Tuesday, 18 February 2014
Scope of sec. 50 limited to compute capital gain, tax rate to be fixed as per holding period of depr
Sec. 14A disallowance would be triggered even if shares were held by assessee as stock-in-trade
Cenvat credit can't be denied to buyer merely if supplier failed to pay duty on goods
Rent from letting out of unused business premises is ‘income from house property’ and not business r
Cad Is Under Control J M Shanti Sundharam
The excise duty reduction for automobiles, mobile handsets and consumer goods would both spur manufacturing and bring more revenue to the exchequer as sales would go up, says J M Shanti Sundharam, chairperson of the Central Board of Excise & Customs (CBEC). The duty concessions, she tells Vrishti Beniwal, would automatically expire in June if the new government doesn't extend it. And, that she'd like to have draft legislation ready for implementation of the Goods & Service Tax (GST) as soon as a consensus on the latter is had. Edited excerpts:
The reduction in excise duty for certain sectors in the interim Budget has come before the elections. Is it politics or economics?
Industrial growth is sluggish and there was a need to give some stimulus to manufacturing industry. Yes, it could have been given a couple of months earlier but that it is given now needn't attract political overtones. There are 40 days to go before the end of the financial year and whatever has to be done for meeting the revenue targets will be done.
What will be the revenue loss to the exchequer due to this reduction?
Whatever the likely loss on account of reduction in excise duties would be offset by increase in sales. So, the purpose is two-fold. While encouraging the domestic manufacturing industry, our revenue targets are also likely to be met, as it's unlikely the sales would remain at the same level. Particularly in cars, commercial vehicles and mobiles. We also have some customs duty concessions which are partly trade facilitation and partly stimulus for the domestic industry, to provide them a level field with imported goods.
By the revised estimates, there will be a shortfall of Rs 45,000 crore in indirect tax collections. Would you blame it entirely on the slowdown or there are other factors?
In excise, definitely the growth has been considerably slower than what we expected. In customs and service tax, we expected to meet the targets given to us. The Budget Estimate was given at a time when the economy was projected to grow at a better rate. Customs duty collections are also lower because of the higher duty on gold, to contain the current account deficit (CAD). So, it is a combination of factors.
So, are you considering reducing the import duty on gold, now that the CAD has been contained?
The CAD is definitely under control but we still have time till the end of the financial year. We will be very cautious on this matter, so that the CAD doesn't go out of hand.
Despite a shortfall this year, you are projecting 19 per cent growth in indirect tax collections next year. Isn't this too ambitious?
The finance minister has already said he expects the growth to improve. We have also given some stimulus to industry. So, it is not too ambitious. It considers the existing realities. The Voluntary Compliance Encouragement Scheme for service tax has also expanded the base, as people who declared dues under it will pay tax from next year.
Will the excise duty concessions announced in the interim Budget automatically expire after June?
In the case of mobile handsets, it is not up to a particular date. However, for capital goods and the automobile sector, the new rates are valid only till June. After that, a call will have to be taken.
What if the new government doesn't touch these decisions?
It would automatically expire.
How high is the possibility of the new government tinkering with tax rates?
The new government would come sometime in mid-June. I think any tinkering will depend on the state of the economy. Excise cuts were basically for improving the domestic industry's prospects. So, seeing how it has improved would definitely be a factor in any change there.
What will be the fate of GST?
As far as the Centre is concerned, we think GST is the way to go ahead. It is absolutely necessary to have a common market because that is the way we are going to improve our revenue collections. It was not because of the Centre that things didn't move ahead. There were a lot of differences of opinion among the states, too. I would like the CBEC to have a draft law ready, so that whenever it (consensus) comes in, the rules and the draft legislation is in place.
The government's efforts to enforce tax compliance in case of income tax have yielded results. What about excise, service tax and customs?
We have got some data from the income tax department, based on the returns and other documents filed, and expect the field formations to use this to widen the base, particularly in service tax. For excise, we have set up a study group. It will shortly give its report on matching Cenvat credit with the person who has issued the invoice. A lot of leakage in revenue takes place here. We have also moved a proposal for a committee which would give us a road map for an improved information technology infrastructure, to encourage voluntary compliance, business intelligence and analytics.
Source:- business-standard.com
ITAT date of service of notice is date of its actual receipt by assessee expiry of prescribed time
U.S. Regulator On India Visit Calls For Greater Drug Safety Collaboration
The head of the U.S. Food and Drug Administration (FDA) called for more collaboration among regulators to improve drug quality and safety as she wrapped up a visit to India after recent import bans on drugs from a handful of plants in the country.
In recent months the FDA has banned the import of drugs and drug ingredients from leading Indian manufacturers including Ranbaxy Laboratories (RANB.NS) and Wockhardt (WCKH.NS), citing quality concerns.
The bans threaten the image and market share of India's $14 billion pharmaceuticals sector in the United States. India is second only to Canada as a drug exporter to the United States, where it supplies about 40 percent of generic and over-the-counter drugs.
"We think this is a critical moment in time, when we have to think and act in new ways, and that requires real commitment as national regulators to work as a coalition of global regulators," FDA Commissioner Margaret Hamburg told reporters.
"And that is why it is so important that the Indian regulator really joins us at the table, because they are so important in the global marketplace for medical products."Hamburg met regulatory and health ministry officials as well as executives of drugmakers including Ranbaxy and Wockhardt.Quality was the central theme of Hamburg's visit, which included a trip to the Taj Mahal.
"It was evident," Hamburg wrote in a blog post on Friday, "that those responsible for building the Taj and those that are preserving the centuries-old structure are committed to extraordinary quality."She said that "vision of quality and care" remained with her as she met executives from Indian drug exporters.
FDA ACTION NOT BINDING
During the visit, Hamburg and ministry officials signed a statement of intent to achieve, among other things, "convergence in regulations in keeping with international standards".
The agreement provides for U.S. and Indian regulators to inform each other before inspecting drugmakers' plants, so host-country inspectors can join as observers.
The Drug Controller General of India on Monday told Reuters that he sees scope for India's Central Drugs Standard Control Organization (CDSCO) working with the FDA and improving regulatory practice, adding that the Indian regulator will continue to follow its own quality standards.
"We don't recognise and are not bound by what the U.S. is doing and is inspecting," G.N. Singh said. "The FDA may regulate its country, but it can't regulate India on how India has to behave or how to deliver."
Industry officials in India say that weak domestic regulatory oversight and a lax approach to quality control by some drugmakers means that a large number of sub-standard drugs reach the market undetected.
Singh, however, said his agency inspects manufacturing facilities in India regularly and that it plans to raise the number of inspectors to 5,000 in three to five years, from about 1,500 now.
U.S. GENERIC DEMAND
Most of the drugs that Ranbaxy, Wockhardt and their peers, including Dr Reddy's Laboratories (REDY.NS) and Lupin (LUPN.NS), export to the United States are cheaper copies of drugs with expired patent protection.
Demand for such drugs, known as generics, is rising in the United States, where the government is pushing to reduce healthcare costs. With increased demand has come greater regulatory scrutiny in India, which has the largest number of FDA-approved plants outside the United States.
The FDA inspected 111 Indian plants last year, compared with 72 in 2010, the regulator's data shows. The number of inspections in China rose to 78 from 48.
Last month the FDA banned imports from Ranbaxy's fourth and final Indian plant, meaning that the company can only sell drugs from its U.S. factory.
The FDA acted similarly in November against a second Wockhardt plant, which made generic versions of AstraZeneca's (AZN.L) hypertension drug Toprol, citing flaws in the manufacturing process.
As a result of the sanctions, the companies face delays in selling new generics in their biggest market as well as the cost of hiring external consultants to ensure compliance with the FDA's manufacturing standards.(Reporting by Sumeet Chatterjee and Zeba Siddiqui; Editing by Christopher Cushing and David Goodman).This story has not been edited by Firstpost staff and is generated by auto-feed.
Source:- firstpost.com
Rupee Drops 36 Paise To End At 62.20 Versus Us Dollar
The rupee fell 36 paise, its biggest loss in three weeks, to close at 62.20 versus the dollar on Tuesday as pent up demand of the American currency and a drop in regional currencies weighed.
The local currency dropped on a day when the equity benchmark Sensex spurted by over 170 points. At the Interbank Foreign Exchange (Forex) market, the rupee commenced lower at 62.02 a dollar from the previous close of 61.84. Later, it declined to a low of 62.31, before settling at 62.20, a fall of 36 paise or 0.58 per cent.
In the previous two sessions, rupee rose by 58 paise or 0.93 per cent. Today's drop is the biggest since the 44-paise
fall on January 27. "Initiating the session on a weaker note today, rupee was seen continuing with its losses during the day against dollar. Slight recovery in dollar index, downbeat data from Germany and dollar demand in the local market were some of the factors leading to weakness in rupee," said Abhishek Goenka, Founder & CEO, India Forex Advisors.
At the Interbank Foreign Exchange (Forex) market, the rupee commenced lower at 62.02 a dollar from the previous close of 61.84. Regional currencies like the Yen slid to its weakest levels this month amid reports that Bank of Japan said it will continue monetary easing to meet its inflation target. Some analysts suggested that rupee's depreciation on Tuesday was linked to fears that fiscal projections in interim budget may not be met.
"FY14 fiscal deficit was contained at 4.6 per cent of GDP. FY15 fiscal deficit is placed at 4.1 per cent. We see 50-100 bps upside risk to fiscal projections. Centre's net borrowing, at Rs 4919 billion, came in line with expectations. In our view, there are upside risks to government issuance," said a Bank of America Merrill Lynch report. FIIs had injected USD 83.91 million yesterday as per SEBI data. Forward dollar premiums declined on fresh export receipts.
The benchmark six-month forward dollar premium payable in July ended further down at 234-236 paise from 237-239 paise. Far forward contracts maturing in January also dropped to 479-481 paise from 482-484 paise previously. The RBI fixed the reference rate for the dollar at 62.1220 and for the euro at 85.1680. The rupee dropped further to 103.87 against the pound from 103.46 while it fell back slightly to 60.73 per 100 Japanese yen from 60.67. However, the rupee strengthened further against the euro to 85.40 from 84.75.
Source:- ibnlive.in.com