IT: Payment made for transmission of electricity alongwith maintenance of metering system, noting down meter reading, sealing and resealing of meters, etc. cannot be treated as fee for technical services; therefore, provision of section 194J do not apply and TDS is to be deducted under section 194C
Thursday 20 February 2014
No withholding from sum paid to NR even if it’s treated as ‘work’ under sec. 194C in absence of PE i
IT/ILT : No TDS under section 195 on payments to non-residents for services specifically characterized as 'work' under section 194C
Cost of abandoned film to be allowed as revenue exp. for film producers, says ITAT
IT : Expenditure on abandoned film is to be treated as revenue expenditure
Restaurateurs Not Happy With Interim Budget ; Concern Over Service Tax
The Interim Budget for 2014-15, presented recently by finance minister P Chidambaram, has failed to enthuse restaurateurs, because no call was taken on the service tax levied upon eateries across the country. The tax is applicable to all states at the rate of 12.36 per cent of 40 per cent of the bill, i.e. 4.94 per cent of the bill.
Arvind Shetty, president, Indian Hotel and Restaurant Association (AHAR), said, “Despite a number of representations to the finance minister against the decision to levy service tax (which includes the food and beverages consumed) upon eateries, he has not addressed the same.”
“We urged Chidambaram to mull over the service tax, citing the legal hassles involved. But since he has not been forthcoming, we would attempt to urge him to take a call on the issue when he presents the Budget for 2014-15,” he said, adding that apart from service tax, there was nothing in the Interim Budget for hoteliers and restaurateurs.
Kamlesh Barot, director, Vie Hospitality; past president, Federation of Hotels and Restaurants Associations of India (FHRAI); and immediate past president, Hotel and Restaurant Association - Western India (HRAWI); concurred that service tax had an adverse impact on the sector.
“We have been advocating that it be rolled back, because tourism - both domestic and overseas - has been hit in the last three years, as has the consumption of food and beverages. We, however, have no problem with goods and service tax (GST), which is a national-level indirect tax reform,” he added.
Barot also highlighted the fact that the external credit borrowing (ECB) limit was set at Rs 200 crore. “Not only is the rate of interest on the amount availed from a bank or financial institution to build a hotel or restaurant low, but the period for its repayment is also short,” he added.
He termed the government’s decision to levy excise duty on bars at twice the prevalent rate another eyewash. “Three years ago, it was decided that the rate at which excise duty would be imposed was 10%. We are stunned with the 50% increase in it, and have sought an appointment with the excise secretary, but he hasn’t responded yet,” he said.
Mumbai
Barot threw light on the problems faced by restaurateurs and hoteliers in Maharashtra in general, and Mumbai in particular. “The number of hotels available in the country’s financial capital is certainly a cause for concern. While the taxes levied on them are high, the tariffs are low,” he added.
Entertainment duty
Three years ago, Government of Maharashtra imposed entertainment tax, amounting to Rs 50,000 per month on standalone establishments that have live bands playing or a demarcated area for performances, and Rs 2,50,000 per month for restaurants in five-star hotels.
“As a rate this high is bound to have an adverse impact on restaurants, pubs, discotheques and lounges, we have been pleading with the state government to revise the three-year-old amendment to the Bombay Entertainments Duty Act, 1923, but this too has fallen on deaf ears,” Barot stated.
Source:- fnbnews.com
No invocation of extended period if penalty was waived off due to reasonable cause
Service Tax: Service tax is leviable under Sale of Advertising Space or Time Services, prima facie, in respect of advertising boards which are on street light poles and in respect of rent which is given to advertising agency to set up advertising board
No reassessment to disallow sec. 80-IB, 80JJA reliefs if such issues were already considered during
IT : Reassessment to disallow deductions under sections 80JJA and 80-IB after expiry of four years period was not justified when said deductions were duly considered in original assessment
Crude Oil Prices Mixed In Asian Trade
Crude oil prices were mixed in Asian trade today as dealers weighed concerns that the Chinese economy may be losing strength against upbeat US stockpiles figures, analysts said.
US benchmark West Texas Intermediate (WTI) for April eased one cent to USD 102.74 in mid-morning trade, while Brent North Sea crude rose four cents to $110.34 for its April delivery.
Weak Chinese manufacturing data released yesterday has heightened concerns about waning demand from the Asian economic powerhouse, the world’s top energy consumer.
HSBC’s preliminary reading for its purchasing managers’ index (PMI), which tracks manufacturing activity in China’s factories and workshops, contracted in February to its lowest level in seven months.
The index also tumbled in January, losing ground for the first time in six months.
Singapore’s United Overseas Bank said oil prices receded “as traders put more weight on the weak China PMI data against the strong US demand” reflected in latest US stockpiles data.
Ric Spooner, chief market analyst at CMC Markets in Sydney, said investors were still mulling the implications of the Chinese manufacturing figures.
“I think, collectively, the market has decided that the safer option will be to wait on more data from China before they make any downward adjustments to their growth outlook,” he told AFP.
The US Energy Department’s official petroleum stockpiles report released Thursday raised hopes of improved demand after bouts of winter storms and bitter cold gripped large parts of the country.
Source:- thehindubusinessline.com
Block assessment under sec. 158BD to be quashed if made by AO without stating reasons for his being
IT : Where Assessing Officer passed block assessment order in case of assessee under section 158BD, read with section 158BC, without recording necessary satisfaction, order so passed was invalid and deserved to be set aside
Jspl Sees 5% Steel Demand Growth In 2014-15
Jindal Steel and Power Ltd (JSPL), a leading manufacturer of flat and long steel products in the country, today said it was hoping for normal consumption growth in the steel sector during the coming financial year.
“We are quite sanguine that the consumption of steel will grow by around 5 per cent in the next year, at par with the expected GDP growth of India,” said V K Mehta, Director (sales and marketing) with JSPL at the regional launching ceremony of its flagship rebar brand Panther here.
Finished steel demand, a key barometer of economic health of any country, grew by only 0.5 per cent in the April-January period in India.
“This is an abnormal year as far as steel industry is concerned. Because normally growth in steel sector is at par with GDP growth, while this year it was much lower. We hope normalcy will be restored in the next year,” said Mehta.
Steel producers across the country felt margin pressure as supply was more than demand amid tight raw material prices such as iron ore, coal and semi-finished long products such as billets. In 2013 calendar year, India produced 81.2 million tonne crude steel, about 5 per cent higher than previous comparable period, data from World Steel Association showed.
Last month, prices of reinforced bars (rebars) used in house and building constructions slipped by around one percent at major cities to Rs 33,500 to Rs 37,000 per tonne on limited demand. “Earlier there was mismatch between demand and supply which was suppressing the prices. At this point of time, though I cannot say prices would go up, we expect demand growth in the next fiscal,” he said, hinting that projected rise in demand would clear huge pile of inventories steel producers have across the country.
As per trade estimates, out of 27 million tonne rebar market in the country, large players like JSW, JSPL, Tata Steel and Steel Authority of India Ltd (SAIL) supply only 7 million tonne while rest of the demand is met by other small rebar producers. The prices are expected to move in a tight range in the next fiscal as well due to capacity addition by manufacturers. JSPL and SAIL have already announced to increase their steel making capacities in coming years including production of long products.
Source:- business-standard.com
Rubber Imports By India Jumping 38% To Record As Shortage Widens
Natural rubber imports by India, the world’s third-largest consumer, will probably climb to a record as production trails demand and automobile sales rebound on tax cuts, according to the nation’s Rubber Board.
Shipments are set to jump to 300,000 metric tons in the financial year ending March 31, surging at least 38 percent from 217,364 tons a year earlier, Sheela Thomas, chairman of the board, said in an interview at an industry conference in the southern city of Kochi today. Imports may drop to 200,000 tons in 2014-2015 because of rising output and an increase in the import tax, she said.
India, the third-largest economy in Asia, cut the excise duty on small cars and sports utility vehicles this week to reverse a slowdown in sales amid the slowest growth in a decade. Tire makers including MRF Ltd. (MRF), Apollo Tyres Ltd. (APTY) and Ceat Ltd. (CEAT) boosted shipments to benefit from a bear market in rubber, prompting the government to increase the import tax in December.
“The auto industry has shown a marginal recovery in the last quarter of 2013 and with the excise duty cut announced, we hope it may improve further,” said Thomas. “The replacement tire sector will be the key driver for consumption.”
Finance Minister Palaniappan Chidambaram on Feb. 17 cut the excise duty on small cars to 8 percent from 12 percent and on SUVs to 24 percent from 30 percent. Rubber imports jumped 41 percent to 279,627 tons between April and January from a year earlier, according to data from the state-run board. The import estimate for 2014-2015 is subject to revision, Thomas said.
Production Curb
“Huge amount of imports are still coming in and imports in the next fiscal year may be similar to this year’s level,” said Santosh Kumar, vice president for rubber at Harrisons Malayalam Ltd. (HRM) “India is getting stuck because of its production constraints and will need to import rubber.”
Futures on the Tokyo Commodity Exchange, the international benchmark price, will drop as much as 15 percent to 200 yen a kilogram ($1,956 a ton) in 2014 from yesterday’s settlement, according to the median of 15 estimates compiled by Bloomberg. That’s 63 percent below the record high set in 2011. The contract for delivery in July traded at 227.50 yen today.
The consumption will climb 4.1 percent to 1.01 million tons in 2014-2015 from this year driven by tire replacement demand, said Thomas. The nation’s automobile market, which consumes 65 percent of the rubber, doubled in size from 2008 to 2011, according to Bloomberg Industries data. The country imports mainly from Thailand, Malaysia and Indonesia.
Production may increase 12 percent to 950,000 tons if the weather remains normal and more trees begin producing latex, said Thomas. Heavy monsoon rains in July and August last year disrupted tapping and led to some pest attacks, cutting output this year, she said. Production fell 9 percent to 723,000 tons in the 10 months through January, while consumption slid 1 percent to 811,110 tons, board data show.
Source:- businessweek.com
Tea Thanks Anand Sharma For Extending Ftp Provisions
Tirupur Exporters' Association today thanked Commerce Minister Anand Sharma for extending the provisions in the Foreign Trade Policy 2009-14, relating to export and import of goods and services, beyond March 2014.
In a statement, TEA president A Shaktivel said he had met Sharma in Delhi and urged upon him on the need to extend the policy, which was conceded immediately, as confusion persisted among exporters after presentation of the interim budget on whether the provisions would continue beyond Mar 31 or not.
Shaktivel said the DGFT notification yesterday in this regard had clarified the position and exporters who take up future orders could make calculations accordingly. They could also quote the competitive rate and continue to maintain the growth trend in the coming months.
Source:- business-standard.com
Gold Recovers On Low Level Buying; Silver Falls
Snapping its two-day losing streak, gold prices recovered by Rs 25 to Rs 31,250 per ten grams in the national capital on Thursday following low level buying for the ongoing marriage season amid a firming global trend.
However, silver lost Rs 320 at Rs 47,500 per kg on lack of buying support from industrial units and coin makers.
Traders said low level buying for the ongoing marriage season and a rising trend in the international markets mainly helped gold prices to recover.
Gold in London, which normally sets price trend in the domestic markets, rose by 0.1 per cent to $ 1,313.42 an ounce on speculation the US Federal Reserve may further cut monetary stimulus, raised demand for the metal as a safe haven.
On the domestic front, gold of 99.9 and 99.5 per cent purity recovered by Rs 25 each to Rs 31,250 and Rs 31,050 per ten grams, respectively. It had lost Rs 225 in last two trading sessions.
Sovereign, however, held steady at Rs 25,500 per piece of eight grams.
On the other hand, silver ready fell by Rs 320 to Rs 47,500 per kg and weekly-based delivery by Rs 410 to Rs 47,210 per kg.
Silver coins continued to be asked around previous levels of Rs 88,000 for buying and Rs 89,000 for selling of 100 pieces.
Source:- timesofindia.indiatimes.com
Rupee Ends 3 Paise Down At 62.23 Against U.S. Dollar
The rupee on Thursday softened by three paise to close at 62.23 against U.S. dollar on late demand for the American currency from importers and tracking weakness in local equities.
The rise in dollar index, a gauge of six major global rivals, was up 0.13 per cent, also led to rupee closing lower.
At the Interbank Foreign Exchange (Forex) market, the local unit commenced lower at 62.35 a dollar from previous close of 62.20. It then dropped further to a low of 62.45 on initial dollar demand from exporters.
Later, it bounced back to a high of 62.2050 before ending at 62.23, showing modest fall of three paise or 0.05 per cent.
The Indian benchmark S&P BSE Sensex today tumbled over 186 points, or 0.90 per cent, while FIIs injected $13.41 million on Tuesday, as per SEBI data.
Pramit Brahmbhatt, CEO, Alpari Financial Services, India said, “Local equities traded weak after rising for four days as profit booking was seen in bluechips. U.S. dollar traded strong against the Australian dollar after the preliminary reading of China’s manufacturing data from HSBC disappointed investors.
“This helped Dollar index to trade positive for the second consecutive day. Rupee traded flat today and closed near previous close. The trading range for the rupee is expected to be within 61.80 to 63.00,” he added.
Forward dollar premiums dipped on sustained export receipts.
The benchmark six-month forward dollar premium payable in July tumbled to 229-231 paise from 234-236 paise previously.
Far forward contracts maturing in January also plunged to 473-475 paise from 479-481 paise.
The RBI fixed the reference rate for the dollar at 62.2843 and for the euro at 85.6995.
The rupee, however, recovered to 103.61 against the pound from 103.87 while improved further to 85.21 per euro from 85.40. It remained weak against the Japanese yen to end at 61.05 per 100 yen from 60.73.
Source:- thehindu.com
TP adjustment set-aside as TPO failed to justify his choice of comparable and variation was within t
IT/ILT : Where in course of transfer pricing proceedings of assessee, TPO on basis of selection of two new comparables, made certain addition to assessee's ALP, since it was not clear as to whether those comparables were in same line of business and, moreover, even after inclusion of said comparables, variation in arithmetic operating margin was within permissible range of +/- per cent as mentioned in proviso to section 92C(2), impugned adjustment made to ALP was to be set aside
Value of goods enhanced on contemporaneous imports of similar goods couldn't be challenged on averme
Excise & Customs: Where customs officer has drawn comparative anatomy of goods imported by assessee and identical/similar goods and enhanced value on that basis, assessee cannot challenge such enhancement merely by averments; assessee must come out with evidence in his support
Commencement of trading before getting registered herself as sub-broker violates SEBI norms
SEBI : Commencement of trading by a sub-broker even prior to making application for registration as sub-broker is in violation of regulation 11 of Brokers Regulations
Assessee coming back after leaving his job abroad isn’t a mere ‘visit’ to India to avail bigger wind
IT/ILT : Return to India after resigning job abroad is not 'visit to India' under Expln(b) to sec 6(1)(c)
Commissioner(Appeals) can't overturn findings of lower authorities without any basis
Excise & Customs : In case of exemption based on quantity of clearances of specified goods, clearances of non-specified goods made on payment of duty, cannot be included for determining quantum of clearances of specified goods, thereby, virtually diluting exemption
Notice to society at address reported in TDS Certificate filed by it is valid even if it was address
IT : Notice to society at address reported in TDS Certificate filed by it is valid even if it was address of its members
Right over mortgaged property through promissory lien can't supersede rights available to a mortgage
Banking laws : No protection would be available to a person only on basis of promissory lien and mortgagee would be entitled to possession of mortgaged premises
While remanding matter, ITAT can't direct AO to decide only on basis of particular judicial decision
IT: On remand, Assessing Officer has to take a fresh decision on merits; Tribunal cannot restrict his decision only to a particular precedent
Only sum incurred to maintain identity of co. allowable if its financials were made on non-going con
IT : Where auditors had prepared accounts of assessee-company as a non-going concern, only expenses required for maintaining corporate identity would be allowed
Concealment penalty upheld even when assessee deliberately offered its concealed income of earlier y
IT : Where assessee offered additional income after search operation unearthing substantial undisclosed income for earlier years, concealment penalty was to be imposed upon assessee and waiver of penalty could not be granted
Dual treatment: Exp. on expansion of business was a revenue exp. even if it was capitalized in books
IT : Where opening of stores at various places was one composite business of assessee-company and in balance-sheet it had shown capital work-in-progress amounting to Rs. 9.40 crores and out of said amount it had claimed an amount of Rs. 3.64 crores as revenue expenditure, since expenditure was for purpose of expansion of existing business, it was allowable as revenue expenditure
Court within whose jurisdiction instrument was presented for encashment shall entertain petition on
Banking Laws : Court within jurisdiction whereof, complainant has presented dishonoured cheque (issued by an accused), has jurisdiction to entertain a petition filed under section 138
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