Service Tax : Once invoices describing type of service stand issued by service provider and service tax stand paid thereon, department cannot challenge classification at end of service receiver to deny benefit of refund under Notification No. 17/2009-S.T.
Tuesday 20 May 2014
HC rejects reassessment initiated on suspected violations of sec. 54E which was never claimed by ass
IT: Where reopening took place on ground of breach of requirement of section 54E, but section 54E was not at all applicable, reopening of case lacked validity
Penalty under sec. 10 of CST Act was not justified without establishing mens rea on part of assessee
CST & VAT: Where Assessing Officer levied penalty upon assessee under section 10(b) of Central Sales Tax Act, 1956 on ground that it had purchased machinery against 'C' form which was not included in its central sales tax registration certificate, in absence of any finding that there was mens rea on part of assessee to deliberately violate statutory provisions or its conduct was of contumacious nature, levy of penalty was not justified
Leasehold property of co.-in-liquidation to be returned to its owner when lease period comes to an e
CL: On winding up of lessee-company, lease of property came to an end and company was to be directed to transfer possession of property to owners
Case remanded as compensation provided by AE to recoup assured profit margin wasn’t reported to TPO
IT/ILT : Where assessee had not properly reported TPO about compensation received by it from AE so as to make up minimum operating profit to be earned by it from international transaction with AE, matter was to be re-adjudicated
Area Acquired By Kamarajar Port May Be Turned Into Sez
A new Special Economic Zone (SEZ) or a Free Trade Zone (FTZ) may be set up within the 650 acres recently acquired by the Kamarajar Port Limited (KPL), formerly the Ennore Port, with the KPL deciding to appoint a consultant to look into the proper utilisation of the land.
Speaking at an interactive session on exports organised by the Confederation of Indian Industry (CII) here on Monday, the Chairman cum Managing Director of the KPL M A Bhaskarachar said that the port had decided on appointing a consultant to look into how to properly utilise the 647.8 acres of land that it took over from the Salt Department of the Government of India early in March this year.
“We have decided to appoint a consultant to look into how to utilise the land and one of the options we have is to set up a SEZ or a FTZ within the property,” he said. The port acquired the land after a 12-year wait only on March 2 this year.
The CMD pointed out that the port had managed to increase the draft of the vessels it can accommodate to 14.5-15 metres from the 12 metres it was earlier by dredging the channel and the basin.
Consequently, the port can now accommodate much larger vessels.
“We hadn’t announced it earlier because of the Model Code of Conduct being in effect, but the port has increased its draft by 2 metres to 14.5 metres. The benefit to the port is huge,” he told reporters on the sidelines of the session.
“We have got a request from the Chettinad berth to dredge the berth to the same level so that they can avail of this draft. We will be awarding this dredging contract within a month and the operation will begin by June and be completed in six months,” he added.
Source:- newindianexpress.com
Iron Ore Price Sinks Below $Us100
Iron ore prices have drifted below $US100 per metric tonne for the first time in nearly two years, driven down by market worries that demand from China is being outpaced by increasing output of the steelmaking raw material from international miners.
Australian exporters of iron ore -- the cheapest in the world -- still have headroom for exports at current prices, but analysts say some may be need to rethink planned expansions if the price continues to slide.
The Steel Index's benchmark price for ore with 62 per cent iron content at China's Tianjin port was $98.50 a tonne, down 2.2 per cent on Friday's level, with the record high of above $190 a tonne reached in early 2011 a distant memory.
"It certainly creates a big headwind for the iron ore mining companies," said Jeff Largey, London-based head of metals and mining at Macquarie Research. "In the near term, they will remain under pressure."
Australian mining companies like BHP Billiton, Rio Tinto and Fortescue Metals Group have poured billions of dollars into new mining or existing operations over the past few years as the value of industrial commodities soared to record levels in response to robust demand from China. The country is the world's largest buyer of iron ore, accounting for more than 60 per cent of seaborne trade.
Rio Tinto already has committed to boosting annual iron ore output in Australia by more than 20 per cent over the next four years in a bet Chinese demand will stay strong. Fortescue Metals and BHP are also building their production. Last week, Rio Tinto said its iron ore mining operations in the Pilbara reached a production rate of 290 million metric tonnes a year, two months ahead of schedule.
Fortescue Metals recently hit its target of producing 155 million tonnes of iron ore on an annual basis, and thinks it could boost exports by a further 13 per cent by mining more efficiently.
Shares in BHP were down 1.7 per cent, Fortescue fell 4.6 per cent and Rio Tinto lost 2.8 per cent at the end of trading on Monday.
"If prices dipped below $80 per tonne, we would see some marginal supply cutbacks, but the bulk of Australian iron ore production is still profitable, down to $50 per tonne," said Mark Pervan, an Australia-based analyst with ANZ Research.
"That said, an iron ore price below $80 per tonne, would halt or delay most expansion plans creating possible export supply tightness in two [to] three years' time," he said, adding that he expected prices will bounce back by $10-$15 a tonne in the months ahead.
Citigroup has said a continuing recovery in China's steel production as well a slower rate of supply growth in the second half could hold iron ore around $108 in 2014, although in the long term it remains bearish, forecasting a price of $80 a tonne in 2016.
Instead of bigger and cheaper producers of iron ore in Australia, the heat more immediately is likely to be on Chinese ore producers, who may have to cut back on their own output at ore prices between $90-$100 per metric tonne, said Paul Bloxham, HSBC's chief economist in Australia and New Zealand.
If such cutbacks kicked in, it would support prices because of lower supplies, he said.
However, reductions by Chinese producers could easily be offset by higher supplies from India, which was the third-largest supplier after Australia and Brazil until two years ago, when legal rulings closed mines and slashed exports.
India's Supreme Court recently eased a mining ban in two of the biggest producing provinces -- Goa and Karnataka, although the outlook for increased exports have been clouded by a separate order issued Friday to shut 26 mines in Orissa state, another leading producer.
Industry officials see these measures as temporary hurdles as they expect India's new industry-friendly government will try to remove obstacles to iron ore production and exports, although it is an open question how quickly this will happen.
"We do see Indian iron ore exports picking up, but they may not reach the level as three years ago," said Mr Largey of Macquarie Research.
Source:- theaustralian.com.au
Cotton Rules Flat On Limited Buying
Cotton prices were unchanged on limited demand from mills and exporters. Traders said that the season is at its end, so demand is subdued.
A broker said that domestic mills demand was there in the market. Exporters’ buying was limited. There is no hope for any big demand and price may decrease this week. Gujarat Sankar-6 best quality cotton was traded at ?42,000-500 for a candy of 356 kg. Average cotton price stood at ?39,000-40,000 and lower grade cotton was quoted at ?35,000-38,000.
About 30,000 bales of 170 kg each of cotton arrived in Gujarat and 80,000 bales arrived in India. Kapas or raw cotton declined by ?5 to ?880-1,050 for a maund of 20 kg. Gin delivery kapas was ?1,050-60. Cotton seed was quoted at ?375-390.
Source:- thehindubusinessline.com
Feeling Squeezed In Textile Sector
Contrary to what many had hoped, textile industry hasn had a good quarter. The industry wide turnover remained on the sluggish side in the third quarter ending March 2014, whereas costs remained strong resulting into lower net profits and a reduction in profit margins.
A look at the countrys top ten vertically-integrated textile firms (based on market capitalization), shows that most firms remained constrained in the third quarter.
Nishat Mills (NML) still managed to be the market leader, contributing around 24 percent to industry sales. NML was followed by Gul Ahmed Textile Mills (GATM), Nishat Chunia (NCL) and Fazal Cloth Mills (FZCM) that also cumulatively contributed 37 percent to industry turnover.
A confluence of factors affected the sector in 3Q FY14. Slowdown in high street retail sector sales in the US and European markets, sharp appreciation of Pakistani rupee against the US dollar of around 6.5 percent during the quarter, without corresponding decrease in input costs and higher inflation compared to China and India during the period under review resulted in decline in revenues and reduction in margins of the textile sector.
In addition, higher wages, a 6 percent year-on-year increase in cotton prices and the upsurge in overhead costs owing to high fuel and power costs led to increased pressure on the industry thereby eroding their margins.
Moreover, "the prices of yarn were under pressure due to stiff competition both in local and export markets as a result of availability of cheaper Indian yarn and decision of China to use previously accumulated huge cotton stocks," NMLs directors said in their third quarter report, while commenting about the industry environment. This slower off-take adversely affected the spinning and weaving divisions of the industry. However, processing and home textile division, especially, of NML and GATM performed remarkably well due to broad customer base and proactive marketing strategy by the firms.
To avail the opportunity from the grant of GSP+ status, some of the major textile companies have invested in increasing their production capacities. NCL is undertaking modernization of NCL seven and eight spinning units, NML is commissioning 100 Toyota Air Jet looms and ANL is going for restructuring. On the other hand, GATM and Kohinoor Textile Mills (KTML) are engaging in strong quality management systems, with the strategy of diversification of products and expansion in target markets.
Reportedly, a new textile policy (2014-19) is being formulated by the current government. Plus, sales tax at the rate of two percent applicable on yarn, three percent on fabric and five percent on garments is expected to be revised in budget (2014-15). The textile sector hopes that the current government will provide level-playing field by releasing billions of rupees stuck in sales tax refunds and give compensatory rebate to make up for the losses suffered due to exchange rate appreciation, as these factors have rendered textile industry uncompetitive within the region.
The real test for textile companies, however, is to maintain the growth trajectory of its margins in the face of difficult macro-economic conditions. FY14 is turning out to be another tough year for textiles. To end the year on a high note, the gross and operating margins would have to perk up by a long shot in the final quarter--something that seems less likely at the moment.
Source:- brecorder.com
Gold, Silver Fall On Sluggish Demand, Global Cues
Gold prices dropped Rs. 130 to Rs. 29,450 per ten gram in the national capital on Tuesday as demand from jewellers and retailers declined at prevailing levels amid weak global cues.
Silver too turned weak and shed Rs. 50 to Rs. 41,500 per kg due to reduced off-take by coin makers.
Market-men said besides weak demand at prevailing levels, lower global trend where gold dipped below $1,300 an ounce mainly led to decline in the precious metals in India.
Gold in Singapore, which normally sets price trend on the domestic front, traded at $1,290.23 an ounce.
In Delhi, gold of 99.9 and 99.5 per cent purity fell by Rs. 130 each to Rs. 29,450 and Rs. 29,250 per ten gram respectively, while sovereign remained unaltered at Rs. 24,900 per piece of 8 gram.
Similarly, silver ready declined by Rs. 50 to Rs. 41,500 per kg and weekly-based delivery lost Rs. 200 at Rs. 41,000 per kg.
On the other hand, silver coins continued to be asked at last level of Rs. 79,000 for buying and Rs. 80,000 for selling of 100 pieces.
Source:- thehindu.com
Imported Solar Cells To Get Costlier As Government Likely To Impose A Steep Dumping Duty
Government is likely to impose a steep dumping duty on solar gear imports, a move that could deal a massive blow to solar power producers in India.
The commerce ministry has identified a dumping margin range of 50-60% from the United States and 100-110% from China, which is the largest exporter of solar cells worldwide. The ministry has identified 58 manufacturers, mostly from China, followed by Taiwan, Malaysia and the US as the subject countries involved in the case of dumping filed by a group of domestic manufacturers two years ago.
"The dumped imports of the subject goods from the subject countries have increased in absolute terms as also in relation to production and consumption of the subject goods in India. The imports of the subject goods from the subject countries are undercutting the prices of domestic industry. Further, the dumped imports have caused price underselling, price suppression as well as price depression effects," the ministry said in a statement.
However, the domestic manufacturers are looking forward to a level playing field following the imposition of duty.
"Revival of manufacturing in India is vital to meeting the new government's objectives around development. Here is an opportunity to send out a strong message by revitalising Indian solar manufacturing," said Vivek Chaturvedi, chief marketing officer, Moser Baer Solar.
The commerce department has determined a dumping margin of 60-70% for sampled manufacturers from China and 100-110% for nonsampled, indicating an unorganised market of imports flowing in from China into India. The dumping margin for First Solar, a USbased solar cell manufacturer, has been kept at 5-15% and for all other exporters at 40-50%. For Malaysia and Taiwan, the ministry determined the margin at 70% and 90%, respectively.
Source:- economictimes.indiatimes.com
India Boosts Natural Rubber Imports On Strong Rupee, Weak Prices
Indian imports of natural rubber are likely to soar over 70 per cent in the three months that end in June from the same period last year, as a strong local currency and lower global prices prompt tyre makers to snap up cargoes.
Increased imports by India would buoy international prices , which have fallen around a quarter this year on concerns over economic growth in China and on plans by world No.1 rubber producer Thailand to sell 200,000 tonnes from its state stockpiles.
"Imports could rise above 100,000 tonnes in the June quarter. Tyre makers are aggressively placing orders," said George Valy, president of the Indian Rubber Dealers' Federation.
India, which usually buys from Thailand, Malaysia Indonesia and Vietnam, imported 58,346 tonnes in the same quarter last year.
The rupee this week rose to its strongest in 11 months against the US dollar on expectations of robust foreign interest in domestic shares and debt after the Bharatiya Janata Party swept to victory in the country's elections.
"Imported rubber is cheaper than local supplies even after paying 20 rupees (per kg) duty," said an official at Apollo TyresBSE -0.17 %, who declined to be named as he was not authorised to speak with media.
Tyre makers have been paying 127 rupees per kg for imported Malaysian grade rubber, including import duty and freight, against local price of 150 rupees per kg.
Indian prices have recently been supported by a drop in local output, with April production falling 3.8 per cent from a year ago to 51,000 tonnes.
"Local production is not sufficient to fulfil demand. In April production fell and even in May production will be lower," Valy told Reuters.
That comes after natural rubber prices in India hit a five-year low of 138 rupees per kg earlier this month, driving some farmers to curb tapping.
"Many farmers have not been tapping. They can't recover the cost of production," said N. Radhakrishnan, a dealer and former president of the Cochin Rubber Merchants Association.
Farmers have also been reluctant to spend money putting rain guards on rubber trees ahead of the monsoon months of June and September. These are typically pieces of plastic that surround a tree's trunk above the tapping panel.
"The supply shortage is likely to increase after June. If farmers are not putting up rain guards, then they won't be able to tap during the rainy season even if prices rise," said Radhakrishnan.
India is the world's fifth largest natural rubber producer, but its imports have more than doubled in the last few years due to the rapid expansion of its auto industry. They stood at 325,190 tonnes in the year that ended March 31.
Indian tyre producers include CEAT LtdBSE 1.10 %, JK Tyre and Industries LtdBSE 4.96 %, MRF LtdBSE -0.04 % and Balkrishna Industries LtdBSE 0.90 %.
"Indian imports can support global prices, but local prices will remain under pressure as tyre makers are slashing dependency on local supplies," Valy said.
Source:- economictimes.indiatimes.com
Tirupur Exporters Urge Rbi To Limit Rupee Gains Against Dollar
Expressing concern over the rupee strengthening against the dollar, knitwear exporters of Tirupur on Monday sought immediate intervention of the RBI to arrest the domestic currency's gains.
In a letter to RBI Governor Raghuram Rajan, Tirupur Exporters' Association (TEA) president A Shaktivel said "the rupee has been gaining against the dollar on a day-to-day basis and touched Rs 58.57 on Saturday and is widely expected that the gain will continue in the coming days also."
Knitwear exports have regained the growth only last year after facing challenging times in the previous four years, Shaktivel said, adding that exporting units, mostly SMEs, have regained business confidence and been putting maximum efforts to sustain and increase shipments.
The main competing country China is maintaining there competitive advantage by calibrating their currency, while Bangladesh, being a least developed nation, has advantage of a zero customs tariff in European market, he said.
The appreciation of the rupee against the dollar would upset the apple cart of Tirupur knitwear export units and lose its competitiveness in the tough global market, Shaktivel said, adding the apprehension was that the new situation may trigger to derail the last year's rebound growth trajectory and continue sustenance of exports in the global market.
Source:- economictimes.indiatimes.com
Penalty for tax default deleted as such default occurred due to genuine scarcity of funds with asses
IT: Where assessee had not clear its statutory dues while filing return of income, fact that assessee's money got stuck in an attachment of a third party and assessee had borrowed funds to clear its tax dues along with interest up to date of payment much before Assessing Officer triggered penal provisions, had elaborately proved that default was committed by it without any mala fide intention and, therefore, no penalty could be levied under section 221(1)
Penalty couldn’t be confirmed on grounds not disclosed in show cause notice
Excise & Customs : Before imposing penalty, it is necessary to : (a) issue show cause notice informing "of grounds"; and (b) give an opportunity of making representations against said "grounds"; hence, penalty cannot be confirmed on grounds not disclosed in notice
COMPAT upholds 630 crores penalty on DLF for abusing its dominant position in real estate sector
CL : Competition Appellate Tribunal upheld the order of CCI directing DLF to pay penalty of Rs. 630 crores for abusing its dominant position in real estate sector
No sec. 68 additions if all transactions were made through banks and share applicants were assessed
IT : Where investing companies were genuinely existing and identity of individual investors were also established, no addition could be made under section 68 on account of share application money, only on basis of any third party statement
CLB: Any joint holder of debentures can make application for its redemption
CL : Provisions of section 117C(4) are applicable to all debentures whether issued prior or after introduction of Amendment Act, 2000, i.e., 13-12-2000 and pending redemption
Rent from letting out of flat with amenities was income from house property in absence of any busine
IT: Where assessee entered into an agreement to let out a floor with various amenities, in view of fact that assessee did not involve in any kind of recurring, systematic and organized business activity and, moreover, in respect of maintenance and upkeeping of floor, it appointed only one person, Assessing Office was justified in treating rental income assessable as 'income from house property' and services receipts as 'income from other sources'
Rent from letting out of flat with amenities was income from house property if absence of any busine
IT: Where assessee entered into an agreement to let out a floor with various amenities, in view of fact that assessee did not involve in any kind of recurring, systematic and organized business activity and, moreover, in respect of maintenance and upkeeping of floor, it appointed only one person, Assessing Office was justified in treating rental income assessable as 'income from house property' and services receipts as 'income from other sources'
HC raps Tribunal for examining validity of assessment when appeal was made on issue of pre-deposit r
CST & VAT: Where against order of Appellate Authority passed on an application for waiver of pre deposit of assessed tax, assessee filed an appeal before Tribunal and in process of hearing appeal Tribunal decided several issues pertaining to validity of assessment order and allowed appeal in part, Tribunal committed serious error in examining validity of assessment order in an appeal concerning question of pre deposit
CBDT gives option to individuals to show mother's name on PAN card; notifies revised forms 49A and 4
IT/ILT : Income-Tax (Fifth Amendment) Rules, 2014 - Substitution of Forms 49A and 49AA
TP method relied upon on by DRP was valid if same method was acceptable to assessee for shipment of
IT/ILT : Where ALP of imported LPG computed on basis of distance between port of origin to port of destination was found to be accepted for almost all shipments, addition for two shipments for which prices were in excess of such ALP was to be upheld
If duty is paid on waste while final product is exempt from tax, pro rated credit for input used in
GST : Waste/Scrap is a final product; hence, even if main final product is exempt, manufacturer is entitled to credit of proportionate inputs which generated such waste/scrap, if such waste/scrap is liable to duty
CCI orders investigation against Coal India as, prima facie it imposed unfair terms and conditions o
Competition Law: Where OPs were dominant in relevant market of production and sale of non-coking coal to thermal power producers in India and appeared to have imposed unfair terms and conditions upon informant, investigation was to be conducted for alleged contravention of section 4
ITAT deleted concealment penalty as retro-amendment merely transformed a valid exp. into disallowabl
IT: Fringe Benefit Tax and prior period adjustment were not allowable deductions as per provisions of law; claims in regard to same fell under category of false claims, hence, provisions of section 271(1) (c) were attracted
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