IT/ILT : Concealment penalty be imposed where assessee claimed that its liaison office was acting as a communication channel, but it was found to be performing other business activities which could demonstrate business connection or constitution of a 'Permanent Establishment'
Thursday, 15 May 2014
No breach of IT rules on admission of additional evidence by CIT(A) if AO was allowed to comment on
IT: Where Commissioner (Appeals) allowed assessee to produce additional evidence after calling remand report and permitting Assessing Officer to comment on such additional evidence, said order of Commissioner (Appeals) did not require any interference
CLB admitted oppression plea as directors of co. were diverting receipts of right issue to their rel
Company Law : In direct contravention of purpose and object for which scheme of rights issue was issued, making investment by erstwhile directors of company in partnership firm-in-dispute was patently mala fide and oppressive
HC set aside revisional proceedings as there was no basis for alleging evasion of sales under Assam
CST & VAT : Where Commissioner took revisional proceedings against assessee and issued on it a notice under section 36(1) of Assam General Sales Tax Act, 1993 stating that (i) it had shown low profit margin, and (ii) it had suppressed sales to extent of Rs. 11.39 crores, since there was no basis for above grounds for invoking suo motu powers contemplated under section 36, revisional proceedings were liable to be quashed
Pasteurization and packing of milk for dairy to be deemed as manufacture; not liable to service tax
Service Tax : Prima facie, process of pasteurisation and packing of milk is a process necessary to make milk marketable to consumer and is covered by Chapter Note 6 of Chapter 4 of Central Excise Tariff and not liable to service tax
HC upheld detention valid based on other grounds by appliying doctrine of segregation as one of grou
CL : Where detention order was based on multiple or different grounds, even when it was held that detention on one of such ground was illegal, detention order could be upheld on other grounds by applying doctrine of segregation
Contribution to approved superannuation fund isn’t a taxable perquisite until employee is entitled t
IT/ILT/AAA: Employer's contribution to the superannuation fund assures only future benefit to employees and they do not get any vested right at the time of making contribution to the fund - Therefore, such contribution could not be treated as taxable perquisite in the hands employee until they are entitled to receive it
Payment by Oxford India to Sri Lankan resident for promotion of books in its country won’t be taxabl
IT/ILT: Sales promotion services rendered by 'G' for promotion of books and brand name of applicant in Sri Lanka were not technical services as defined in the Act –Such payments were not taxable in India as Article 14 of India-Sri Lanka DTAA provided that such income would be taxable only in the country in which services were rendered
‘Most Favoured Nation’ clause can be referred to interpret treaties and not to import ‘make-availabl
IT/ILT: The applicant contended that in view of Protocol to India-France DTAA, are stricted scope of the term FTS should be applied as provided for in any treaty entered into between India and a third State - Hence, when there was no 'make available' clause in the India-France Treaty, the restricted scope of FTS in the India-UK DTAA had to be applied - Held: Authority held that Protocol or Memorandum can be made use of for interpreting provision of the Treaty -It will be inappropriate to import
To End Misdeclaration, Revenue Loss: Customs Recommends 10 Percent Duty On Import Of Silicon Steel
Pakistan Customs has recommended the Federal Board of Revenue (FBR) to impose 10 percent import duty on commercial import of silicon steel in order to end misdeclaration. Industry sources told Business Recorder on Wednesday that during the last one year import of silicon steel has witnessed notable increase despite the fact that no new investment has been made in silicon steel consuming sector like electric, transformer and fan industry.
Reportedly, a large quantity of Cold Rolled Coils (CRC) is being imported under the umbrella of silicon steel, as there is zero duty on import of silicon whereas some 10 percent duty on CRC. "Some of the commercial importers are involved in misdeclaration and importing huge quantity of CRC by declaring it silicon steel," they added.
FBR has received a large number of complaints in this regard from domestic steel industry, which is demanding some duty on import of silicon steel in order to end misdeclaration of CRC. Sources said that the federal government has given 10 percent tariff protection to domestic CRC Steel manufacturers, which have invested some 200 million dollar in steel sector during the last few years.
However, some of commercial importers/traders started to import CRC steel declaring its silicon steel to avoid paying 10 percent customs duty which resulted in loss of approximately Rs one billion annually to the national exchequer, besides creating serious difficulties for the domestic CRC industry.
The customs data showed the import of silicon steel jumped by 330 percent to a monthly average of more than 7,600 metric tons during January 2013 to February 2014 up from previous monthly average of 2,300 metric tons during 18 months period from July 2011 till December 2012. In this regard, the CRC Steel manufacturers have held a number of meetings with Ministry of Industries, Engineering Development Board, Federal Board of Revenue and Customs officials and finally Pakistan Customs (Karachi Enforcement) has recommended FBR to impose 10 percent duty on commercial import of silicon steel to stop mis-declaration and enhance revenue collection.
Sources said that customs have recommended duty only on commercial imports in order to ensure availability of cheap raw material to the genuine user/manufacturers. As per the proposal, manufactures will continue to avail the duty exemption. This way the customs' revenue collection would increase by over one billion rupees without affecting the genuine users of Silicon Steel, they informed.
"It is the right time that Ministry of Industries & Production and Engineering Development Board also recommend the same to protect development of steel industry of Pakistan while protecting genuine end users of Silicon Steel by exempting them from duty," they demanded.
It is necessary for the authorities to ensure level playing field for CRC Steel manufacturers as well as stop government's revenue pilferage and increase tax/duty collection, they added. Industry sources said that if the government provide level playing field to domestic steel sector and give confidence to existing companies, they are willing to expand their production capacities, besides bringing new investors in the steel industry.
It is worth mentioning here that Pakistan has one of the lowest per capita annual steel consumptions in the region at 34 kilogram per head compared to 427 kilogram per head in China, 211 kilogram per head in Thailand, 130 kilogram per head in Brazil and 55 kilogram per head in India. It is a well established fact that no country can prosper unless it has its own steel production facilities and sufficient energy generation.
Source:- brecorder.com
Mango Exports To Us Likely To Rise By 42% This Yr
Mango exports from India to the US are likely to increase by 42 per cent to 400 tonnes this year on strong demand, according to the government body APEDA.
Last year, India, the world's largest grower of the fruit, had shippped about 281 tonnes of mangoes to America.
"Mango exports to US would be around 400 tonnes this year," a senior official of the Agricultural and processed Food Products Export Development Authority (APEDA) said.
Mango exports to the US have commenced this month. In the last ten days, the country has exported 50 tonnes of mangoes, mainly 'Alfonso' and 'Kesar' varieties from western India.
The official said that the exports are expected to pick in the coming days with arrival of different varieties of mangoes from various parts of the country.
However, higher exports will depend on supply of quality UP mangoes like 'Dasheri', 'Langda' and 'Chounsa' that will hit the market during monsoon, he added.
Mango exports to the US resumed in 2007. The fruits are exported to the US after the irradiation process, a preservation technology that can reduce the risk of food poisoning and extend shelf-life of food.
Currently, India has only one irradiation unit in Maharashtra with a processing capacity of 10-15 tonnes a day.
Traders and experts said that big volumes of exports to the US cannot take place due to insufficient irradiation centres in the country.
India's overall mango exports in 2014 are expected to be at last year's level of around 60,000 tonnes, while the domestic production is estimated to be around 16 lakh tonnes.
Source:- financialexpress.com
March Tea Output Rises 11 Percent Y/Y: Board
Tea production in March jumped 11 per cent from a year earlier to 52.49 million kg due to higher plucking in top producing Assam state, the state-run Tea Board said on Thursday.
Production in the north-eastern state rose 53.2 per cent from a year earlier to 14.37 million kg, the board said in a statement.
The world's second biggest tea producer exports CTC (crush-tear-curl) grade mainly to Egypt, Pakistan and the UK, and the orthodox variety to Iraq, Iran and Russia.
Source:- economictimes.indiatimes.com
State Plans Pack Houses To Meet Eu Norms
The recent European Union (EU) ban on agro products from India may, in the long run, help you buy pesticide-free vegetables and fruits from the local market.
To meet the stringent EU norms, the state government has plans to set up Agricultural and Food Products Export development Authority (APEDA)-certified integrated pack houses, a senior government official said here on Wednesday.
The 28-member EU imposed the ban on mangoes and vegetables after finding pests in some of the consignments from India.
The ban has hit Kerala's modest Rs 220-crore vegetable and fruit export industry. The state has been exporting pineapple, bananas, spices and red rice to growing markets such as France and Germany in the EU.
State agriculture secretary K R Jyothilal said the EU has low tolerance towards pesticide residue limits unlike in India.
"But once we adhere to EU norms, the farmer is assured of huge profits. This will also in turn encourage him to use lesser pesticides on products meant for the domestic market, as he will find agriculture sustainable,'' the official said.
Kerala has been lacking APEDA-approved pack houses and the government was now planning to start such centres at Ernakulam, Thiruvananthapuram, Kozhikode and Nadukara agro-processing factories.
"We plan to begin APEDA-certified pack houses, where inspectors will conduct lab tests. The department will take the assistance of scientists from Kerala Agriculture University to test vegetables and fruits,'' Jyothilal said.
APEDA chairman Santhosh Sarangi expressed his organisation's willingness to help the state set up pack houses. "The future of agro export industry lies in penetrating niche EU market by delivering quality food products and booking good profits,'' he said.
APEDA, the nodal body affiliated to the Union ministry of commerce and industry, is responsible for developing farm export-based industries, besides providing financial assistance to farm-entrepreneurs. The body also issues standards and specifications for agro-products meant for exports.
Sarangi said the setting up of APEDA-approved pack houses would help farmers export products to European countries with stringent import rules.
The authority chief termed the EU blanket ban on agro products from all Indian states unfortunate since "pests were found in a few consignments. We should be more stringent in our testing methods,'' he said.
Organic food growers, meanwhile, mooted a more holistic view on the EU ban, rather than merely looking at export figures.
"We are still driven by figures. If you look at the number of cancer cases that have increased dramatically in the past decade, one can clearly see a link with the consumption of pesticide-ridden food products,'' C Jayakumar, a trustee of Thanal, which runs an organic bazaar, said.
He said the state should instead promote the cultivation and consumption of organic food for its own citizens or else the cost for healthcare would exceed short-term economic gains.
Source:- timesofindia.indiatimes.com
HC condoned delay in filing appeal as it was a meritorious case involving huge revenue
CST & VAT: Where against order of Tribunal, revenue filed appeal before High Court late by 210 days and sought condonation of delay contending that it was a very meritorious case and amount involved in matter was very huge, considering large amount of revenue involved, delay caused in preferring appeal deserved to be condoned
Taxes paid on upfront fees for borrowing weren’t disallowable when these were included in loan amoun
IT : Where in terms of loan agreement entered into with a bank, assessee agreed to bear tax on upfront fee, since it was a part of entire consideration agreed to be paid, no disallowance could be made in respect of same under section 40(a)(ii)
India's Veg Oil Import Surges 27 Per Cent In April
India's import of vegetable oils, both edible and non-edible, jumped 27 per cent to 832,760 tonnes in April compared with 654,827 tonnes imported in April last year.
Of the total, 819,435 tonnes were edible oils and 13,325 tonnes non-edible oils, The Solvent Extractors' Association of India announced in a statement.
The overall import of vegetable oils during November 2013 to April 2014 fell two per cent to 5,164,991 tonnes compared with 5,279,505 tonnes imported during the same corresponding period.
During the five-months period, the import of refined oil rose three per cent to 898,715 tonnes compared with 874,187 tonnes during the same period of last year.
Import of crude oil declined two per cent and was reported at 4,174,377 tonnes compared with 4,264,576 tonnes registered during the same period of last year.
Palm Oil import also decreased during November 2013-April 2014 to 3,678,593 tonnes from 4,311,057 tonnes during the same period of last year due to disparity in processing, said the association.
However, soft oils import increased to 1,394,499 tonnes from 827,706 tonnes recorded during the same period of last year.
"Indian refiners prefer to import crude soft oils over crude palm oil in India, which has reflected in the pattern of import the last few months," it said.
Stock of edible oils, as of May 1, 2014, at various ports was estimated at 465,000 tonnes, of which CPO accounted for 230,000 tonnes, Refined Bleached and Deodorized Palmolein (70,000 tonnes), Degummed Soybean Oil (40,000 tonnes) and Crude Sunflower Oil (125,000 tonnes) and about 700,000 tonnes in the pipeline.
Total stocks, both at ports and in the pipelines, despite the higher imports during April 2014, was reduced at 1,165,000 tonnes from 1,200,000 tonnes previously.
Source:- bernama.com.my
Texprocil Study Finds Robust Figures For Cotton Yarn Export From India, Outlook Bright
A study conducted by The Cotton Textiles Export Promotion Council, (Texprocil) has revealed that India's cotton yarns exports are meeting their targets barring the seasonal fluctuations generally witnessed every April and inspite of high raw cotton prices.
Statistics revealed by Texprocil show that India exported 1,082 mn kgs of cotton yarn valued at US$ 3.75 billion in the first 10 months (April - January) of fiscal year 2013-14. It is estimated that cotton yarn export for the full fiscal year 2013-14 would be around 1,350 mn kgs valued at US$ 4.70 billaion. The high quality of Indian yarn is ensuring firm orders for Indian mills from the international markets.
Exports of cotton yarn dropped during last three years in the month of April and it happened in 2014 too. One of the reasons, in addition to the high year end exports which cause a drop in April, is the temporary high cotton prices during this period. Last year as well as this year during the month of March and April Indian cotton prices have gone above the international prices for cotton upto 40s count. Current Indian prices are higher than international prices and good quantity imports of 1 1/8 inch cotton are taking place.
There is an increasing anxiety in the industry due to recent developments in Chinese cotton policy since China is the major importer of cotton and cotton yarn from India. Presently, the price difference between Indian and Chinese cotton is quite high with the Indian yarn selling at much lower rates. In fact, prices of Indian cotton yarns after payment of duty and taxes in China are still very much lower than the Chinese domestic yarn prices.
SaysMr Manikam Ramaswami, Chairman, Texprocil, "Given the better quality produced by Indian mills there will always be good exports of Indian yarns taking place, even if the difference between Chinese cotton prices and international cotton prices narrows down substantially. Indian mills need not fear a drop in yarn exports happening beyond the seasonal fluctuations. However profitability of exports will depend upon our price parity with International cotton prices."
Established in 1954 as an autonomous, non-profit body dedicated to promotion of exports, Texprocil facilitates the exports from India of raw cotton, cotton yarns and blended yarns, woven and knitted fabrics, home textiles and technical textiles. The Council provides export promotional services to over 3,500 members including composite mills, spinning units, weaving units, knitting units, process houses and merchant exporters who collectively generate billions of dollars of turnover. For more information.
Source:- prnewswire.co.in
India May Back Solar Duties After Probe Finds Dumping
India may recommend duties on US and Chinese solar imports after finding evidence of dumping, broadening a global trade dispute in the $130 billion market.
More than 20 overseas suppliers, including First Solar Inc and Yingli Green Energy Holding Co, sold equipment in India for as little as half the cost as in their home markets and undercut local prices by as much as a third, according to a summary of a 1 1/2 year probe by the Ministry of Commerce & Industry sent to the parties involved and obtained by Bloomberg News.
The document indicates the ministry will recommend duties on imports from the US, China, Taiwan and Malaysia, said Jagdish Agarwal, spokesman for the Solar Independent Power Producers Association, which opposes trade barriers.
If Asia’s third-biggest solar market imposes duties, it would escalate a protectionist trend that’s threatening the viability of projects as they compete against conventional power. The US applied tariffs as high as 250 per cent on Chinese products in 2012, and the European Union followed with its own measures a year later. Australia yesterday announced a dumping probe.
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India, which had virtually no solar power in 2010, has built $10 billion of projects and driven down the cost of generation by half, making it cheaper today than grid power in Delhi and Mumbai. Tariffs will derail that trajectory, making solar power more expensive and causing projects to fail
Vinay Rustagi, joint managing director of Bridge to India Energy Pvt
India, which had virtually no solar power in 2010, has built $10 billion of projects and driven down the cost of generation by half, making it cheaper today than grid power in Delhi and Mumbai. Tariffs will derail that trajectory, making solar power more expensive and causing projects to fail, said Vinay Rustagi, joint managing director of Bridge to India Energy Pvt, a New Delhi-based consulting company.
‘Wafer-thin margins’
“It will make most large-scale projects, currently developed on wafer-thin margins, unviable,” Rustagi said. Developers, who depend on imports for 90 per cent of panels, could back out of projects, government programs may be scrapped, and India could set itself back two years on its goal to make solar competitive with conventional power, he said.
The document sent out this week was the first indication of which side India’s government is favoring since the start of the probe in November 2012. The dispute pits local panel and cell makers against project developers and overseas manufacturers.
“We disagree that we have dumped imports,” Tempe, Arizona-based First Solar, the largest US panelmaker, said in an e-mailed statement. “The preliminary decision by the Indian authorities, if upheld, would make serving the Indian market very difficult.”
The ministry has until May 22 to decide whether to impose duties before the case expires. Any tariffs it proposes could take six months to implement and may be scrapped by a new government, said Bridge to India’s Rustagi.
Results in national elections will be announced tomorrow. Narendra Modi, the frontrunner who pioneered India’s first incentives for large-scale solar power, has called for a clean-energy revolution during the campaign.
Inferior quality
The document upheld many of the arguments submitted by domestic makers Indosolar Ltd, Websol Energy System Ltd and Jupiter Solar Power Ltd, concluding that “the domestic industry suffered material injury due to dumped imports.”
The ministry dismissed arguments by the opposing side that Indian products are inferior in quality. Opponents including China Sunergy Co, Canadian Solar Inc and JA Solar (JASO) Holdings Co cited World Trade Organization rules, which say an anti-dumping probe can’t be initiated if the producers supporting the application account for less than 25 per cent of national production. Indosolar, Websol and Jupiter account for just 12 per cent, according to the opponents’ submissions.
Project dropped
The value of photovoltaic imports into India has reached $2.4 billion since 2010 when the nation started its solar program, according to commerce ministry data. Domestic manufacturers benefited little from that growth, idling 70 per cent of their production capacity after losing orders to foreign competitors.
Duties won’t create globally competitive Indian manufacturers because they can’t match the scale of Chinese rivals, according to Bridge to India. BlackRock Inc-backed SunEdison Inc dropped a project in India last month on doubts that local producers can meet demand.
The annual production capacity of China’s Yingli, the world’s biggest panelmaker, dwarfs the largest Indian maker by 10 times, according to data compiled by Bloomberg. If India imposes tariffs, developers would probably look to Singapore and South Korean suppliers instead, said Jenny Chase, head of solar analysis for Bloomberg New Energy Finance in Zurich.
Parties involved in India’s anti-dumping probe have until tomorrow to respond to the document.
Yingli spokeswoman Qing Miao wasn’t available when called at her office and didn’t respond to an e-mail requesting comment. JA Solar and Canadian Solar, also among the biggest Chinese exporters to India, didn’t respond to inquiries.
Commerce Secretary Rajeev Kher and D.P. Mohapatra, a director in the ministry who signed the document, didn’t respond to e-mails and phone calls seeking comment.
Source:- eco-business.com
India's Cil Expected To Decide On Imported Coal Contract By End-May
India's largest coal producer Coal India Limited is expected to decide whether to award a contract for thermal coal imports at its next board meeting set for late May, a source said Thursday.
CIL received a single bid from government trading firm MMTC in response to a tender it issued earlier this year to import 5 million mt of thermal coal.
If the board approves the deal, CIL will sign an import agreement with MMTC and specify the quality and quantity of the coal to be imported along with the delivery schedule, the source said.
CIL invited bids from government trading firms seeking 5 million mt of thermal coal imports of any origin on its behalf and supply to various power plants until September 2015. The tender was reissued after it drew no responses in November.
The tender asked for bidders interested in importing, handling and transporting the coal to power plants.
CIL, which produces more than 80% of India's coal output, is facing a shortfall under fuel supply agreements signed with power plants.
The agreements require CIL to meet 80% of the plants' coal needs, with 65% of the contracted amount from domestic sources and another 15% through imports.
It aims to import two types of coal. For the first type, it sought coal of 5,800-6,500 kcal/kg ADB, having 10-20% total moisture as received, 8-20% ash air dried and 0.7-0.9% sulfur air dried.
Specifications for the second type include 5,300-5,800 kcal/kg ADB with up to 32% moisture as received, up to 20% ash air dried and sulfur up to 1% air dried.
Source:- platts.com
‘Outdoor catering service’ not eligible for cenvat credit if number of workers below 250
Cenvat Credit : 'Outdoor catering service' is eligible for credit only if : (a) canteen is provided by manufacturer in discharge of statutory obligation under Factories Act; and (b) cost thereof is factored into cost of production of final product
HC rejects reassessment notice issued merely to get extended time to complete block assessment
IT : Where in course of block assessment proceedings, seized material was available with revenue and thus there was no reason to hold that assessee had failed to disclose fully and truly material facts necessary for assessment, Assessing Officer could not issue notice under section 148 merely to seek extension of period of limitation for completing block assessment
Rules uploaded on MCA portal under Companies Act, 2013 won't be effective until their publication in
CL : Bombay High Court questions application of Rules framed under Companies Act, 2013 from 1-4-2014, without they being notified in Gazette
SC : Order dictated in open Court in criminal case can be recalled or reviewed until it is signed an
SC : Unless the judgment is signed and sealed, it is not a judgment in strict legal sense and, therefore, in exceptional circumstances the order can be recalled and altered to certain extent
Allowing exclusive import into India by ‘Lamborghini’ to one of its group cos. wasn’t anti-competiti
Competition Law: Where OP appointed its group company as exclusive dealer and asked existing dealer to terminate dealership agreement and brought into effect a fresh dealership agreement with new dealer, it could not be anti-competitive
Banking route was not sacred if creditworthiness of lenders weren’t proved; additions for cash credi
IT : Where even though assessee took unsecured loan through cheques, yet he could not establish identity and creditworthiness of lenders, amount of loan was rightly added to assessee's taxable income under section 68
TP addition deleted as functionally dissimilar comparable was chosen by TPO after rejecting suitable
IT/ILT: Where in course of transfer pricing proceedings, TPO made adjustment to assessee's ALP in respect of import of components of automobiles, in view of fact that one of comparables selected by TPO was inappropriate on account of functional difference whereas another comparable rejected had been considered as appropriate comparable by DRP in preceding year, impugned adjustment was to be set aside and matter was to be remanded back for disposal afresh
No concealment penalty under MP VAT Act if discount was claimed by dealer via credit note subsequent
CST & VAT: Where Assessing Authority had disallowed assessee's claim with regard to transportation and freight charges and payment made through credit note and also imposed penalty upon it under section 64(1) of Madhya Pradesh Value Added Tax Act, 2002, in view of law laid down by Supreme Court in a similar context, imposition of penalty was not justified
HC dismissed winding-up plea as petitioner couldn’t prove that respondent had admitted overdue of de
CL: Where from e-mail exchanged between parties there was no clear admission of debt by contracting party, winding-up petition would not be maintainable
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