IT: Exemption under section 10(23C)(iiiac) is automatic for Hospitals which are wholly or substantially funded by Government of India or a State Government
Monday, 9 December 2013
Revenue supposed to verify agreement between parties and relevant tax treaty to bring payment within
IT/ILT: To decide whether payment made by assessee to its subsidiary of USA amounted to 'fees for technical services' or same was reimbursement of expenses, it was necessary to look into agreement between assessee and its subsidiary and also whether services rendered fell within ambit of 'technical service' as per DTAA
Non-filing of Form 3CEB in response to sec. 142(1) notice won't allow reassessment after four years
IT: Non-filing of document, viz., Form 3 CEB, in response to notice under section 142(1) will not, by itself, without anything more entitle Assessing Officer to take action to reassess an assessee in respect of an assessment year after expiry of four years from end of relevant assessment year
Natural Rubber Imports Fall 4.6%
09-Dec-2013
India's natural rubber imports fell 4.57 percent on year in November to 22,872 tonnes, the Rubber Board said on Monday, as tyremakers reduced overseas purchases after prices in local markets plunged to their lowest level in more than three years.
Output of natural rubber fell 7.1 per cent to 91,000 in November, the trade body said. India, the world's fourth-biggest producer of natural rubber, also imports it from Malaysia, Thailand and Indonesia.
Source:- business-standard.com
How India Might Find Its Own Balance In Asia
India does not appear to be comfortable with the growing tensions in Asia that follow the United States of America’s attempts at ‘rebalancing’ the Chinese assertion of influence in the maritime regions contested by its neighbours. The discomfort comes through loud and clear in the speech given on November 22 by the prime minister, Manmohan Singh, to the combined commanders’ conference in Delhi. Getting his exact words on record would be useful to understand the prime minister’s anxiety: “If you survey the global strategic environment over the past decade, it would not escape your notice that, just as the economic pendulum is shifting inexorably from West to East, so is the strategic focus, as exemplified by the increasing contestation in the seas to our east and the related ‘pivot’ or ‘rebalancing’ by the US in this area. This, to my mind, is a development fraught with uncertainty. We don’t yet know whether these economic and strategic transitions will be peaceful....”
Singh then focuses on the global scenario of “intense competition”: “While globalization has induced growing and complex interdependencies among states and multinationals on the economic and trade front, it has also nurtured intense competition and rivalries in the security domain. Managing this contradictory tenor, which has been highlighted by the global surveillance operation mounted by the US National Security Agency, is also a policy imperative for us. Naturally, our objective must be to acquire tangible national capacity, or what the lexicon now refers to as comprehensive national power.”
India’s discomfort with the US global snooping operation revealed by Edward Snowden, in which India was an important target, also comes through clearly. India has made clear its displeasure at the US’s plans of drastic withdrawal of troops from Afghanistan because that promises a more intense jihadi campaign with Kashmir as a prime target. Indian and US diplomats have already been involved in some bitter media sparring in Bangladesh with Delhi backing the Awami League and the US, at least its local envoy, indicating a clear preference for the BNP-Jamaat-e-Islami combine.
Now after the India-US-Japan trilateral in Tokyo, it is beginning to emerge that Delhi insists on being left to do its own ‘balancing’ in Asia, and is happy to develop better relations with both China and its neighbours at the same time. Earlier this year, India’s former envoy to the US and former foreign secretary, Nirupama Rao, tried to drive home this point to an American audience. On February 4, she said in a lecture at Brown University, “We are part of the Asia-Pacific and an Indian Ocean world that traditionally lived in peace, pursuing the traffic of ideas, the peaceful absorption of different religions without proselytization, pursuing trade and commerce in a non-polarized, peaceful, common economic space. In our view, more than geopolitical, or geo-economic, this was a geo-civilizational paradigm — a creative space with revolving doors where civilizations coalesced and did not clash. One has only to visit the caves of Ajanta in western India or see the murals of Dunhuang in China’s west to see this vision of unity that marked our past... This is the region where we hear the muffled footsteps of historical travellers and thinkers like Boddhidharma of India and Xuan Zang of China beat in our blood, to use a phrase from Rabindranath Tagore. These were lives mortgaged to pilgrimage, and voyages of intellectual discovery. We see that past as a rough guide to our future.”
Seeing this past as the “rough guide to our future” may not exactly impress the US. A “geo-civilizational paradigm” is much too woolly a concept for contemporary diplomacy in a country that understands and promotes “containment” and “balance of power” — key concepts of the European colonial-era diplomacy, provided greater relevance and thrust by US policy during the Cold War and after — a policy that thrived on identifying threats and villains, the bad guys and the good guys, those who need to be boxed into corners and those who need to be used to help that happen. But India — with its long tradition of non-alignment rooted in a philosophical conviction that truth is neither here or there but often in between — has good reasons to attempt a new text of diplomacy in what appears to be an emerging Asian century.
So, Rao had to remind her American audience at the Brown India initiative, “Guided by the strong economic rationale of our ‘Look East’ policy, ASEAN and East Asian countries — including Japan, China and South Korea — have emerged as large trading and investment partners of India. The richness of this engagement is visible in wide-ranging cooperation in areas as diverse as science and technology, tourism, human resource development, transport and infrastructure, health and pharmaceuticals. Indeed, the strategic footprint of our relations with China and Japan, particularly, will exert a major impact on the future of the region.”
So if the core focus of US “rebalancing” is containing China’s growing influence by developing an Asian equivalent of Nato, India’s “rebalancing” involves developing balanced relations with both China and its Asian neighbours like Japan, Vietnam, South Korea and other ASEAN countries (together with Australia) in areas of trade and commerce as well as security. That explains why India will do everything possible to avert a conflict-like situation with China that was developing over the Depsang bulge and within six months, pull off the Border Defence Cooperation Agreement with China. That explains why India will agree to take forward the Bangladesh-China-India-Myanmar economic corridor plan, and why its foreign ministry will start backing the Kunming-Kolkata Forum. And that also explains why within a month of Singh’s Beijing visit, India will host the general secretary of the Vietnam Communist Party and then plan similar visits by the prime ministers of Japan and Australia. Otherwise, how would one be able to explain India resuming military links with China through joint counterterrorism exercises in Yunnan even when Delhi agrees to supply military hardware to Vietnam. The whole idea is to augment national military power, but use it only as a last resort, avoiding any deployment or military exercise perceived as hostile by China.
It is interesting that the Chinese have also reciprocated US “rebalancing” (essentially, redeployment of US military specially naval assets to Asia) by some aggressive “charm diplomacy” in southeast Asia. Around the time that it was trying to build bridges with India and preparing to host Singh in Beijing, the Chinese president, Xi Jinping, and Premier Li Keqiang were touring a host of southeast Asian countries. Li’s proposed “2+7” cooperation framework between China and ASEAN (two political consensuses and seven areas of cooperation) is seen as a game-changer because it seeks to upgrade the China-ASEAN region into a Free Trade Area that will ultimately draw in India and create an integrated market for an area with half the world’s population.
During Asia-Pacific Economic Cooperation’s finance ministers’ meeting at Bali, the Chinese proposed multilateral foreign-exchange swaps with ASEAN countries to help them face “external shocks”. This, after having already done similar deals involving 1.4 trillion yuan. In Indonesia, Xi proposed an Asian infrastructure bank to help finance connectivity and crucial regional infrastructure projects like the high-speed railway connecting China to Thailand and Singapore.
China has been countering Washington’s efforts to develop the Trans-Pacific Partnership with its own heightened negotiations on Regional Comprehensive Economic Partnership, an initiative to incorporate existing free-trade zones between ASEAN and other countries. The Yunnan-based Link Times was quick to point out, “Although the US and Japan have tried to highlight the potential military threat posed by China’s rise, economic issues remained the primary concern of Asian countries. For example, when the US government shut down and the threat of a treasury default loomed, it was Japan , US’ closest ally in Asia, who joined China in pressuring the US to avoid a default”.
Interestingly, this Link Times article talks of Japan and Vietnam as allies of the US, not of India. Both India and China are keen to promote ever greater regional cooperation in southeast and east Asia to create a “larger cake” (a Chinese expression for a win-win situation for all). Without this new diplomatic ethos that focuses on cooperation and not conflict or containment, an Asian century will remain a dream on paper, manipulated by non-Asians, who would like contests and confrontation to push their armaments exports to a prosperous Asia rather than allow it to emerge as the globe’s economic powerhouse.
Source:- telegraphindia.com
Indian Cotton Seen Up On Demand, Lower-Than-Expected Supply
Cotton futures in India, the world's second-largest producer, are expected to rise this week on export demand and likely lower supplies as farmers hold back hoping for better prices, though estimates of higher output could restrict the upside.
Cotton supplies across India are around 150,000-160,000 bales of 170 kg each as against the expectation of 200,000 bales as production is expected at a record high, spot traders said.
The state-run Cotton Advisory Board estimated India's cotton output at a record 37.5 million bales in the year.
Farmers have held back supplies on expectations of better prices and are selling only as per the requirement amid good export demand, traders said.
"Farmers have seen good prices, so they are not willing to sell at lower levels. If spot cotton prices fall below 38,000 rupees a candy, arrivals would fall sharply," said Manu Mangaldas Shah, a trader from Ahmedabad in Gujarat state.
In the spot market, the price of the most-traded domestic spot Shankar-6 variety fell 100 rupees to 38,900 rupees per candy of 356 kg, data from the Cotton Association of India showed.
The January cotton contract ended 0.31 percent higher at 19,130 rupees per bale on the Multi Commodity Exchange.
"Higher prices (Indian cotton) will see export demand reduce sharply, as China is getting stocks at lower prices from the reserve sales," Kotak Commodities said in a research note.
China's purchases of domestic cotton for state reserves have exceeded 3.5 million tonnes midway through the 2013/2014 year after last week's buying of 475,800 tonnes, official statistics show. Stockpiling by the world's top cotton buyer is a driver of global prices of the fibre.
Source:- in.reuters.com
India: Plan To Export 10,000 Tonnes Of Banana To Gulf Countries
09-Dec-2013
Measures are being taken to expand the area under tissue-cultured banana cultivation to 10,000 hectares from the present 6,000 hectares to tap export markets and meet the growing demand, said Agricultural Production Commissioner Sandeep Saxena.
The State government had allotted Rs.1.2 lakh crore for agriculture development under its Vision 2023 Plan, according special importance to 10 crops including banana. All required technologies and advanced crop management techniques would be offered to farmers to boost production and scale down production costs.
With effective propagation of drip irrigation system among banana growers, almost all of them in the district had switched over to drip irrigation. Such facility had scaled down use of fertilizers, reduced maintenance costs and cut down weed growth in farms. Moreover, the use of water too reduced substantially. All required inputs reached the root directly and it protected soil fertility.
The Commissioner also advised farmers to form banana clusters to produce banana on a large scale and to enable buyers to procure banana from one spot. Moreover, clusters could handle bulk orders easily and ensure instant supply of large quantities of banana in uniform quality and size. Cluster members would get more assistance under the National Horticulture Mission. Ultimately, profit margin would go up if they sold their produces through clusters, he advised.
Collector K.S. Palanisamy said that the government had constructed a banana processing and ripening chamber to process bananas at source. Seven private processing centres have also been functioning to meet the growing demand.
Earlier, banana growers had sent the raw banana to Bangalore for ripening. Some progressive farmers had been exporting hybrid banana to Singapore and Central Asian countries, he added.
Source: thehindu.com
Rashtriya Ispat Nigam Hopes For Rs 1,000-Crore Export Revenue This Fiscal
Public sector steel maker Rashtriya Ispat Nigam is hopeful of achieving an export turn over of Rs 1,000 crore this fiscal on the back of new product launches, a top company official said.
"We are hopeful that around Rs 1,000 crore of export turnover will be achieved in the current financial year," RINL commercial director TK Chand told PTI today.
The company is going to launch a new product, which will give the firm around Rs 300 crore in export revenue in the near-term, helping it to achieve the number.
RINL has registered 142 per cent rise in exports turnover during the April-November period of current financial year to Rs 519 crore against Rs 366 crore reported in the same period of last fiscal.
"We hope to export 70,000-80,000 tonnes of this new product, which will give us revenue of Rs 300 crore. This will help in achieving Rs 1,000 crore of export turnover in this fiscal," Chand said.
As per the steel firm, it is mainly exporting to South and Southeast Asia.
"As per our plan, we aim to open office in Sri Lanka in the fourth quarter," Chand said, adding it is also witnessing sound demand from West Asian economies.
RINL, which is headquartered in the port city of Vishakhapatnam, has a natural advantage for exports.
Meanwhile, the company said domestic demand till now is subdued but expected it to pick in the fourth quarter. The Navaratna public sector enterprise has a 3 million tonnes production capacity in Visakhapatnam plant which is undergoing expansion.
Source:- economictimes.indiatimes.com
A Nil Imports Year Likely For Coal India
Coal India Ltd is unlikely to import the fuel this fiscal. With just three months for the financial year to end, the public sector miner has not received a single ‘firm commitment’ from any power company asking it to provide imported coal.
“Coal India is ready for imports if asked by the power sector buyers under the fuel supply agreement (FSA). We have asked them; not a single company has given firm commitment till now,” a senior company official told Business Line.
According to the latest FSA, the company will offer 65 per cent domestic coal for 2013-14 and 2014-15; 67 per cent for 2015-16 and 75 per cent for 2016-17 to the annual contracted quantity (ACQ).
To meet the balance FSA obligation (15 per cent), Coal India may import coal and supply the same to willing power producers on a cost-plus basis. The power producer can also import coal by itself. The miner is sealing FSAs with 78,000 MW of power plants.
If power firms are not seeking imported coal, it is mainly due to lower electricity demand and improved domestic supplies, say industry watchers.
India is seeing a fall in overall electricity demand. For example, in October 2013, demand was 80,458 million units, down 6.35 per cent from 85,922 million units in October 2012.
However, the trend reveals that electricity deficit is reducing at a faster rate than the decrease in demand. This means power stations are running at lesser plant load factor (PLF), resulting in lower fuel demand. The overall PLF in October 2013 came down to 61.85 per cent from 71.04 per cent in the corresponding month the previous year.
Second, some of the power utilities such as those r un by NTPC and Tamil Nadu Electricity Board import coal themselves. In June, the Cabinet Committee on Economic Affairs gave its go-ahead for a mechanism that allows power generators to pass through to distribution utilities the cost of expensive imported coal used by them.
Coal India reported a 2 per cent growth in supplies during April-November at 292.9 million tonnes against the same period in 2012. The public sector company had earlier said it is ready to import 4-6 million tonnes through MMTC and STC. It would charge around 2 per cent as service charge.
Source:- www.thehindubusinessline.com
Goods Imported Duty Free Under Advance Authorisation Can Be Sent To A Job-Worker
We have imported our inputs duty free under advance authorisation. Can we send such imported inputs to a job-worker for carrying out part of the process of manufacture of the finished goods that we want to export? Do we need any permission for that?
As per Para 4.1.5 of the Foreign Trade Policy, goods imported under advance authorisation are subject to Actual User Condition. As per Para 9.5 of the Policy, "Actual User (Industrial) means a person who utilises imported goods for manufacturing in his own industrial unit or manufacturing for his own use in another unit including a jobbing unit." Therefore, you may send the goods imported duty free under advance authorisation to a job-worker. You do not need any permission but you must follow the procedure for job-work laid down under the relevant Central Excise notification (e.g. 214/86). It is desirable that you get the name of the job-worker as supporting manufacturer in your advance authorisation.
We want to know whether we can consider design and development of samples for exports as services incidental to manufacturing and claim the benefits of Served from India Scheme (SFIS).
The entry 'Services Incidental to Manufacturing' appears under the heading 'Other Business Services' in the list of services eligible for SFIS benefits at D(f) of Appendix-41 of the Handbook of Procedures Vol.1. However, in your case, it appears that you want to export samples and not the services incidental to manufacturing. You can try to make out a case that design and development services should be treated on a par with Research and Development services, if the billing is done for design and development charges and the results of your design and development services are sent to buyers of such services by way of samples. It is for the Director General of Foreign Trade (DGFT) to consider such a representation and take a call on whether to grant SFIS for such services.
We have imported certain capital goods under an Export Promotion Capital Goods (EPCG) licence but have not been able to install the same within six months. Can we get extension in time limit and, if so, from whom should we get the extension?
Condition no. 10 of the Customs exemption notification no. 22/2013-Cus dated 18.04.2013 does contain a provision for production of installation certificate within six months from the date of completion of imports, or such extended period as the Deputy/Assistant Commissioner of Customs may allow. Similar provisions are also there in other Customs notifications relating to imports under EPCG authorisation/licence. So, you may approach the concerned authority at the port of importation and obtain necessary extension. The Foreign Trade Policy, however, contains no such provision for extension. So, you may approach the Policy Relaxation Committee at the office of DGFT Headquarters with the necessary request, giving reasons for the delay. The EPCG committee has condoned the delay in installation in several cases.
Source:- business-standard.com
Increase In Gold Smuggling Due To Hike In Import Duty
The Finance Ministry has said incidence of gold smuggling has increased due to hike in import duty and fluctuation in global prices.
"The increase in the cases of smuggling of gold may be partly attributed to the fluctuation of the prices of gold and Customs duty rates," Minister of State for Finance J D Seelam said in a written reply to Lok Sabha.
With an aim to discourage gold imports, one of the major reason for high current account deficit, the government has raised the customs duty to 10 per cent, while on jewellery it has been increased to 15 per cent.
He informed that gold worth Rs 208.23 crore has been seized in seven months through October in the current fiscal. The seizure was 107.51 crore, 42.38 crore adn 17.22 crore in the previous three fiscal, respectively.
During April-October 2013-14 period, there were 664 cases of gold smuggling.
The Minister further said that the maximum amounts of seizures (in terms of number and value) have been reported from various international airports wherein the gold/gold jewellery was being attempted to be smuggled using the passengers as well as cargo and courier.
"Mostly the source of the seized gold/gold jewellery had been UAE, Singapore, Sri Lanka, Bangladesh, Nepal, Hong Kong, etc," Seelam added.
Source:- economictimes.indiatimes.com
Rupee Opens Higher To Breach 61 Per Dollar
The rupee on Tuesday opened higher against the dollar, carrying forward the momentum it gained on Monday, on hopes of emerging political stability in the country and tracking the strength seen in Asian currency markets.
The partially convertible rupee opened at 60.99 per dollar against Monday’s close of 61.1350. Since its all-time low of 68.85 on 28 August, the domestic currency has gained 12.67% till date, but has lost 9.97% since January.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.043, down 0.12% from the previous close of 80.134. Majority of the Asian currencies were seen trading higher against dollar.
The yield on India’s 10-year benchmark bond was trading at 8.920%, up from its previous close of 8.906.
At 9.10am, the rupee was trading at 61.07, up 0.11%. India’s equity benchmark Sensex was trading at 21,293.58 points, down 0.15% from its previous close.
Source:- livemint.com
Sec. 167 relief granted as co. couldn't convene AGM due to absence of one shareholder out of two
CL : Where company was not able to convene AGM in view of reason that it had only two shareholders and one of shareholder was not attending meeting, it was a prima facie case to grant relief under section 167
Society to get recognition of a trust if it extends its object to benefit public at large
IT: Where initially object clause of society was limited to benefit of business community of an area but subsequently object clause was amended to extend benefit to public at large, application of registration under section 12A to be reconsidered in light of amended object clause
No penalty if exact nature of contravention with specific clause of law isn't specified
Cenvat Credit : When particular clause of provisions of law/Rules is neither mentioned in show-cause notice nor in adjudication order and assessee is not put to notice as to exact nature of contravention for which penalty is proposed, assessee cannot be made liable to penalty
Prizes to customers are sales promotion activities and not akin to winnings from lottery to attract
IT : Where assessee had conducted sales promotion schemes and distributed prizes to customers wholly in kind of an amount of Rs. 60 lakhs, it was not obliged to deduct tax at source under section 194B in respect of prizes paid in kind
Additions on mere pretext of bogus purchases deleted as seller confirmed such transactions
IT: Where assessee was trading in ghee and Assessing Officer made addition to its income on plea that purchases shown from seller were bogus purchases and profit to this extent had been suppressed, since seller had confirmed making of purchases by assessee, impugned addition was not justified
No addition of EC or SHEC on amount of custom duty for DTA clearances made by 100% EOU
Excise & Customs : In view of unchallenged Tribunal judgments in favour of assessee, in computing excise duty leviable on DTA clearances by 100% EOUs, education cesses are not required to be added to amount of customs duty determined as per customs laws
Assessee got depreciation on a mall even if when part of it wasn't commercially exploited
IT: Where assessee allocated head office expenses on basis of capital cost of each project, Assessing Officer was not right in allocating such expenses in different ratio on estimated basis
SC slams department for levying ST penalty under Sections 76 and 78; grants stay on recovery
ST : As per section 78 if penalty is payable under this section, penalty cannot be imposed under section 76; further, in adjudication order, there was finding that assessee had not indulged in fraud, collusion or wilful mis-statement, hence, demand of penalty was stayed
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