Service Tax : Where applicant received money on transfer of goodwill and right to use a particular name as part of purchaser's name for 30 years and agreement stipulated termination clause in certain circumstances, services rendered by applicant would fall under category of 'Right to Intellectual Property'
Wednesday 18 June 2014
Commerce Department Looks To Give New Lease Of Life To Sezs
Looking to give a new lease of life to special economic zones (SEZs), the commerce department has strongly pitched for allowing units in the taxfree enclaves to sell part of their production in the local market and the extension of benefits under the Focus Products and Focus Market export promotion schemes.
The department has also lobbied the finance ministry to scrap minimum alternate and dividend distribution taxes for SEZ units.
"The scheme needs to be overhauled to boost manufacturing in the country," said a government official, confirming that the three measures cited above ranked high on the department's agenda for reviving the programme.
More than 60% of the total land notified as SEZs is vacant years after the scheme was launched in 2006. Of the total 47,803 hectares of SEZ land notified, only 17,689, or 37%, has been put to use so far, according to ministry of commerce and industry data. And, of 389 SEZs, only 185 are functional. Since being functional is defined as at least one working export unit, the majority of the zones do not have full occupancy.
The department had tasked the Indian Council for Research and International Economic Relations (ICRIER) to conduct an in-depth study of the reasons for the scheme's lack of success. Arpita Mukherjee, principal author of the report, recommends taking a calibrated approach to SEZ approvals and allowing the lowest duties under free trade agreements in these zones. The report's findings and recommendations will be discussed with the commerce department. Commerce minister Nirmala Sitharaman has strongly advocated a review of the SEZ scheme.
The original scheme provided for a complete tax holiday to SEZs but the revenue department clamped down after indications that the programme was being misused for real estate arbitrage apart from IT companies using the avenue to regain tax benefits that they lost with the end of the holiday under the Software Technology Parks of India scheme. "MAT and DDT are only part of the problem. There are bigger issues that need to be addressed to make SEZs successful," said Mukherjee, a professor at ICRIER.
For instance, import duties have been slashed to zero for certain product lines because of India's trade accords, hurting local sales of goods and services by SEZ units, which need to pay the levy as well as sales tax.
Mukherjee said SEZs should enjoy the lowest FTA tariffs and trade agreements signed by the country should take into account implications on SEZs.She also pointed out that there's no restriction on the number of SEZs that can be approved in India unlike most other countries, which take an incremental approach. They first approve a specific number of zones and the programme is widened depending on how successful these are.
Source:- economictimes.indiatimes.com
Even genuine transactions go through rigours of sec. 50C; provision applicable if stamp value exceed
IT : Guideline value shall be deemed to be full value of consideration where consideration stated by assessee is less than guideline value and section 50C would operate
Fimi Pitches For Complete Withdrawal Of Iron Ore Export Duty.
Apex industry body Federation of Indian Mineral Industries (FIMI) today pitched for complete withdrawal of export duty of iron ore, saying it would help achieve zero-waste mining.
"In order that the resources are fully utilised without detriment to the domestic steel industry, it is imperative to make Indian exports competitive by withdrawing export duty completely," FIMI said in an hour-long meeting with Steel and Mines minister Narendra Singh Tomar.
Iron ore exports at present attract 30 per cent duty. The industry association suggested that as exports from Karnataka are banned and not yet open from Goa, shipments can be made from Odisha, Jharkhand, Chhattisgarh, Andhra Pradesh and other states.
"If the export duty is withdrawn and railway freight is brought at par with domestic fare, we are sure, the exports can go up to 70-75 million tonnes per year," FIMI said.
"Exports help in fuller utilisataion of resources and lead to zero-waste mining," it added.
India's export of iron ore has come down drastically to 14.42 million tonnes in 2013-14 compared to 117.37 million tonnes in 2009-10. Miners often blame the duty hike for the dip in shipments.
"Most of the exports are from standalone non-captive mines providing direct and indirect employment to more than one million people in backward and tribal area," a delegation led by FIMI President H C Daga said.
An official statement later said during the interaction, FIMI requested to take steps for enhancing exploration and exploitation of mineral resources in the country and laid emphasis that while meeting the need of domestic industry, export also needs to be encouraged.
Tomar said that government was keen in bringing about a transparent policy for using mineral resources of the country and the mineral industry's suggestions will help in formulating a policy on mining.
The Minister said the government would coordinate with all stakeholders so that the interests of environmental and rehabilitation issues were also adequately addressed along with exploitation.
Source:- economictimes.indiatimes.com
Indian Steel Companies To Ramp Up Iron-Ore Imports
Indian steel companies, faced with a domestic shortage of iron ore, are cranking up imports to capitalize on international prices that are near two-year lows.
While certain to be welcomed by global iron-ore miners, the rise in Indian imports is unlikely to have a lasting impact on international prices, given slowing demand from China and an expanding supply.
JSW Steel, 500228.BY +1.08% one of India's largest steel producers, will import 500,000 metric tons of high-grade ore in July-August from South Africa, Canada and Australia, at a landed price of around $91.5 a ton, after paying a 2.5% import tax, according to people with direct knowledge of the purchases.
The price for ore with 62% iron content delivered to China's Tianjin port, a regional benchmark, was $89.3 a ton Tuesday, according to The Steel Index, far below the $139.7 a ton seen in early December last year. Iron ore is a key ingredient in steel.
JSW Steel also plans to import 500,000 tons of iron ore from October to December, the people said.
Separately, Tata Steel Ltd., one of India's top steel producers, recently imported around 140,000 tons of iron ore in two separate shipments, according to a person familiar with the matter.
A JSW Steel executive, who declined to be identified, said these were the company's first iron-ore imports this year and that it had never imported such large volumes.
Basant Poddar, vice chairman of Federation of Indian Mineral Industries, said he expected total Indian imports to reach 10 million-15 million tons this financial year ending in March, compared with 500,000 tons last year. He said it made sense for port-based steel plants to import high-grade ores as the imported price was nearly comparable to lower-grade Indian ores.
Further out, imports could accelerate.
"Recent plans to increase Indian imports of iron ore show that India will be increasingly reliant on commodities from other countries, which is likely to be an upside risk to iron ore and other hard commodity prices," said Paul Bloxham, HSBC's HSBA.LN -0.33% chief economist for Australia and New Zealand.
India's pressing need for infrastructure and housing means its demand for iron ore and other hard commodities is likely to get much stronger when such investment materializes, he said.
"The recent change of government means there is more optimism about India's investment outlook than there has been in a number of years," he said.
Domestic steel producers have approached the new Bhartiya Janata Party-led government about scrapping a 2.55% import tax on iron ore, said an industry executive. The government is due to release its first budget in July.
Helen Lau, senior analyst with UOB Kay Hian, said India's imports may only have a marginal effect on prices, at least in the short-term. She pointed out that India's imports are tiny compared to China's. In 2013, China imported 819 million tons of iron ore and it has more than 100 million tons stockpiled at its ports, she noted.
India's domestic iron-ore production is expected to fall by 7% to around 125 million tons this financial year. A majority of mines in two key provinces—Karnataka and Goa—have yet to resume normal operations despite a partial lifting of court-ordered mining bans.
Domestic output has been hit also by a Supreme Court order that a number of mines in the mineral-rich eastern state of Orissa must reapply for mining permission.
Source:- online.wsj.com
Union Budget 2014-15 Likely To Be Presented On July 09.
Finance Minister Arun Jaitly is likely to present the Union Budget for 2014-2015 in Parliament on on July 09 as per sources.
The budget session of Parliament is likely to be convened from July 07 while the Rail Budget will be presented on July 08, sources told Zee Media.
Both the budgets have to be cleared before July-end as the Votes-on Account taken before Lok Sabha elections will expire by July-end.
It will be the maiden Budget of Arun Jaitley. It will also be the first major policy document of the Narendra Modi government and will spell out the direction for the economy.
Jaitley has already started pre-budget consultations with different interest groups. He faces several challenges on the economic front, like rising prices, subdued growth and the need to move ahead on the path of fiscal consolidation.
Among other things, he will also have to focus on streamlining subsidies which consume a major potion of government expenditure.
Source:- zeenews.india.com
India Reintroduces Onion Export Price To Help Curb Inflation
India on Tuesday set a minimum export price for onions of $300 per tonne to discourage overseas shipments amid an inflation scare that threatens to stoke public anger over rising prices at local food markets.
Prime Minister Narendra Modi has made tackling inflation his top priority after widespread resentment about rising prices contributed to the exit of the previous government last month.
After wholesale price inflation accelerated to a five-month high in May, the new government imposed the price rule on onions three months after the previous administration withdrew it. (bit.ly/1lNElaf)
Until early March, the minimum export price was $150 per tonne.
Indians consume about 15 million tonnes of onions a year, using them as the base for curries and traditional dishes such as biryani and bhaji. In the past, higher onion prices have contributed to the fall of state governments.
India exports about 1.5 million tonnes of onions a year. Fears of domestic shortages have been fuelled by a scorching summer, a lack of chilled storage and a threat of strike action by distribution workers.
Finance Minister Arun Jaitley said in a post on Facebook late on Monday that the rise in prices of fresh produce could be due to withholding stocks on fears of a weak monsoon. He vowed to crack down on "speculative hoarding".
Source:- in.reuters.com
India's Exports Jumped In May But It May Be A Little Too Early To Celebrate.
Belying fears that a strengthening rupee will adversely impact India's competitiveness in the global market, the country's export growth has accelerated to a seven-month high in May.
Shipments rose 12.4 per cent to almost $28 billion for the second month of the current fiscal year from $24.91 billion a year earlier, according to commerce ministry data. Growth was led by higher shipments of petroleum products and engineering goods. Imports fell 11.41 per cent, due mainly to a sharp 71 per cent drop in gold purchases.
The data will likely ease concerns, at least in the short term, that the rupee's recent gains will hurt exports. The local currency has gained nearly 13 per cent against the US dollar since touching a record low near 69 in August last year. The rupee is currently trading around 59.7 to a dollar.
Biswajit Dhar, former director general of Research and Information System for Developing Countries, a think tank under the Ministry of External Affairs, says the export growth can be linked to the base effect. In May last year, exports had declined by more than one per cent.
"The growth, however, will create positive sentiments in the economy with its impact on the current account deficit," says Dhar, who is also a professor at Jawaharlal Nehru University. But the base effect is not the sole reason for the high growth. This is because shipments in May were nearly nine per cent higher compared with April's exports of $25.63 billion.
The base effect will likely help the country post handsome export growth in June as well, as shipments in June 2013 had declined 4.56 per cent. The long-term growth trend, however, will be clearer from July onwards because shipments had started growing in double digits after a sharp weakening in the rupee in July and August last year made Indian exporters more competitive.
"As the unfavourable base kicks in July onwards, annual growth readings are expected to moderate," says a YES Bank report released after the trade data was announced. "However, given the upside potential that global growth recovery is likely to offer, the sequential momentum would still be positive for Indian shipments."
Source:- businesstoday.intoday.in
Gold Jewellery Exports In Fy15 Seen Jumping By A Quarter
Gold jewellery exports from India are likely to grow by a quarter in the year to March 2015, helped by an expected relaxation of import policy and recovering demand from major consuming countries, the head of a trade body said on Wednesday.
Exports of gold jewellery fell by more than half last year due to non-availability of the precious metal after the government tied the import of gold to exports. It also raised the import duty to a record 10 percent.
"There are indications of a relaxation of policy on gold imports and even demand is recovering in the U.S. and other countries," said Vipul Shah, chairman of the Gems and Jewellery Export Promotion Council, which represents over 6,000 exporters.
India exported $7.86 billion of gold jewellery in the last fiscal year, data from the trade body showed.
GJEPC also expects total gem and jewellery exports, which account for 14 percent of merchandise exports, to rise to $44 billion from the last fiscal year's $41 billion.
The trade body has asked the government to reduce the import duty to 4 percent to make smuggling non-viable, and gradually to remove the so-called 80/20 rule, which required a fifth of all gold imports to be exported.
GJEPC has also asked the finance ministry to reduce the import duty on machinery used for jewellery-making to 5 percent from 10 percent.
The budget is due to be presented next month. Prime Minister Narendra Modi has said any action on gold should take into account the interests of the public and traders, not just economics and policy.
Source:- in.reuters.com
Rupee Strengthens Past 60 Per Dollar After Fed Trims Bond Purchases
The Indian rupee strengthened to 60 per dollar on Thursday in the opening trade, in line with other Asian currencies.The home currency opened at 60.06 per dollar against its previous close of 60.40. At 9.20am, the rupee was trading at 59.93 per dollar, up 0.79% from its previous close. It touched a high of 59.93 in intraday.
The US Federal Reserve Open Market Committee trimmed bond-buying by $10 billion for a fifth straight meeting, to $35 billion, keeping it on pace to end the programme late this year. Central bank has also said that economic activity in the US is rebounding and suggested that interest rates in the long run would be lower.
Most of the Asian currencies were trading higher. The Philippines peso was trading up 0.6%, Indonesian rupiah was up 0.6%, Malaysian ringgit rose 0.5%, South Korean won jumped 0.4%, Taiwan dollar rose 0.2%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.374, down 0.26% from its the previous close of 80.584.
India’s equity benchmark Sensex was trading at 25,320 points on BSE, up 0.3%.The yield on India’s 10-year benchmark bond was trading at 8.64%, compared with its Wednesday’s close of 8.66%. Bond yields and prices move in opposite directions.
Since the beginning of this year, the rupee has gained 2.94% against the dollar, while foreign institutional investors have bought $9.91 billion from local equity markets.
Source:- livemint.com
Same handwriting in all bills didn’t prove them bogus; HC deletes penalty under Rajasthan Sales Tax
CST & VAT: Where assessee was carrying goods from Delhi to Gujarat through State of Rajasthan and on checking of said goods in State of Rajasthan, Assessing Officer having found that all bills accompanied with goods were in same handwriting, levied penalty upon assessee under proviso to section 22A(7) of Rajasthan Sales Tax Act, 1954, levy of penalty on said ground was not justified
Laxity and negligence of officers and Enforcement Directorate convinced HC for not condoning belated
FERA : Inaction and negligence on part of various officers of department and slackness on part of Enforcement Directorate to pursue appeal could not be said to be sufficient cause for seeking condonation of delay in filing appeal
Case remanded as TP adjustment was made without considering utilization of capacity by assessee in m
IT/ILT : Matter remanded for deciding issue of capacity utilization in view of guidelines laid down by Tribunal in this regard
MCA calls for fast weeding out of redundant records to improve the quality of governance
COMPANIES ACT, 2013 : Action Points Arising Out of Prime Minister's Meeting with Secretaries Pertaining to Weeding out of Files and Papers in MCA in Accordance With Rules of Record Keeping Including Digitization, Wherever Necessary
Multiple expansion can’t reset initial year for sec. 80-IC relief; allowable for 10 years from first
IT : Where a manufacturing unit undertook second substantial expansion after five years of first expansion, deduction under section 80-IC would continue for a total of ten year; only rate of deduction would go up
Sec. 35(2AB) deduction couldn’t be denied if approval was signed by nodal officer on behalf of Secre
IT : Where assessee claimed deduction under section 35(2AB) in respect of expenditure incurred on in-house R&D facilities and in support of claim filed letter issued by DSIR, New Delhi under signature of Scientist -G and Assessing Officer disallowed claim of deduction on plea that approval had to be obtained from Secretary, DSIR, whether order of approval had been signed by Secretary, DSIR or by any of Nodal Officer on his behalf would not make any difference and in such a case claim for deducti
IRDA releases new guidelines on interest rate derivatives
INSURANCE : Guidelines on Interest Rate Derivatives
SEBI tighten norms on public issue of debt securities; stipulates minimum subscription of 75% for th
SEBI : Base Issue Size, Minimum Subscription, Retention of Over-Subscription Limit and Further Disclosures in The Prospectus for Public Issue of Debt Securities
MCA defers e-voting mandate till Dec 31, 2014; clarifies related issues on e-voting
COMPANIES ACT, 2013 : Section 108 of The Companies Act, 2013 - Voting Through Electronic Means - Clarifications on Issues Associated with E-Voting Procedure
Interest on refund must be granted immediately after 3 months from date of receipt of application of
Excise & Customs : Appellate order allowing refund relates back to order of original authority; hence, as per section 11BB, interest on refund has to be paid from date immediately after three months from date of receipt of application till date of refund
AO erred in disallowing relief on pretext of siphoning off funds without identifying the actual fact
IT : Where Assessing Officer rejected assessee's application under section 10(22) on ground that it had made payment to 'C' with an intention to siphon away its funds, in view of fact that Assessing Officer neither called upon assessee to produce 'C' nor did he examine as to how said amount was adjusted by 'C' in her return of income, impugned order was to be set aside and, matter was to be remanded back for disposal afresh
Spouse with joint account or sole nominee can continue with account of deceased under Senior Citizen
IT : Senior Citizen Savings Scheme (Amendment) Rules, 2014 - Amendment in Rule 8
Non-compete fee received by assessee from divestment of its insignificant business activity was a re
IT-I : Where assessee engaged in various manufacturing activities, sold only one of its activities to another concern and said activity was not a part of it core activities, non-compete fee received in order to refrain from carrying on said activity for a limited period of five years resulted in revenue receipt liable to tax
HC can admit writ against adjudication order even after expiry of time-limit to file appeal against
Excise & Customs : There is no time-limit to file writ petition provided there is no inordinate and unexplained delay on part of petitioner; hence, writ against adjudication order violating principles of natural justice is maintainable even if time-limit to file appeal thereagainst has expired
Closure of plant and variation in price during off season couldn’t be held as anti-competitive, CCI
Competition Laws: Use of asbestos sheet being seasonal, price variation and closure of plant during lean period would not prove anti-competitive measure
Case remanded to consider certificate issued by Maharashtra Sales Tax Authority on alterations made
CST & VAT: Where assessee carrying on business at Bangalore had sent certain goods to a dealer in Maharashtra by way of stock transfer and filed before Assessing Authority 'F' forms received from said dealer and Assessing Authority rejected forms on plea that values were tempered and they bore corrections, since now assessee had obtained a certificate from Maharashtra Sales Tax Authority stating that corrections in values of 'F' forms were done by him and they were genuine, matter was remanded b
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