CL : Where issues of oppression and mismanagement raised in company petition was covered in shareholder's agreement with arbitration clause and relief sought being consequential to lis pending before High Court in arbitration proceedings, such an issue was to be decided only by arbitral Tribunal unless party which raised litigation in a forum other than arbitral Tribunal was not a party to arbitration agreement
Wednesday, 4 December 2013
Dealings between assessee and NR on principal-to-principal basis rule out existence of 'service PE'
IT/ILT-I: Payment for use of copyright belonging to non-resident would amount to royalty within meaning of article 12(3) of DTAA
Agricultural income tagged as unexplained credit as no agricultural activities were performed by ass
IT : Where no agricultural activity was performed by assessee-firm, agricultural income shown by it was treated as unexplained cash credit under section 68
Karachi Firm Set To Take Part In Surat Textile Expo
Looking to foray into Indian markets, one of the leading Karachi-based textile groups, Gul Ahmed, is all set to participate in the annual three-day event for textile sector, "Fibre to Fashion", organised by the Southern Gujarat Chamber of Commerce and Industry (SGCCI) in Surat from Saturday
. The participation of the Rs 2,000 crore textile giant is one of the takeaways from the recent MoU inked between SGCCI and the Karachi Chamber of Commerce and Industry (KCCI) last month to strengthen cooperation between the two chambers. Both organisations have also mutually agreed to make a joint chamber of commerce to boost bilateral trade as part of the MoU.
"Gul Ahmed will be looking for a soft launch in India. They will be looking to expand the scope of its business by selling its products under its brand name and garnering more distribution partners here," said Jagat Shah, promoter of Cluster Pulse, an Ahmedabad-based economic development agency, who was one of the three members from Gujarat in the delegation that visited Pakistan in the last week of November.
"The participation of the Karachi-based textile brand is an outcome of the MoU we signed with KCCI, paving way to form a joint chamber of commerce and industry and facilitating trade visits for member of both the chambers in both the countries. While the current bilateral trade between India and Pakistan is worth $2.6 billion, it has the potential to reach 20 billion in the next ten years. We identified four sectors namely texile, agriculture, non-tariff barriers and banking in our deliberations with officials and business leaders from Pakistan," said Kamlesh Yagnik, President of SGCCI.
Source:- indianexpress.com
Exports To India Likely To Touch $500M
Indian High Commissioner to Pakistan Dr TCA Raghavan said on Wednesday that trade between Pakistan and India has improved substantially to $2.5 billion, and it is expected that Pakistan’s export to India would surge to $500 million this year for the first time.
During his visit to the Karachi Chamber of Commerce and Industry (KCCI), Mr Raghavan said the opening of Khokhrapar-Monabao passenger train service has paved way for a host of opportunities for both countries to boost trade.
Highlighting the need for normal trading activity between the two countries, he said the resolution of all issues, including law and order, terrorism, and the Kashmir, through dialogue was inevitable.
Mr Raghavan also lauded the role of business communities of both nations, saying they were the catalyst for the overall progress in trade ties between the two countries. Efforts must be made by both governments to effectively deal with the visa issues, he added.
Former KCCI president and Businessmen Group chairman Siraj Kassam Teli said that although trade ties between Pakistan and India had improved, a lot more needed to be done. He said the task of improving bilateral relations should not be left only on the governments and bureaucracies.
“It is heartening to note that business communities of both sides have come forward to enhance trade ties, which will ultimately leave no other option for both the governments but to do the same,” he added.
Mr Teli suggested that Indian visa policy restricted city-to-city movement of Pakistani visitors which must be relaxed and Pakistani business community should be allowed to move freely.
Underscoring the need for focusing on enhancing regional trade, he said that instead of focusing on expanding international trade to other countries, priority should be given to improve regional trade by encouraging trading activities amongst Saarc countries which currently remained limited to six per cent only.
“On the other hand, this regional trade amongst EU countries has risen to 70pc and it was around 40pc amongst Asean countries. These countries have been progressing, but unfortunately our region is far behind,” he added.
KCCI President Abdullah Zaki informed that Indo-Pak relations had progressed well with the passage of time but some major obstacles, including ending visa restriction and non-tariff barriers, required attention.
“Both countries have renewed interest to take concrete steps towards further intensifying their relations in the areas of trade, economy and investments,” he added.
Source:- dawn.com
India Rupee Drops As Costlier Oil Seen Boosting Import Bill
India’s rupee weakened for a second day on concern costlier oil will boost the nation’s import bill, offsetting any benefit from a drop in gold shipments.
Brent crude rose to a three-month high before a meeting of the Organization of Petroleum Exporting Countries in Vienna today. Indian refiners, the nation’s biggest purchasers of foreign exchange, are fulfilling all of their dollar needs from the local market after the central bank stopped direct supplies last week, the Reserve Bank of India said in a Dec. 2 statement.
“Higher oil prices are a concern,” said Vikas Babu, a currency trader at Andhra Bank in Mumbai. “Inflows are expected but we also expect bids for dollars from oil importers.”
The rupee dropped 0.2 percent to 62.4950 per dollar as of 10:02 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg. One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, fell two basis points, or 0.02 percentage point, to 12.21 percent.
India’s July-September current-account deficit shrank to the narrowest since at least 2010 as gold imports cooled, according to RBI data published Dec. 2. India, the world’s biggest consumer of the metal, raised taxes on bullion imports three times this year to pare a trade imbalance that helped push the rupee to a record low of 68.8450 per dollar on Aug. 28. The nation also ships in about 80 percent of its oil.
OPEC, the 12-member group which pumps about 40 percent of the world’s crude, is forecast to keep its production quota unchanged at today’s meeting. Investors also await U.S. jobs and new home sales data today that may provide clues as to when the Federal Reserve will pare monetary stimulus that has boosted inflows into emerging markets.
Three-month offshore non-deliverable rupee forwards weakened 0.3 percent to 63.96 per dollar, according to data compiled by Bloomberg. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
Source:- bloomberg.com
Cotton Arrivals Drop 35% As Farmers Await Better Price
Even as India’s cotton production is forecast to be on the higher side this year, arrivals of the crop have remained 30-35 per cent lower compared to a year ago. This is because farmers are unwilling to sell at the prevailing price levels.
Against the daily arrival of 210,000-225,000 bales (each of 170 kg) last year same month, this time it was 160,000-170,000. In Gujarat, the largest cotton-producing state, those were 55,000-60,000 bales, against 85,000-90,000 a year ago.
“Delay in season is also a reason for lower arrival in the country,” said Arunbhai Dalal of Arun Kumar & Company from Ahmedabad.
Experts said farmers are demanding Rs 1,000 a 20 kg, and they are ready to wait for the prices to reach the level.
Prices have fallen from the peak of Rs 48,000 a candy (equal to 356 kg) in the beginning of the season to Rs 38,500-39,000. The prices have dropped Rs 9,000 a candy since the beginning of the season due to higher crop projection and weak demand. Raw cotton, or kapas, price was Rs 930-960 a 20 kg in various markets in Gujarat.
According to the Inter-national Cotton Advisory Committee (ICAC), against the price scenario for three seasons, the 2013-14 world production was expected to outpace the world consumption. The 2013-14 world production is projected at 25.6 million tonnes (mt), down 1.2 mt from the last season.
World consumption is forecast at 23.8 mt in 2013-14, up two per cent from last season, with an upward revision of 85,000 tonnes in India from last month.
Globally, too, prices have shown a downward trend. ICAC noted, in its December report, in April, it had projected prices for the current season at 118 cents a pound. But, since then, the prices have plummeted and the current midpoint of the forecast range is 88 cents.
Arvind Patel, vice-president of Saurashtra Ginners’ Association (SGA), said, “Farmers want higher price as their costing has gone up. During sowing and harvesting, the cost of labor, seeds, pesticides have increased.”
Generally, at this time or in month of December, ginners run their unit in two shifts but this year as they are not getting proper supply most of the ginning units operate in single shift. On the demand front, domestic mill demand is also limited and they are buying as per their requirement.
Taking into consideration, the overall situation of cotton production, ending stock, price trend and traders’ reports, the research team of Department of Agricultural Economics, Junagadh Agriculture University (JAU), analysed the historical monthly price data of cotton collected from Gondal APMC.
The econometric analysis of cotton prices and consultation with the NAIP project, Domestic and Export Market Intelligence Cell, Tamil Nadu Agricultural University, Coimbatore, revealed the prices of raw cotton during November 2013 to January 2014 might remain in the range of Rs 920-1040 a 20 kg.
JAU expert said, “Since there is a limited chance for the prices to increase in the near future, it is suggested that farmers may sell cotton upon harvest, without going for storage, taking their own decision.”
Cotton traders and market analysts do not expect cotton prices to increase in near future. The upside trend may start after January 2014 when there is demand in the market.
Source:- business-standard.com
Indian Wine Exports May Get A Boost With Global Fall In Production
Global demand for wine exceeded production by a huge margin last year. With the shortfall forecast to widen this year, Indian producers could use the opportunity to increase exports, given that the domestic market is at saturation point and the quality of local wine is improving, analysts say.
Global wine production peaked in 2004 and continues to decline, according to a recent report by Morgan Stanley Research. Demand for wine exceeded supply by 300 million cases in 2012, the biggest shortfall in over 40 years. Production, too, fell to its lowest levels in more than 40 years, the report said, suggesting “there may be insufficient supply to meet demand in coming years, as current vintages are released”.
Vintage is defined as the yield of wine or grapes from a vineyard or district during a season.
Production declines, according to the report, have continued in France, Spain and Italy and the global export market is estimated at about one billion cases. Morgan Stanley in its note said: “As consumption turns to the 2012 vintage, we expect the current production shortfall to culminate in a significant increase in export demand, and higher prices for exports globally. Further growth in consumption in the meantime may exacerbate the shortage when it comes through.”
Exports account for 40% of global production—up from 15% 30 years ago, the note added.
Technopak Advisors Pvt. Ltd, a consulting firm, pegs the overall Indian wine market at 975,000 cases, or about Rs.175 crore at wholesale prices, and growing at a compounded annual growth rate (CAGR) of 20-25%. The overall market can be bifurcated into domestic and imported markets, which account for 70% and 30%, respectively.
Official data from India’s Directorate General of Foreign Trade revealed that 122,000 cases of wine were exported in 2012.
The trend may offer Indian wine makers an opportunity to expand abroad by exporting more, wine growers say.
“India has not seen a decline in wine production unlike other major wine producing countries, this would allow us to expand and grab more and more global market share” says Cecilia Oldne, head of international business at Sula Vineyards.
Sula has been exporting to 23 countries and plans to enter more markets soon, said Oldne. “Many Indian wine makers are looking at expanding abroad. We currently sell our products in the UK and would soon be launching our wines in markets like Japan, Hong Kong, China and the US,” said Shailendra Pai, founder and chief executive officer of Vallonne Vineyards.
Milind Pandit, head sales and marketing of Charosa Winery, said it makes sense for Indian wine makers to expand globally as the Indian market is growing at a slower pace.
“We used to see the Indian wine market growing at 30% earlier, but now it has slowed to much lower rate,” Pandit said.
Competing in overseas markets may not be easy.
Ankur Bisen, senior vice-president, retail and consumer products at Technopak, said: “The Indian wine market remains a young market, where most wine is made out of table grape variety.... It would be difficult for Indian players to compete in a global market where vintages are more popular.”
Nikhil Agarwal, a wine marketing consultant and founder of a wine portal www.allthingsnice.in, said: “It will take some time for Indian wines to succeed in global markets as a lot of people do not know about Indian wines. The Indian wine industry should work collectively and market itself. There is also a misconception that Indian wines are inferior to foreign ones”.
According to Ajay Shetty, chief executive officer of Myra Vineyards, the cost of wine production is higher in India compared with other wine-producing countries. “To improve the quality of wine, we need to invest in better technology, but domestic consumption needs to improve fast to justify such investments,” he added.
Nevertheless, many Indian wine makers are adopting several initiatives to improve the quality of wine produced in India. Many have begun growing grapes of foreign origin in India to improve wine quality and appeal to foreign customers. For instance, Vallonne Vineyards has begun growing Malbac, an Argentinian variety of grape, and Cabernt Sauvignon, a French variety. Grover Zampa, another vineyard, recently started growing Cemprinello Greeche—a Spanish grape. Indian wineries are also placing emphasis on viticulture, the science of growing grapes. They are currently bringing in international experts to train farmers to grow grapes of international standards.
Pai of Vallonne Vineyards said: “90% quality of a wine is determined in the vineyard and hence we are investing in bringing in innovation in agricultural practices.”
Besides India has a weather more suited to wine than European countries.
According to Morgan Stanley, Europe now has 10% less wine-making capacity than it did in 2005. France and Spain, with Europe’s largest capacity, are 10% and 13% lower respectively than in 2005. The decline is attributed to poor weather conditions in these European regions. France saw a fall of 20% in its wine production and Argentina also saw its wine production to fall 24% in 2012.
Sumedh Singh, chief executive officer of Grover Zampa, said, “Weather is not a concern to Indian wine growers, it is only European wine growers who are suffering due to bad weather”.
“There is a misconception that India is too warm to grow grapes of international variety. Nasik for instance is 600 metres above sea level with dry climate and cool nights during growing season which is ideal climate for growing good variety of international grapes... moreover India is the only country in Northern Hemisphere that has winter harvest that makes wine producing unique here,” says Sula’s Oldne. Pandit of Charosa Winery believes the quality of Indian wine has improved over the last few years. “Indian wine used to be sweet earlier but now has improvised itself to drier versions of late, which appeals to international customers.”
Source:- livemint.com
Fruit and vegetable chutney are processed fruit and vegetables; liable to VAT at 4%, says HC
ST/VAT : Karnataka VAT : Mango chutney, Mango garlic chutney, Mango and saffron, Apple and cinnamon, Mutton kolhapuri curry paste, Kadai chicken curry paste and Vegetable biryani paste are 'processed fruit and vegetables' liable to VAT at 4 per cent and kids colour filling exercise books are 'printed books' exempt from VAT
India, Japan 'Seriously' Examining Joint Lng Procurement
India and Japan, two of the world's biggest buyers of liquefied natural gas (LNG), will in next three months look at buying the fuel jointly so as to hammer down high prices.
"We want to combine our buying powers to get better price," Oil Secretary Vivek Rae told reporters on sidelines of the 8th Asia Gas Partnership Summit here.
The two nations, who feel LNG sold to Asian countries is priced more than that supplied to consumers in Europe and the US, had in October last year agreed to carry out a joint study to examine ways to mitigate increasing import costs in Asia as well as to maintain stable supplies of LNG to the region.
In September, they agreed to work together towards the development of LNG markets that will enable effective, stable and globally competitive LNG procurement.
"We are seriously examining joint procurement of LNG," Rae said. "In three months we hope to examine if joint procurement is possible and work out modalities."
Asked if a joint tender can happen in three months, he said, "May be."
India, the seventh largest LNG buyer in the world, and Japan, the biggest importer of liquid gas, currently buy the gas separately. This bring to the market huge competing demand, pushing the prices up.
New Delhi has been pushing for LNG buyers forming a forum to better negotiate price with suppliers in the Middle East, Africa and Australia.
Speaking at the conference yesterday, Oil Minister M Veerappa Moily had asked large consumers in the region like China, Japan and Korea to forge an Asian buyers block to extract price discounts.
Despite 70 per cent of LNG being consumed in Asia, energy suppliers sell fuel to the region at a rate which is higher than the so-called premium markets of Europe.
"We understand that its not only demand supply imbalance, which govern prices for Asian markets. There are other elements too which determine the Buyer-Seller relationship," he said yesterday.
Moily had discussed the idea with Japan's Minister of Economy, Trade and Industry Toshimitsu Motegi when he visited Tokyo in September.
India wants LNG price to be mutually acceptable for both producers and consumers.
Since the prices of individual contracts signed on a bilateral basis are confidential, there are no reliable price indices that accurately reflect the LNG supply and demand balance in the region at this point.
Source:- economictimes.indiatimes.com
'Small size' and 'Numerous quantity' of stock can't be reasons to exclude it for valuation purposes
IT: Fact that items of stock were small and numerous cannot be reason to exclude same from closing stock
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