No denial of credit to buyer when duty paid by supplier on non-excisable goods was accepted by depar

Cenvat Credit: Though Zinc Dross is non-excisable and duty paid thereon did not partake character of 'excise duty' but when department did not dispute classification by supplier, credit on such duty cannot be declined to purchaser

Embroidery Dealers Raided For Evading Service Tax

The preventive wing of the Central Excise and Customs on Tuesday raided the embroider dealers in the diamond city for allegedly evading paying service tax on the sale of the hi-tech machines in the textile sector.

Sources said the embroidery dealers have been taking huge amount of installation and maintenance charges from the embroidery unit owners. Though, the dealers are not paying service tax on the charges raised by them.

There are more than 1 lakh embroidery machines installed in the city. The embroidery machines are imported from China, Taiwan and Japan. The machines costs between Rs. 5 lakh to Rs 1 crore and above.

Official sources said the embroidery dealers have been charging between 20 per cent to 40 per cent as maintenance and installation charge to their customers, but they never pay service tax on the amount raised by them. More than dozen such dealers were raided in the city and that more are likely to be raided in the next few days.

A senior officer said, "Surat is the hub of embroidery industry. In the short span of six to seven years, the embroidery industry has grown by leaps and bound. They have costly machines fitted in their units and when it comes to paying service tax to the government, the dealers and even the manufacturers are not very keen.

Source:- timesofindia.indiatimes.com

Farmers Prefer Cotton Over Paddy, Oilseeds This Season

With cotton sowing in full swing across major producing states, the trend this season indicates a rise in the crop’s acreage compared to last year. This is because cotton offers higher returns compared to other kharif crops such as paddy and oilseeds, as well as the introduction of improved varieties, which cut costs related to pest- and weed-control, and labour.

Sowing is in the final stages in Punjab, Haryana and Rajasthan; in Gujarat, Maharashtra and Madhya Pradesh, it is expected to last a few more days.

In northern states, the area under paddy is being diverted towards cotton, as cultivation costs for the latter are lower.Jagtar Singh Brar, a farmer from Mehma Sarji (Bathinda district), in Punjab, said with agricultural labour turning scarce and the water table dwindling, paddy has been becoming less remunerative (farmers in Punjab and Haryana use underground water to irrigate paddy fields and run tube wells; now, this is becoming unviable due to high diesel costs). Also, paddy has an adverse impact on soil, as fields are inundated for two months. Cotton helps loosen the soil and make it conducive for sowing other crops, too.

Last year, the minimum support price for the short- and long-staple cotton varieties stood at Rs 3,700 a quintal and Rs 4,000 a quintal, respectively. Farmers sold the commodity in the open market for up to Rs 5,000 a quintal.

For farmers in Gujarat and Maharashtra, too, cotton has turned more lucrative compared to oilseeds. Dilip Bhai Patel, president of All Gujarat Cotton Ginners’ Association, said, “Last year, prices of oilseeds remained consistently low; so, cotton is being preferred by farmers. The area under cotton could see an estimated rise of 15 per cent.”

He added this year, the monsoon might be sub-normal, owing to the El Niño phenomenon. He said a good monsoon last year had filled water reservoirs and, therefore, the predicted shortfall of six per cent in rainfall wouldn’t affect yields. Semi-draught-like conditions helped increase cotton yields, he added.

This year, production is estimated at 40 million bales (one bale=170 kg) Arrivals start in October. The spinning sector’s annual requirement is 30 million bales. Arun Seksaria, director of a leading cotton trade and export house, said this year, farmers were shifting to cotton. He added they might get good remuneration.

Though exporters aren’t bullish, due to the strengthening rupee and the competitive international market, a change in government policy (likely due to the change of guard at the Centre) might drive up exports. Sources at Monsanto, a major supplier of BT cotton seeds in India, confirmed this year, the demand for cotton seeds was higher than last year, across producing areas.

Source:- business-standard.com

AO can proceed against other person under sec. 158BC only if AO of searched person records his satis

IT : In order to clothe Assessing Officer of person other than searched person with jurisdiction to proceed against such a person under section 158BC, it is necessary that Assessing Officer of searched person has to be satisfied, that any undisclosed income belongs to any person other than person searched or whose books of account or other documents are requisitioned

General Motors India To Start Exporting Beat To Chile

General Motors have announced that they would start exporting the Beat to Chile, South America, by the second half of 2014. The car will probably continue to be sold with the name Spark GT. The initial lot would be left hand drive and will be manufactured at GM’s Talegaon plant. Sales in South America will begin from the first quarter of 2015.

The sales of General Motors have dropped by 8.24 per cent and stand at 80,890 units for FY 2013-14. The sales of Beat itself fell by 20.3 per cent MoM. Exports are a good option to keep the boat afloat in such testing times. Hyundai is currently the leader in exports with 2,59,811 units. Maruti and Nissan also exported 1,20,388 and 98,971 units respectively.

The initial lot would be left hand drive and will be manufactured at GM’s Talegaon plant

The Beat starts at Rs 5.51 lakh for base petrol in Chile. The base petrol costs Rs 3.92 lakh in India while the diesel starts at Rs 4.72 lakh. This decision comes in a bit late because the weaker rupee would have fetched more competitive prices.

“The exports will create more employment opportunities within GM India and the supplier community while helping improve capacity utilization at the Talegaon Plant” said GM India president and MD Arvind Saxena.

The Beat was recently given a facelift. It gets a new grille, smoked head-lamps and a few changes to the rear bumper. On the inside silver inserts and steering mounted audio controls were added. The ARAI fuel economy rating of the diesel model stands at 25.44 kmpl.

General Motors India today announced that it will begin production of export vehicles at its Talegaon Plant in the second half of 2014, with sales commencing in Chile in the first quarter of 2015.

Its first export model will be the left-hand-drive version of the Chevrolet Beat. The fuel-efficient smart city car is already built and sold in many markets around the world.

“The start of Beat exports underlines GM’s commitment to India and demonstrates the quality of the country’s growing supplier base,” said GM India President and Managing Director Arvind Saxena. “The exports will create more employment opportunities within GM India and the supplier community while helping improve capacity utilization at the Talegaon Plant.

Source:- overdrive.in

Cooperation With China Important For India’S Eurasian Energy Policy – Analysis

India, which imported 62.2 percent of its total oil needs from the Middle East during April 2013 to January 2014, is diversifying from this region largely due to vulnerable and unsteady conditions, so as to mitigate its security risks.

With robust increasing energy demand and a shortfall in domestic energy production, particularly hydrocarbons, India is gazing toward energy-rich countries like the US and of late Russia for energy imports.

While on the one hand, if approved, India will join with Cheniere Energy Partners to import liquefied natural gas from the US, the Ukrainian crisis seems to have opened a door for India to further diversify its energy procurements from Russia.

Russia too is ready to embrace the opportunity to diversify its hydrocarbon exports beyond Europe and enter the South Asia market.

A $30 billion oil pipeline proposal from Russia to India through China is an important step forward in this regard.

The pipeline, starting from the Russia’s Altai Mountain region, would reach northern India after going through China’s Xinjiang Uyghur Autonomous Region.

India and Russia have launched a joint study into the possibility of direct ground transportation of such oil. This project was first discussed in 2005 by India’s Oil and Natural Gas Corporation (ONGC). Talks on the project should conclude by mid-2014, according to an ONGC official. The project is expected to be completed by 2020-22.

India’s domestic hydrocarbon production is consistently falling, making oil, natural gas and coal imports increase. Given that India must consistently confront the challenging geopolitical terrains from where such energy is imported, the Eurasian energy outlook appears most promising, particularly at a time when China has agreed to the proposed oil pipeline. This would provide considerably better leverage for India’s energy policy.

The unstable political environment in Pakistan and Afghanistan has been a choke point preventing India importing hydrocarbons from either Russia or even Central Asia.

However, with China willing to open its door to Russian oil to flow through its territory, this creates an opportunity via this important route for India to even pursue its “Connect Central Asia” policy.

For Russia and even Central Asian countries, China can act as a catalyst to market their hydrocarbon resources to South Asia and beyond, opening an opportunity for gas exports too. Russia’s $400 billion gas deal with China is a case in point.

Furthermore, a Turkmenistan-Afghanistan-Pakistan-India gas pipeline could soon involve China as one of its partners.

These developments, which have already surprised the US, have provided a strategic win for Russia, India and China, particularly in Central and South Asia.

With India’s plan to join the Shanghai Cooperation Organization supported by Russia so as to help it gain a strategic presence in Central Asia, this would in return strengthen India’s strategic partnerships with Russia and China in South Asia, particularly after the US military withdrawal in Afghanistan after 2014.

Thus China holds the key to India’s pipeline diplomacy through Eurasia facilitating Russia and Central Asia to market its energy exports to South Asia as well. This would offer India and China a chance to revive their energy cooperation in hydrocarbons, which so far has remained on paper only.

Notably, both countries haven’t actually moved forward beyond agreements signed in 2006 and 2012. The commencement of pipeline diplomacy through Chinese territory could end their traditional rivalries over acquiring worldwide hydrocarbon resources.

In a way, the Ukrainian crisis has therefore come as a blessing in disguise for both India and China to gear up to tap the Russian and Central Asian energy markets, creating overall economic growth for Eurasia while strengthening mutual energy security.

China can facilitate India’s energy security goals by providing a gateway through its territory to Russia, concurrently opening possible avenues for India’s Eurasian energy policy including Central Asia.

With China expressing hope for better ties with India under the new government, one can expect improved energy diplomacy through this energy corridor.

Source:- eurasiareview.com

Increased Indian Demand, Safe-Haven Buying Likely To Support Gold

Gold prices remain stuck in a narrow range between $1,290 and $1,305, the downside being limited by geopolitical concern and the upside being capped by generally good US data, which suggest the US Federal Reserve will persist with the current pace of stimulus tapering.

Official demand for physical gold from India is expected to increase as the Reserve Bank of India (RBI) is expected to relax some of the restrictions imposed on the importing of gold.

Earlier this week, the RBI gave permission to "star trading houses" and private jewellery exporters, which had been barred from importing gold since July 2013, to resume imports, with immediate effect.

Ever since the Indian government imposed restrictions on gold imports, smuggling has increased substantially, which comes as no surprise, except to those government officials who thought their draconian actions would reduce gold demand and prompt individuals to hold more fiat currency instead of gold.

Recent data released by the Central Board of Excise and Customs (CBEC) in India showed that the smuggling of physical gold soared six-fold during the fiscal year ended this March 31 compared to the previous year.

The actual gold smuggled into the country is feared to be much more as Directorate of Revenue Intelligence estimates show that only one-tenth of the smuggling acts are caught by authorities.

According to the CBEC, the primary source of smuggled gold into the country is Dubai. And, recently, the World Gold Council reported a substantial increase of gold imports by neighbouring countries such as Nepal, Bangladesh and Sri Lanka.

I expect to see prices supported by increased demand from India and from further safe-haven buying from investors due to the continuing crisis in Ukraine.

However, I don’t think this increased demand will be enough to push prices above the resistance of $1,310 an ounce in the short-term, and thus I expect to see further sideways action.

For the past few weeks, the price of silver has been mostly directionless as prices remain stuck in a trading range of between $19/oz and $20/oz.

The company that runs the London silver fixing, a benchmark dating back more than a century that allows everyone from miners to jewellers to trade and value the metal, will stop operations on August 14.

The silver fixing takes place each day at noon by phone between the three members, who declare how much metal they want to buy or sell for clients, as well as their own accounts.

The first silver fixing took place in 1897 at the office of Sharps & Wilkins.

Deutsche Bank AG, HSBC Holdings Plc and Bank of Nova Scotia will remain the three members of the company, which will continue to liaise with the UK Financial Conduct Authority (FCA) and other stakeholders, the London Silver Market Fixing Ltd said in a statement.

In January this year, Deutsche Bank said it planned to withdraw from the London gold and silver fixings as it scales back its commodities business. And, last month, after failing to find a buyer for their seat, the bank said it would resign from the fixings.

The bank was asked by the FCA to stay on with the silver fixing for another 90 days, according to a person familiar with the request, who asked not to be identified because the information is private.

Source:- bdlive.co.za

Rupee Ends At 58.93 Per Dollar, Snapping 3-Day Fall

The rupee snapped a three-day losing streak on Wednesday as dollar inflows related to foreign funds and companies helped offset heavy month-end demand for the greenback from oil and other importers.

Traders also cited occasional dollar buying by the Reserve Bank of India (RBI), although the intervention was not believed to be as aggressive as in recent weeks.

Traders will continue to focus on the measures new Prime Minister Narendra Modi led government will take to bring down the fiscal deficit and fight inflation.

"There was good dollar selling seen today, likely some corporate flows as well. Foreign banks were mostly on the sell side while there were importers and state-run firms seen bidding," said A AjithKumar, a foreign exchange dealer with Federal Bank.

"There is a good technical support for the pair at 58.35 levels which the central bank defended last time. If that level is broken we could see the pair fall more, if not, we could head back towards 59.50 again," he added.

The partially convertible rupee closed at 58.93/94 per dollar compared to 59.04/05 on Tuesday.

Foreign investors have bought a net $1.46 billion in debt over the past four sessions, bringing their total buying so far this month to $3 billion. In shares, despite some modest selling over the past few sessions, net inflows in May are $2.4 billion.

In the offshore non-deliverable forwards, the one-month contract was at 59.21 while the three-month was at 59.76.

Source:- profit.ndtv.com

ITAT deletes TP addition as adjustments made by TPO weren’t based on any prescribed TP methods

IT/ILT : Where in respect of amount paid by assessee to its AE located abroad for rendering sales and marketing services, TPO made certain addition taking a view that cost base of AE was not genuine, in view of fact that basis adopted for making TP adjustment was not in accordance with procedure prescribed in statute, impugned adjustment deserved to be set aside

Notification for reduced rate of tax on all types of glasses and glass sheets not applicable to ‘gla

CST & VAT : Where assessee was engaged in manufacture of glassware made of opal glass and it claimed benefit of reduced rate of tax under notification S.O. No. 25, dated 25-6-2011 issued by State Government of Jharkhand under section 8(5)(b) of Central Sales Tax Act, 1956, product manufactured by assessee would not be covered by above notification and, therefore, it was not entitled to derive benefit of notification

CCI nods to combination of Unifying Engineering division of Tech Mahindra as it won’t impact competi

Competition Law : Where proposed combination relating to transfer of business of MES to TechM was for creation of unified engineering services division within TechM and was not likely to have an appreciable effect on competition in India, same was to be approved

RBI announces operational guidelines for 'Depositor's Education and Awareness Fund Scheme'

BANKING : Depositor Education and Awareness Fund Scheme, 2014 –Section 26A of Banking Regulation Act, 1949- Operational Guidelines

Demand notice for services provided by Co. Couldn’t be issued in name of its director describing him

Service Tax : Where notice demanding service tax on services provided by company was issued in name of director portraying director as 'proprietor', said notice was liable to be set aside as misjoinder

HC rejects deletion of unexplained sum by CIT(A) on basis of evidences not adduced before AO

IT : Where books of account of third party company from whom assessee claimed to have received cash/cheque on sale of shares, were placed for first time before appellate authority without Assessing Officer having any opportunity to examine, such evidence would be inadmissible to disprove unexplained money

Non-disclosure of value and tax separately in invoice would result in calculation of VAT on total in

CST & VAT: Where assessee, a registered dealer under Karnataka Value Added Tax Act, 2003, had purchased cigarettes, etc. from local registered dealers and sold same to local buyers and in invoice/bill issued it had not mentioned value of goods and amount of tax separately and in bottom of invoice a seal was put saying that tax was collected at rate of 12.5 per cent, assessee was not entitled to benefit of deduction of tax from total value mentioned in invoice

Payment of fees for technical know-how is out of scope of sec. 35AB if it’s considered as revenue ex

IT : Even if there is expenditure for acquisition of technical know-how, provision of section 35AB would not apply, if it is revenue expenditure; it is allowable only under section 37(1)

RBI widens hedging bracket for importers; allows them to book forward contracts up to 50% of eligibl

FEMA/ILT : Risk Management and Inter Bank Dealings

NBFCs to round off all transactions to the nearest rupee, RBI directs

NBFCs : Rounding Off Transactions to the Nearest Rupee by NBFCs

Foreign co. deemed to have PE in India if few places in India were at its disposal or at disposal of

IT/ILT: Where there was some place at disposal of assessee a non-resident company registered in Mauritius or its employees during entire period of stay in India for rendering extensive services to Indian company, it constituted PE in India under India-Mauritius DTAA

HC dismissed writ against SEBI's order as petitioner had an alternative remedy of filing appeal befo

SEBI : Where whole time member of SEBI passed an order against petitioner for violation of regulation 11 of SEBI (Prohibition of Insider Trading Regulations), 1992 and petitioner filed writ petition against that order contending that consent order had already been passed by Adjudicating Officer on identical issue, writ petition was to be dismissed as effective, efficatious and alternative remedy of appeal to SAT was available to petitioner

Time-limit provided under sec. 27 of Customs Act isn’t applicable to refund of Special CVD

Excise & Customs : Amendment in Notification No. 102/2007-Cus. vide Notification No. 93/2008-Cus. introducing time-limit of 1 year from date of payment for claim of refund of 'Special CVD on goods imported for resale' is not retrospective; it is effective from 1-8-2008 and is inapplicable to right of refund accruing prior 1-8-2008

HC dismissed petition for investigation into Co.’s affairs as petitioner wasn’t qualified to seek in

CL : Where petitioner was not qualified under any of clauses of section 237(b) to seek opinion of CLB for investigation into affairs of company, petition seeking investigation was to be dismissed

Sec. 220 interest to be computed with reference to date of original demand notice if order of AO is

IT: Where assessment made originally by Assessing Officer is either varied or even set aside by appellate authority, but on further appeal, original order of Assessing Officer is restored either in part or wholly, interest under section 220(2) shall be computed with reference to date reckoned from original demand notice and with reference to tax finally determined