IT: Where assessee did not realize sale proceeds of exported goods within stipulated period, reopening of assessment on issue of section 10B deduction was valid
Tuesday, 17 December 2013
Financial analysis of borrowers won't be deemed as facilitation of loan agreement as per India-Franc
IT/ILT: Where role of assessee in inninged transactions of foreign currency loan under ECB was to provide financial analysis of borrowers, general market conditions and regulatory environment, nature of services provided by assessee did not fall under terms of facilitation of conclusion of loan agreement or signing thereof as stipulated under para 4 of protocol between India and France
Cooling zone isn't includible in determining number of chambers to compute production capacity based
Excise & Customs : Cooling zone, which is neither installed in nor attached to stenter and did not aiding in process of heat setting or drying of fabrics but merely cooled fabrics which came out of stenter, cannot be counted as chamber for determining annual capacity of production for levy of excise duty
Eac Losing Battle Against Illegal Fishing
While this God-given resource has to be enjoyed, both for food and revenue, greed has sidestepped sustainability of the fisheries resource, risking the industry’s survival.
As 2013 goes to bed, the question how illegal fishing can be wiped out in its entirety is still a big one not just for Uganda, but all the other East African Community (EAC) countries. Here are highlights from the sector.
President endorses fish ban
President Yoweri Museveni endorsed a move by Mukono district leaders in May to impose a fishing ban in the area between July and October every year to allow fish to mature.
The step, considering that fish revenues constitute a big percentage of revenue for Mukono and other districts bordering Lake Victoria, was one worthy of emulation.
The President also supported the ban on the importation of illegal fishing gear used in catching immature fish.
Rise in trade deficit
Uganda’s trade deficit rose by 14% in June from the previous month, driven up by imports, amid falling commodity exports due to the euro area crisis, announced Bank of Uganda.
The country’s trade deficit climbed to $252m in June, from $221m in May, as balance of payments position was expected to worsen in the months ahead as the Euro Zone crisis curbed remittances, foreign direct investment and earnings from exports of commodities.
Europe is the main buyer of Uganda’s fish, flowers and coffee. It is also host to a number of Ugandan immigrants who usually send money back home.
Fish prices fall
In November, a kilogramme of Nile Perch cost sh7, 000, compared to sh13, 000 in October. A medium sized Tilapia fish also costs about sh25,000, down from about sh35,000 months ago.
Fish is plenty during April and May, as well as November and December.
Fish holidays
The Government is planning to introduce fishing holidays in a bid to enable the fish breed and increase stocks.
Fisheries state minister Ruth Nankabirwa said the Government collaborated with Uganda Revenue Authority (URA) to strengthen security on border points to hinder the entry of illegal nets into the country.
It also investigate and arrest culprits involved in catching immature fish.
Government statistics
Fish exports have over the years emerged as Uganda’s second major non-agricultural foreign exchange earner, with exports to premium international markets rising from $0.40m (about sh820m) in 1998 to over $145m (about sh297.3b) in 2008.
However, this fell to $117m in 2007 and finally $82m in 2010 as the country exported 15,600 tonnes of processed fish. The free-fall continued well into 2011, with 14,500 tonnes of fish exported, a drop from 18,000 tonnes in 2009.
The peak exports was 37,000 tonnes in 2005. Of the 660,000 tonnes of fish produced, 100,000 tonnes of the Nile Perch are processed for export to EU markets, with 100,000- 150,000 tonnes salted and dried or smoked for regional markets.
Sustainable and prudent harnessing of fisheries resource still eludes Uganda, with 60% of fish traded in local and regional markets being immature and handled under unhygienic conditions. About 300,000 tonnes of fish are traded locally, according to data from the department of fisheries resources, Entebbe.
Formal regional trade earns $35m on average, whilst Illicit and informal regional fish trade has grown from under $10m a year five years ago to $70m today. Illegal fishing practices culminated in a $60m (about sh120b) loss in returns in 2008, $39m in 1996, $28m in 1997 and $34m in 2000.
Source:- newvision.co.ug
India To Issue Circular On Excise Duty Soon
In a move that may end months of uncertainty for industry following the Supreme Court’s decision in the Fiat India case, the finance ministry on Tuesday said the government would issue a circular by next month specifying how excise duty will be levied on goods that are sold below their cost of production.
The court had ruled last year that Fiat India will have to pay excise duty on the basis of cost of production plus a notional mark-up, rather than on the selling price, which was lower than the production cost. This ruling affected many auto makers and fast-moving consumer goods producers and other manufacturers, who often sell goods below their cost price to capture market share or prune inventories— especially in a slowing market. In the 11 months ended November, passenger vehicle sales have fallen 7.4% in India as compared to the same period last year.
In the absence of clear rules, the tax department, looking at ways to raise tax revenues and narrow the fiscal deficit started scrutinizing past sales. Following concerns expressed by the industry in mid-2013, after the Union budget was presented on 28 February, the government promised to set up a committee in a month but that did not materialize.
It is still not clear whether manufacturers will get any relief from the proposed circular.
“The tax department has been writing to companies and asking if they have been selling goods below market price and nudging them to furnish details of the same,” said Harishanker Subramaniam, partner and national leader, indirect taxes, at audit and consulting firm EY. “The circular that comes out may explain in which cases the Fiat judgement will be applicable,” he said.
In a statement, the finance ministry said the modality of implementation of the decision of Supreme Court is under consideration of a committee of chief commissioners and a circular in this regard will be issued by 15 January.
This decision was taken following the suggestions by a forum headed by Parthasarathi Shome, adviser to the finance minister, that was set up in July to exchange views between industry groups and government for tax issues.
Vishnu Mathur, director general of Society of Indian Automobile Manufacturers, declined comment stating that nothing has been communicated to the auto lobby.
The government will also ensure that the pending service tax refunds for export of services are made available to the taxpayer.
“It is a good move on part of the government to push through rebates and refunds. The delay in refunds of service tax has been one of the major issues faced by the industry,” said Subramaniam.
The finance ministry will also address the problem of service tax on reinsurance agents, distribution of Cenvat (central value added tax) credit to input service distributors to any unit of the entity so long as the unit to which the credit is getting distributed is manufacturing dutiable goods or providing taxable output services.
Source:- livemint.com
AO to give a chance to assessee to cross-examine witness prior to sec. 68 addition if he has letter
IT : Where assessee-trust claimed that amount in question was given as loan by a party but such party before Assessing Officer denied such transaction, assessee should not be denied an opportunity to cross examine said party
Finmin Set To Implement Supreme Court’S Decision On Excise Duty
The finance ministry will soon come out with a circular to implement a Supreme Court decision regarding valuation of goods sold below the cost price for levying excise duty.
The case pertains to Fiat India (P) Ltd where the apex court has ruled that where products are sold at considerable losses for an unduly long period of time for the purpose of market penetration, price is not the sole consideration and excise duty should be paid on manufacturing cost, plus a reasonable profit margin.
While the company was insisting that the duty should be levied on the discounted sale price, the revenue department was calculating it on the cost of car produced. After the ruling, the Central Board of Excise and Customs (CBEC has started asking assessees to furnish cost data of various products for the previous years.
"The modality of implementation of the decision of the Supreme Court is under consideration of a committee of Chief Commissioners. The circular in this regard will be issued by January 15, 2014," the ministry has said.
The decision comes after a forum under Parthasarathi Shome, advisor to finance minister P Chidamabarm, set up in July, heard industry groups and government on tax-related issues or disputes to iron them out.
On service tax to be paid by reinsurance agents, the statement said the department will seek inputs from the insurance industry to ascertain whether there is double taxation of the brokerage paid to reinsurance agents. The panel suggested that a process is being designed to get the importers to register with the tax department, who may then more easily pass on the Cenvat credit of counter-veiling duty to a manufacturer. The new mechanism will be in place by December 31.
The guidelines will also be issued with regard to service tax refunds for exporters, distribution of Cenvat credit by input service providers and clarifications with regard to status holder incentive scheme.
Source:-indianexpress.com
Govt. could object to share exchange ratio in proposed scheme even if scheme was approved in shareho
CL: In a proposed scheme of compromise and arrangement, Central Government can raise objection in relation to share exchange ratio even though in shareholders' meeting entire scheme has been approved unanimously
Parts and components of capital goods are eligible 'capital goods', irrespective of their tariff cla
Cenvat Credit: Parts and components of specified capital goods (falling under Chapters 82, 84, 85 and 90 as well as tariff headings 6804 and 6805) are eligible as capital goods even if such parts/components are not classifiable under Chapters 82, 84, 85 and 90 as well as tariff headings 6804 and 6805
Initiating re-assessment to verify certain known facts would be 'change of opinion'; re-assessment q
IT : Re-opening of assessment for purpose of "verifying" or "verification" will be necessarily an action based on a mere change of opinion
No denial of sec. 80-IB relief on DEPB discount in search proceedings if same was allowed in scrutin
IT: Where deduction under section 80-IB was allowed on DEPB premiums and discount in scrutiny assessment under section 143(3), same could not be disallowed in proceedings under section 153A
No reassessment to deal with an accommodation entry if AO has such info during assessment as well
IT : Where all information relating to alleged accommodation entry providers were available with Assessing Officer at time of assessment proceedings and Assessing Officer also applied his mind on such information, reassessment proceedings were not valid
Services in relation to aircraft used for business visit of Managing director of co. are eligible fo
Cenvat Credit : Maintenance of aircraft owned by assessee and used by its Managing Director in course of its business activity is eligible for input service credit
Quotation price isn’t analogous to actual price paid; former can’t be used for benchmarking under CU
IT/ILT : Under CUP method, a quotation which hasn't fructified into a transaction cant be used for benchmarking
ITAT allows sec. 11 relief to a trust investing in shares of Co-op. bank as collateral for raising o
IT: Where impugned shares in co-operative banks had been acquired by assessee-trust as a pre-condition for raising loans from co-operative banks to be used for furtherance of its objects, acquisition of shares cannot be considered as an 'investment' within meaning of section 13(1)(d) read with section 11(5) to disallow exemption under section 11
Demand can't be confirmed on basis of evidences not relied upon while issuing show cause notice
Excise & Customs : All materials which are relied for adjudication of demand/imposing of penalty must be supplied to assessee; demand confirmed on basis of material not relied upon at time of issuing show cause notice was set aside
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