Cenvat Credit : Non-payment of Service Tax liability by service provider to Government, prima facie, cannot be held a ground for denial of credit at end of assessee when assessee has paid entire invoice amount to service provider
Sunday, 18 May 2014
HC slams AO for invoking sec. 50B when slump sale was effected prior to introduction of such provisi
IT: Where a company 'S' took over business of assessee-company prior to 1-4-2000 and thereupon assessee received an amount of Rs. 4.50 crores from 'S' and it had bifurcated said amount towards trade mark and technical know-how, copyright and non compete compensation, in given situation it was a case of slump sale and since sale had taken place prior to introduction of section 50B, above amount could not be subjected to tax in hands of assessee under head 'capital gain
Textile Sector Add Value And Don’T Hint At A Bailout, Says Govt
In view of power shortages and the Pakistan rupee’s appreciation against the dollar, the textile industry has demanded that the government must do ‘something’ to avoid an industry-wide shutdown.
All Pakistan Textile Mills Association (Aptma) – country’s biggest lobbying group of textile sector – has published advertisements in newspapers, reminding the government about the contribution of the industry and the problems of power outages especially in Punjab. About two weeks ago, Aptma urged the government to provide rebate to textile exporters whose profits have shrunk since January due to the rupee appreciation.
Aptma believes its demands are not tantamount to an effective bailout.“No, this is not a bailout demand. We want the government to supply proper electricity and gas to textile industries which is our right,” Aptma Chairman Yasin Siddik told The Express Tribune.
Commerce Minister Khurram Dastgir, on his visit to Aptma House two weeks ago, floated questions like what should be the level of government interference in the textile sector and what should it do to increase value addition. His point of government’s interference was directed towards the old rivalry between cotton yarn and fabric producers and the producers of finished garments and other value-added products.
Many economists believe the government should not be in the business of doling out favours to one sector of the economy at the cost of another. The commerce minister’s stress was exactly on this same point when he made it clear that the government was not in a position to give out subsidies or rebates to the textile sector.
Dastgir pointed out that the experiences of previous Pakistani governments’ show that most of the time subsidies went in to the pockets of those who did not need them while the deserving failed to get their due share.
Federal Minister for Textile Industry Abbas Khan Afridi has recently spoken in favour of finished textile goods exporters and said that he has urged the government to facilitate this sector in the upcoming budget.
When contacted, Afridi was not available for comment. Same was the case for Dastgir.On the other hand, Siddik said that he supported the textile minister’s view on finished goods producers and wanted to see growth in its exports.
“The whole textile chain should get some support especially the value-added textile sector,” Siddik said, while commenting on whether the government should extend a helping hand or not.
Pakistan is far behind its competitors like India, China and Bangladesh in producing finished textile products. There are over 950 textile items that are traded worldwide. Out of those Pakistan exports only 13 items despite having a complete textile chain that its competitors lack. Still, the textile minister believes that this could be raised to 100 items with some value-addition.
The share of the finished knitted and woven garments in Pakistan’s textile exports remained almost the same over a decade as garment exports contributed 29.2% in the total textile exports of $12.3 billion in fiscal year 2012, virtually unchanged from the 29% in FY02. In FY13, it rose slightly to 29.53% of the total textile exports.
Despite the gloomy performance, the present government believes that it should give highly subsidised loans and concessions in import duties on textile machines to spur investment in the sector.
However, it is quite clear that a lot depends upon the private sector to meet requirements of the EU’s 27 conventions to increase exports under the GSP Plus scheme.
Source:- tribune.com.pk
Sec. 10A deduction to be allowed before setting off losses and depreciation of non-eligible business
IT : Deduction under section 10A has to be allowed before setting off unabsorbed loss and depreciation of non-eligible business unit of assessee
Progress On $1.6Bn Six Lng Carriers Brightens Nigeria’S Export Prospect
With the ongoing construction of six additional liquefied natural gas (LNG) ships for the Nigeria LNG Limited (NLNG) expected to be concluded by the end of 2016, Nigeria’s effort to consolidate its position as one of the largest exporters of LNG in the world is taking shape.
Steel cutting on the first of the project’s LNG carriers took place on April 25, 2014 at Samsung Heavy Industries’ (SHI) Geoje shipyard in South Korea, according to Braemar Engineering, the specialist maritime engineering consultancy appointed to act as shipping consultants to Bonny Gas Transport Limited (BGT), the wholly-owned subsidiary of NLNG responsible for transporting NLNG’s output over the Atlantic to Europe and the Americas.
Braemar Engineering will oversee the building of the six LNG carriers, from design to delivery, with completion of the project anticipated at the end of 2016.
NLNG had in 2012 said it would seek funding to expand its shipping subsidiary BGT, which currently has 24 LNG ships. Last year, BGT ordered six new vessels at the cost of $1.6 billion from both Hyundai Heavy Industries (HHI) and SHI to boost its shipping capacity. Four of the vessels are being built by Samsung and two by Hyundai.
“The inception of this project began nearly 12 months ago, and we are pleased to now be in a position to make details known to the marketplace,” Geoff Green, chief executive officer, Braemar Engineering, said last week.
“This project is the fusion of Braemar Engineering’s expertise in the LNG sector with Nigeria LNG’s core values of integrity, teamwork, excellence and caring for people to create a long-term partnership offering benefits to both the industry and to the Nigerian community,” he said.
NLNG Limited, which recently exported its 3,000th cargo of LNG from its Bonny Island terminal, is planning to expand plant capacity by 40 percent by building a new production line at a cost of around $15 billion. The company plans to refurbish existing plants as it seeks to produce around 40 million tonnes of LNG each year in the foreseeable future.
“NLNG intends to consolidate its position as one of the largest producers and exporters of LNG in the world, maintaining its position as a major and strategic supplier. Currently, NLNG delivers some 8 percent of the world’s LNG supply,” the company said in its ‘Facts and Figures on NLNG 2013’.
Already, the shale gas boom in the United States (US) has impacted on the country’s LNG exports as imports of LNG from the US have dropped significantly.
Industry analysts have said that Nigeria’s share of the LNG market could significantly fall as the increasing availability of LNG from US and East Africa reaches into the Asian region, the top destination for the fuel, stressing the need for Nigeria to intensify efforts to attract long-term buyers.
Emeka Duruigbo, oil and gas professor, Thurgood Marshall School of Law, United States, who was in Nigeria recently, told BusinessDay that with the shale gas revolution occurring in the US right now, Nigeria was almost disappearing from the radar, such that it might not even get any supply orders from the US.
“But Nigerian gas will still be needed, but it means it has to start looking for new markets, get closer to China, India, all these emerging economies that need more energy, but that’s more work and some of those people may not have the purchasing power the way the US has to pay and so Nigeria may have to start selling at a discount,” he said.
In fulfilment of Nigerian Content Development activities agreed between BGT and HHI as contained in the contract for the construction of two new LNG carriers for BGT, 180 Nigerians would be trained in different aspects of ship building and construction, said NLNG, adding that of the 180 technicians travelling to South Korea for the three-month programme, the best 28 would remain to join in the construction of the six new vessels.
NLNG has long-term supply contracts with buyers in Italy, Spain, Turkey, Portugal and France and also sells on-the-spot market to buyers in Japan and South Korea, among others.
Nigeria, Africa’s top oil producer and world’s fifth biggest LNG exporter, currently has LNG production capacity of 22 million metric tonnes per annum (mtpa) and is expected to ramp up when a seventh train comes on stream. The Train 7, which is still awaiting final investment decision (FID) by the stakeholders, is expected to lift the total production capacity to 30 mtpa.
The country holds the largest natural gas reserves in Africa but has limited infrastructure in place to develop the sector. Uncertainties in Nigeria’s investment policies and regulatory framework are said to have caused a slowdown in oil and gas exploration activity and delays in project development, including LNG projects.
Nigeria, which is home to the world’s ninth biggest gas reserves and one of the world’s largest LNG export terminals, in 1989 established the NLNG to harness the nation’s vast natural gas resources and produce LNG and natural gas liquids for export.
Source:- businessdayonline.com
India Inc's Q4 Earnings Fuel Recovery Hopes
INDIA Inc’s earnings for the March quarter appear to be in recovery mode, with bottomline growth better than the past three quarters as companies benefited from lower input costs and slower rise in interest expenses.
Net profits for a sample of 763 companies (excluding banks and financial institutions) were up 57.35% y-o-y compared to the 19.59% rise seen in the third quarter of FY14. However, the bottomline was boosted by exceptional items that led to a sharp rise in net profit at Tata Steel and Adani Power, excluding which net profit growth moderates to 18.37% – still the best in the last four quarters.
Tata Steel's net profit in the March quarter stood at R1,036 crore compared to a loss of Rs 6,529 crore in Q4FY13 on account of exceptional charges related to impairment recognition on some of its steel assets in Europe and Thailand. Similarly, Adani Power, which recognised R1,842 crore of revenues in view of the CERC order granting compensatory tariff, also reported a profit of R2,850 crore compared to a loss of R426.57 crore in the corresponding quarter of the previous fiscal.
The bottomlines seem to have received support from lower tax expenses reported by corporate India, which fell 10.60% on account of several companies writing back additional taxes they paid earlier. Also, interest costs as a percentage of operating profit at 18.42% stood at the lowest in last six quarters while raw material costs as a percentage of net sales were the lowest in last three quarters at 46.75%.
However, earnings still continue to be driven by export-oriented companies with four IT majors —TCS, Infosys, Wipro and HCL Technologies — together reporting 47.7% growth in net profit. Excluding them, along with Tata Steel and Adani Power from the sample, net profit growth declines to 11.01%.
Tech Mahindra, just like its software counterparts, delivered a strong performance with revenues rising 34.3% y-o-y and Ebitda increasing 39% on the back of 70-bps y-o-y improvement in operating margin.
Sales growth, which recovered to 15.31% from 12-13% in the preceding quarter, remained subdued due to the overall slowdown.
With retail inflation steadily remaining over 8%, urban consumers continued to remain tight-fisted. While Asian Paints outperformed expectations with domestic
volume growth of around 15% led by higher growth in tier-2 and tier- 3 cities, Nestle India registered subdued revenue growth, with domestic sales growing at 3.4%, the lowest in a decade. Similarly, though Bajaj Auto benefited from rupee depreciation, total volume declined 4.6% y-o-y with domestic bike sales falling 11% y-o-y, with revenue growth of 4%.
The fall in input costs remains the only saving grace for the majority of firms. Emami benefited from lower raw material prices that resulted in gross margins improving by 790 bps y-o-y even as its domestic volumes declined 10% due to seasonality and de-stocking of distributor inventory. ABB did well on containing costs with operating margin improving 150 bps y-o-y to 6.94%, the highest in the last 16 quarters, but revenues fell 7.2% on account of delayed offtake by customers.
Though some large infrastructure-related players showed strong earnings, smaller infra firms continued to struggle due to falling revenues and rising interest costs. Tata Steel reported robust 14.7% y-o-y growth in consolidated operating profit to R5,011 crore led by its domestic operations, which recorded the highest-
On the other hand, Gammon India's revenues fell 30% y-o-y while interest costs rose 21.66%, widening its net loss to R173.6 crore from R125 crore in the March quarter. NCC too reported an 11% fall in operating profit while interest costs rose 21.1% y-o-y. Though Adani Power reported a near six-fold jump in Ebitda, finance costs rose 22% y-o-y to R1,165 crore while total gross debt stood at R39,768 crore, up 5.73% y-o-y.
Tech Mahindra's management has given guidance for a positive demand outlook with no dramatic changes in client budgets, but the ABB management highlighted that while some uptick was seen in the metals industry, overall industry scenario remains sluggish.
The poor industrial growth numbers — IIP growth for fy14 was -0.1%, first-ever contraction since 1981 — suggest earnings growth will pick up meaningfully only gradually.
Source:- financialexpress.com
Provisional Anti-Dumping Duty Imposed On Phenol Imports From Us, Chinese Taipei
The Finance Ministry has imposed provisional anti-dumping duty on all phenol imports from the US and Chinese Taipei.The provisional anti-dumping duty will be valid for six months and has been levied based on the recommendations of the designated authority in the commerce ministry.
Hindustan Organic Chemicals Ltd (HOCL) had filed the petition seeking anti-dumping duty on phenol imports from the US and Chinese Taipei.
In the case of Chinese Taipei, the anti-dumping duty levied by the revenue department ranged from $ 46.07 per tonne to $ 193.9 per tonne depending on the exporter.
The revenue department has imposed an anti-dumping duty of $146.09 per tonne on all producers and exporters of phenol from the US.
Phenol is a basic organic chemical used in phenol formaldehyde resins, laminates, plywood, particle boards, bisphenol-A and pharmaceuticals.
Source:-thehindubusinessline.com
Gold Jewellery Exports Rise Again In April
Gold jewellery exports from India rose for a third consecutive month in April as raw material supplies improved after the Reserve Bank of India (RBI) allowed more banks to import bullion.
Struggling with a ballooning trade deficit, India last year imposed a record duty of 10 percent on overseas purchases of gold, the second-biggest expense in its import bill. That hit gold jewellery exports, with shipments in the fiscal year that ended in March dropping around 40 percent.
But jewellery exports in April continued to build on a firm trend, registering a 14.69 percent rise to $604.42 million, the Gems and Jewellery Export Promotion Council said in a statement.
"Supply condition has improved a little bit...if supplies improve more, exports will grow further," said Rajiv Jain, past chairman of the council.
India imported 50 tonnes of gold in March, which acted as a buffer for the following months, Jain said, when the country witnessed lower imports due to restrictions imposed on cash due to elections. India imported 30 tonnes of gold in April.
Total gems and jewellery exports fell 6.8 percent to $2.5 billion.
The amount of gold jewellery shipped by India is directly related to its imports after the country enforced the so-called 80/20 rule in July, making it mandatory to export a fifth of all gold imports.
Meanwhile, the RBI has indicated that it aims for a slow and steady removal of restrictions as the current account deficit comes under control.Silver jewellery exports unexpectedly fell 36.85 percent to $111.12 million in April, after displaying a strong trend last year.
Source:- zeenews.india.com
Foreign Trade Policy Expected After Budget
The Ministry of Commerce and Industry is expected to announce the new five-year foreign trade policy (2009-14) after the Budget as it seeks to boost manufacturing and exports, among other things.
"The Directorate General of Foreign Trade (DGFT) is already doing stakeholder consultations. It is expected that the new FTP would be announced only after the Budget. It would help in giving final touch to the policy.
Source:- ptinews.com
Assessee couldn't seek adjudication on merits if he had already claimed benefit of payment of duty p
Excise & Customs: If assessee's stand is that duty was paid in full with interest, even before issuance of notice and no proceedings could, therefore, have been initiated; his stand that duty must be adjudicated on merit was invalid
TP addition ordered on basis of avg. margin of profit yielding products as no benchmark found for im
IT/ILT : Where assessee, engaged in manufacturing raw material of perfumes, declared operating loss of 2.1 per cent on export of Acsantal Crude whereas, TPO relying upon operating margin of 25.93 per cent earned by assessee's unit where Acsantal Crude was allegedly manufactured, made addition to assessee's ALP, extreme view so taken by TPO was to be rejected with a direction to benchmark transaction in question on basis of average profit margin earned on all products manufactured by assessee
No violation of FERA if NR parent co. issued a credit note to Indian branch for sum otherwise not pa
FERA : Where non-resident parent company issued credit notes in favour of its Indian branch which was instead of being paid to it in India was adjusted against amount payable by latter to former, in view of fact that so called payments which were to be received were not owed to Indian branch office question of seeking general or special permission from RBI under section 16 did not arise
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