Excise & Customs : Rule 96ZO is ultra vires upto extent it provides for mandatory minimum penalty without mens rea and without any element of discretion; hence, authorities have option to levy lesser penalty than duty looking to gravity of offence
Sunday 25 May 2014
Losses already adjusted in earlier years couldn’t be considered again by revenue to compute sec. 80-
IT: For purpose of determining quantum of section 80-IA deduction in year in which assessee put forth claim, revenue cannot take into consideration loss and depreciation from eligible business of earlier year which was already set-off against income of assessee from other source
India, Pakistan May Shake Hands On Electricity, Hydrocarbons
New Delhi and Islamabad, thanks to their newfound bonhomie following Pakistan premier Nawaz Sharif accepting the invite to attend the swearing-in ceremony of Narendra Modi as Indian prime minister, are looking to seal a deal soon in trade in electricity and hydrocarbon products.
The move is against the backdrop of bilateral trade between the two countries crawling: It was just $1.8 billion during April-December last fiscal and the ambitious target of $6 billion for the financial year must have been missed by a wide margin, although disaggregated data is yet to be out.
The move for a deal in India-Pak trade in electricity and hydrocarbons is in addition to speeding up of opening of branches of Indian and Pakistani banks in each other’s territories and boosting infrastructure development at the border for trade facilitation, official sources told FE.
Talks will soon be held to ink a pact on export of liquefied natural gas (LNG) from India to Pakistan via a pipeline through the Wagah border.
Negotiations are currently deadlocked on the issue of the price at which India will export the item as Pakistan feels that India’s offer price is too high.
The Pakistani proposal is to import 200 million cubic feet per day (mmcfd) of LNG from India.
India itself imports LNG at $14 per mmBtu and therefore is quoting around $21 per mmBtu for sale to Pakistan consumers after taking into account duties, transportation charge and local taxes. However, Pakistan is pitching for a maximum price of $17 per mmBtu.
On electricity trade, the talks are stuck on “technical issues,” the sources said. There is also an offer from the World Bank to finance a project to transfer at least 500 MW of power to Pakistan from India initially and then upgrade it to 1200 MW.
On the issue of bank branches, India’s Punjab National Bank, which was founded in Lahore (Pakistan), and SBI are keen to open branches in Pakistan, while Pakistan’s Muslim Commercial Bank and Commercial Bank of Pakistan want to start branches in India.
Pakistan has already indicated its readiness to grant India non-discriminatory market access (NDMA) – similar to Most Favoured Nation (MFN) status where India will be treated on an equal basis with Pakistan’s other trading partners – and had said it was waiting for the new government to take charge in India to announce the details. India had MFN status to Pakistan in 1996 itself. Soon both countries will bring out a time line to reduce duties on a small list of sensitive products, the sources said.
One sector which India is keen to focus on is automobiles and auto-components. The sources said the plan is to make the South Asian region, including Pakistan, a major sourcing hub for the Indian automobiles sector and build value chains. Simultaneously, India is hoping to get market access in Pakistan in the sector and compete with Chinese products. The sources said Pakistani auto sector is in favour of gradual relaxation of duty curbs in the protected sector.
According to a study by the think-tank ICRIER, the significant performance improvement in Pakistan’s motor cycle industry, among other factors, can be attributed to the opening up of Pakistan’s market to imported Chinese components. “Thus there is a case for Pakistan to further liberalize its auto sector. Currently, there is hardly any direct trade in auto components between India and Pakistan and most of the trade is routed via Dubai, according to the Automotive Component Manufacturers Association of India,” ICRIER said.
Source:- financialexpress.com
Hc Directs Inclusion Of Cbcce In Illegal Crackers Imports Pil
The Madras High Court today directed to include Central Board of Customs and Central Excise (CBCCE) in a PIL seeking CBI probe into the recent seizure of Chinese crackers at a godown in Sivakasi.
Justice N Kirubakaran and Justice S Vaidhyanathan of the Madurai Bench of the HC, in a special sitting, asked if the Customs Commissioner (Preventive), Tiruchirappalli, was not aware of the ban on import of the crackers and how was it that crackers were being sold in Sivakasi, and if the complaint regarding it, made to the Commissioner at Chennai, had not been brought to their notice.
The Assistant Commissioner replied that they did not receive the copy of the complaint from Chennai office.
The Central Government lawyer submitted that Director General of Trade had banned import of Chinese crackers and described them as "explosive items".
The Assistant Commissioner said they were checking all the suspicious containers and containers of blacklisted companies. The Tuticorin Port would soon be installing X-ray scanner apart from the "gamma scanner" they were having and they would be able to check more containers.
The Judges also directed the Tamil Nadu Amorces and Fireworks Manufacturers Association to give details about sale of Chinese crackers in the state when their advocate said they have specific information about Rs 100 crore worth of Chinese crackers being stored in godowns at various places.
The Judges asked the CBI to provide the details about cases of illegal sale of Chinese crackers.
Virudhunagar SP, Maheswaran said special teams had been formed to nab the two accused from whose shops Chinese crackers were seized recently. He said 50 godowns had been raided by special teams.
Muthkrishnan, executive member of Aditamizhar Peravai, a Dalit outfit, who filed the PIL seeking a CBI inquiry into the illegal sale of Chinese crackers in Sivakasi, also sought checking of all the godowns across the country and find out the origin of Chinese crackers stored in various godowns.
Source:- business-standard.com
HC denied to entertain writ filed for stay of recovery proceedings as matter was already pending bef
IT : Where no objection and/or representation had been filed before Tax Recovery Officer against attachment of its bank accounts and assessee had accepted same, it was not open to petitioner to make a grievance in writ petition
Pledging Policy Blamed For Drastic Fall In Price Of Rice
THE PRICE of Thai rice has plunged to the lowest level in six years, even lower than Vietnam's despite higher cost of production, due to the deposed government's pledging policy.
The Thai Rice Exporters Association reported last week that the price of 5-per-cent white rice had dived about 60 per cent to US$375-$389 per tonne from the all-time high of $1,020 in April 2008.
Compared to $395 quoted for Vietnamese rice, it is also the first time in history that Thai rice is cheaper.
Chookiat Ophaswongse, president of the association, blamed this on the ousted government's rice-pledging scheme. Exporters are not happy with the price trend, which should boost exports, as the cost of production has been on the rise and Thai rice quality is superior to Vietnam's.
"Thai rice should be more expensive than Vietnamese rice. Our price has, however, dropped gradually since late last year, because the government released stocks in haste," he said.
According to Chookiat, Thailand's paddy rice price is also priced lower than Vietnam's, at about Bt7,000-Bt7,500 a tonne against Bt8,000.
The pledging scheme, which quotes Bt15,000 or about $500 per tonne, has encouraged farmers to sell rice to the government. In the first two years of the scheme, the inventory exceeded 10 million tonnes.
Late last year, the dissolution of the lower House left the scheme struggling, as the government could not find the cash to pay farmers for their rice. Under pressure to raise money quickly, the stockpiles were dumped into the market, leading to the sharp drop in price.
Many foreign buyers have piled on orders for Thai rice because of the cheap price, he said.
That is supported by the Foreign Trade Department's figures for the first four months of this year. By volume, Thailand exported 3.21 million tonnes, which was 26.6 per cent higher than the 2.05 million tonnes in the same period last year.
However, by value, exports rose only 17.5 per cent in baht terms to Bt51.5 billion and only 8.3 per cent in dollar terms to $1.47 billion.
Chookiat hopes that the Commerce Ministry, after the military coup, would slow down the stockpile releases and this should prop up the price.
However, the United States Department of Agriculture projects that in the 2014-15 crop year, rice production would hit a new record of 480.7 million tonnes, up 4.6 million tonnes from the previous year. Assuming normal weather, record crops are projected for the major exporters including India, Thailand and Vietnam.
Global rice supply and consumption are projected to reach record levels of 592 tonnes and 482.2 million tonnes.
Source:- nationmultimedia.com
Iran To India: Pay Suppliers Of Food, Medicines With Oil Euros
Iran now wants to get back its euros owed by India through a new channel. It wants New Delhi to pay the money that Tehran owes to third countries for purchase of food, medicines and medical equipment.
With nuclear talks between Iran and P5+1 (the US, Britain, France, China, Russia and Germany) going slow, Tehran has approached New Delhi for allowing third country exports of humanitarian goods for drawing down the $3.6 billion accumulated balance on account of India’s oil imports.
Last week, the Reserve Bank of India agreed that payments for third country exports to Iran could be made from the 55 per cent euro component of oil payment due to National Iranian Oil Company (NIOC) with UCO Bank acting as the settlement bank.
UCO Bank would examine the letters of credit issued by Iranian banks for third country imports by Iranian firms and would advise the identified Indian oil importing refineries to remit the foreign exchange to its nostro account on a particular date which would then be remitted to the Iranian Bank.
The due diligence would involve UCO Bank securing certification from renowned inspection agencies of the goods being humanitarian in nature. If there is any suspicion or doubt on any consignment, then UCO Bank would be free not to release the money.
To trigger this mechanism, NIOC would have to enter into a tripartite agreement with UCO Bank and the Indian oil companies detailing all responsibilities and obligations. The payouts by each Indian refinery would be in proportion to their outstanding amount.
Once the payment is done, NIOC will deduct from the obligations the amount it receives from each company.
India is set to pay Iran $1.65 billion under an interim nuclear deal that eases sanctions on Tehran and gives it access to $4.2 billion in blocked funds. As long as Tehran complies with the terms of its preliminary pact with P5+1, Iran receives some of its funds abroad frozen with various buyers over six months.
Indian refiners Essar Oil, Bangalore Refinery and Petrochemicals Ltd, Hindustan Petroleum Corp and HPCL-Mittal Energy Ltd have been settling 45 per cent of payments in rupees, which Iran used for importing goods from India, while the refiners held the remainder.
Three days of negotiations in Vienna between Iran and the P5+1 ended May 17 with no sign of advance.
The Vienna round follows the conclusion of the interim pact under which Iran froze or rolled back key aspects of its nuclear program in return for sanctions relief.
If an agreement is not concluded by July 20, the talks can be extended for another six months.
source:- financialexpress.com
Dastgir Hints At New Policy On Cotton Import From India
Vowing not to do trade with India at the cost of farmers, ginners and industrialists, the Federal Commerce Minister, Khurram Dastgir Khan, has said that trade policies would be framed with the consent of all stakeholders.
He was talking to a delegation of Pakistan Cotton Ginners Association (PCGA) which called on him in Islamabad under the chairmanship of Mukhtar Ahmed Khan Baloch. The other members of the PCGA included Senior Vice Chairman Prem Chand Khiatani, Vice Chairman Aasim Saeed Sheikh and Shehzad Ali Khan. The minister also announced that a new policy would be framed on cotton import from India with the consent of all stake holders.
He said that funds have already been released for the establishment of Cotton Ginning Research & Training Institute in Multan.
Reiterating that the ministry of textile would play a key role in getting cleared refund cases of ginners, the minister said: "We have imposed five per cent import duty on the import of cotton yarn after reviewing the effects of cotton and yarn import from India."
He also claimed that revolutionary amendments were being introduced in Seed Act-2010 so that well-germinated, certified and heat resistant seeds could be supplied to the farmers on reasonable rates.
Quoting Prime Minister Mian Nawaz Sharif as saying that fleecing of growers would not be tolerated at any stage, the minister said: "Use of uncertified varieties of seeds increases input costs of farmers. The low levels of pest resistance in these seeds have increased insects'' immunity, necessitating the use of nearly double the normal amount of pesticides," he added.
At the outset, the minister lauded the PCGA''s role in ensuring supply of certified cotton seed.
Earlier, the PCGA delegation expressed its reservations on the import of cotton from India and stressed the need for finalising a timeframe for cotton import so that interest of local growers could not be hurt.
Source:- brecorder.com
India Easing Gold Import Restrictions: Curb Your Enthusiasm
Long the top importer of gold, India fell behind China in 2013. The decline in gold consumption came after bullion import duties were pushed up tenfold – from 1% at the start of 2012 to 10% and other rules such as mandatory re-export of 20% of imports, transaction taxes and even curbs on ETF buying stymied India's gold industry.
Business-friendly prime minister elect Narendra Modi's sweeping victory has raised hopes inside the country that promises of relief for the gold industry that employs more than 3 million traders and shopworkers would be kept.
Last week gold was boosted by news that the Reserve Bank of India is relaxing the much-maligned 80-20 import-export measure.
Hopes that the measure could be fully phased out by October, ahead of the Diwali festival in October and the crucial gold-buying wedding season, has already seen the rupee price of gold drop to nine-month lows.
"It’s only a matter of time before these restrictions on gold are removed completely by the new Indian government,” Marcus Grubb, managing director of investment strategy at the World Gold Council told the Telegraph.
Gradually, a number of things are now adding up to make investors more positive about gold."
Despite the curbs overall Indian consumption still rose by more than 100 tonnes to 975 tonnes in 2013 according to the WGC data while some estimates put "unofficial imports" at more than 100 tonnes.
But the first quarter this year the restrictions really began to bite with gold demand on the subcontinent plummeting during the first quarter.
Jewellery consumption in India declined 9% to 145.6 tonnes, while India's bars and coins buying showed a huge drop-off of 54% to 98 tonnes.
Overall gold demand in India slid 26% during the first three months of 2014.
WGC says "as demand for physical gold investment products fell back, the pressures that had been squeezing the supply chain throughout 2013 eased," pushing down price premiums in a number of local markets.
Premiums paid over the London price rocketed to as much as $170 an ounce during the gold festivals and wedding season last year.
Source:- mining.com
It has since come down but last week premiums demanded by India's gold traders still hovered around $60 above the international ruling price.
That compares to Shanghai premiums that topped out at $37 an ounce a year ago, but which has since fallen to par or even a discount.
India imposed the import restriction to shore up the value of the rupee and cut down on the country's crippling current account deficit.
Bullion and crude oil contributed almost 80% of the record $88 billion deficit in the past fiscal year.
Those problems have eased, but have certainly not gone away.
The relatively muted reaction on New York and London gold markets – briefly scaling $1,300 on Thursday only to fall back to $1,292 the next session – to the prospects of greater India imports could indicate that the changes may not be the positive catalyst gold investors have been hoping for.
Easing the curbs should result in declining premiums inside the country and a reduction in smuggling, but may not alter underlying demand that much.
Gains in the rupee to 11-month highs following the Modi win have also already been pared back. Naveen Mathur, associate director (commodities and currencies), Angel Broking told India's Business Standard over the weekend:
"There is no positive trigger for prices in the domestic market; also, the rupee will continue to remain the major deciding factor for the yellow metal."
Last month Rajesh Khosla, managing director of the country’s biggest refiner which is expanding capacity to 200 tonnes of gold per year, predicted the relaxation of the 80-20 rule, but added that "while the form of restrictions may change, the government will continue to restrain buying."
That means the limits would result in shipments of 650–700 tonnes for the 12 months started April 1, close to last year's levels and down from 845 tonnes in 2012–2013
Source:- mining.com
Rupee Recovers By 12 Paise Against Usd In Early Trade
The rupee recovered by 12 paise to trade at 11-month high of 58.40 against the US dollar in early trade today at the Interbank Foreign Exchange market on increased foreign capital inflows ahead of swearing-in of Narendra Modi as the Prime Minister of India.
Besides, increased dollar selling by exporters, a higher opening in the domestic equity market and strengthening of euro against the American currency overseas also supported the rupee.
Source:- ptinews.com
Payment of ST on services availed during construction of mall was eligible input against renting of
Cenvat Credit : Expression 'used for providing output services' cannot, prima facie, be given wide import so as to cover raw materials used for construction of building; hence, construction materials are ineligible for credit
Composite suit under two different Acts not allowed if court has no jurisdiction to entertain both c
CL: Where composite suit was filed under Copyright Act and Trade and Merchandise Marks Act, 1958, such a suit would not be maintainable unless Court had jurisdiction to entertain suit in relation to both causes of action
Fee from Technical aid on pipeline project by consortium member was FTS if construction work done by
IT/ILT : Where assessee provided design and engineering for laying pipelines, prepared welding procedure, reviewed work procedure and deputed expertised manpower for site review, assessee's income was taxable at rate of 10 per cent only as technical supervision
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