Monday, 26 May 2014
Value of goods sold to be excluded while determining value of services for purpose of SSP exemption
Provision for NPA to be included in book profit for MAT; HC remanded matter for fresh adjudication
CA gets immunity from penalty under FEMA as ED couldn’t prove that retracted confession was a truth
Goods and services utilized for exports of inputs without using them in manufacturing weren’t eligib
No TP adjustments if assessee earned profits in India in contrast to losses incurred by its NR AEs c
Energy Security Is The Key, Need To Cut Dependence On Imports Over Next Few Years
The amount of coal that we are importing now has already touched about 173 million tonnes and it will touch nearly 200 million tonnes in the next few years' time.
It implies a massive foreign exchange outgo and it is actually going to put a lot of pressure in terms of handling coal from ports to the place where the coal is needed to generate electricity.
In terms of oil, we are now importing 70-80% and in terms of gas, particularly LNG, we are importing more or less everything that we need because the domestic production is not as high as it should be.
So the challenge of course is to, first of all, look at the issues in these three segments--- coal, gas and oil --- from the perspective of energy security, because if we continue to import in this magnitude, even disregarding the challenge it poses to the macro economy given the subsidies we need to give and the amount of pressure it puts on the current account deficit, it is an energy security issue.
Thus, no country can afford to rely on such a large quantity of imported fuel to meet the domestic requirement and, as you know, anything can cause disruption in the supply chain. Look at the Malaysia Airlines flight.
Nobody knows where it has gone, despite the fact that we have such an advanced technology. What it means is that there are a lot of issues on which we have no control and if something goes wrong and if the supply line gets disrupted, we will be in big trouble. We do not have strategic reserves in India unlike the US. The US is more or less now becoming, thanks to shale gas, less dependent on imports and will be a net exporter of gas.
So the point is, how do we meet the challenge of increasing our domestic production of gas, oil and coal? As far as coal is concerned, we have almost 7-8% of the world's coal reserves and the bulk of it is still not explored.
The same is the case with oil and gas, where 48% of the sedimentation is still not explored and the production is not very high in case of the 52% of the sedimentation which has been already explored.
Source:- economictimes.indiatimes.com
Export Zone Mat Scrap On Agenda
The new government will explore the possibility of abolishing the minimum alternate tax (MAT) on special economic zones and extending the benefits of export schemes to the zones. The incentives are expected to boost exports and prop up the manufacturing sector.
“The investments in SEZs have been impacted by uncertain taxation. Changes in policy have impacted the performance of units in these zones. Exports and manufacturing activities have come down from SEZs. Labour laws, too, are hitting the manufacturing sector’s growth,” a senior commerce ministry official said.
“Efforts would be to restore the confidence of investors and continuity in policy as these zones contribute about 30 per cent to the country’s exports,” officials said.
Under the SEZ act, units get a 100 per cent tax exemption on profits earned for the first five years, a 50 per cent exemption for the next five years and another 50 per cent on re-invested profits in the following five years. However, the government had imposed an 18.5 per cent MAT on the book profit of SEZs in the budget for 2010-11.
This resulted in a large number of developers withdrawing their proposals and a very few coming up with new ones.
The major reason for the SEZs losing their appeal was the frequent policy changes owing to the turf war between the finance and commerce ministries.
The finance ministry wanted to explore every opportunity to generate more revenue, while the commerce ministry wanted to offer tax sops to encourage the creation of more export-oriented manufacturing centres.
During 2012-13, SEZs attracted investments worth Rs 2.36 lakh crore and provided direct employment to over 11 lakh people. Exports from SEZs grew around 31 per cent year-on-year to Rs 4.76 lakh crore.
The another big change in the rule being considered by the ministry includes the extension of the benefits of export schemes to units within SEZs. In the foreign trade policy, the 2 per cent interest subvention scheme had been widened to include items such as toys, sports goods, processed agricultural products and readymade garments, apart from SMEs and the handloom sectors.
The focus product and focus market schemes, wherein the government gives cash incentives equivalent to 2 per cent of the value of exports, were also expanded to incorporate 10 markets and over 100 products.
The government, however, had eased land requirement norms to rekindle investor interest in SEZs in view of the problems faced by developers in land acquisition.
For multi-product SEZs, the minimum land requirement was brought down from 1,000 hectares to 500 hectares. For sector-specific SEZs, it has been reduced by half to 50 hectares. Also, there is no minimum land requirement for setting up IT/ITeS SEZs apart from easing the minimum built-up area criterion.
The minimum built-up area requirements to be met by SEZ developers will be 100,000 square meters for the seven major cities Mumbai, Delhi (NCR), Chennai, Hyderabad, Bangalore, Pune and Calcutta; 50,000 square meters for Category B cities and only 25,000 square meters for the remaining cities.
The country’s exports in the past three years have hovered at $300 billion. The policy is aimed at boosting overseas shipments and enhancing its share in world trade. Exports in 2013-14 increased to $312.35 billion but fell short of the target of $325 billion. Shipments stood at $300.4 billion in 2012-13 and $307 billion in 2011-12.
Source:- telegraphindia.com
Share broker allowed to set off losses from derivatives with profits arising from share dealings on
HC remands matter as vital grounds raised in written submission were not considered by Tribunal
Instead of filing a writ assessee should plea before AO against his jurisdiction and reason assigned
Dumping Duty On Phenol From Us, Taipei
The Finance Ministry has imposed provisional anti-dumping duty on all phenol imports from the US and Chinese Taipei.
The duty will be valid for six months and has been levied based on the recommendations of the designated authority in the Commerce Ministry on a petition filed by Hindustan Organic Chemicals Ltd.
In the case of Chinese Taipei, the duty levied by the Revenue Department ranged from $46.07 a tonne to $193.9 a tonne depending on the exporter.
The Revenue Department has imposed an anti-dumping duty of $146.09 a 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
India Containerized Scrap Import Prices Advance To $410 A Ton
India containerized scrap import prices advanced by $6 a ton week-on-week to $410 a ton in the week ended May 23rd this year, as per the latest figures released by the The Steel Index (TSI).
According to TSI, containerised shredded index for Indian imports gained 1.5% last week to finish at $410 a ton CFR Indian west coast port.
The country as a whole is riding a wave of positivity following the election win by the pro-business BJP party, with the steel industry in particular seeing a familiar ally coming into power.
However, the news that mining permits have been revoked from 26 mines in the Odisha region, with the potential to remove one third of domestic iron ore production, has served to dampen spirits in the steel industry.
Either more expensive imports would have to be sought or production levels reduced, with the likely result being that finished steel prices will rise. This has already begun to be reflected in scrap pricing for imports into the country.
Source:- metal.com
Officials Earn Court's Wrath For Ignoring Import Of Chinese Firecrackers
The Madras high court on Sunday chided top central agencies, including the Customs department, for not taking any action to prevent the illegal import of Chinese firecrackers into the country. Meanwhile, the court's bench here was also told that many containers were allowed to go out from ports unchecked, thus helping the entry of about 600 containers of Chinese firecrackers into the country now.
During the hearing at the special sitting, the Madurai bench of the court was told by the Customs department at Tuticorin that it was not even aware of communications sent by the chief controller of explosives (CCE) seeking action against the illegal import of Chinese firecrackers so that the Indian industry based primarily in Sivakasi could be saved.
At Saturday's hearing too, the court was told by the petitioner's side that the CCE' letter was communicated to the customs authorities and repeated representations were sent to the central government agencies, but their efforts had been in vain. Besides, the CBI too did not take action on the complaint filed by the fireworks manufacturers.
The court was considering a public interest litigation (PIL) filed by A Muthukrishnan of Sivakasi against illegal import of Chinese firecrackers. The Tamil Nadu Fireworks and Amorces Manufacturers Association had also filed a case in the matter.
In the special sitting, the division bench of justices N Kirubakaran and S Vaidyanathan raised several questions to the central government's counsels. They represented the Central Bureau of Investigation, the Customs and the Directorate of Revenue Intelligence (DRI).
"The issue of illegal importing has been brought to the notice of the central government agencies for many years now. What prevented the agencies to take suo moto action in the issue? What action was taken on the letter sent from the CCE in 2012? The court asked.
"The court was told that there is only one scanner in the Tuticorin port. How it is possible for the customs to check the entire consignments when hundreds of containers come to the port? The court asked.
Piyush Bharadwaj, assistant commissioner of customs (Tuticorin) who appeared in the court, said the CCE's letter dated May 30, 2012 was not addressed to the central board of excise and customs (CBEC) or to the DRI. And, the same was also not addressed to either the commissioner of customs (Tuticorin) or to the chief commissioner of customs (preventive), Trichy, to whom the former reports.
Meanwhile, senior standing counsel of custom and excise B Vijay Karthikeyan said the Tuticorin customs will soon get one more modern scanner. Customs' intelligence wing is always on alert and frequent surprise checks are carried out by the higher officers, he added.
Assistant solicitor general K K Senthilvelan who appeared for CBI said the agency has started an inquiry on a complaint sent by the fireworks manufacturers association.
Additional government pleader S Sadeeshkumar said two special teams headed by inspectors of police have been formed in this case and raids were carried out in 10 godowns. However, no one has been apprehended so far.
Meanwhile, the TANFAMA filed a petition on Sunday stating that six containers carrying Chinese firecrackers have been found in Noida, which is under the jurisdiction of the joint controller of explosives, Agra. The concerned officials have been engaged to destroy the same, the petition said.
After hearing all concerned sides, the high court directed to add the CBEC as a party to the case and reserved its interim orders. It suggested that proper checks are essential in all ports and airports across the country.
Recently, Tamil Nadu Fireworks Industries Workers Protection Association had announced a reward ranging from Rs 25,000 to Rs 10 lakh to anyone helping to locate imported Chinese firecrackers.
Source:- timesofindia.indiatimes.com
Rupee Could Appreciate Above 58
The rupee will be seen appreciating above 58 to the dollar this week due to dollar flows in domestic markets and government bond yields will be seen falling further on hopes that the new government will strive to bring down the fiscal deficit.
“This week, the rupee may appreciate above the 58 a dollar level. The broad trading range would be between 57.75 to 58.50 a dollar,” said the head of treasury with a public sector bank.
On Friday, the rupee ended at 58.51, compared with the previous close of 58.46 a dollar. The rupee had ended marginally weak due to dollar buying by state-run banks on behalf of the Reserve Bank of India.
The rupee still rose 0.4 per cent for the week, posting its fourth straight weekly gain and its longest winning streak in 16 months on hopes the Bharatiya Janata Party-led National Democratic Alliance win would bring about a government willing to undertake substantial economic reforms and drive the nation towards the growth path.
On the other hand, government bond yields might fall as the street is hoping that the fiscal deficit for the current fiscal might be brought down by the new government.
“This week, the 10-year bond yields may trade between 8.50 per cent to 8.70 per cent,” said a government bond dealer with a state-run bank.
The yield on the 10-year government bond ended at 8.64 per cent on Friday, its lowest since January 22, compared with the previous close of 8.71 per cent.
Narendra Modi will be sworn in as prime minister on Monday at Rashtrapati Bhavan. The Street is also waiting to know who would be finance minister in Modi's government.
Source:- business-standard.com