Matter rightly remanded by the ITAT when notice of inquiry was served at wrong address, says HC

IT: In absence of relevant books to verify wage payment made by assessee, disallowance at rate of 1 per cent was just

Property occupied for business but not utilized for same can’t escape taxability as Income from Hous

IT : Where a property occupied for business purpose, is not utilised for running a business, profits of which are taxable, said property would not enjoy benefit of exception mentioned under section 22 and, its income would be determined as per provisions of section 23(1)(a)

Increase in TDS rate of VAT would also apply to provisional payments already made

CST & VAT : In case of increase in TDS rate of VAT under Jharkhand VAT Act, such increased rate would, prima facie, apply to provisional bills/payments already made for which final billing is pending

No exemption on succession of a firm by co. if partners got consideration in form of ‘loan’ instead

IT: Where prior to conversion of partnership firm into company, land belonging to partnership firm was revalued as per market value and realization was credited to partners' current account maintained with partnership firm as per their profit sharing ratio and value of land was treated as loan in hands of company, such transaction would be subjected to capital gains tax

Absence of bylaws and contributions to other educational institutions can’t cause denial of trust re

IT : Where Memorandum of Association (MoA) of trust does not provide for allocation of functions and duties of office bearers, it can not be a ground to refuse registration because it is an internal regulation and does not in anyway affect objects of trust

Adopting Indian Procedure: Government Urged To Curb Dumping Of Hazardous Plastic Scrap

During the last three years Pakistan has imported more than 100 thousand tons of plastic scrap out of which most of the imported plastic scrap is used in manufacturing of pipes, which are then used for supply of water thus putting millions of lives at risk and also in violation of Pakistani Pipe manufacturing standards PS 3051/1991, according to stakeholders here.

To control the dumping of hazardous plastic scrap in the country, the Government doesn't need to invent any special procedure as it can fully control this menace by adopting the procedure being followed by neighbouring India. In India, only production waste can be imported for further recycling. According to Indian law, "plastic scrap/waste shall constitute those fractions of plastics generated by various plastic processing operations or those fractions generated in the production process of plastics in a plant, which have not been put to any use whatsoever and as such can be termed as virgin or new material which can be recycled into viable commercial products using standard plastic processing techniques but without involving any process of cleaning, whereby effluents are generated."

Conditions for importing plastic waste in India demand that:

(i) Applications for import licenses would be granted by Directorate General of Foreign Trade (DGFT) in consultation with Department of Chemicals & Petrochemicals and Ministry of Environment & Forests, India.

(ii) The plastic scrap/wastes conforming to the prescribed specifications would be permitted only to the actual users who have the required facility for recycling such scrap/waste and who are duly registered with the competent State/Central authority and also possess clear pollution clearance certificate from the concerned State Pollution Board where the unit is located, as well as a capacity assessment certificate.

(iii) Each consignment of plastic scrap/wastes imported shall be accompanied with a certificate from the factory in which it was generated to the effect that it conforms to the prescribed specifications.

(iv) The importer of the plastic scrap/waste shall also be required to furnish a declaration to the Customs authorities at the time of clearance of goods, certifying that the plastic scrap/wastes imported by him and for which clearance is being sought, strictly conforms to the prescribed specifications and that it is free from any kind of toxic/non-toxic contamination and has not been put to any previous use, whatsoever.

(v) The Port and Customs authorities shall ensure that shipment is accompanied by test report of analysis of the consignment in question, from a laboratory accredited by the exporting country.

(vi) Before the clearance of the plastic waste/scrap, all imported consignments of such plastic scrap/waste shall be subjected to scrutiny and testing of samples. Customs authorities shall for this purpose draw a sample and send the same to the nearest laboratory/Office of the Central Institute of Plastic Engineering & Technology (CIPET) with a view to having the same analysed and verified that such imported consignments are in conformity with the prescribed specifications.

Pakistan's Ministry of Commerce in its import policy order dated March 8 had introduced measures to further control the import of hazardous plastic import in the country. Under the new policy order the government wouldn't allow import of hospital waste of all kind, used sewerage pipes and used chemical containers.

According to the new import policy, plastic scrap was supposed to be Importable by industrial consumers subject to the fulfilment of certain conditions, such as certification confirming appropriate manufacturing facility available with the importer and determination of import quota from concerned Federal/Provincial Environmental Protection Agency.

Nothing has so far been implemented in this regard and from January 2013 to December 2013 Pakistan allowed dumping of over 25,736 metric tons of plastic scrap in the country. The major dumping countries include, kingdom of Saudi Arabia 37 percent, Britain 27 percent and United Arab Emirates 15 percent share. Other dumping countries include: Bahrain/Kingdom of Bahrain 6 percent, Belgium 4 percent, Netherlands 3 percent, Hong Kong, China 2 percent, Oman 2 percent, Germany 2 percent, Kuwait 1 percent, & others.

Informed sources said that despite it being the policy's intent to have the plastic scrap consignments inspected by technically qualified designated Pre-Shipment Inspection companies in exporting countries, this rule is yet o be implemented.

Industry sources said that the current policy like previous policy limits the import of non hazardous plastic scrap to manufacturers only, however, making it more regulated by assigning manufacturer quota for import. As previously observed that most of plastic scrap in Pakistan is imported by traders for resale therefore, the efficacy of newly proposed measures could only be ascertained if it's implemented in letter and spirit.

They said that in Pakistan, despite the new rules in Import Policy order 2013, imported plastic scrap continued to be released on certification of a renowned multinational certification company on the basis of visual inspection and radiation testing. The irony being that of the 27 hazardous constituent elements defined in the Basel convention none can be tested by either visual inspection or radiation testing.

The former method lacks any and all scientific analytical reasoning capability while the latter checks a sample for radioactivity (plastics due to their generally lower densities are not used to handle radioactive substances in the first place) and is incapable of identifying levels of biological toxicity, heavy metals, chemical toxins and other sources of toxicity. This is all in principle due to the implementation framework of the import policy, which is still not finalised.

Source:- brecorder.com

Govt Urged To Improve Economic Competitiveness

Experts have urged the planners to improve the economic competitiveness, which is an ability to export more value-added products than import, but without subsidising exports or erecting tariff and nontariff barriers against imports.

“You cannot increase competitiveness through subsidies, concessions and grants,” Naveed Anwar, senior economist, said. He said a country needs strong institution and prudent policies to increase competitiveness. True competitiveness comes when a level playing field is provided to all citizens, he said, calling for equal opportunity to all entrepreneurs and innovators that are most efficient producers of goods and services.

“Even global experts are confused about the actual definition of competitiveness,” he said, adding that the European Commission, for instance, in its European competitiveness report did not elaborate what competitiveness is. Michael Porter of Harvard states that productivity is the barometer of competitiveness of an economy. Some others consider competitiveness as a set of institutions and policies that determine the level of productivity.

Anwar said this confusion should be addressed as competitiveness is not the same as productivity. You can increase productivity through subsidies or through better technology, quality human resource and higher efficiencies.

The economist said competitiveness relates only to the economic health of a traded sector, in which a firm sells a significant share of its output outside a particular nation. He said Pakistan could have high productivity in its locally operated hardware stores but still have unhealthy traded sectors.

Economist Faisal Qamar said if we look around our region, China and India are able to export more in textiles because they provide huge subsidies to cotton producers and direct subsidies to its exporters. Likewise, Bangladesh enjoys duty concessions from developed economies over major textile exporting nations; it also provides direct subsidy to its exporters.

These three economies are not competitive in true sense as they have also erected trade barriers on import of textiles, he said. Textile sector in Pakistan operates without government support or subsidies and is more competitive than the above three nations.Qamar said the distortions created by other regional countries are undermining the ability of Pakistan to exploit its true export potential.

Weak institutions and flawed government policies are compounding the woes of this sector. Despite these drawbacks, textiles, he added, is the most growth-oriented sector of Pakistan’s economy as it operates without government subsidies and concessions.

The economist said most planners focus on trade deficits alone but ignore the fact that a nation might run a trade surplus by providing discounts to its exporters. This, he added, could be in the shape of undervalued currency as is the case in China, or due to suppressed export sector wages, which are in Bangladesh. He said subsidies or import barriers as in India could increase exports and have the potential to create trade surplus.

A certified public accountant Asif Ali Shahid CPA if the trade surplus of a nation is due to large discounts provided to the exporters, it will not be truly competiveness.If the trade surplus is accumulated by erecting sizable import barriers, the competitiveness of the economy would be in doubt.

Source:- thenews.com.pk

Exports Fail To Lift Onion Prices; Increased Arrivals Keep Market Rates Low

Exports fail to lift onion prices; increased arrivals keep market rates low Jayashree Bhosale, ET Bureau Feb 5, 2014, 04.00AM IST.wholesale prices|Onion prices|Onion|Nafed|MEP|markets|exports(Export of onions may be robust)

Export of onions may be robust, but that's no relief for farmers are domestic prices are sliding. Wholesale prices crashed to 5.50/kg in Pune on Monday. Crop input from Maharashtra is on the rise, despite the exporters shifting their procurement base from Nashik to Pune. Trade veterans expect the situation to turn worse by April when the rabi crop hits the market.

After the Central government reduced the minimum export price ( MEP) to $150/tonne in December 2013, exports from Maharashtra boomed, especially from Nashik. Recently, the exporters have shifted their procurement base from Nashik to Pune region comprising of Satara, Kolhapur etc.

The light pink coloured onion coming from this region is better suited for exports due to its slightly longer shelf life. "About 50 to 70 trucks of onions are going from Pune to Mumbai every day for exports. The Dubai-quality onion gets Rs 8.50/kg," said Ganesh Shedage, an onion and potato wholesaler from Pune.

Despite the exports, onion prices have declined by 30-40% during last one month in all the growing areas in Maharashtra, Gujarat and Karnataka. They are likely slide further due to heavy arrival of the bulb everywhere. Markets such as Ahmedabad, Pune etc are getting about 30,000 quintal onion every day from last week.

Trade veterans say the worse is yet to come. "The domestic onion prices may crash further by April as the area under the crop has increased everywhere. The government may have to give subsidy to boost onion exports and support the prices," said CB Holkar, director of National Agricultural Cooperative Marketing Federation of India.

Source:- articles.economictimes.indiatimes.com

Southern Indian Cement Producers Start Exports To Myanmar

Producers in the south of India have started exporting cement to Myanmar in response to depressed market conditions locally. Chettinad Cements, the India Cements, Dalmia Cements and Ramco Cements have all started shipping cement to Myanmar in the past few months, according to local media.

"We started shipments in January 2014 to Myanmar of about 10,000 - 12,000t. It is not very remunerative, but when the chips are down, we have do something to stay afloat," said Vipin Agarwal, CEO-south, Dalmia Cements. He added that producers make 'token' profits from this market but hope it will become profitable in the future. Dalmia transports its cement from Dalmiapuram in central Tamil Nadu to Tuticorin port for subsequent export. Ramco Cements also starting trialling cement exports to Myanmar in mid-2013, having shipped around 40,000t so far.

Agarwal said that demand in south India has continued to fall with growth in Karnataka, no change in Kerala and decreases in Tamil Nadu and Andhra Pradesh. Cement producers in the region are operating at 55% of their rated cement production capacities. Myanmar is the second export market that cement producers are testing, after Sri Lanka.

Source:- globalcement.com

Libor rate is acceptable to calculate ALP of interest payable or receivable in International Transac

IT/ILT : Where while calculating ALP in respect of interest receivable or payable in international transaction, Libor plus Certain base points could be accepted

HC can’t condone delay in filing of appeal beyond permissible period of condonation by Commissioner(

Service Tax : High Court has no power, even in exercise of its writ jurisdiction, to condone delay in filing appeal before Commissioner (Appeals) beyond permissible period of condonation by him

Stock broker penalized for unauthorizly operating client's account to create artificial volumes in s

CL: Where stock broker, instead of trading on behalf of his client, had used account of his client for placing orders in scrip leading to manipulation of volumes of scrip which resulted into increase in its price, there was violation of PFUTF Regulation

Pension Fund Regulatory and Development Authority Act, 2013 applicable from 1 February, 2014

CL : OTHERS/INDIAN ACTS & RULES : Section 1 of The Pension Fund Regulatory and Development Authority Act, 2013 - Act - Enforcement of - Notified Date on Which all The Provisions of Said Act Shall Come into Force

Sec. 40(a)(i) disallowances based on residential status doesn’t violate non-discrimination clauses o

IT/ILT : Sec. 40(a)(i), based on residential status, doesn't violate DTAA bar on discrimination based on nationalities

No ST on construction of self-contained buildings, wherein each building was having 12 dwelling unit

Service Tax : Where assessee had constructed various residential complexes for State Government wherein each building had self-contained facilities and was consisted of 12 dwelling units, it was not liable to service tax under construction of complex services

Sale of agricultural land located outside the purview of municipal limits is exempt from tax

IT : Profit earned on sale of a land wherein agricultural operations were carried out and which was also classified as agricultural land in revenue records, is agricultural income of assessee

No appeal against oppression if petitioner didn't prove payment of call money necessary to treat him

CL: Where petitioner was a subscriber to Memorandum of Association and had failed to produce any document to substantiate that he had paid call money, requisite criteria as contemplated under section 399 was not fulfilled and petition filed under section 397 was not maintainable

Rectification appeal allowed as Tribunal erroneously concluded that certain matters weren’t pressed

IT: Where Tribunal erroneously recorded revenue's concession to effect that certain grounds were not pressed and rendered no decision on merits on such grounds, it constituted a mistake apparent from record and, thus, revenue's application seeking rectification of said order was to be allowed

RBI devises new system to facilitate filing of returns relating to export of goods/services on a sin

FEMA/ILT : Export of Goods and Services - Export Data Processing and Monitoring System (EDPMS)

Service of sales commission agent isn’t eligible for input service credit; CBEC circular not binding

Cenvat Credit : An assessee is not entitled to input service credit of services of commission agent; view in assessee's favour taken in CBEC Circular is not binding on Department

No concealment penalty for creating a provision for liquidated damages even when other party didn’t

IT : Where contract entered into between assessee and other contracting party provided a clause for liquidated damages from assessee in case of delay in executing work, concealment penalty could not be imposed merely because assessee made a provision for same and claimed it as deduction but no such claim was raised by other party

Predominant objective of promoting Christianity wasn’t an educational activity; trust registration n

IT: Where assessee-trust made application for grant of registration under section 12AA claiming itself as an educational trust, since predominant object of trust was to promote Christian religious faith and no educational activity within meaning of section 2(15) was carried out, it was not entitled for registration

Purchases couldn’t be treated as undisclosed investment without pointing out defect in supporting do

IT: Where genuineness of documents evidencing purchase of machineries by assessee was not doubted, any addition treating said purchase as undisclosed investment could not have been made to assessee's income

RBI devises new system to facilitate filing of returns relating to export of goods or services on a

FEMA/ILT : Export of Goods and Services - Export Data Processing and Monitoring System (EDPMS)

RBI eases export-import norms; does away with requirement of firm irrevocable order for third party

FEMA/ILT : Third Party Payments for Export/Import Transactions

Additions upheld by ITAT under different provision can be challenged through review and not rectific

IT: Assessee could challenge finding of applicability of section only under review proceedings, but not in rectification proceedings as long as action was authorised and governed by a provision

Directors and Guarantors of sick company not entitled to get protection under sec. 22(1) of SICA

SICA: Directors and guarantors of a sick company are not entitled to get protection of section 22(1) of SICA