Indian roads with potholes.
“Either the authorities make good roads or ban the import of such cars,” Aijth Kumar said.
On September 17, because the roads were bad, the steering mechanism of another car (not a BMW) froze and the vehicle skidded into the Beguvalli Lake, Thirthahalli.
A family of six was trapped inside. Luckily, they were saved.
While some companies like Fiat and Ford have been known to modify their cars for Indian conditions, the practice is not mandatory.
Globally, BMW has recalled many units of the X5 as and when problems with the steering, fuel pump and other components were discovered.
Source:- newindianexpress.com
Duties On Newsprint Import Cut
The National Board of Revenue (NBR) yesterday cut import duties on newsprint consumed by the country’s newspaper industry to 5 percent from 10 percent.
The NBR issued a statutory regulatory order bringing down the import duties, which came into effect yesterday.
The move came two months after the government agreed to reduce the duties on the imported newsprint following a tripartite meeting with the owners of the newspapers and leaders of the media community after the Eighth Wage Board was approved.
Following the meeting in September, the cabinet approved the decision and instructed the NBR to implement the decision.
The information ministry also recommended the reduction of the import duties.
Sources at the NBR said the value-added taxes and advance income tax for the newspaper industry would remain the same.
As a result, the newspaper owners will have to pay 26 percent as duties for importing a tonne of newspaper, compared to 31 percent earlier.
The duties on imported printing plates will remain unchanged at 2 percent.
Newsprint is the key raw material for the newspaper printing industry, and the country relies heavily on imports.
While placing the budget for the fiscal 2013-14 in parliament, Finance Minister AMA Muhith had proposed raising the import duty on newsprint to 25 percent from 3 percent.
Following an outcry from the industry, the rate was fixed at 10 percent when the parliament approved the budget.
But industry people still saw the high import duty as a threat for the printing industry.
The government, however, agreed to halve the import duties after newspaper owners accepted the Eighth Wage Board for raising salaries and other benefits for journalists.
The government has also doubled the rates for newspaper advertisements.
Source:- thedailystar.net
Dabhol Lng Import Terminal Gets Shipment After Six-Month Gap
The Dabhol LNG import terminal in Maharashtra has received a shipload of liquefied natural gas (LNG) after a gap of six months.
Ratnagiri Gas and Power Pvt Ltd (RGPPL) received a spot cargo from Nigeria on Sunday.
“It was the sixth successful unloading of LNG cargo since commissioning (of the terminal) in January,” RGPPL Deputy Managing Director A K Jana said.
LNG carrier Iberica Knutsen, with a capacity of about 135,000 cubic meters, discharged the cargo at Dabhol on Sunday, he said. The vessel had loaded the gas at Nigeria LNG Ltd’s Bonny Island facility.
The 5 million ton-a-year capacity LNG terminal was half ready when original builder and US energy major Enron Corp went bankrupt. The terminal and adjacent power plant were taken over in 2005 by RGPPL - a joint venture of state gas utility GAIL India and NTPC.
GAIL is now seeking another cargo from the spot market for January delivery at Dabhol.
Dabhol, about 340 km south of Mumbai, is India’s oldest LNG import facility and one of four such terminals in the country, Asia’s fourth-largest buyer of liquefied natural gas.
“As on date, global LNG suppliers like Gazprom, GdF, Shell, Sonatrach and GnF have successfully brought their cargoes at Dabhol terminal,” Mr. Jana said, adding that the terminal has now received LNG from BG Group, RasGas of Qatar and Nigeria LNG.
The shipment from Nigeria was the first imported by Dabhol after the monsoon.
Mr. Jana said RGPPL plans to build a breakwater at Dabhol port by 2016. In the absence of the breakwater, which guards ships against high tides, the terminal could operate at about 60 per cent of its capacity, with operations shut during the monsoon.
The contract for building a breakwater will be awarded by January, he said. “On completion, the terminal would be able to handle more than 80 cargoes in a year.”
GAIL owns 31.52 per cent stake in RGPPL - the owner of the 1,967 MW power plant and the adjacent LNG import terminal.
GAIL completed the plant in late 2010 and dredging work of the sea channel leading to Dabhol port was ready last year.
The company, as the commercial operator, has underwritten the re-gasification capacity of the Dabhol terminal for 25 years for lending support to the project.
Source:- thehindu.com
Gold Jewellery Exports Slip 7% In October
India's exports of gold jewellery slipped 7 percent in October as government restrictions continued to hit imports, and the trend is likely to continue for the rest of this year, industry experts said.
India's government has slapped a record 10 percent import duty on gold, its second-biggest import after oil, as it seeks to curb a swollen current account, and has said 20 percent of all imports must be turned around and exported as jewellery.
While exporters had increased sales during August and September, the measures delayed further supplies just as demand from the United States for the Christmas season weakened.
Gold jewellery exports fell 6.9 percent in October from the previous month to $608.95 million, the Gems and Jewellery Export Promotion Council (GJEPC) said in a statement.
Exports so far this fiscal year, from April to October, slid nearly 55 percent to $3.95 billion, the GJEPC said.
"Even if we have demand we are unable to supply due to inconsistency in securing gold," said Rajiv Jain, managing director with Sambhav Gems, an exporter to the United States andEuropean Union.
In order to prove export quantities, importing banks and trading agencies are required to submit the export performance of their first two import shipments while bringing in the third lot. That has meant irregular supplies for what used to be the world's biggest buyer of bullion.
"Now there is a problem with supplies of gold once again, which will weigh on the exports of November and December," said Pankaj Kumar Parekh, vice-chairman of the GJEPC.
Falling exports will have a knock-on effect on future imports because of the ties between the two and that will hurt domestic jewellers who should be seeing surging demand as the wedding season gets into full swing.
In October, India imported 23.5 tonnes, less than half last year's average monthly consumption of 60 tonnes, although it saw resurgence in August and September, when purchases slowed to a trickle as buyers struggled to work out the new restrictions.
Premiums paid by Indian buyers over London gold prices surged to a record $125 an ounce in October and tighter supplies in the next couple of months could push them even higher, Parekh said.
That would hurt domestic jewellery makers like Gitanjali Gems and Tara Jewels.
The World Gold Council (WGC) cut its forecast for Indian gold demand earlier this month, predicting that the country could also lose its crown as the world's biggest consumer of bullion toChina.
The WGC said Indian demand could be 900 tonnes in 2013 from its previous forecast of 1,000 tonnes. Demand is met partly by recycling, which rises when imported supplies dry up.
In September, as the restrictions bit, an Indian finance ministry official estimated gold imports would be 750-800 tonnes in the fiscal year to March 2014, down from 845-850 tonnes in 2012/13.
Meanwhile, India's exporters have been pushing silver jewellery and exports rose 52.73 percent in value terms to $109.89 million in October from a year ago.
The country's total gems and jewellery exports fell 6.67 percent to $20.94 billion between April and October.
Source:- profit.ndtv.com
CBEC clarifies yet more issues on VCES; SCN necessary prior to rejection of declaration
ST : Chapter VI of the Finance Act, 2013 - Service Tax Voluntary Compliance Encouragement Scheme - CBEC clarifies that : (1) defective applications not to be rejected; authorities must help in rectification (2) prior to rejection of declaration, a mandatory show-cause notice be issued within 30 days of filing declaration; and (3) benefit available under scheme even if part of tax dues paid in cash prior to filing declaration
No 'royalty' from sale of software, HC ignores amended Sec. 9 as DTAA more beneficial; Samsung’s cas
IT/ILT : Delhi High Court upheld the order of the Tribunal that amount received by the assessee under the license agreement for allowing the use of the software would not be royalty under the DTAA
Amendments by Finance Act 2007 to sec. 254D for abatement of settlement proceedings are constitution
IT : Amendments made to section 245D(4A)(i) and section 245HA(1)(iv) providing for abatement of proceedings were constitutionally valid
Net interest to be taken into account for computing deduction under section 80HHC
IT: It is net interest which has to be taken into account while computing deduction under section 80HHC as per Explanation (baa) to section 80HHC (4C)
Interest paid by Muthoot Finance in excess of statutory limit held as an exp. prohibited by law; not
IT : Where expenditure was laid out for purpose which constituted an offence or prohibited by law, same could not be treated as expenditure for which deduction could be claimed
Reassessment to deny section 54F relief when such issue was already considered in block assessment h
IT : Where deduction under section 54F was partly allowed to assessee in scrutiny assessment and same was again considered in block assessment proceedings, initiation of reassessment proceedings under section 147/148 on said issue on same materials was void ab initio and invalid
Mere omission to declare certain activity before department won’t amount to suppression to attract S
ST : Mere omission to declare activity before department would not amount to suppression of fact so as to warrant penalty under section 78
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