Excise & Customs : CESTAT should not dismiss appeal for non-compliance of pre-deposit order where it is informed that pre-deposit order had been challenged before High Court; CESTAT must await result of hearing of appeal before High Court so as to ensure justice and avoid multiplicity of proceedings
Wednesday 15 January 2014
Furnishing of SSI certificate isn’t pre-requisite for purpose of claiming sec. 80-IB relief
IT: Activity of extraction of granite boulders from hills and producing granite aggregate of different sizes by crushing and segregating through mechanical process amounts to 'manufacture' within meaning of section 2(29BA)
Revenue couldn’t make addition relying on same books of account which were rejected by them, says HC
IT : Where assessee's books of account were rejected being defective in nature, same set of books could not be relied upon to make additions to assessee's taxable income
Payment of duty prior to show cause notice couldn’t bypass evasion penalty if concealment was delibe
Excise & Customs : Where assessee had withheld payment of duty despite being conscious of liability to pay duty and said fact came to knowledge of department only on surprise visit/inspection, assessee was liable to evasion penalty even if entire duty had been paid prior to issuance of show-cause notice
Govt Plan To Raise Gas Supply May Run Out Of Gas
India's plan to raise gas availability in the country may well run out of gas. Earlier the Union cabinet approved a new formula for gas pricing - to come into force from April 1 - which, it believes, will incentivise gas production in the newer gas fields of the country. Such fields currently find exploration unviable given the existing gas price which is linked to oil prices for subsequent five years.
The formula, devised by a committee headed by C. Rangarajan, Chairman of the Prime Minister's Economic Advisory Committee, links domestic gas prices to the gas price at international gas hubs . But the new price of gas based on this formula, which is yet to be announced, could well be so high that it will find few takers in the country. According to calculations by global brokerage house, Nomura, the new price could be $8.7 per mmbtu. In FY 2012/13, India produced an average of 106 mmscmd (million metric standard cubic metres per day).
It currently imports about 25 per cent of its gas requirements. Depending too much on imported gas is not a good sign, notes Deniel Yargin, Pulitzer winning author and vice-president of energy research company iHS, and the oil ministry agrees with him.
India's storage capacity for imported gas is currently 15 MTPA (million tonnes per annum). It is expected to add another 30 MTPA by 2017.
Experts believe the country also needs to rework its priorities in gas consumption. The last gas utilization policy came out in 2008, when domestic production looked rosy, with Reliance Industries' KG-D6 was expected to increase gas projected manifold. But that did not happen. Production at the KG D6 oil and gas fields has dropped drastically.
The bulk of the gas produced domestically is consumed by the fertilizer sector. The fertilizer sector gets highest priority for the domestic allocation of gas, followed by power, compressed natural gas for domestic and industrial use and finally petrochemicals and refineries. In FY2013/14, the fertilizer sector is expected to consume roughly 65 mmcmd of gas. Moily believes that the additional revenues could be used to subsidise the power and fertilizer sectors. But this cannot happen overnight.
Girish Shirodkar, managing partner at the global risk consultancy, Strategic Decisions Group's india chapter, feels that it is high time to rework the gas utilization policy. "A preferred strategy for an Indian company would be to acquire stakes or build plants in countries where gas is cheaper," he says, "We already have companies such as IFFCO forming a JV in Oman, or Indian companies looking at Iran as an option. Bringing in gas and then making fertilizer is not a great idea in the current scenario."
Already, for power generation, the price of gas is way ahead of that of coal. But even as transportation fuel or for other industrial needs, it may well become too expensive once the new pricing formula comes into operation. Rough calculations show that for power generated using gas, an increase of one US dollar per mmbtu (million metric British thermal unit) in the price of gas will raise the cost of generation by 47 paise per unit.
Imported gas is available at $12-$15 per mmbtu in the spot market. Using this puts the cost of generation at Rs 7 a unit, which is much higher than the cost of generation at a thermal power plant running on imported coal, which is roughly at Rs 3-4 per unit.
"We have enough capacity to run on gas. It is an accepted fact that generation of power from domestic gas is an unviable option. It is just peaking power or stop gap arrangements that should be filled with these units," says an official from oil ministry.
The other casualty could be transportation fuel, or CNG. Today, Indraprastha Gas Limited uses roughly three fourths of gas coming from domestic gas allocations, whereas its Mumbai counterpart, Mahanagar Gas gets all its gas from the government allocations. Presently local gas is available from $4 to $6.4 per mmbtu. But with the new formula it would be much higher.
It is estimated that for every US dollar increase per mmbtu in the gas price CNG prices will rise by roughly three rupee per kg (with only domestic gas allocations). "Consumers can expect correction of at least Rs 6 in Mumbai," and roughly Rs 4 in Delhi," says an official. If we go by the current corrections of diesel prices of 50 paise per litre every month, it would be corrected only by Rs 1.5 by then. "The government has to clearly state whether they want to replace these fuels with gas, then they would have to tax these fuels accordingly," Shirodkar of SDG says.
Source:- businesstoday.intoday.in
HC restores appeal dismissed, due to non-compliance with pre-deposit order, on payment of duty and c
Excise & Customs: Where assessee's appeal was dismissed by Commissioner (Appeals) and Tribunal for non-compliance with pre-deposit order, such appeal was restored before Commissioner (Appeals) on assessee paying entire tax/duty demand and payment of reasonable costs to Department
Drop In Coking Coal Prices To Improve Steel Firms’ Profit
Decline in coking coal prices and a marginal improvement in steel prices are likely to help steel companies report better margins in January-March quarter.
Price of coking coal, one of the key input for steel manufacturing, declined by around $8 to $10 to $135-$138 per tonne compared to previous quarter mainly on weak demand from China, experts said.
“Coking coal prices have declined by around $10 per tonne which would help steel companies to improve margins in January-March quarter,” said Seshagiri Rao, joint managing director at JSW Steel.
A senior official from Steel Authority of India said, internationally coking coal prices have declined by around $8-$9 per tonne and are likely to benefit steel manufacturers.
The Indian steel industry is showing a positive upswing in demand and the trend is expected to continue in 2014, helped by increased spending on infrastructure, said CS Verma, chairman, SAIL.
Internationally coking coal prices declined by $8 said an Essar Steel official but said that the benefit for steel companies would be marginal.
In January most of the steel companies increased prices by around Rs 1,000 per tonne and this would further help them to report better profits.
January-March is considered to be the peak season for steel companies.
Analysts too said since January-March is the peak season for steel companies and if they are able to continue to increase prices in the quarter their margins would improve.
Bhavesh Chauhan, an analyst at Angel Broking said, “This is the peak quarter for steel companies and already in January there has been a price increase taken by them. If the steel companies are able to sustain the price increase profits would further increase.”
Sanjay Jain, an analyst at Motilal Oswal, said, if the steel companies are able to retain price hike of steel it would benefit them but if they are forced to cut prices and pass on the benefits of lower input costs due to continued weak demand in the domestic market then the margins will be under pressure.
Domestic demand continues to remain subdued as demand from sectors like auto, real estate, infrastructure among others continued to remain low, Jain said.
However, since steel companies are focusing on exports to boost sales and they might benefit from the lower input costs.
The country turned a net exporter in April-December, with exports of carbon steel at 3.822 million tonnes, exceeding imports of 3.298 million tonnes. The export of alloy and non-alloy steel also exceeded total imports by 37,000 tonnes.
Source:- mydigitalfc.com
ITAT had to consider notional tax effect in case of loss while considering maintainability of revenu
IT: While considering tax effect for purpose of preferring appeal by revenue, Tribunal was required to consider notional tax effect in case of negative income of assessee
Indian Govt Divided Over Pak Trade Talks
It seems the Indian government is once again divided whether to continue the trade normalisation dialogue with Pakistan with both the ministries of commerce and industry and external affairs being at loggerheads over the issue, even as Indian Commerce and Industry Minister Anand Sharma is expected to hold a bilateral meeting with Pakistan Minister of State for Commerce and Textile Khurram Dastagir Khan on the sidelines of the SAARC Business Leaders Conclave to be held today (Thursday), reported Indian newspaper Business Standard on Wednesday.
The bilateral meeting between both ministers was preceded by the commerce secretary-level talks that got underway in New Delhi Wednesday ‘without any concrete results’ on the road ahead.
It is learnt Indian Commerce Secretary SR Rao had almost a three-hour long meeting with his Pakistani counterpart Qasim M Niaz but both sides did not arrive at any specific outcome, sources told Business Standard.
The ministry of commerce and industry had been brandishing the meeting as “resumption of the trade dialogue” that started in April 2011 but ever since has hit several hurdles due to the age-old political and military tensions between both the neighbours. However, it is learnt that the ministry of external affairs (MEA) has asked commerce ministry to underplay the matter and not project the meeting as dialogue resumption resulting in a war of words of sorts.
On the other hand, the commerce ministry is not leaving any stone unturned to make the dialogue successful. Sharma, it is learnt, is fighting against all odds to obtain the MFN status, which will add another feather in his cap. But MEA believes trade talks cannot proceed without a “peaceful environment in the background of a series of ceasefire violations across the Line of Control (LoC),” sources added.
Trade talks had reached a hiatus since early 2013 when incidents of military-standoff across the LoC started coming to light. It seems matters got worse with the recent emergence of a mysterious video that allegedly showed beheading of an Indian soldier in January last year.
Earlier this week, army chief Bikram Singh said India will not shy away from taking retaliatory steps if Pakistan breaks the ceasefire norms across the border. He even referred to the violations as ‘mini war’.
Recently, Syed Akbaruddin, joint secretary and spokesperson, MEA clearly stated that meeting between both sides “cannot be construed as a resumption of the India-Pakistan dialogue process.” He also said that the govt is waiting for Pakistan to implement the commitment made by them on September 2012, when both commerce secretaries last met, on allowing greater flow of goods along the Attari-Wagha border.
Market access important than MFN: Dastagir
In an interview with Hindu, Pakistan State Minister for Commerce and Textiles Khurram Dastagir Khan said while the grant of MFN status may take some time, Pakistan wants more market access in India.
Replying to a question, he said “There is a sense that India, which gave MFN to Pakistan in 1996, did not give it market access. These two go together unfortunately. Pakistan on the other hand might not have given MFN to India but has given substantial market access and this has now been reflected in our trade figures. The trade balance has, in fact, increased manifold in favour of India. Pakistan’s exports last year were $327.496 million while Pakistan’s imports from India totalled $1809.867.
“MFN is a designation and a technical term WTO and India can ask for, but we have been talking to the Indian government to say let’s call it non-discriminatory access (NDA), or as some call it, non-discriminatory market access. NDA is good enough, it’s a more useful and workable term.
“In Pakistan there are certain sectors that have reservations on trading with India. Agriculture is one of them. The others are pharmaceutical, auto parts and automobiles, the synthetic fibre-based clothing or fabric. We have to find some way ultimately — the NDA is something we are going towards and I don’t think it will take long, the Nawaz Sharif government is keen and the Indian government is also talking about it.”
Source:- nation.com.pk
India Potentially Strong Market For Canadian Lumber, Energy
India is a strong potential growth market for Canadian lumber despite misinformation about wood construction that have limited exports even as they have soared in neighbouring China, Canada’s resource minister said Wednesday.
“This is the fourth-largest consumer market in the world. For us to ignore that would make no sense and we’re not and we see enormous potential,” Joe Oliver said during a conference call from Mumbai, where he’s on a six-day trade mission.
The federal government announced it is investing an additional $600,000 to spur efforts to boost lumber exports to a market with about 1.2 billion people.
Ottawa has already provided $1.6 million to Forest Innovation Investment India (FII India), Canada’s forest products market development office, which is also supported by the B.C. government.
Oliver said more effort is required to sell the Canadian lumber brand and overcome the lack of a tradition in using wood for construction and myths about lumber being unable to withstand India’s intense heat and humidity.“You’ve got to put in the time. You don’t necessarily have instant wins — you have gradual improvement and increasing recognition,” he said.
The minister said Indian demand for imports is a decade behind China. While Chinese imports from Canada soared by 1,000 per cent between 2007 and 2012, Indian imports shrunk in one year to just 53,000 cubic metres of B.C. lumber valued at $8.7 million.
“China was very small too 10 years ago and yet the Chinese market was crucial in helping our forestry industry emerge from the recession when residential construction in United States basically collapsed.”
He said exponential growth in India fuelled by rising disposable incomes will accelerate demand for all kinds of Canadian products, including lumber, oil and gas, mining products and nuclear power.
“There’s nothing at the moment but when it happens we’re looking at an additional market in the billions.”Oliver also said there is growing interest by India in investing in Canada and said the impending election of a new prime minister to replace Manmohan Singh won’t impede the potential “irrespective of who wins.”
He said efforts to build Indian lumber imports must be realistic by initially focusing on specialty products like door and window frames and furniture, instead of building construction that has traditionally fallen to other materials.
Analyst Paul Quinn of RBC Capital Markets says Indian lumber imports will gradually increase but efforts face transportation and infrastructure challenges to get the material to local markets. Internal dynamics of doing business in India can also be more challenging than China where government involvement can clear roadblocks.
“I think it’s going to be a slower growth story than what we’ve seen with China but I think it’s going to be yet another place to put lumber which continues to tighten the market,” he said from Vancouver.
Quinn sees Canfor Corp. (TSX:CFP) and West Fraser Timbing (TSX:WFT) being the main beneficiaries because of the volumes they already have in the country.
North American lumber production increased 1.1 per cent in October from the prior year with Canadian output rising 3.6 per cent and by 10.7 per cent from September. Shipments decreased 0.7 per cent from the prior year on a 1.2 per cent decrease in Canada.
Lumber shipments from British Columbia to China were up 6.9 per cent for the first 11 months of 2013, while prices have risen five per cent over the last month after climbing 19 per cent in 2013.
Quinn said he expects prices in 2014 will be similar to last year, but with less volatility. He forecasts they will average US$360 per thousand board feet for 2014, down from US$372 as of Jan. 10, but rise to US$410 for 2015 and US$435 for 2016 as U.S. housing starts reach 1.3 million in 2016.
The analyst expects Canada’s forest products companies will post stronger results in the upcoming fourth quarter and full year and will feel the positive effects of a lower Canadian dollar in the first quarter.
“It looks like a pretty significant tailwind building for the first quarter,” he said, noting that the loonie has dropped to near 91 cents US from the fourth-quarter average above 95 cents US
Source :- vancouverdesi.com
India’S Iron Ore Exports To Increase As Goa Prepares Auction
India’s iron ore exports are set to increase as Goa prepares to auction unsold stocks, following the easing of a ban on sales of the steel-making raw material.
“Bids will be invited for about 15 million metric tonnes of inventory that’ll be offered through online sales starting next month,” Goa’s mines director Prasanna Acharya said on Wednesday in a phone interview. “The buyers will be allowed to ship the ore overseas or sell locally,” he said.
India’s top court in November had allowed sales of mined ore in Goa, while continuing the ban on extraction because of environmental concerns. Goa was the nation’s biggest iron ore exporter before the ban was imposed in September 2012.“Goa’s mines department has sought applications from prospective bidders and we hope to have the first auction early February,” Acharya said. “There’s no timeline for completing the sale of the entire quantity.”
The revival in Goa’s exports comes as iron ore shipments from India are poised to tumble for a fourth year to less than 10 million metric tonnes in the year ending March from 18 million tonnes a year earlier. Government curbs, mining bans and higher export taxes are prompting buyers to secure the raw material from other producers, Federation of Indian Mineral Industries’ secretary general R.K. Sharma said on 2 January.
Sesa Sterlite Ltd, which owns its biggest iron ore mine in Goa, and rival miners mainly export their low-grade produce to China as steel makers in India mostly lack the ability to process poor quality ore.
Sesa Sterlite rose as much as 2.3% to Rs.197 and traded at Rs.196.40 as of 2:27pm in Mumbai. The benchmark S&P BSE Sensex rose 1.1%.
Source:- livemint.com
Indian Rupee Drops Two Paise To 61.54 Against Us Dollar
Fresh demand from importers for the dollar as it strengthened overseas led the rupee to fall for the first time in three sessions today and close two paise lower at 61.54 against the US currency.
While capital outflows weighed on the rupee, positive local stocks helped to limit the fall, a forex dealer said. At the interbank foreign exchange market, the rupee opened lower at 61.65 a dollar from Monday's close of 61.52 and declined further to a low of 61.7150.
However, the local currency bounced back to a high of 61.4250 before closing at 61.54, a fall of two paise.Support for the rupee came as local stocks advanced after wholesale inflation eased to a five-month low in December, raising hopes the Reserve Bank will keep interest rates on hold.
The dollar gained overseas after a stronger-than-expected report on US retail sales indicated the Federal Reserve could continue to slow the rate of its monthly bond purchases.The benchmark 30-share Sensex surged 256.61 points, or 1.22 per cent, to 21,289.49, the highest closing since ending at a record 21,326.42 on December 9. Overseas investors sold shares worth a net Rs 260.88 crore yesterday, according to provisional data.
"The dollar index, which measures the US currency's value against a basket of six major currencies, traded strong throughout the day," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).
"But in the second session, the rupee recovered and closed near the previous day's level with the help of local equities, which ended on a positive note," he said.
Forward dollar premiums remained weak on sustained receipts by exporters.The benchmark six-month forward dollar premium payable in June eased to 229-231 paise from 230-1/2 to 232-1/2 paise previously.Far-forward contracts maturing in December slipped to 463-1/2 to 465-1/2 paise from 465-467 paise.
The RBI fixed the reference rate for the dollar at 61.5885 and for the euro at 83.9915.The rupee strengthened to 101.11 against the pound from 101.20 and hardened to 83.85 per euro from 84.06.It recovered to 59.03 per 100 Japanese yen from 59.50.
Source:- financialexpress.com
Sum received for transfer of non-exclusive right for use of software is royalty
IT/ILT: Where assessee, a US based company, having obtained a non-exclusive user right of a software owned by another company, granted said right to two of its affiliates in India, fee received by assessee from affiliates in respect of same was liable to be taxed as royalty in India in terms of Explanation 4 to section 9(1)(vi)
Commissioner should consider all materials put forth by assessee before exercising revisionary power
CST & VAT : It is duty of Commissioner to consider all material adduced by assessee in support of its case that it is immune from exercise of revisional powers of Commissioner; if all such material is not considered, matter is to be remanded back for consideration afresh
SAT releases broker without penalty as he rectified his error, advises him to be vigilant towards SE
SEBI: A broker who had received payments through third parties in violation of regulation 7 of Brokers Regulation but had rectified its error immediately was given a warning to be more diligent in complying regulatory norms prescribed by SEBI
Clearances to 100% EOU have to be at par with physical export; eligible for refund of credit under R
GST: Clearance to 100% EOU, being deemed export, is at par with physical exports and is eligible for refund of credit under rule 5 of CENVAT Credit Rules, 2004
Revenue couldn’t presume cash payments for sec. 40A(3) disallowance if sums were paid by someone els
IT: Where assessee purchased land in an auction and payment on its behalf was made by 'Z' through pay orders and drafts prepared from bank account of 'Z', impugned disallowance made by Assessing Officer under section 40A(3) in respect of said payment was to be set aside
Bank of India denotified for payment of DVAT
GST : VAT/CST : Bank of India Denotified for Payment of VAT/CST by Dealers Under Delhi Vat Act
Income admitted by assessee before issue of reassessment notice doesn’t invite concealment penalty
IT: Where assessee after filing its return declaring income from sale of shares taxable as long term capital gain, intimated DDIT (Inv.) later on that amount disclosed earlier as long term capital gain was in fact taxable as 'income from other sources' and, accordingly, paid differential tax on said amount before issuance of notice under section 148, said conduct of assessee being bona fide in nature, impugned penalty order passed under section 271(1)(c) on account of concealment of particulars
No penalty under general provision if higher penalty was leviable for sales-tax evasion under specif
CST & VAT : Where assessee had committed a grave offence of evasion of sales-tax punishable with mandatory and higher penalty under Sec. 17(5A) of Kerala GST Act, he could not be made liable to discretionary, lower and general penalty under Section 45A for maintaining false/incorrect accounts
Bal Bharti School, existing solely for profit motive, aims at charging higher fees; no sec. 10(23c)
IT: Where assessee-society claiming itself to be engaged in activity of imparting education moved applications on 26-3-2008 before Chief Commissioner praying for grant of exemption under section 1023C(vi) for assessment years 2007-08 to 2009-10, as per fourteenth proviso to section 10(23C)(vi) application for assessment year 2007-08 was not maintainable and further since assessee was not existing solely for educational purposes, applications for subsequent years were liable to be rejected
Palm fatty acid arising during refining of crude oil is dutiable, yet pre-deposit reduced due to con
Excise & Customs : Palm fatty acid arising in course of refining of crude oil is, prima facie, a dutiable product but, in view of conflicting views of Tribunal, requirement of pre-deposit was reduced in part
HC slams assessee for filing writ against reassessment notice without filing its objections before A
IT : Where Assessing Officer issued on assessee a notice under section 148 seeking to reopen assessment and assessee directly filed writ petition against issue of notice, assessee was directed to file objections before Assessing Officer and in case objections were rejected, it would be open to it to approach High Court
Dept. couldn’t recover duty during pendency of stay application if such pendency wasn’t attributable
Excise & Customs: Circular No. 967/1/2013-CX., dated 1-1-2013 mandating initiation of recovery proceedings 30 days after filing of an appeal, if no stay is granted by Commissioner (Appeals), cannot be applied to an assessee who has filed an application for stay, which has remained pending for reasons beyond control of assessee
Comparables accepted by both TPO and assessee without any agitation couldn't be excluded from TP stu
IT/ILT: Where assessee as well as TPO accepted a particular company as functionally comparable and assessee had not agitated on such comparable before Commissioner (Appeals), same could not be excluded from list of comparables
HC clamps down practice of banks to threaten borrowers, they are barred from publishing photos of de
Banking Laws : Banks are restrained from publishing photographs of loanees in leading newspapers for failure to repay debt within a specified date
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