Stevedores At Major Ports Face Fee Regulation

The Union Government is evaluating a policy option to regulate the rates being charged by stevedores and other cargo handling agencies at major ports.

The move follows the recent controversies over the alleged irregularities in appointing stevedores at Kolkata port.The Ministry of Shipping has reportedly sought an explanation from the port authorities on the allegations of high rates being charged by cargo handling agencies.

Stevedoring charges are fees paid for loading and unloading ships and there are firms that specialise in this service.The Ministry has now constituted a committee headed by Paul Antony, Chairman of Indian Ports Association, to study the issue in detail and to suggest whether the private cargo handling agencies at ports can be regulated.

One of the options is said to be to auction stevedoring services on the basis of a revenue sharing arrangement with the port. Like in the case of public private partnership projects in ports, the parties offering the highest revenue share will get the contract to offer cargo handling services.

The committee is required to submit its report in two weeks and, based on its recommendations, the government is expected to come out with a policy on engaging the service of private stevedores at all the major ports, said a government official.

Currently, the government ports appoint stevedores after accepting a licence fee approved by its board of trustees.

There is no limit on the number of stevedores a port can appoint. Stevedores and other cargo handling agencies are free to charge any rates for the service they render.

Following allegations of revenue loss to ports on account of private stevedoring, the UPA Government had appointed a committee headed by the Development Advisor on Ports to Shipping Ministry to study the issues.

That committee had recommended against the appointment of stevedores on the basis of revenue share as, it felt, such an arrangement will increase the transaction cost at ports.

The committee was also said to be against regulation of the rates charged by cargo handling agencies as there is enough competition among them and that forces market to determine the rates.

Though the Tariff Authority for Major Ports (TAMP) regulates port charges at government ports, stevedoring and cargo handling services on board ships were left unregulated.

Stevedores are hired by shippers and historically these services are not regulated by ports.The government is weighing the option of regulating stevedores at a time when there is a demand to abolish even TAMP and de-regulate port charges at the government ports, said an official with a stevedoring firm.

Source:- thehindubusinessline.com

Deductions allowable under one provision can’t be withdrawn unless other overriding provision is ove

IT : Once deduction is allowable under specific section, which is on an altogether different footing, same cannot be withdrawn by any other section unless conditions mentioned under any overriding section have been infringed

India Needs Export-Oriented Fdi

In his address to the joint session of Parliament, President emphasised three distinct but closely related economic policy thrusts — FDI, jobs and manufacturing.

The talk of encouraging investments, including by foreign investors and boosting labour-intensive manufacturing, is not new. Arvind Panagriya and others have attributed India’s poor show in manufacturing to the lack of suitable policy to make use of its abundant unskilled labour force.

Deploying the country’s labour force should not amount to subjecting them to exploitation or curtailing the democratic rights of workers; well-intentioned but archaic labour laws have, however, had a contrary effect.

The problem is one of means and ends. Current labour laws require firms to obtain government permission to sack employees, even if they are unproductive, and this law applies to all manufacturing firms of a decent scale.

Besides, firms find it difficult to exit in the face of financial loss, unprofitability or any other good reason to shut shop. These restrictive clauses discourage firms to invest in Indian manufacturing.

The way out is to reform labour laws and solicit export-oriented FDI (EFDI) in Indian manufacturing. For sufficient jobs to be created for the teeming mass of low-skilled workers, India needs to become a good place to manufacture and export. It has to become a hub for global export of manufactures, and not just domestic consumption.

EFDI has the potential to transport India to the industrial economy league: a stage which it allegedly jumped — wrongly, as we now realise — to become a post-industrial service-based economy.

In India, foreign affiliates accounted for only 5 per cent of total exports in 2001, when in China foreign invested enterprises made up 50 per cent of total exports. In fact, in China, export obligation is mandatory for foreign investors, whereas it is not so in India.

It is important that export obligation for FDI is introduced in India to enhance exports. EFDI also responds to quality physical infrastructure — and this is where we need to do some serious work. In infrastructure, massive state investments with help from private sector partners can rescue us from the present sorry state.

Given that uninterrupted power and seamless transport infrastructure are two crucial demands of the manufacturing sector, it is a good sign that energy and infrastructure form the core of the new cabinet’s economic policy focus.

Once infrastructure is in place, the trade and transactions costs will automatically reduce, giving a further boost to manufacturing and exports.

In terms of labour cost, India is not at a disadvantage relative to China or East Asia. India’s wage levels are more or less at par with these economies. India has among the best stock of raw material in the world, notably in coal and iron ore, and an abundance of workers. Hence, as far as factor endowments are concerned, India has everything that should form the bedrock of a thriving manufacturing sector.

The problems, however, have cropped up in the form of shoddy infrastructure and policymaking. The Government should focus on labour intensive manufacturing for the vast swathe of low to medium skilled populace, and simultaneously undertake a national skills mission, boost R&D spending and infuse greater quality into education at all levels.

The need of the hour is a synchronisation of India’s export and FDI policies. This can be achieved by increasing FDI in export oriented sectors such as gems and jewellery, light engineering goods, textiles and so on.

As of now FDI in India is concentrated in telecom, infrastructure and financial services. Eventually rising exports, on the back of growing EFDI, will help India address its troubling trade deficit, just as China has done.

Source:- thehindubusinessline.com

Farmers Seek Level Playing Field

Frequent and sizeable imports of cheaper vegetables from India hurt Pakistani farmers while the idea behind imports is to ensure the availability of vegetables at affordable prices for urban consumers.Critics argue that the strategy for import/export is demand-driven when the interests of both growers and urban consumers need to be protected.

Owing to heavy subsidy for farmers in India, Pakistani growers say they simply can’t compete with Indian produce, if their hands remain tied. They argue that in absence of the government subsidy and support, they cannot make inroads into Indian markets.

“Besides receiving commodities, we need to seriously consider what we can send to India. It’s acceptable that the market should be free and consumers should be facilitated too, but does that mean that one competitor has all government assistance whereas other is left high and dry. Take the case of garlic. We are dependent on Chinese garlic nowadays as local production has gone down since we started buying it from China given its cheap price”, says Mahmood Nawaz Shah, vice president Sindh Abadgar Board (SAB). He fears this way Pakistani market will become dependent on imports and local production would continue to suffer.

The government fixes indicative prices of two crops — wheat and sugarcane — every year although farmers demand that minimum prices of rice and cotton should be set too. Owing to a weak regulatory mechanism, farmers complain that they usually don’t even get the subsidised farm inputs.

“We lack an overall strategy to tackle issue of import or exports of goods as we always pursue demand-driven strategy alone”, argues Iffat Ara of Social Policy and Development Centre. She says the two governments of India and Pakistan need to mutually decide as to when import or export of agricultural commodities is to be allowed to protect interests of farmers as well as consumers.

Comparative study of input costs, which was recently presented to Economic Co-ordination Committee (ECC) of Cabinet, reveals that Indian farm inputs are much cheaper as compared to Pakistan. Per bag price of Indian urea (in Pakistani rupee) is Rs459-510 against Rs1,790 in Pakistan. Average DAP price in Pakistani rupee ranges between Rs1,931 to Rs2,125 in India while local price here is Rs3,580. Price of diesel in Pakistan is 24pc higher compared to prevailing price in

India while electricity is either completely subsidised for agriculture sector in India or a nominal amount per unit is charged from farmers.

Iffat points out that there is support price for wheat in Pakistan but no government policy is there for vegetables. “Everything can’t be left to market forces and the government’s intervention is a must to have a check on prices”, she argues.Besides, the government does not go beyond announcement of support price to see whether it reaches farmers or is pocketed by other market forces. She says government should monitor when prices of onion or potato increases and the status of local crop’s arrival in the market at that point of time.

Economists like Dr Kaiser Bengali believe that it’s the absence of an economic policy that creates chaos in the market with small farmers crying hoarse against price distortion. “We see long queues of vehicles on Wagah border carrying commodities which shows the quantum of goods actually entering our markets regardless of their rates”, he says. He points out that the WTO allows levy of countervailing duty if it is proved that a certain item has some sort of hidden subsidy. “Consumers are concerned about cheaper prices regardless of economic suffering of small farmers and losses to domestic market which can also compromise local productions”, he remarks.

Some farmers believe the government may not increase support price of wheat in the next year to ensure the availability of flour to urban consumers at affordable price. But it needs to ensure stability in farm inputs prices.

Source:- dawn.com

AO can only scrutinize statement of garnishee under sec. 226 without examining nature or existence o

IT : In terms of section 226(3)(vi), power of Assessing Officer/TPO does not extend to adjudicating upon nature of existence of liability, however, if there is facial invalidity or falsity in assertion of garnishee as to absence of its liability to assessee, there is no preclusion of Assessing Officer's authority to scrutinize said statement to find out whether it is false and take proceeding to another direction, if it is false

Food Grains Imports Surge To Two-Year High

Food grains imports touched a two-year high in fiscal 2013-14 on the back of low prices of rice and wheat.Grains imports accelerated 62 percent year-on-year to 30.64 lakh tonnes, according to data from the food ministry. Bangladesh imported 3.74 lakh tonnes of rice last fiscal year-13 times higher than a year ago. Wheat imports rose 44 percent year-on-year to 26.89 lakh tonnes.

Cereal imports by the government doubled to 9.27 tonnes in the same period, accounting for 30 percent of total overseas purchases. The government imports are mainly used for open markets sales to the low-income groups.

The country requires nearly 40 lakh tonnes of wheat to meet its annual demand, which is growing by the year for the rise in population, health consciousness and industrial use. Of the amount, 12 lakh tonnes of wheat are grown locally and the rest is imported.

Abul Bashar Chowdhury, chairman of BSM Group, a Chittagong-based importer, said the relatively lower price of wheat flour than rice in the domestic market encouraged importers.

Over the past one year, prices of wheat flour hovered below the prices of coarse rice, enabling private sector to register better demands. The low price of the grain in international market was another reason.

Chowdhury expects the low wheat prices to persist in the global market during the course of the fiscal year and the imports to rise by 5-10 percent.

The spiral in imports though will depend on domestic rice production and the overall political atmosphere, he added. If rice production does not increase and the political situation remains stable, wheat imports will rise. Meanwhile, public sector imports also surged last year to 9.27 lakh tonnes, an increase of 97 percent year-on-year. Wheat accounted for 99 percent of it, according to official data.

For the current fiscal year, the government plans to buy 12.10 lakh tonnes of cereal including 9 lakh tonnes of wheat and 2 lakh tonnes of rice.

Source:- thedailystar.net

Stainless Steel Body For Duty Hike To Check China Imports

Stating that the share of Chinese stainless steel products has touched about 30 per cent in the Indian market, the Indian Stainless Steel Development Association (ISSDA) has demanded doubling the import duty on these to 10 per cent in the upcoming budget to safeguard interests of the domestic industry.



In a statement, the stainless steel body said Chinese producers were enjoying advantages like low power tariff and various forms of direct and indirect support provided by the Chinese government.



These were being dumped in India at the cost of domestic industry, it said, adding that the share of Chinese flat stainless steel products into the country had risen to 30 per cent.



"The basic customs duty on import of Stainless Steel Flat Products in China is 10 per cent as opposed to 5 per cent duty in India, while it is 14 per cent in Brazil," it said.



"Also, the import duties on raw materials like scrap, nickel and Ferro nickel is virtually nil in China as compared to 2.5 per cent in India," the statement said, adding that this gives the Chinese mills far higher levels of protection as compared to Indian manufacturers.



It further said the problem of trade imbalance is especially pronounced in the industry where China now accounts for almost 50 per cent of total stainless steel global production in the world.



India, on its part, witnessed a huge surge in its imports to 3,07,266 tonnes in 2013-14 from 1,78,611 tonnes in 2009-10, the industry body said.



On the contrary, Indian companies have made a huge investment of over Rs. 25,000 crore in the last few years and are reporting losses and that this may result in NPA due to the high import of stainless steel from China.



For April 2014, stainless steel exports data indicate an increase of 22 per cent during April to 3.9 lakh tonnes.



"Although India is the world's second-largest consumer and third-largest producer of stainless steel, the nation's average per capita consumption of stainless steel is only about 2 kilos, whereas the global average is 5 kilos," ISSDA president NC Mathur said.



"To address these challenges and meet development goals, an import duty hike is really needed to create a level-playing field for domestic steel producers because China uses dumping and other unfair trade practices to enter foreign markets," he said.



"It would also be in the national interest to abolish customs duty on the key raw materials so that Indian steel producers remain globally competitive and meet the challenge of cheaper Chinese products head on."

Source:- profit.ndtv.com

Govt Lifts Quantitative Ceiling On Organic Sugar Exports

In a move expected to help the cash-starved industry, the government has removed the quantitative ceiling on exports of organic sugar.Earlier, the government had kept a ceiling of 10,000 tonnes on organic sugar exports.

"The quantity ceiling for export of organic sugar has been removed till the time export of sugar is permitted freely," Directorate General of Foreign Trade (DGFT) said in a notification.

However, it said the export of organic sugar would be permitted subject to registration of quantity with DGFT and certification by Agricultural and Processed Food Products Export Development Authority (APEDA).

In a public notice, the DGFT has also permitted export of 8,100 tonnes of raw sugar to the US under tariff rate quota (TRQ) by Indian Sugar Exim Corporation Ltd.

The TRQ is a quota for a volume of exports that enter the US at relatively low tariffs. After the quota is reached, a higher tariff is applied on additional imports from India.

Sugar production of India, the world's second largest sugar producer and biggest consumer, is expected to be at 23.8 million tonnes in 2013-14, as against 25.1 million tonnes last year.

Last month, the Centre had decided to provide additional interest-free loan of up to Rs 4,400 crore to cash-starved sugar industry for paying cane arrears.

The sugar industry has been facing a cash crunch due to higher cost of production and lower selling prices in the wake of surplus output over the past few years.

Currently, sugarcane arrears stand at about Rs 11,000 crore across the country, with the maximum of Rs 7,200 crore in Uttar Pradesh.

Mills are facing a cash crunch as domestic prices have slipped below the cost of production, hurting their profits.

Source:- articles.economictime.indiatime

Mere deputation of employees by ITC to hotels owned by affiliates on reimbursement basis wasn’t manp

Service Tax : Where assessee, engaged in hotel business, sent its employees on deputation to hotels owned by its subsidiaries/associates against reimbursement of actual costs, assessee could neither be regarded as 'supplying manpower' nor a manpower supply agency and was, prima facie, not liable to service tax

SC: Fine which exceeds twice amount of dishonoured cheque violates section 138 of Negotiable Instru

Banking Laws : Imposition of fine exceeding double amount of dishonoured cheque would be violative of section 138 of NI Act

Filing of revised return in anticipation of proposed adjustment by TPO won’t escape penalty

IT/ILT : Where subsequent to reference made by Assessing Officer to TPO for determination of ALP relating to transaction of reimbursement of expenses incurred in respect of services availed from AE, assessee filed a revised return making disallowance of entire marketing expenses, since said revision was made in anticipation of proposed adjustment, it could not be regarded as voluntary and bona fide and, thus, authorities below rightly passed penalty order under section 271(1)(c) on basis