IT: Where purchases were not bogus but were made from parties other than those mentioned in books of account, not entire purchase price but only profit element embedded in such purchases can be added to income of assessee
Friday 29 November 2013
No TP adjustments for notional interest if loan granted to affiliates was eventually converted into
IT/ILT: Where assessee granted loan to its foreign subsidiary company which was subsequently converted into equity capital, in view of fact that as per loan agreement interest was not chargeable in such a situation, addition made by TPO/Assessing Officer on account of notional interest was to be set aside
‘Hearing aids’ enhance quality of hearing of handicaped persons; exempted from VAT
ST/VAT : Since 'Hearing aid' enhances quality of hearing of a person suffering from auditory handicap; therefore, it should be treated as an aid/ implement used by handicapped persons and accordingly, exempt from VAT
Govt Okays More Duty-Free Imports From Poor Nations
Ahead of next week's ministerial meeting of the World Trade Organization (WTO) in Bali, the government on Friday said it will allow duty-free and quota-free import of over 96% of the goods from least developed countries (LDCs), a move that is aimed at embarrassing the US that has for years resisted allowing greater access for foods from poor countries to protect its domestic industry.
The US, the world's largest trading nation, allows 78% of the goods to come duty-free and quota-free, compared to 85% of the goods covered by India. On Thursday, the Union cabinet that discussed India's strategy for Bali, also endorsed the move to increase the coverage, commerce & industry minister Anand Sharma told a news conference.
Although the decision comes days before the WTO meet, the proposal had been in the pipeline for several months. The move before the ministerial is seen as new-found aggression from India, aimed at cementing its ties with LDCs ahead of the ministerial meeting. Traditionally, the US and the European Union have offered sops before a WTO meet to wean away support from the poor countries, while developing countries such as India have merely offered support and technical assistance in training negotiators.
On Friday too, Sharma said that India endorsed the stance taken by the LDCs, for whom duty-free quota-free exports is a key demand as they seek to become more prominent players in the global trading arena, dominated by the developed countries and a handful of developing countries such as China.
In 2005, WTO members had agreed to make it mandatory for developed countries, and optional for developing countries, to give duty- and quota-free market access to all exports from LDCs. They insisted on being allowed to exclude up to 3% of tariff lines from this so-called 'Duty Free Quota Free Market Access' (DFQFMA) initiative, to protect sensitive sectors. Currently over two dozen countries use the duty-free and quota-free facility offered by India, which is available as long as they retain LDC status. The cabinet decision will be notified soon, Sharma said.
Inset: No compromise on food security: Sharma
New Delhi: In its first public statement on the WTO ministerial meeting, the government on Friday said it will not compromise its position on food security even if subsidy limits are breached.
"There are issues which are of paramount importance to India. India will secure and protect the right to food security of the poor people and India will defend its resource for poor and subsistence farmers. These are issues on which India shall never compromise," Sharma told a press conference, while promising to constructively engage at the negotiations.
The minister, who is leading the Indian delegation, said that India is going to insist on a "peace clause" till a permanent solution is found even as it wanted a change in the way subsidies are calculated. "In Bali, India expects all countries to commit to negotiating all issues for a permanent solution."
At the same time, he said there were 78 areas of differences in the proposed trade facilitation agreement, with at least three issues on which India had concerns.
Source:- timesofindia.indiatimes.com
Payment of interest by knocking it off against any sum recoverable from creditor is 'actual payment'
IT: In terms of section 43B(d), if interest is paid not by actually receiving amount from loan advancing person or institution but is paid out of fund lying in any another account of assessee with such creditor, it amounts to actual payment and disallowance under section 43B can not be made in respect of said payment
Harley Davidson India To Export Street 750
Harley Davidson India will begin assembling the Street 750 at its facility in Bawal, Haryana, from the second quarter of 2014 and also plans to export it to Europe.
India is the only country outside the US to be making the new bike, which is built on the completely new ‘Street’ platform, and this will be the first HD product to be exported from the facility.
The first Harley Davidson member in the sub-Rs-5-lakh segment, the Street 750 will be unveiled at the India Bike Week in Goa in early January, following which it will be showcased at the forthcoming Delhi Auto Expo.
In Pune to inaugurate HDI’s 11th dealership in India, Anoop Prakash, Managing Director HD India, said commercial deliveries of the Street 750 will begin by April or May of 2014, adding that the Made-in-India bike will also be exported to Italy, Portugal and Spain. Total shipments of the model (US and India) are pegged between 7,000 and 10,000 units.
To enable assembly of the Street 750, Harley Davidson will increase its investment in the Indian facility by around 35 per cent. At present it assembles nine of the 11 models it sells in the country and says it expects sales at the end of 2013 to touch 4,000 units since the 2010 launch.
India is already on the global sourcing map of the American heavy bike maker, and locally assembled motorcycles already have some Indian content. The plan is to increase this with time, Prakash said.
Another revenue stream for Harley Davidson is merchandise and accessories. “Globally this accounts for around 18 per cent of total sales, including 5 per cent for riding gear alone, and this is more or less also the case in India,” he added.
HDI will inaugurate two new dealerships in Goa and Mumbai over the coming weekend, and plans to add three more next year to take the total to 16. Amongst the locations being considered are tier-2 and 3 towns including Surat, Coimbatore, Guwahati and Kozhikode.
Source:- thehindubusinessline.com
Focus On Export Of 'Made-In-India' Electrical Products: Ieema
Electrical equipment manufacturers' apex body today said increasing the focus on domestically made products can help double exports in the next three years.
"The prospects of exports of 'made-in-India' look good for domestic players and can help double exports in the three years," Indian Electrical & Electronics Manufacturers Association ( Ieema) Chairman Sanjeev Sardana said in a statement.
The Rs 1.30-lakh crore electrical equipment industry has, after four consecutive quarters of negative growth, shown a 2 per cent positive growth in the first quarter of FY14. This has been largely attributed to increase in exports of electrical equipment, he said.
Currently, Chinese products enjoy a market share of 45 per cent in the country's electrical equipment imports.
"The quality of domestically manufactured products has improved in the recent times. These products have seen a wider acceptance in international markets, especially in Africa and West Asian countries. We are working towards making India an export hub for electrical equipment," Sardana said.
Exports growth is also visible in developed countries like the US, Germany, Britain, Australia and Canada, apart from the UAE, Saudi Arab, Nigeria and Kenya.
"This clearly shows the increasing acceptability of 'made-in-India' brand with desired quality and competitive cost in both developed and developing countries," he added.
Source:- economictimes.indiatimes.com
Urea Import Up 25% To 50.37 Lakh Tonne Till Oct
Urea imports have increased by 25 per cent to 50.37 lakh tonnes in the April-October period of the current fiscal as demand for the soil nutrient has increased on normal monsoon this year.
“India had imported 40.14 lakh tonnes of urea in the April-October period in 2012-13 fiscal,” a senior official of the Fertiliser Ministry said.
The country had imported 80.44 lakh tonnes of urea in 2012-13 at an average cost of $ 417 per tonne.
However, in the current fiscal the average price at which urea has been imported so far stood at $ 340 per tonne, lower than the last year’s average price, the official added.
Urea is imported mainly by three canalising state agencies — Indian Potash Ltd, Metals and Minerals Trading Corporation of India and State Trading Corporation.
Besides these three state trading enterprises, the country also has off-take agreement for import of urea with OMIFCO in Oman, which is a joint venture project of IFFCO, Kribhco and Oman Oil Company SAOC.
Urea demand is expected to remain high in the current rabi season, as total area sown under rabi crops has so far increased by 7 per cent to 314.24 lakh hectares, while area under wheat has risen by 25 per cent to 127.47 lakh hectares.
Urea is provided to farmers at a fixed subsidised maximum retail price (MRP) of Rs 5,360 per tonne. The difference between the cost of production and MRP of urea is provided as subsidy. The domestic production of urea stands at about 220 lakh tonne.
Source:- thehindubusinessline.com
Import Duty Hike Talk Hits Edible Oils
29-Nov-2013
Speculation over a possible hike in edible oils’ Customs duty fuelled sentiments in the edible oils market on Friday. But slack demand, selling pressure in indigenous oils and a weak futures market kept prices stable on Friday.
Barring palmolein, which increased by Rs 2 and rapeseed oil which declined by Rs 2, all other edible oils remained unchanged. The volume remained thin, said sources.
A broker said: “On hopes of import duty hike, a leading refinery stopped offering palmolein and super palmolein, while other refineries continued offering as demand was subdued. Needy stockists bought a about 80-100 tonnes of palmolein at Rs 598-600 for ready delivery in Mumbai and 250-300 tonnes of palmolein at Rs 592-596 ex-JNPT for December 10.
In producing centres, soyabean supplies are limited, but cotton supplies from the new season have been rising in spot markets that put pressure on edible oil prices. Soyabean arrivals are also likely to jump in the coming days.”
Towards the day’s close, Liberty was quoting super deluxe palmolein at Rs 650, soyabean refined oil at Rs 680 and sunflower refined oil at Rs 765.
Ruchi quoted palmolein at Rs 610, soyabean refined oil at Rs 670 and sunflower refined oil at Rs 721.
Allana was quoting palmolein at Rs 608 for December 10, super palmolein at Rs 625, super deluxe at Rs 645, soyabean refined oil at Rs 675 and sunflower refined oil at Rs 745. In Rajkot, groundnut oil was quoted at Rs 1,300 (Rs 1,270) for telia tin and loose (10 kg) was Rs 825 (Rs 810).
Soyabean arrivals were 4 lakh bags and prices were Rs 3,600-3,750 in Maharashtra while in Madhya Pradesh it was Rs 3,700-3,875 ex mandi and Rs 3,900-80 plant delivery.
Mustard seed arrivals were 85,000 bags and its prices were Rs 3,350-3,700.
Source:- thehindubusinessline.com
Sugar Output Likely To Fall By 10-15%
As the impasse between the government and millers continued in Uttar Pradesh, analysts said India’s sugar output in 2013-14 could drop 10-15 per cent on a year ago if crushing did not start in 15 days. In Maharashtra and Karnataka, too, crushing has not started, as the farmers are demanding a higher cane price.
However, it might not have any impact on prices or supplies as the opening stock of sugar, nine million tonnes, is much more than required, said the chairman of the Commission for Agricultural Costs and Prices, Ashok Gulati. “We have excess stock and a 10-15 per cent cut in production would bring the market to equilibrium.” “The more the cane stands in the field, there is a possibility of production getting impacted, as the sucrose in those would go down,” an expert said.
Indian Sugar Mills Association on Friday said till November, 0.80 million tonnes of sugar was produced in the country, 67 per cent less than last year, as 208 of India’s 400-odd sugar mills started crushing. On Thursday, Food Minister K V Thomas said there was no impact on production, but conceded output could fall if the impasse continued and the farmers did not bring the cane to the mills. He said production in the 2013-14 crop marketing year (October-Sept-ember) was expected to be 24.4 mt, 2.7 per cent less a year ago.
However, this drop is due to drought in Maharashtra and Gujarat last year and not because of the current logjam between millers and sugarcane growers.
India’s sugar production in 2013-14 is estimated at 24.4 million tonnes, while demand is estimated at 23.5 million tonnes. “The difference between demand and supply of sugar is expected to be around 0.85-0.90 million tonnes,” Thomas said. He said the old five-year cycle of excess and deficient production in sugar is over.
The impasse of sugarcane pricing has impacted crushing with as more than 70 of the 99-odd private mills in Uttar Pradesh have suspended their operation. The crushing had to start from middle of November.
Source:- business-standard.com
No unfair trade practice if manufacturer restricts life time warranty to 12 years and it mentions so
MRTP : Where company manufacturing kitchen chimneys had specified in its owners manual that lifetime warranty meant life of 12 years, complaint against company for giving misleading impression was to be dismissed
Rupee Falls Three Paise To 62.44 Vs Dollar
The rupee fell for the second day, dropping three paise to close at 62.44 against the dollar, amid demand for the US currency from oil refiners even as local equities firmed up on optimism about GDP data.
A weak dollar overseas and sustained capital inflows into local stocks limited the rupee’s decline, a forex dealer said.
At the interbank foreign exchange market, the rupee opened higher at 62.30 a dollar from the previous close of 62.41. The local currency moved in a range of 62.20 to 62.64 before settling at 62.44, a fall of three paise. Yesterday, it dropped 27 paise.
The rupee advanced for the second straight week, adding a total of 67 paise. However, the local currency fell 94 paise in November, the first monthly drop in three.
“Month-end oil-related dollar demand kept rupee under pressure. Dollar index was trading weak and was heading towards the third weekly fall in a row, taking cues from mixed economic data,” said Pramit Brahmbhatt, CEO, Alpari Financial Services (India).
The 30-share benchmark Sensex flared up 257 points, or 1.25 per cent, on expectations economic growth is recovering.
The country’s GDP expanded 4.8 per cent in July-September compared with 4.4 per cent in April-June, the government said after the markets closed.
Also, the fiscal deficit in the first seven months (Apr-Oct) of FY14 reached 84.4 per cent of the full-year budget target compared with 71.6 per cent last year.
Overseas investors bought a net Rs 102.91 crore of shares on Thursday, according to provisional data.
The dollar index, consisting of six major global rivals, was down 0.03 per cent.
“The surging Indian stock market and the flat dollar index didn’t provide help to the falling rupee,” said Abhishek Goenka, CEO of India Forex Advisors. “Dollar demand is seen coming back to the markets.”
A dollar-rupee swap window for foreign currency deposits by non-resident Indians is scheduled to close on Saturday. The facility was opened by the Reserve Bank of India on September 10.
Source:- thehindu.com
Advances by rural branches excluded while calculating sec. 36(1)(viia) claim if it didn’t satisfy pr
IT : Where rural branches of co-operative bank did not satisfy definition of rural branch given under section 36(1)(viia), advances made by such rural branches would not qualify for deduction as bad debt
RBI seeks more participation of NBFCs in insurance sector; relaxes investment limit in insurance sec
NBFCs : Participation of NBFCs in Insurance Sector
FIIs or QFIs to seek consent of depositories to invest in credit enhanced bonds beyond 90% of permit
SEBI : Investments by FIIs/QFIs in Credit Enhanced Bonds
Plastic flooring isn’t eligible for credit
Cenvat Credit: Plastic flooring is not eligible for Cenvat credit since it is neither any aid of manufacture nor any inevitable necessity to carry out manufacture
Couple attempted to dupe I-T department with bogus TDS certificates; HC dismissed discharge petition
IT: Where there was a strong prima facie case against assessee that she conspired alongwith her husband and other accused to dupe department for purpose of making unlawful gain by producing bogus tax deducted at source certificates in name of fictions persons, discharge petition could not be allowed
‘Universal Commodity Exchange’ notified as a recognized association for trading in commodity derivat
IT : Section 43(5), Clause (III) of Explanation 2 to Clause (E) of Proviso, of The Income-Tax Act, 1961 - Speculative Transaction - Recognized Stock Exchange - Notified Recognized Stock Exchange
CBDT seeks info on assessee opting for Safe Harbour from returns filed till November 30, 2013
IT/ILT : Section 92CB of The Income-Tax Act, 1961 - Safe Harbour Rules - Power of Board to Make - Analyses of Form 3CEFA Received While Opting for Safe Harbour
E-homes with pre-fitted gadgets akin to other residential units; their developer isn’t dominant play
Competition Act: E-homes with facilities like wifi, finger print security cannot be said to be different from other residential units
Delay caused due to removal of defects in appeal won’t be deemed as delay for filing condonation of
ST : Where appeal was presented in time but defects pointed out by office of appellate authority were removed by way of filing of appeal afresh after a few days from due date, there was no delay so as to warrant filing of application for condonation of delay
Sum paid to import master copy of Oracle software was allowable as revenue expenditure, says HC
IT : Media cost paid for the import of a master copy of Oracle Software used for duplication and licensing is an expenditure of a revenue nature and as such is an allowable deduction
Assessee couldn’t seek refund of ST even if consideration for providing services was written off
ST/UK VAT: If consideration for providing services is written off as bad on account of bad financial condition of service recipient, assessee cannot seek refund/credit of service tax paid earlier on due basis
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