IT: Unless it was shown that society was running any activity, other than educational activity, for mere existence of object not related to core activity, exemption could not be denied
Sunday, 8 June 2014
No reassessment to tax gains on share dealing as business income if once taxed as capital gains afte
IT: Once income from sale purchase of shares was treated as capital gain after verification of all relevant details, reassessment could not be allowed to treat same as business income
Paradip Port Offers Hybrid Cargo Terminals To Investors
Paradip port proposes to permit private parties to set up hybrid cargo terminals — captive-cum-common user facility — as part of its expansion plans.
Paradip will be the first government port to offer this facility though some private ports have already started doing this.
SS Mishra, Chairman of Paradip Port Trust, said the hybrid terminals will be one of the many new ideas being worked out by the port to attract private investments.
“This will provide private investors the flexibility to ensure optimum unitisation of the port capacity,” Mishra said at a roadshow held by the port in Mumbai recently.
Investors can fix the ratio of captive and third party cargo at 60:40 or 70:30 but there should be a minimum guaranteed throughput, he explained to a gathering of potential investors and port users.
However, the Odisha-based port will have to get the Centre’s permission before offering its innovative concept to investors.
The hybrid concept does not exist in the current policy. It is a new concept which could give more flexibility to terminal operators. The Government will have to take the decision, said A Janardhana Rao, Managing Director, Indian Ports Association.
There is also the issue of tariff regulation. Tariffs at the government ports are regulated by the Tariff Authority for Major Ports and its guideline does not cover the proposed hybrid terminals.
There is separate policy for captive port policy under which port-based industries are given land/waterfront facilities to set up terminals for handling their own cargo.
Mishra is pinning his hope on the new regime at the Centre to get the nod for this new concept. “Let investors come out with their option, getting any approval is our responsibility, he said. Paradip port will soon be inviting bids for developing several bulk and liquid cargo terminals.
Source:- thehindubusinessline.com
Gail’S Cheaper Offer May Impact Gas Pricing Formula.
Gas utility Gail hopes to shake up the domestic market by offering some 2.5 million tonnes of liquid gas from the US at a dollar less than imports from Qatar.
Gail has tied up 3.5 million tonnes of liquid gas per year from US firm Cheniere's Sabine Pass facility in Louisiana. It intends to trade a million tonne of this gas through its Singapore arm and offer the remaining quantity to domestic buyers.
Gail's gas deal is linked to Henry Hub, the US benchmark, where prices have fallen to $4.7 per unit due to shale gas boom. After adding shipping and other charges, Gail expects to offer a price of $12-13 per unit.
Sabine Pass is one of the three US liquid gas projects with permission to export to non- FTA (free trade agreement) countries. Since India does not have an FTA with the US, it has been lobbying for a special waiver.
Till that waiver comes through, Gail's offering may be too little to kick off a shake-out in the Indian market. But it could impact the government's thinking on domestic gas pricing formula. Many had objected to the inclusion of costly JCC (Japan Customs Cleared) crude basket as one of the benchmarks along with Henry Hub.
Imports meet 40% of India's gas demand and are set to rise as demand outpaces domestic production. Most of the imports come from Qatar under long-term contracts and spot purchases at costs benchmarked to crude oil price. Gas import price now range between $13 per unit for long-term contracts up to $16 for spot buys.
Source:- timesofindia.indiatimes.com
Government Plans To Ship Vehicles From Chennai To Delhi Via Mundra To Save Fuel Cost.
In a bid to save on fuel cost and promote water transport, the Shipping Ministry is preparing a blue-print on the ambitious plan to ship vehicles made in Chennai to Gujarat via sea route and from there to Delhi via road.
"The Ministry has been asked to prepare a report on the feasibility of transport of vehicles manufactured in the South, from Chennai-based ports to Gujarat-based ports and automobiles built in Delhi and surrounding regions to South from Gujarat-based ports," a Shipping Ministry official said.
Last week, Road, Transport, Highways and Shipping Minister Nitin Gadkari had asked officials to come up with a report in this regard. "Officials have been asked to come up with a report for shipping vehicles manufactured in Chennai from Ports in Chennai to Mundra in Gujarat and from there to Delhi via road to minimise fuel cost," Gadkari had said.
The same route could be adopted for transfer of vehicles from manufactures like Maruti to South, he had said. The Minister had said that waterways were a fuel efficient mode of transport with a cost of barely 55 paise a km as against Rs 1.5 on transportation through road, besides it being environment-friendly.
It may be noted that Ennore Port has already seen exports of 4,49,720 automobile units till December, 2013 including by automobile manufacturers like Nissan, Ford and Ashok Leyland from Chennai, Toyota from Bangalore and Honda from Delhi. India has 12 major ports - Kandla, Mumbai, JNPT, Marmugao, New Mangalore, Cochin, Chennai, Ennore, V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia) which handle approximately 61 per cent of the country's total cargo traffic besides about 200 non-major ports in control of states.
It may also be noted that the possibility of a waterway of Gangotri-Kanpur-Allahabad-Kolkata for cargo and passenger movement is also being explored. Meanwhile, a screening committee has accorded approval for a World Bank study for making 1,620 km waterways from Kolkata to Allahabad.
Inland waterways comprising of rivers, lakes, canals, creeks, backwaters etc extend to about 14,500 km in the country. However, potential of this mode of transport has not been fully exploited so far. So far, India has five declared waterways besides the new 121-Km Barak in Assam but some of them are yet to be operationalised.
Source:- economictimes.indiatimes.com
Russia To Offer Investments To India For Projects, Jvs
Russia, keen to move shift funds from Europe after the Ukraine crisis, will offer investments to India for projects and Joint Ventures during the trip of its Deputy Prime Minister Dmitry Rogozin's visit to Delhi in third week of June in what will be first high profile engagement between the strategic allies since the anointment of the Modi government.
Rogozin will pick up from where he left during his last trip to India last February and pitch for hydrocarbon exports, stronger defence ties, expansion of nuclear power projects and investments in Indian projects, senior sources in the Russian government told ET. Rogozin, who is expected to meet the PM, External Affairs, Finance and Defence Ministers and National Security Advisor on June 18 will prepare for Modi's first meeting with President Vladimir Putin on the sidelines of the BRICS Summit in Brazil in July.
Sources indicated that Russia is keen to divert some of its funds from Europe following deterioration in ties between Moscow and European capital in the backdrop on Ukraine crisis. Moscow may route these funds to India that would contribute boosting Indian economy, sources said, adding, this would be major point of engagement with the Modi government that is keen to pursue a robust economic diplomacy. It has been learnt that Putin would propose investments for India during his meeting with Modi in Brazil. Putin will also travel to India later this year for annual summit. Very people are aware that Modi had visited Russia thrice as the Chief Minister.
Russia is also keen to work with India on changing the bilateral investment treaty to encourage and safeguard mutual investments, sources indicated. Besides, energy will be key pillar of partnership with Moscow planning additional nuclear power plants and oil exports to India. There is also a talk of oil pipeline to India from Russia to meet Delhi's growing energy demands. Russia is looking beyond Europe towards Asian markets for its energy export - the recent Western-Russian standoff is fueling this drive.
Last March Igor Sechin, a close ally of President Vladimir Putin and the head of Rosneft, Russia's largest oil company travelled to India to discuss energy deals. Rosneft offered Oil and Natural GasBSE -2.34 % Corp (ONGC), ten offshore oil and gas blocks. Nine of those blocks were located in the Barents Sea while the remaining one was located in the Black Sea. Rogozin will follow up on Sechin visit, sources said. ONGCBSE -2.34 % is also studying a previous offer from Rosneft to help explore the Magadan 2 and Magadan 3 blocks in the northern part of the Sea of Okhotsk.
Assocham Urged Commerce Minister To Restore The Policy For Sezs To Its Original Form.
Apex industry body ASSOCHAM has urged the new commerce minister, Ms Nirmala Sitharaman to restore the policy for special economic zones (SEZs) to its original form and immediately withdraw minimum alternate tax (MAT) and dividend distribution tax to regain trust of domestic and global investors.
SEZs were conceived as tax free enclaves with world class infrastructure for exporting only goods and services from units set up in them without carrying the incidence of various direct and indirect taxes, duties and levies to provide Indian exports a strong competitive edge in global markets.
However, imposition of MAT and DDT by the government a few years after the announcement of SEZ policy took investors by surprise followed by a fall in their interest thereby raising questions about government’s commitment to a stable policy regime.
“Creation of additional infrastructure in approved SEZs without exemptions, concessions and drawback is also imperative as additional benefits would flow through decongestion of overcrowded cities and creation of alternated urban satellite centres would provide new streams of revenue for governments and local bodies,” highlighted a paper on ‘Suggestions to Revive Special Economic Zones’ prepared by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
“Both of these significant changes in the SEZ policy are imperative to provide Indian exporters a level-playing field and these should be included and be implemented as part of the new government’s immediate economic agenda,” said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the chamber’s paper.
“If immediate action is taken by implementing these corrective measures it would restore investor confidence and bring back SEZs to the forefront of economic and industrial development,” said Mr Rawat. “Restoring confidence of domestic manufacturing sector by providing a stable policy environment would promote competitiveness as SEZs can be the vehicle to boost manufacturing exports from India and catalyse revival of Indian economy.”
Besides, global markets are showing strong trends of revival after a prolonged spell of subdued and in some cases, negative growth, noted the ASSOCHAM paper. “India has the opportunity to reclaim its position as a world class, competitive global manufacturing power.”
Frequent policy changes have eroded the investors’ confidence in SEZs thereby severely affecting the overall potential of SEZs to provide significant boost to investments, exports and employment in India thereby virtually reducing it to a non-starter, noted the paper prepared by the ASSOCHAM Economic Research Bureau (AERB).
Source : orissadiary.com
Cotton Area In India Climbing For First Time In Three Years
Cotton seeding in India, the world’s second-largest grower, will probably expand for the first time since 2011 after global prices reached a two-year high in March.
The area may increase by 3.4 percent to 12 million hectares (29.65 million acres) in the planting season that started in May, according to the median of five estimates from growers, exporters and industry groups compiled by Bloomberg. The crop, which will be harvested from October, may be a record for a second year, the Confederation of Indian Textile Industry said, without giving an estimate.
A bigger crop in India, the largest exporter after the U.S., would increase global supplies as demand slows in China, the world’s top importer. Futures in New York tumbled 13 percent from the high in March as improving weather aided late seeding of cotton in Texas and on concern Chinese demand would weaken. Futures in Mumbai rallied to a seven-month high in May.
“Farmers have been happy with the prices they have got and they have very limited alternate crops available,” Nayan Mirani, vice president of the Mumbai-based Cotton Association of India, said by phone on June 5. “Planting is looking positive and should be the same or even more than last year.”
Futures on ICE Futures U.S. slumped 8.5 percent in May, the most since October, and were at 84.88 cents a pound today. Prices reached a two-year high of 97.35 cents on March 26. The contract for June delivery on the Multi Commodity Exchange of India Ltd. rose as much as 0.3 percent to 19,400 rupees ($329) per bale of 170 kilograms (375 pounds each) today.
Planting began last month in the northern Indian states of Punjab and Haryana, which are irrigated regions, while sowing in the biggest producing states of Gujarat and Maharashtra starts with the onset of monsoon rain this month. The monsoon, which provides more than 70 percent of annual rainfall, will be 95 percent of a 50-year average from June to September, the India Meteorological Department estimates.
“If the monsoon is below normal, the area under cotton will remain the same or even go up because among the competing crops cotton requires the least amount of water,” D.K. Nair, Secretary General of the Confederation of Indian Textile Industry, said by phone from New Delhi. “When there’s a water shortage, more people shift to cotton.”
An El Nino weather pattern may be established by August as Australia remains on alert for the event that brings drought to the Asia-Pacific region and heavier-than-usual rain to South America, the Bureau of Meteorology said on June 3. The event will reduce monsoon rain and crops from cotton to sugar and rice may be hurt, Newedge LLC said in a report dated June 5.
Even if El Nino develops toward the end of the monsoon season, output will not be hurt as cotton doesn’t require much moisture, A. Ramani, secretary of the Indian Cotton Federation, which represents 350 spinners, ginners and traders, said by phone from the southern Indian city of Coimbatore last month.
“There are indications that area might increase in Gujarat by 10 percent to 15 percent because the farmers have got good prices,” Shirish Shah, partner at Bhaidas Cursondas & Co., a Mumbai-based exporter, said by phone. Acreage will also climb in Rajasthan, Telangana and Seemandhra states, he said.
Output in the 12 months starting Aug. 1 may be 6.262 million tons, possibly making India the biggest producer ahead of China, Rebecca Pandolph, a statistician at the International Cotton Advisory Committee, said. China’s crop may drop 10 percent to 6 million tons in 2014-2015, the group said.
Exports to China may decline next year as India’s biggest buyer is reducing imports, Ramani said, without providing any estimates. Total imports by China tumbled 64 percent to 222,088 tons in the first three months of 2014, customs data show.
India probably exported 9.5 million bales in the year that began Oct. 1, according to Nair. Shipments totaled 9.8 million bales in 2012-2013, the Cotton Association of India estimates.
Source:- bloomberg.com
China’S Exports Rise 7% In May, Imports Fall
China’s exports gained steam in May thanks to firmer global demand, data showed on Sunday, but an unexpected fall in imports signalled weaker domestic demand that could continue to weigh on the world’s second-largest economy.
Exports rose 7 per cent in May from a year earlier, quickening from April’s 0.9 per cent rise, while imports fell 1.6 per cent, versus a rise of 0.8 per cent in April, the General Administration of Customs said.
China’s trade surplus widened sharply to $35.9 billion in May from April’s $18.5 billion, the customs office said.
That compared with market expectations in a Reuters poll of a 6.6 per cent rise in exports, a 6.1 per cent rise in imports and a monthly trade surplus of $22.6 billion.
“We do not think the May trade data will change the policy stance significantly,” Louis Kuijs, an RBS economist in Hong Kong, said in a note.
“While the export data is reasonably positive, the weakness of domestic demand implied by the import data may keep the pressure up for initiatives to support growth,” he said. China’s commerce ministry had predicted that the trade picture could brighten in May as base efforts fade and government support measures kick in.
Analysts have attributed the weak trade figures partly to an inflated comparison base with last year due to a rash of fake invoicing of exports to beat currency restrictions.
India’s trade deficit with China mounts to $9 bn in January-April
China’s trade with South Asian nations including India has touched a whopping $100 billion even as the deficit in trade between the two countries neared $9 billion in the first four months of this year.
Trade volume between China and South Asian nations jumped from $35 billion in 2006 to about $100 billion in 2013, but the fast growth features a rising trade imbalance with China exporting more, state-run Xinhua news agency reported. The India-China trade topped much of the $100 billion as the bilateral trade totalled $65.47 billion in 2013 with trade deficit mounting to $31.42 billion. Indian officials said the trade deficit averaged about $35 billion in the last three years.
Source:- indianexpress.com
Rupee Up 19 Paise To 58.98 Vs Dollar In Early Trade
The rupee strengthened by 19 paise to 58.98 against the US dollar in early trade on Monday on the Interbank Foreign Exchange market on selling of the American currency by banks and exporters amidst strong local equities.
Besides, dollar's weakness against other currencies overseas also supported the local unit, forex dealers said.
The rupee had appreciated by 16 paise to close at 59.17 per dollar on Friday on the back of a surge in local equities and heavy capital inflows.
Meanwhile, the benchmark BSE Sensex today rose by 183.26 points, or 0.72 percent, to hit new high of 25,579.72 in early trade.
Source:- zeenews.india.com
HC slaps Tribunal for deciding an appeal on merits instead of issues arising therefrom
CST & VAT : Where against order of assessment, assessee filed appeal and Appellate Commissioner insisted that assessee should deposit a sum of Rs. 23 lakhs by way of pre deposit and thereupon assessee filed appeal before Tribunal, scope of appeal before Tribunal was whether such condition imposed by Appellate Commissioner was correct in law or not and in process it could not have directly heard appeal on merits of order passed by Assessing Officer
HC rejected winding-up plea as bona fide dispute for debt existed between the parties
CL : Where a pre-existing bona fide dispute existed between petitioner and respondent, winding up petition against respondent for outstanding sum would not be maintainable
If insurance claim is capital receipt residual loss can’t be taken as revenue loss; excluded for ALP
IT/ILT: Where assessee imported certain computer equipments from its supplier located abroad which got damaged in transit, in view of fact that insurance claim received for same was treated as capital receipt, remaining portion of cost of equipment could not be allowed as a revenue loss and included in computation of ALP
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