IT : Where assessee had sufficient funds, interest could not be disallowed, holding advances to concerns as diversion of interest bearing funds
Monday, 2 December 2013
Credits wrongly utilized to be demanded in cash with interest but wrong utilization must be allowed
Excise & Customs : If, owing to default in paying duty, assessee's facility of monthly payment of duty is withdrawn and even then, assessee pays duty using Cenvat credit, assessee can be asked to pay duty in cash/through PLA with interest and penalty, but, credit earlier utilized must be allowed as re-credit
Assessment pursuant to revisionary order would be infructuous if revision order per se set aside
IT : Where revision order passed under section 263 was set aside, assessment order passed in pursuance thereof became infructuous
No depreciations to owner on assets given on lease if loan transaction was disguised as sale and lea
IT: Where assessee stated that it had purchased certain energy meters from Gujarat State Electricity Board and same were then immediately leased back to Board vide a lease agreement and accordingly it claimed depreciation on said meters, since sale invoice and lease agreement showed that transaction was a sham transaction, assessee was not entitled to get depreciation
Government May Scrap Sugar Export Registration
The government is considering removal of the mandatory registration process for sugar exports in view of surplus production this year.
The move would come as a boon to the cash-starved industry by fast-tracking shipments. “The issue related to scrapping sugar export registration was discussed in the informal meeting of ministers last week. The matter is under consideration,” a senior government official said.
Currently, exporters are required to register sugar shipments with the Directorate General of Foreign Trade (DGFT) under the Commerce Ministry. The DGFT last month doubled the limit per overseas sugar shipment to 50,000 tonnes.
Last year, India exported 4 lakh tonnes of sugar. Mills are targeting exports of up to 40 lakh tonnes this year. Global prices have plummeted due to surplus production in some countries. Indian mills are eyeing exports of raw sugar, which commands a premium.
Sugar mills across the country have started crushing operations for the 2013-14 marketing year (October-September).
Private mills in Uttar Pradesh yesterday ended over a week-long standoff with the state government over cane prices and agreed to commence operations.
The industry forecasts sugar production of 25 million tonnes this year, higher than the government estimate of 24.4 million tonnes and more than sufficient to meet domestic demand of 23.5 million tonnes. Last year, the country produced 25.1 million tonnes of sugar.
Source:- thehindubusinessline.com
Falling Iron Ore Exports Take Toll On Tax Revenues
The Supreme Court’s ban on iron ore mining in Goa has dealt a blow not just to the Indian economy, but also to the Union government’s indirect tax receipts. Besides falling tax receipts from the services sector catering to the mining industry, a direct fall out of the ban is the erosion of revenue from the 30% duty on iron-ore exports from India that has progressively declined from 117 million tonne in 2009-10 to less than seven million tonne in the April-September period of 2013-14.
Goa, which accounted for 70% of India’s total iron ore export of 62 mt in 2010-11, had collected R2,850 crore from iron-ore export duty that year. In the April-October period of 2013, export duty receipts from iron-ore exports from Goa remained zero.
The apex court banned iron-ore mining in Karnataka in July 2011 and in Goa in October 2012 on account of illegal mining and damages to the environment. The court suspended all iron-ore mining operations in Goa, including transportation of iron. Although the restart of the mining is allowed in many mines (Category A and B) in Karnataka, production continues to crawl as many mines haven't been opened as yet due to delays in requisite state government approvals.
Sesa Goa, the leading miner in Goa, which contributed R1,198 crore to the exchequer by way of iron-export duty in 2011-12, has not made any payment in the April-October period of FY14 as exports dried up. Port service providers such as Mormugoa Port Trust, South West Port, Sesa Goa and VM Salgaocar & Bros that paid about R32 crore of service tax in the first seven months of 2012-13, has paid only R20 crore in the same period of 2013-14.
“The ban on iron-ore mining came by the end of monsoon in 2012. Upto June, we got export duty receipts, after which it froze,” said a central government official.
Besides the ban, the drastic drop in exports is attributed to the increase in the iron-ore export duty from 20% to 30% on all grades of iron ore (except pellets) with effect from December 30, 2012, and the differential railway freight on movement of iron ore for exports compared to railway freight on movement for domestic consumption.
The decline in tax receipts comes at a time when collection of excise duty (the tax on manufacturing) — another major components of industrial production — has seen a contraction due to the overall economic slowdown. The slowdown has in turn led to a reduction in growth in custom duty receipts as raw material imports too declined.
The revenue department has set a collection target of R5.65 lakh crore for this fiscal from excise, customs and service tax. In the first half of this fiscal, indirect tax receipts grew only 3.5% from last year, mainly on account of the 11% contraction in excise. Custom duty receipts rose only 5.6% during the period despite a sharp depreciation in the value of the domestic currency against the dollar. Service tax collections, however, rose 16% during the period.
Source:- financialexpress.com
Indian Garment Exports To Touch $60Bn In Three Years, Aepc
Speaking at the Textile Conclave 2013, Chairman, AEPC said that India’s garment exports would be touching 60 US $ billion in the next 3 years, with the help of Government support.
The one day Textiles Conclave 2013 is organized by the Ministry of Textiles. The Union Textiles Minister - Dr. K S Rao inaugurated the conference in presence of Secretary Textiles Smt. Zohra Chatterji and stakeholders of the Textiles Industry.
Dr. Sakthivel identified shortfall of labour to be the biggest bottlenecks. Chairman AEPC informed that, “We are getting good orders and have won the confidence of buyers. As a brand, we are recognized everywhere but challenge is translating that leverage into the world textiles global hub.”
Apparel exports grew to 31% for the month of October 2013. Export in dollar terms for April-Oct. of the FY 2013-14 has increased by 15.5 per cent over the same period of previous FY and reached to USD 8259 million however, in rupee terms exports increased by 26.18 per cent compared to same period of last FY.
Lauding the efforts of Textiles Minister Dr. K S Rao and Secretary Textiles, Smt Zohra Chatterji , Dr Sakthivel stated that, “Today’s Textiles conclave is the first conclave in the history of India. This is a mega platform where all stakeholders from the Textiles industry, including policy matters, industrialists and the Government, to usher the new era for the Indian Textiles Industry. The issues that were discussions and deliberations and sharing of prospective will surely fix the agenda of the textiles Industry.
On the partnering OF Textiles Conclave with CNBC TV 18 for the Textiles conclave Chairman AEPC, stated that, there is also way to brand India through international media tie-ups and promotions.
Speaking on the Textiles Conclave 2013 Dr. K S Rao, the Union Textiles Minister stated that, I am happy to participate in the Textiles Conclave. This is the golden era of textiles in India and we have to work to make India hub of Textiles exports. I don’t think it’s difficult to achieve the number 1 position. We have the potential and capacity we need to just take care of skill training and power availability.
Delivering the inaugural address Secretary Textiles, Smt. Zohra Chatterji stated that, we are building road map to move forward. The planned schemes are ready and we are going full way to implement it. We have a strong raw material base, skilled workforce and stringent compliant standards.
Top brands and retails are eyeing India as a sourcing destination. We have a large skill base to meet the growing burgeoning demand the women need s to work for the longer hours and our role is to make this possible.
The participants of AEPC also spoke of DISHA which is the program for ensuring compliance in the garment factories in India.
Source:- fibre2fashion.com
India's Jan-Nov Coffee Exports Up Marginally At 2.94 Lakh Ton
India's coffee exports increased marginally to over 2.94 lakh tonne in the first 11 months this year as exporters sold more stock last month fearing further fall in global prices, the Coffee Board said.
The country had exported 2.91 lakh tonne coffee bean in the January-November period of last year, it said.
"There is a small increase in export volumes as of now. One of the reasons was that exporters offloaded slightly more stock in the global market in anticipation of further fall in global prices," a senior Coffee Board official told PTI.
Total exports in terms of value also increased marginally to Rs 4,421.25 crore in the January-November period of this year from Rs 4,406.98 in the year-ago period, the Board said.
However, the export value realisation remained lower at Rs 1.50 lakh per tonne, as against Rs 1.51 lakh per tonne in the review period, it added.
Of the total exports, Board said the shipment of robusta variety of coffee bean increased by 3 per cent to 1,56,925 tonne in the first eleven months of 2013, as compared to 1,52,480 tonne in the same period last year.
However, the shipment of arabica coffee fell by 6.4 per cent to 52,003 tonnes from 55,570 tonnes, while the export of instant coffee declined sharply by 48 per cent to 21,138 tonnes from 41,090 tonnes in the review period.
Maximum exports were to Italy at 73,209 tonne, Germany at 29,089 tonne, Russia at 19,274 tonne and Belgium at 16,680 tonne in the said period.
According to analysts, coffee prices have plummeted in the world markets due to forecasts of record output in several coffee-producing countries such as Brazil, Colombia and Vietnam.
Prices of both robusta and arabica coffee have slipped below USD 100 cents per pound level in the overseas market.
India's coffee production is estimated higher at 3.47 lakh tonne for this year. Harvesting of the crop has begun in some states.
Source:- economictimes.indiatimes.com
Export Surge Not To Benefit All Export Sectors: India Ratings
India Ratings & Research (Ind-Ra) believes given the tentative nature of recovery in global demand, not all export oriented Indian corporates will benefit evenly. The key drivers of this asymmetric growth are divergent expectations of growth trends in developed markets and emerging markets, uncertainty with respect to quantitative easing (QE3) tapering and prices of precious metals.
Ind-Ra expects the tentative revival of global demand to benefit pharmaceutical companies the most, followed by textiles and IT companies. We expect India's engineering exports' growth to remain muted given the moderating growth of emerging markets. Also, gems & jewellery exporters are unlikely to benefit significantly due to the relatively lower prices of precious metals.
Ind-Ra believes exports of pharmaceuticals from India will continue to witness fast-paced growth driven by patent expiries, higher healthcare spending and demand from new markets such as Europe and Japan.
The tentative improvement in global consumption is likely to support Indian textile exports. After a 3.1% yoy decline (in US dollar terms) in FY13, exports of textile products increased 13.2% over April-September 2013 (April-September 2012: negative 8.9%). Most Indian textile exporters are running on full capacity and are outsourcing manufacturing on a job work basis as order books are growing ahead of the peak festive season (December). Incremental demand may be driven more by European consumption which has shown some growth from 3Q13. However, demand from the US is likely to be maintained at current levels.
Certain indicators such as US tech job postings and the International Data Corporation's Buyer Intent Index signal a positive trend for the demand of IT services and technology products. However, both these indicators have shown some moderation in the past four to six months.
While robust corporate performance in the US could create a case for an increase in IT budgets of corporates, the quantity of increase is likely to be moderate given the global economic uncertainty Given the uncertainties related to QE tapering, corporates in developed markets may prefer to conserve cash rather than significantly ramping up their IT budgets.
Gems & jewellery exports declined 6.7% over April-September 2013 mainly on falling precious metal prices and recent regulatory changes by the government. These factors, along with continued forex volatility, will continue to impact exporters in this segment despite consumer demand being favourable.
Source:- economictimes.indiatimes.com
Harley Davidson To Export India-Made Street 750 To Europe
Harley Davidson India (HDI) will begin assembling the Street 750 at its facility in Bawal, Haryana, from the second quarter of 2014. It will also export the vehicles to Europe.
India is the only country outside of the US to be making the new bike, which is built on the completely new “Street” platform. Also, it will be the first Harley Davidson product to be exported from the facility.
The first Harley Davidson member in the sub-Rs 5 lakh segment, the Street 750 is to be unveiled at the India Bike Week in Goa in early January, following which it will be showcased at the forthcoming Delhi Auto Expo.
Here last week to inaugurate HDI’s 11th dealership in India, Anoop Prakash, MD of HD India, said commercial deliveries of the Street 750 will begin by April or May next year. The Made-in-India bike will also be exported to Italy, Portugal and Spain. Total shipments of the model are pegged at 7,000-10,000 units.
HD will increase its investment in the Indian facility by around 35 per cent for assembling the Street 750.
Source:- thehindubusinessline.com
Nepal Imports Additional Power From India
Nepal has begun buying an additional 30 MW of power from India in a bid to ease the chronic power shortage in the country during winter, officials said Monday.
Nepal faces up to 16 hours of load-shedding during the season.
"Since Sunday, we have added an additional 30 MW power from India, purchased from the Power Trading Corporation of India," said Bhuwan Kumar Chetteri, manager of the system operation department of the Nepal Electricity Authority (NEA).
The authority is the sole entity for generating and distributing power in the country.
The Power Trading Corporation of India has sold the power to Nepal at a rate of Rs.3.75 (NRs.6) per unit. The additional power import takes Nepal's total import from India to 165 MW.
Nepal has been requesting India to provide at least 250 MW to meet its increasing power deficit.
"We are in a process to import additional power from various cross border points at this juncture as many cross border lines are being maintained from both sides," Chetteri told IANS.
Nepal has also been importing power from Indian states of Bihar, Uttar Pradesh and Uttarakhand, he said.
Several upgradation and revamp projects are underway to import power from other Indian states as well, he added.
The NEA is aiming to bring down load-shedding to 12 hours this winter by getting more power from India.
Currently, there is a shortfall of 350 MW to meet the requirements as existing capacity is just around 700 MW.
Measures are being taken to reduce power demand, including operating some multi-fuel plants and revamping existing power plants.
Officials said Nepal pays around Rs.22 billion every year for procuring power from India, which includes importing inverters and diesel generators.
Source:- newstrackindia.com
Cad In India Plunges To $5.2 Bn As Exports Rise, Gold Imports Decline In Quarter
Current account deficit (CAD) in India narrowed sharply to $5.2 billion, or 1.2 per cent of GDP, in the July-September quarter (Q2) of 2013-14 on the back of turnaround in exports and decline in gold imports.
The current account deficit (CAD), the difference between outflow and inflow of foreign exchange, was USD 21 billion, or 5 per cent of the GDP, in the second quarter of last fiscal.
"Contraction in the trade deficit coupled with a rise in net invisibles receipts resulted in a reduction of the CAD to USD 26.9 billion (3.1 per cent of GDP) in H1 of 2013-14 from USD 37.9 billion (4.5 per cent of GDP) in H1 of 2012-13," RBI said in a statement.
Notwithstanding a lower CAD during April-September (H1) of 2013-14, there was a drawdown of foreign exchange reserve to the tune of USD 10.7 billion as against an accretion of USD 400 million in same period last fiscal mainly due to a decline in net capital inflows under the financial account, it added.
Both the government and RBI are expecting the CAD to be below USD 56 billion in the current fiscal compared to the record high of USD 88.2 billion, or 4.8 per cent of the GDP last fiscal.
Besides, pick up in exports, the steps taken by the Reserve Bank and the government have resulted in a sharp decline in gold imports, which was one of the main contributors to high CAD last year.
The government has taken several steps, including hike in gold import duty to 10 per cent and restrictions on import of gold bars and medallions, to restrict CAD. It has also taken measures to boost exports, taking advantage of depreciating rupee.
On a Balance of Payment (BoP) basis, it said, there was a drawdown of foreign exchange reserves of USD 10.4 billion in second quarter as compared to that of USD 0.2 billion in the same period of last fiscal.
Source:- indianexpress.com
Voluntary winding up would also attract provisions of Section 446
CL: Provisions of section 446 would be applicable in case of valuntary winding up also
‘Multi Commodity Exchange of India’ notified as a recognized association for trading in commodity de
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
Goods exported under bond for exhibition and re-import liable to custom duty equivalent to excise du
Excise & Customs : Goods exported under bond for exhibition purposes and re-imported subsequently are covered under Serial Number 1(d) of Notification 94/96-Cus. and therefore, on re-import, are liable to customs duty equal to 'excise duty not paid'.
Commissioner can't revise an order of AO on grounds not raised during assessment
IT : Commissioner cannot revise an order on grounds regarding which assessee was not show caused, particularly when Assessing Officer had computed assessee's income after detailed inquiry
No additions merely due to lower GP ratio if no defect was pointed out in provisional audit report
IT: No additions merely due to lower GP ratio if no defect was pointed out in provisional audit report
Consumables used in manufacture and sugarcane are liable to Punjab Purchase Tax
ST/VAT: Consumables used in manufacture of taxable as well as tax-free goods and also sugarcane exempted in hands of grower, are liable to purchase tax under Punjab General Sales Tax Act
Nature, volume and motive behind share trading decide if profit earned therefrom is cap gain or busi
IT: Where Assessing Officer without examining various aspects of share transactions entered into by assessee, viz., nature and volume of transactions, period of holding and motive behind same, opined that assessee was investor in shares and income arising from sale of shares was taxable as capital gain, order so passed was erroneous and prejudicial to interest of revenue and, thus, Commissioner was justified in revising same under section 263
Cenvat credit can’t be transferred to new premises in case of amalgamation
Cenvat Credit : In case of amalgamation, Cenvat credit pertaining to amalgamating company stands transferred to amalgamated company but at same premises where amalgamating company was located; amalgamated company cannot transfer credit to new premises without actually transferring input/capital goods
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