IT: If amount of advance received for making export stood as a liability in books of account, and same had not been written of, it could not be said that liability had ceased to exist; additions under section 41(1) could not be made
Sunday, 2 February 2014
Interest under sec. 158BC to be computed on total tax liability before reducing seized amount, HC sa
IT : Surcharge for block assessment period 1-4-1991 to 27-4-2001 could be levied even though proviso to section 113 came into effect from 1-6-2002
Interest on excise refund to be computed from date of filing of refund claim and not from date of re
Service Tax : Interest on delayed refund under section 11BB of Central Excise Act, 1944 starts from 3 months after date of filing of refund claim by assessee; and not from date of order of appellate authority directing grant of refund
Experts Concerned Over Us Objection To Coal-Fired Power Plants
Power sector and industry experts have expressed concern on the statement of US Ambassador Richard Olson regarding global powers reservation on coal-fired power plants in Pakistan, ignoring the fact that the United States produces 43 percent of electricity from coal.
“According to Global Coal Council, coal accounts for 41 percent of the total electricity produced in the world,” Ghalib Atta, a power sector expert, said, adding that Pakistan hardly produces one percent of power from coal, while all major industrial countries generate most of the power from coal.
South Africa produces 94 percent of electricity from coal, while power production from coal is 79 percent in China, 78 percent in Australia, 68 percent in India, 59 percent in Israel, 51 percent in Czech Republic, 54 percent in Greece, 43 percent in the United States, 41 percent in Germany, 40 percent in England and 27 percent in Japan, he said.
All these countries consume more power than Pakistan. In fact, he said, if Pakistan fulfills all its power needs from coal, it will pollute the environment at least 25 times less than the pollution that the US causes by producing power from coal, Atta said.
The world powers should stop using double standards and endorse every environment polluting step of their own and harass others on slightest fear of environmental pollution, he said, adding that coal is the cheapest fuel for power production after hydropower and gas-run generators.
Moreover, coal-fired power plants can be established in shortest possible time, the expert said, adding that in countries such as Pakistan where power shortage is acute, coal-based power plants are the only short-term remedy.
He said if the global community has concerns about the pollution caused by coal they should start eliminating their coal-fired power plants. Until they do that they have no right to object to other countries striving to reduce their power deficit through coal-based power generation, he said.
Lahore Chamber of Commerce and Industry (LCCI) President Engineer Sohail Lashari said that according to statistics, total coal consumption in Pakistan is only 4.6 metric tons of oil equivalent (MTOE), whereas it is 277.7 MTOE in India and whooping 17,135 MTOE in China.
In the United States it is almost two times that of China, he said, adding that even if Pakistan installs 12,000MW coal-based plants, the use of coal will not exceed 100 MTOE.
The objection by the US came at a time when Prime Minister Nawaz Sharif and former president Asif Ali Zardari buried their differences to support Thar coal project, he said.Pakistan is sitting on one of the largest coal reserves in the world and it has every right to use this natural resource, he said.
Lashari said that Pakistan always faces discrimination from the developed world, adding that when sanctions were imposed on Iran, the United States gave waiver to India and Iran who continue importing oil from that country.
He said when Pakistan desired to buy gas from Iran it was warned in clear terms about the consequences of the violation of sanctions, adding that had Pak-Iran gas pipeline been allowed at the right time, there would have been no need to produce power from coal.
Growth in Pakistan is hostage to acute power shortages, he said. “We will see irreversible increase in poverty, if Pakistan remained energy-starved country after four years,” he said, and urged the United States to facilitate Pakistan in overcoming power shortages through low-cost short-term solutions.
Mohsin Syed, another energy sector expert, said that the United States discriminated against Pakistan on the nuclear technology, as well.Indian stand and deeds on nuclear issue are the same as that of Pakistan, he said, adding that the United States has provided nuclear technology for peaceful purposes to India but the same has been denied to Pakistan.
Not only this, the US government puts pressure on China, as well that continues to supply nuclear power plants to Pakistan, he said, adding that such a discrimination is increasing poverty in the country.The US opposition to coal-based power plants is the height of hypocrisy, he said. “How can it oppose a technology when it produces largest amount of power from that same technology?” He questioned.
He said even globally highest electricity (41 percent) is produced from coal, five percent from oil, 21 percent from gas, 13 percent hydro and three percent other renewables.
Source:- thenews.com.pk
If all transactions weren't disclosed during first reassessment, second reassessment was justified H
IT : Where information regarding all transactions were not subject matter of earlier reassessment proceedings and details provided fresh material for Assessing Officer to initiate second reassessment proceedings, second reassessment could not be said to be based upon mere change of opinion
ITAT couldn't adjudicate upon jurisdictional issue when it wasn't raised before assessing authority
IT : Tribunal is not a competent authority to adjudicate upon jurisdiction of Assessing Officer when it is not raised before Assessing Authority
Natural Gas Blows Hot In Cold Us Winter
Natural gas prices have rallied sharply following an unusually freezing winter in the US.Temperatures dropping to record lows in many parts of the US has increased the demand for natural gas, a primary heating source.The data available from the US Energy Information Administration shows that there has been a sharp drop in natural gas inventory in the last few months.
Since November last year, gas inventory has dropped 42.8 per cent to 2,193 billion cubic ft (Bcf). This is much higher than the 28.7 per cent drop in inventory for the same period last year.
In the international market, natural gas prices are at $4.94 per million British thermal units (MMBtu), up 46 per cent since November. The natural gas futures contract in MCX too has seen a sharp rally. It has moved up from a low of ?210.5 per MMBtu in November last year to ?302.6 now.
Reports say temperatures could remain low in the US until March. So, demand for natural gas could continue to remain high. This would take gas inventories still lower, thereby pushing the price further higher in the coming months.
The demand for natural gas as an alternative for coal in electricity generation has been a major driver behind new gas exploration projects globally.
In 2015, global natural gas demand would be around 3,258 million tonnes (mt) of oil equivalent, says British Petroleum, up from the 2,987 mt recorded in 2012.
Supply is pegged to be neck-to-neck with demand at 3,291 mt (which is up 8.5 per cent from the supply in 2012). In India too, demand for natural gas is expected to be robust.
The Indian Petroleum and Natural Gas Regulatory Board expects gas demand to increase at a compounded annual rate of 6.8 per cent till 2029-30.The two major consumers of natural gas in India are the power and fertiliser sectors. The domestic consumption is largely met through imports.
As such, fluctuation in the rupee will influence the prices of natural gas in our country to a large extent.Long-term view: The strong downtrend in the MCX Natural gas futures contract from the 2008 high of ?591.8 halted in 2012. The natural gas contract bottomed at ?99.5 in April 2012 and has been in a strong uptrend since then. Long-term support for the contract is at ?210.
On the other hand key resistance is at ?410. A strong break above this resistance will open doors for a rally to ?600 in the long-term.
But a failure to breach ?410 will turn the outlook bearish and can drag the contract lower to ?290 or even ?250 in the long-term.
Medium-term view: Medium-term outlook is mixed for the contract. Strong support is at ?240. Intermediate resistance is at ?346 — the 50 per cent Fibonacci retracement level.
A breach of this resistance can take the contract to ?400 in the medium-term. Failure to break the resistance at ?346 can keep the contract in a sideways range of ?280 and ?346 for some time and then it can rally to ?400. The bullish trend will reverse only on a decline below ?240. The contract will then drop to ?210.
Short-term view: For the short-term there is a strong resistance at ?346 which can halt the current upmove for a while.
There is a high probability for a pullback at this level as traders do some profit booking. A reversal from ?346 can take the contract lower to ?280, which is the significant support level.
Fresh buying interest can emerge in the market in this ?280 support level.The downside is expected to be limited to ?280 in the short term. A break below ?280 will turn the outlook negative and will take the contract lower to ?240 in the short term.
Source:-thehindubusinessline.com
Gujarat's Agricultural Growth Sluggish In 11Th Plan: Report
The agriculture growth rate in Gujarat in the 11th plan, which is between 2007-08 and 2011-12, has just remained 4.9% and the state was ranked eighth in the overall ranking. States like Madhya Pradesh, Rajasthan and Chhattisgarh are ahead of Gujarat when it comes to agriculture production.
According to a report by the agriculture department central Gujarat, during the 11th Plan 2007-08 to 2011-12, the growth performance of agriculture in Madhya Pradesh (7.6%), Chhatisgarh (7.6%), Rajasthan (7.4%), Jharkhand (6.0%) and Karnataka (5.6%) and Gujarat (4.9 per cent) was much higher than that of Punjab (1.6%), Maharashtra (2.0%), Tamil Nadu (2.2%), West Bengal (2.8%), Uttar Pradesh (3.3%) and Haryana (3.3%). The repot states that 6.59 million tonnes (about 5.02%) decline in kharif production has been caused by the late onset of monsoon and deficient rainfall in several states including Andhra Pradesh, Bihar, Gujarat, Haryana, Karnataka, Maharashtra, Rajasthan, Tamil Nadu and West Bengal.
The report says that the production of coarse cereals has been severely affected by the deficient monsoon in Gujarat. The report states that there has been a decline in the area coverage in the state. A major increase in the productivity of pulses has been noticed in Gujarat, says the report. Productivity of pulses has increased from 625 kg per hectare in 2007-08 to 699 kg per hectare in 2011-12 in the state.
The report says the highest yield in Oilseed cultivation in 2011-12 was recorded by Tamil Nadu (2,479 kg/ha) followed by Gujarat (1,608 kg/ha) and Haryana (1,394 kg/ha).
The report says that India is the second largest cotton producer, consumer and exporter in the world. Punjab, Haryana, Rajasthan, Maharashtra, Gujarat, Madhya Pradesh, Andhra Pradesh, Tamil Nadu and Karnataka are the major cotton producing states. During 2011-12 a record area of 12.18 lakh hectare was sown with cotton. Major increase in the cotton area was noticed in Andhra Pradesh, Maharashtra and Gujarat.
Also several projects were taken up in the year 2012-13 for increasing productivity. While Jharkhand chose to increase cropping intensity by creating water conservation structures, Gujarat preferred to check salinity ingress in coastal areas and reclaim almost 70,000 ha of land for cultivation.
The report says that Gujarat was ranked sixth in Vegetable production. The vegetable production in Gujarat was 6.4% of the country's total production. West Bengal accounts for 15% of vegetable production
Source:- timesofindia.indiatimes.com
Higher-End Shift In Export Basket
Bit by bit, India's export basket is tilting in favour of high value-added sectors such as automobiles, pharmaceuticals and capital goods. And, away from traditional manufacturing exports such as textiles and gems & jewellery.
The latter now account for less than a quarter of total merchandise exports (23.6 per cent), down from 39.2 per cent in 2002-03. In this period, the combined share of engineering goods, including automobiles (transport equipment), capital goods and pharmaceuticals (including basic chemicals and cosmetics) rose to 30.7 per cent from 26 per cent in FY03, according to Reserve Bank data. In 2012-13, India exported $27 billion worth of chemicals, pharmaceuticals and cosmetics, just a tad below textile and garment export revenue of $27.5 bn (see chart).
Experts say this shows maturing of Indian manufacturing and multinational corporations (MNCs) setting base here. "Exports mirror the shift in Indian manufacturing, with more and more companies moving towards higher value-added and intellectual property-driven products and services. The shift has been quickened by the entry of multinationals and the competitive pressure they've brought on Indian companies," says Kumar Kandaswami, country manufacturing industry leader for Deloitte in India.
The trend is likely to persist as competition intensifies and more sectors are exposed to global competition. "This is a positive development for the export story. We should aspire to export more value-added and IP-driven products, so that exporters could command some premium in international market," he says.
This is visible in automobiles and pharmaceuticals. Bajaj Auto, TVS Motors, Hyundai Motors India, Cipla, Dr Reddy's Laboratories, Sun Pharma and Lupin are among the companies now getting a large chunk of their revenue from export.
In 10 years, the combined export of engineering goods, including automobiles, capital goods, pharma and basic chemicals, grew at a compounded annual rate (CAGR) of 21 per cent, faster than the 19 per cent growth recorded by all merchandise exports. Transport equipment was the star of the show, with a CAGR of 30 per cent in dollar terms to reach $18.4 bn in FY13, making it the country's largest engineering export. Total engineering exports during the period expanded at the rate of 21.9 per cent annually. Transport equipment (including aircraft and ships) now account for 6.1 per cent of all exports against 2.5 per cent a decade before.
Similar buoyancy is visible in other engineering products such as machinery & equipment and electronic goods. In the last decade, export of machinery and equipment showed a CAGR of 22.4 per cent in dollar terms, to $15.2 bn in FY13 from $2 bn in FY03. Electronics exports expanded at a 20.5 per cent (annual) rate during the period to reach $8.1 bn last year.
Automotive exports would have been even higher, if not for the global economic slowdown. In 2012-13, these declined 13 per cent as consumers across the globe cut on big-size purchases. A similar thing had happened in the aftermath of the 2008 global financial crisis. Automotive exports had declined sharply in 2009-10 but recovered subsequently.
"Automobile exports are highly sensitive to economic growth in the destination country. They grow faster than the overall basket in good times and fall during a downturn. Given the current economic sluggishness in key emerging markets, including China, automotive exports may remain subdued in the near term," says Devendra Pant, head economist at India Ratings.
Pharmaceutical exports, however, have been more consistent. Last year, these grew 18 per cent, to cross $10 bn. In the past 10 years, these have shown a CAGR of 21.8 per cent and continue to outperform. Pharma's share in the total export basket increased by 15 basis points to 3.5 per cent in the first six months of the current financial year, from 3.35 per cent in FY13.
Experts believe a combination of rupee depreciation and the rising sophistication of Indian manufacturing companies, especially those at the top, will continue to support high-tech export.
"In the past, Indian manufacturers were constrained by lack of technology and exposure to global markets. The gap has been filled a bit by recent acquisitions by Indian companies in Europe and North America, giving them access to technology, besides markets. Many companies are augmenting it by scaling up in-house research and development, and product development," says Kandaswami.
Others say a lot will depend on the global growth environment. "It's tough to increase exports when the world's key economies are slowing. And, being discretionary in nature, high-end manufacturing exports suffer more than staples such as textile and agri products during a downturn," says Pant.
Source:-business-standard.com
Give Our Textiles Also Duty-Free Access: India To Germany, Uk
India is seeking duty-free access for its garments and textiles into the European Union, in line with what is on offer to competing countries such as Pakistan and Bangladesh. The Textiles Ministry is already in talks with Germany and the UK for zero duty access for garments and some other textile items, Textiles Minister KS Rao told Business Line.
“We are negotiating Government-to-Government. We want them (EU countries) to give us the same dispensation as Pakistan and Bangladesh,” the Minister said. It is important to ensure a level-playing field for Indian exporters. The Ministry has also asked the Finance Ministry for an interest rate subvention (lower interest rate) of 3-4 per cent for textile exporters. “This will help them compete in the export market better and exports would go up,” Rao said.
The Minister said that the Textile Ministry would set an ambitious export target of $60 billion for the textiles sector for the coming fiscal, which is almost 50 per cent higher than exports of $41 billion estimated this year.
But the fact that the country has graduated out of the Generalised System of Preferences (GSP) scheme offered by the EU under which it was getting preferential access to the European market (by paying lower import duties) could make the going tough. EU is India’s largest market for textiles.
While Bangladesh and Sri Lanka have been taking advantage of a duty-free regime for their textile items for some time, Pakistan too has been made eligible for zero-duty access since January this year under the EU’s GSP Plus scheme. Rao said that Indian garments and textiles were getting affected because of the double blow. “In a market like Germany, while Pakistan does not have to pay any duties for readymade garments, Indian exporters are subject to a duty of 9.36 per cent,” the Minister said.
Under the GSP Plus Scheme, Pakistan is allowed to export textile goods to the 27-member EU duty free till 2017.As per estimates made by the Pakistani Government, the textile industry would earn additional profits of $930 million per year because of the scheme.
With Chinese textiles becoming uncompetitive due to rising labour cost and Bangladeshi textiles facing quality issues, India is hopeful that several European countries will take the country's request seriously.
“EU imports 95 per cent of its textile requirements. It is giving concessions to Pakistan and Bangladesh for political reasons. We are requesting the same,” Rao pointed out.
Source;- thehindubusinessline.com
AO can't estimate operating cost on basis of proportionate turnover if segmental working is availabl
IT/ILT : Where segmental working is available on basis of separate books of account maintained for EOU, operating cost has to be calculated on basis of said segmental results and TPO/Assessing Officer is not justified in rejecting same and estimating operating cost on basis of proportionate turnover
Prior to 01-06-2007, extended period couldn't be invoked to demand ST on service portion of work con
Service Tax : Where assessee was carrying out contract of construction of petrol/diesel bunks for oil companies and had not paid service tax thereon prior to introduction of works contract service, extended period could not be invoked to demand service tax for said prior period
SC slams HC for concluding contempt proceedings without assigning any reasons, sets aside order of H
CL : Where High Court in contempt proceedings without assigning any reason held that no deliberate attempt was made by respondents to cause any prejudice to appellant, said judgment was to be set aside
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