HC affirms payment of 20% of tax demand and guarantee for balance sums during pendency of appeal of

IT : Where during pendency of appellate proceedings, Tribunal directed to deposit only 20 per cent of tax demanded and revenue was willing to accept a corporate guarantee for balance amount, impugned direction issued by Tribunal did not require any interference

Retail Onion Prices Soar To Double Of Wholesale Rates

The large difference between wholesale and retail prices of onions in markets such as Delhi, Indore, Chandigarh and Mumbai has taken the government by surprise despite several steps announced by it, including an advisory to states to crack down on hoarding and speculation.

Data available with the government showed that last week, the key kitchen ingredient was available for Rs 12.75 a kg in the wholesale market in Delhi. But the retail price was Rs 24, nearly twice the level. "It is quite surprising that the price doubles from the time it leaves Azadpur mandi. Middlemen seem to be charging a huge premium," said an official.

In fact, official data showed that Delhi is seeing unusually price behaviour, although there is pressure in other markets such as Mumbai too, where the difference is a little under Rs 10 a kg. But in Kolkata, the difference between the wholesale and retail price is Rs 5 with households getting onions for Rs 24 a kg, the same as Delhi. Similarly, in Agra the difference is Rs 3 a kg, while in Hyderabad and Bangalore the gap is just Rs 2 a kg.

A labourer weighs a sack of onions in a wholesale market in Hyderabad. (AFP photo) "There is an element of speculation and expectation that there will be a further spurt due to shortages. This needs to be handled," added an official, pointing to the spurt in retail prices in cities such as Bangalore, Vishakapatnam, Chennai, Indore and Bhubaneswar, where prices rose by up to Rs 12 a kg between May 27 and June 27.

In Delhi, there was a moderation of Re 1 a kg in retail prices due to higher supplies by Nafed, but the wide gap in retail and wholesale rates is expected to be the subject of inter-ministerial discussions to crack down on the possibility of artificial jacking up of prices.

A vendor selling onions and other vegetables in a makeshift retail shop in Kolkata. (TOI file photo)

With monsoon rains expected to be lower than normal levels, the government is monitoring the prices of 22 essential commodities with onions, potatoes, milk, pulses and non-basmati rice coming under special focus. In Delhi, the Centre had ordered a special drive to ensure that there was adequate supply of onions and potatoes at reasonable rates.

Finance minister Arun Jaitley is scheduled to meet state food and consumer affairs ministers this week, where the issue of rise in food prices will be discussed.

While retail prices are holding up, officials said that there is a possibility of an increase in July when supplies from Rajasthan and Nashik slow down. Sources said that Delhi government has asked Nafed to supply onions and potatoes to meet possible shortages.

Source:- timesofindia.indiatimes.com

Sugar Prices Jump After Govt Raised Import Duty To 40%

Exactly a week ago, last Monday, sugar prices jumped by Rs 30-40 a quintal in the wholesale spot market, after the Centre’s decision to raise import duty on sugar to 40 per cent. Likewise, naka prices and mill tender rates also shot up by Rs 20-50 a quintal. The volume also increased as retailers came forward with fresh orders in the markets and stockists made fresh commitments with producers. Prices in the futures market went up by Rs 50-60, crossing the Rs 3,100 level.

The new government hopes that surplus stocks will help stabilise rates and there is enough surplus. India does not depend on imports to meet its requirement of the sugar and the proposed duty should have no impact on prices, union food minister Ram Vilas Paswan said. The Centre is also doing its bit to give additional interest-free loans to sugar mills to clear dues to cane farmers, the crisis facing millers in Uttar Pradesh was due to policies followed by the state government.

Following the recent price rise of Rs 2-3/kg in the national capital, sugar is available at Rs 35-36/kg and Rs 40-41/kg in wholesale and retail outlets, respectively. Cane arrears have increased from Rs 11,000 crore to Rs 13,350 crore across the country. Mills are on the verge of shutdown due to many reasons. According to government officials, the decision aimed at ensuring that mills are able to clear cane arrears to growers.

To improve the cash flow of the mills, the Centre has simultaneously decided to give them upto Rs 4,400 crore in extra-interest free loan, hike import duty to 40 per cent from 15 per cent, extend support subsidy of Rs 3,300 per tonne till September and raise mandatory ethanol blending with petrol to 10 per cent from the existing 5 per cent. The Centre's decision was to protect farmers by ensuring they get payments for the sugarcane sold to factories.

The decision of the Centre to allow export subsidy on sugar till September end only, has, in turn, left the industry in the lurch as prices of the commodity are expected to plummet during the Diwali festival. The Union food minister’s decision is not clear as he has not stated whether the export subsidy will continue after September or not.

Interestingly, the former union agriculture minister Sharad Pawar (in the UPA-II regime) had stipulated the time limit for export subsidy till September 2015. It had also been decided that the subsidy would be reviewed in lieu of the international market rate of sugar and the value of the dollar. By contrast, the high-level committee under the present union food minister Ramvilas Paswan has ignored the formula to calculate the subsidy amount.

Paswan on his parts, attributed the recent spurt in price of essential commodities mostly to speculation, hoarding and creation of a fear psychosis due to low rains.

While the Narendra Modi government promises steps against speculators, black marketers and hoarders, there is no doubt whatsoever that the weakest start to India’s monsoon season in at least five years is delaying planting of crops, threatening to push up food prices in India. According to the latest estimate on the of the India Meteorological Department (IMD) rainfall is 38 per cent below a 50-year average since June 1, the least since 2009. According IMD, the monsoon, stalled over India’s western and central regions since June 15, may not progress further before the beginning of July.

With more than 80 per cent of India getting limited rain, delayed sowing may lead to a decline in crop areas and yield. IMD however given some hopes that rainfall is likely to improve substantially in July and August, though the monsoon has been delayed. While stating the monsoon was expected to improve after July 7, agriculture minister Radha Mohan Singh said that the government was fully prepared to handle the situation in case of poor rainfall.

Source:- mydigitalfc.com

Steel Makers Want Solid Support To Break Shackles Of Slowdown

Industry seeks conducive policy, input security, faster green clearances, infra status Indian steel industry is seeing tumultuous times since the past few years due to slowdown in key steel consuming sectors including construction and automobile.

Iron ore mining ban in various states and long delays in several greenfield projects due to slow regulatory and environmental clearances have compounded the woes.

The previous UPA government had set up a target of achieving 300 million tonne (mt) of step production capacity by 2025. Most industry players believe that in order to achieve this target, there is an immediate need for a conducive policy regime, easy access to funds, raw material linkages and faster clearances for greenfield projects.

Steel is one of the sectors that has been on the radar of Narendra Modi even before he became PM. His criticism of iron ore exports and steel imports had instilled hope in the battered sector for better times. The industry mainly wants finance minister Arun Jaitley to ensure raw material security for the sector and complete removal of the current 2.5% import duty on iron ore.

There has been severe ore shortage in the country after the Supreme Court-appointed Shah panel revealed rampant illegal mining in Karnataka, Odisha and Goa, leading to a mining ban in these three states.

"Duties on import of all raw materials should be made nil, so as to benefit end-user industries." Dilip Oommen, managing director and chief executive officer of Essar Steel, said.

Ashima Tyagi, researcher at Infraline Research, believes that the government should prioritise allotment of resources, especially iron ore. "An iron ore utilisation policy at the central level – on the lines of the gas policy – will go a long way," she said.

Industry also expects that export duty of 30% on iron ore lumps and fines would be maintained. Associated Chambers of Commerce and Industry of India (Assocham) has even requested the commerce ministry to impose 30% duty on iron ore pellet exports, arguing that such exports are draining India's mineral wealth.

However, most industry participants dna spoke to vehemently opposed this move."The existing 5% export duty for pellets itself is not justified as it involves value-addition. The country currently has nearly 62 mt of pellet capacity and only 30 mt is operating. It is a myth that steel industry is demanding such increase in export duty of pellets," Oommen said.

Worried over growing imports from Japan and Korea with whom India has free trade agreements (FTAs), industry members demanded that steel products should come under negative list so as to protect the interest of local firms.

"While iron ore prices are increasing domestically, they are going down globally. With FTAs imports coming at much faster rate, this is not a level-playing field. The government needs to revisit FTA scheme. For Japan and Korea, interest costs are much cheaper and their raw material cost is also going down," Oommen said.

Easier access to finance is another immediate requirement of the sector."From the industry point of view, the entire industrial sector should be provided proper loans by Indian banks and govt itself which would stop them from going abroad in search of cheaper and heavier loans," Prakash Duvvuri, head of research at Ore Team, said. Instead of incentivising the products or services, the loans structure should be eased to fit into the pockets of the industrialists, he said.

"Steel is a capital-intensive business. So we propose the government to set up financial institution on the lines of Power Finance Corp that will provide fund for steel projects at lower interest rates and for longer tenures," Oommen said.

Land acquisition and environmental clearances has been a key impediment for steel manufacturers for almost a decade now.

"Environmental clearance must be given in time-bound manner, and there needs to be enough justification for any denial," RK Goyal, managing director of Kalyani Steels, said. Concurring with him, Oommen said there was an immediate need for streamlining project approvals.

"Single window clearance can be implemented for time-bound clearance of files," he said.One of the best ways to improve steel demand in the country which is currently way behind global standards of per capita consumption is to push infrastructure growth in the country. Fast tracking the processing of big projects like high-speed railway, freight corridor, new cities and towns, rural development, etc could go long way in fueling steel demand.

Goyal said the government could promote low-cost housing projects through budget, which would not only aim at homeless people but would also spur domestic steel consumption."The sector needs to be given an infrastructure sector status as it is a key for faster development of the nation," Oommen said.

Apart from this, steel exports need to be encouraged especially while global demand is slowly picking up. "The government can give focused market and product benefit. Today only 2% of exports are through focused exports. The government can provide duty drawback for specific products like flat products to enhance market for focused products," Oommen said.GST implementation, zero-import duty for plant and machinery are some of the key demands of steel.

Source:- dnaindia.com

Sec. 10(23AAA): Only income from investment is taxable and not whole investment made in violation of

IT: Where Employees Welfare Fund was approved by Commissioner, only income portion from investment made in violation of section 11(5) and not whole of investment, would be liable to tax

Cotton Textile Industry Has Potential To Invest Upto Rs 4,000 Crore

The cotton textile industry has a potential to invest up to Rs 4,000 crore leading to generation of 50,000 new jobs if the government accepts the sector's demands in the forthcoming Budget, a top industry official has said.

"We have urged the government that Technology Upgradation Fund Scheme (TUFS) should be extended during the blackout period from June 29, 2010 to April 27, 2011, when the scheme was suspended to all cases which have been left out for no fault of the industry," Cotton Textiles Export Promotion Council of India (Texprocil) Deputy Chairman R K Dalmia told PTI here.

Dalmia urged Textile Minister Santosh Kumar Gangwar to restore the benefit as investments made during the 18 month gap are eligible investments before and after extension of the TUFS.

Should the Rs 1,000 crore of TUFS money surrendered is given back to the textile industry, we can assure that it would help the industry invest up to Rs 4,000 crore and kickstart the process of capacity creation leading to creation of 50,000 new jobs, he said.

Texprocil, a government constituted body, is seeking duty cut on textile machinery and extending interest rate subvention of three per cent on rupee export credit to cotton textile exports to mitigate high cost of export finance.

"We would have performed even better but for certain impediments we face on account of high tariffs imposed by some countries and discriminatory Free Trade Agreements (FTA's) signed by others," Texprocil Executive Director Siddhartha Rajagopal said.

Source:- economictimes.indiatimes.com

India Raises Minimum Price For Potato Exports

The Indian government has set a minimum export price (MEP) on potato exports in a bid to secure supplies to the domestic market and contain inflation.

On Thursday, the Ministry of Commerce and Industry announced a change in policy for export of the tuber, setting an MEP of US$450 per metric ton (MT).

Click here to see the notification from Director General of Foreign Trade, Pravir Kumar.

This comes at a time when the cost of essential food staples like potatoes and onions have been steadily rising in Indian states.

Price have reportedly risen by INR22-30 (US$0.37-0.50) per kg (2.2lbs) across several states and in the nation’s capital.

Key potato producing states include Uttar Pradesh, West Bengal, Punjab and Uttaranchal, and India mainly exports to the overseas markets of Nepal, Russia, Kuwait, Mauritius and Sri Lanka.

Earlier this year, export restrictions were lifted on onions following complaints from growers, however, on June 17 the government set another MEP of US$300 on the bulbous vegetable.

Source:- freshfruitportal.com

Japan, S Korea, India, China And Singapore Major Export Markets For Qatar

Japan, South Korea, India, China and Singapore are the major export markets for Qatar with exports to these five Asian countries totalling QR27.9bn as of May, new data show.

Japan accounted for QR9.28bn of Qatari exports while South Korea received QR7.28bn worth Qatari produce as of last month, according to the Ministry of Development Planning & Statistics (MDP&S).

Qatari exports to India accounted for QR5.67bn, China QR3.04bn and Singapore QR2.64bn.

All these countries import significant volumes of Qatar’s hydrocarbon products.

The top five import markets for Qatar are China (QR0.91bn), US (QR0.87bn), UAE (QR0.77bn), Germany (0.65bn) and UK (QR0.43bn).

Qatar’s three major export commodities are petroleum gases and other gaseous hydrocarbons, petroleum oil and oil obtained from bituminous minerals (crude as well as non-crude).

Major import commodities include motor cars and other motor vehicles, iron ores and concentrates and aircraft spare parts.

A recent Qatar Consumer Confidence Index (CCI) released by the Ministry of Development Planning & Statistics showed Qatar’s economic development that supports private sector in development projects, consequent job opportunities and better income and allowances, led the country reporting higher consumer confidence in the first quarter of this year.

The report showed that 46.7% of households felt that their financial situation improved over the past 12 months compared to 47.4% in December 2013 survey results.

Also 45.7% of households felt their financial situation was the same as 12 months before compared to 37.8% in December 2013.

Qatar is expected to have “solid” economic growth in 2014 and 2015, driven by the non-hydrocarbon sector owing to accelerated investment spending and population growth, the Ministry of Development Planning and Statistics (MDP&S) said in another report.

The country’s real GDP (adjusted for inflation) is slated to grow 6.3% this year from 6.5% in 2013, and 7.8% in 2015, said the Qatar Economic Outlook (QEO) 2014-15, which was released yesterday by MDP&S.The outlook for 2014–2015 is generally favourable, but subject to low-probability, high-impact downside risks, according to QEO.

Source:- gulf-times.com

Govt May Cut 2% Import Duty On Gold In Budget: Bank Of America Merrill Lynch

The union government is expected to cut two per cent import duty in gold in the forthcoming budget, as local jewellers run out of inventory, a leading US brokerage said.



"We expect a two per cent cut in gold import duty. In our view, the government will, sooner than later, have to withdraw gold import restrictions as local jewellers run out of inventory. The impending drought may also moderate gold import demand," Bank of America Merrill Lynch said in its report.



We expect the current account deficit to widen to 2.6 per cent of GDP in FY15 from 1.7 per cent in FY14 especially as latent demand could lead to a spike in gold import demand, it said.



The March quarter current account deficit came in at $1.3 billion. The net gold imports will increase to $40 billion or 2 per cent of GDP in FY15 from $28.8 billion or 1.5 per cent this past fiscal year. On our part, we never took the shrinkage in the current account deficit from 4.7 per cent of GDP that seriously as it was achieved by these unsustainable curbs in gold imports.



BoAML also expect the RBI to recoup forex at Rs 58/USD levels. After all, Iraq has demonstrated how quickly sentiment can change in the forex market, when import cover is an inadequate eight months.



While advising its clients, the brokerage said its oil strategists expect oil prices to sustain $110+/bbl for now.



This assumes that the ISIS is contained in northern Iraq. It could shoot up to $140/bbl if fighting spills over to the oil fields of the South. Note that $10/bbl rise impacts the current account deficit by 0.4 per cent of GDP, it said.



BoAML also expects some relaxation within the overall $30 billion limit for gilts.



The RBI needs to raise forex reserves to stabilise Indian rupee expectations. At the same time, sovereign wealth funds have not used up their on-tap $10bn limit.

Source:- businesstoday.intoday.in

India Seeks Easier Norms For Entry Of Its Goods In China

Before grabbing China's offer to invest in and help develop India's infrastructure, the Narendra Modi-led government wants to ensure easier norms in return for India to export IT, pharmaceuticals, farm goods, and health and tourism services so that the trade imbalance between the two countries gets reduced.



In response to the five-year trade and economic planning cooperation plan that China submitted to India in February, the new government at the Centre has proposed to raise the country's exports to $95 billion over the next five years from $15 billion at present.



"India-China trade in the next five years must stand at $200 billion, comprising $105 billion worth of imports and $95 billion exports," a government official familiar with the development told ET. China is now India's biggest trading partner but the trade balance is heavily skewed in China's favour.



India has said the trade deficit must be cut to one-fourth, targeting $10 billion by 2020 from close to $36 billion at present. "The only way to cut trade deficit is by asking China to invest in manufacturing activity. Rather than importing, China can manufacture machinery, heavy duty power equipment etc in SEZs (special economic zones), NIMZs (national investment and manufacturing zones) or industrial parks," said the official, who did not wish to be identified.

India seeks easier norms for entry of its goods in China



The Cabinet has already cleared signing of a memorandum of understanding with China for setting up industrial parks in India. The five-year trade and economic planning road map prepared by India after several rounds of interministerial consultations has noted that information technology sector can be a win-win for both economies if China eases its licensing norms to allow participation of Indian companies in local projects.



Pharmaceutical companies, which rank among India's potential strengths in bilateral trade, face registration hurdles in China, where it takes three-five years for registration compared with just three-six months in India.India has also asked China to allow export of buffalo meat to the country.



China had proposed in its five-year plan to enter critical areas including telecom, railways, roads, and nuclear and solar power for investment in India. While China was silent on narrowing the trade deficit, it noted that the gap was on account of the very nature of the two economies, China's being manufacturing-led and India's services-led.



China, which has accumulated over $4 trillion of forex reserves, plans to invest $500 billion overseas in the coming years, it announced in March.



"There is no need to fear investment from China. It just needs to be leveraged well. We need investment in building our roads, railways, manufacturing. Barring the sensitive areas, flow of funds should not be discouraged from China," the official cited earlier said.



Although India has said that it will welcome investment from China in sectors like roads, effluent treatment and railways, the matter is yet to be examined by the ministries of defence and home affairs. China is keen on railways, particularly electrification, high-speed trains, wagons, last-mile connectivity and gauge conversion.



It has also identified sewage treatment and tunnel building among areas where it can offer substantial expertise. China has invested about $0.4 billion in India in the past 14 years, contributing just 0.18% to the overall foreign direct investment in the country.

Source:- economictimes.indiatimes.com

Rupee Up 7 Paise Against Dollar In Early Trade

The rupee strengthened by seven paise to 60.01 against the American currency in early trade today at the Interbank Foreign Exchange market on selling of dollars by exporters and banks.



A higher opening in the domestic equity market and a weak dollar against other currencies overseas on a string of disappointing US data last week also supported the gain in the rupee, forex dealers said.



The rupee had closed six paise higher at 60.08 against the dollar in Friday's trade on fresh selling of the US currency by exporters amid moderate gains in stock markets.



Meanwhile, the benchmark BSE Sensex rose 141.73 points, or 0.56 per cent, to 25,241.65 in early trade today.

Source:- timesofindia.indiatimes.com

Telephone Services availed at corporate office are also eligible for credit

Cenvat Credit : Transportation of executives/employees from residence to corporate office and back is eligible for input service credit

Failure to apply for final decree within 3 years of interim decree would bar banks to recover overdu

CL : Where respondent bank having obtained preliminary decree for recovery of loan amount against petitioner, did not apply for final degree within prescribed period of three years as mentioned in Article 137 of Limitation Act, 1963, there remained no enforceable decree in existence for which any application under section 31A of Recovery of Debts Due to Bank and Financial Institution Act, 1993, could have been filed

ITAT fixes ALP of oil considering Malaysian Oil Board’s rate on date of contract instead of date of

IT/ILT : Where in transfer pricing proceedings, TPO made addition to assessee's ALP in respect of import of crude palm oil by adopting Malaysian Palm Oil Board (MPOB) rate prevailing on invoice date, in view of fact that for all purposes of execution and cancellation, MPOB rates specified on date of contract were applied, which was in accordance with prevalent practice of trade impugned addition deserved to be set aside