CA Terminal: 08/13/14

Wednesday 13 August 2014

HC sets aside third SCN issued for same period and on same issue as assessee had already furnished a

Service Tax : Where assessee had furnished all relevant details at time of first and second notice, but, no order was passed thereon, issuance of third notice for very same period on very same issue/materials is invalid, as there was no new material with Department to believe that service tax had been under-assessed

Museum for Indian Arts shall get continued recognition as Trust, as long as it satisfies conditions

IT : A museum is entitled for approval under section 80G(5)

Wrongly distributed credit to be recovered from person who utilised it and not from ‘Input Service D

Cenvat Credit : Demand for recovery of wrongly distributed Cenvat credit cannot be raised against Input Service Distributor under Rule 14; if Cenvat credit is wrongly availed and utilised, same should be recovered from manufacturer or provider of output services to whom such credit is distributed

CLB adjourned oppression proceedings sine die as matter as regards title of shares was pending befor

CL: Until rights with regard to title of shares was adjudicated and finally decided by civil Court, proceedings under CLB are to be adjourned sine die

TP adjustments on basis of comparables with divergent operations and related party transactions aren

IT/ILT: Where TPO made adjustment to assessee's ALP in respect of providing software development services to its AE, in view of fact that some of comparables selected by TPO were improper on account of functional difference, brand value, turnover, related party transactions etc., impugned adjustment was to be set aside and, matter was to be remanded back for disposal afresh

Delhi And Western Up In Gi Region Recognised By Apeda For Basmati Rice

The Agriculture and Processed Food Export Development Authority (APEDA) has identified Delhi, Western Uttar Pradesh, two districts of Jammu and Kashmir (namely Jammu and Kathua) and four other states (Punjab, Haryana, Himachal Pradesh and Uttarakhand) as having geographical indication (GI) to cultivate basmati rice.

“Only the basmati rice produced in these GI states would be recognised as basmati rice, while basmati rice produced in other states not be considered as basmati rice, as APEDA does not consider areas other than those with the GI status as basmati rice producers,” said A K Gupta, advisor, cereals, APEDA.

In a reply a question in the Rajya Sabha, Nirmala Sitharaman, minister of state for commerce and industries (independent charge), stated that the aforementioned states were recognised by the National Agricultural Research System under the agriculture and co-operatives ministry.

“APEDA has included the northern states in the application it submitted to GI Registry in Chennai for the registration of basmati rice as a product with Geographical Indication (GI),” she added.

Following APEDA’s application, GI Registry passed a common order on December 31, 2013, directing the authority to file an amended GI application, including all uncovered areas where basmati rice is cultivated. These include Madhya Pradesh, Rajasthan and Bihar.

“In view of the legal advice and review of the matter on the far-reaching consequences of implementing the order, APEDA has filed an appeal before the Intellectual Property Appellate Board in February 2014,” Sitharaman added. Following this it was decided that only the traditional GI areas for basmati rice cultivation would be given the nod.

Source;- fnbnews.com

India Eyes Higher Share Of Vietnamese Textile Imports

The Indian textile industry is seeking to increase its exports of raw cotton and cotton textile products to the Vietnamese apparel industry in the next five years.

A TEXPROCIL-led trade delegation from India, which is the second biggest textiles producer in the world, was in Vietnam recently, which incidentally is the fifth largest global apparel exporter to explore ways and means to increase its exports of raw cotton and cotton textiles.

A trade exchange between representatives of the textile and apparel industry in India and Vietnam was held in HCM City last week.

Chairman of TEXPROCIL, Mr Manikam Ramaswami said, India’s exports of raw cotton accounted for less than 2 percent of Vietnamese cotton imports, despite the country importing a majority of its consumption of the raw material.

On the other hand, share of India in Vietnam’s huge volume of cotton yarn and cotton fabric imports stood at 16.5 percent and 0.58 percent, respectively. This segment too presented a huge opportunity for substantial growth, Mr Ramaswami observed.

Mr Ramaswami noted that Vietnam has a high demand for textile raw material imports while India offers these materials at highly competitive prices globally.

This leaves a big scope for bilateral cooperation between the two countries and India hoped to become a long term partner for Vietnamese apparel industry, by increasing cooperation between the textile sectors of the two countries, Vietnamese businessmen were told.

Deputy Director of the Vietnam trade promotion agency (VIETRADE) Bui Thanh An said that Vietnam in recent years has signed several trade agreements with India, which has facilitated increased cooperation with India businesses.

This exchange will serve as a bridge connecting Indian and Vietnamese businessmen to strengthen cooperation, An said.

Earlier on June 2, 2014, fibre2fashion had reported that the Indian Ambassador in Vietnam - Preeti Saran had proposed enhanced cooperation in the textile sector with Vietnam, during a meeting with Vuong Dinh Hue, Head of the Central Economic Committee.

Source:- fibre2fashion.com

Hyundai India Car Exports To Decline By 25%

Hyundai, which is the country’s largest car exporter, accounting for 45% of total shipments has immediately stopped exports of the i10 and i20 (old) to Europe.

Last year, Hyundai exports totalled 2.5 lakh units while this year’s exports are down to 1.9 lakhs resulting in a 24% decline. The Korean automaker has discontinued small car exports from the country and, will instead, rely on factories in Turkey and the Czech Republic to step in and fill the gap.

Following this immediate decision taken to stop exports to European countries, Hyundai Motors will continue with exports to countries in Latin America, Middle East, Australia and Asia besides the domestic market. Even then, the company is expected to see a decline of 25% in exports this year.

Europe has been a major market for Hyundai Motors which is also the largest exporter of cars in India. The company’s Chennai plant has the capacity of 6.8 lakh units annually out of which 40% is exported. With four new launches this year, Hyundai Motors plans to augment capacities at their Chennai plant while the Elite i20 which was recently launched being simultaneously produced in Turkey to take care of sales across Europe.

Higher wages and increased logistics have had an adverse effect on manufacturing costs while the company has also sought a rail link from Chennai plant to the port which has also not seen the light of day.These constraints coupled with strained labour relations have also taken its toll on plant performance disrupting production which has also prompted the company to move exports to other locations.

Source:- rushlane.com

India's July Palm Oil Imports Up A Tenth As Local Supplies Lag

India's palm oil imports rose by a tenth to 657,750 tonnes in July from a month earlier, data from a leading trade body showed, as buyers boosted shipments to meet a big gap in local supplies amid poor monsoon rains.

Palm oil imports by the world's top vegetable oil buyer are expected to stay firm in the next couple of months due to a drop in local cooking oil supplies on expectation of a lower harvest of summer sown oilseed crops including soybean, traders said.

India mainly buys palm oil from top producers Indonesia and Malaysia, and a small quantity of crude soft oils, including soyoil from Latin America and sunflower oil from Ukraine and Russia.

Half of India's annual demand of 17-18 million tonnes of cooking oil is met through palm oil imports, while it buys about 1 million tonne each of crude soy and sunflower oil.

India's total vegetable oil imports rose 25.6 percent from a month ago to 1.1 million tonnes in July, data from the Solvent Extractors' Association of India (SEA) showed on Wednesday.

Vegetable oil imports in July hit the highest level for the current marketing year (November-October) as the country's soyoil shipments touched a record 306,068 tonnes, a three-fold surge from the previous month.

Imports of soyoil hit the highest level in any single month since 1994 when India allowed unrestricted imports of the cooking oils, the trade body said in a statement.

Expectations of a lower soybean harvest due to this year's poor start of the June-September monsoon season led importers to contract higher quantities of soyoil, traders said.

Soybean, India's main summer oilseed crop, is planted with the spread of the monsoon over the main growing areas of central region.

This year, India's soybean areas received scant rainfall during the main planting month of July, causing lower coverage under the main summer oilseed crop.

But a late revival of the monsoon improved the soybean area from early August, and scaled down the initial expectation of a poor harvest later this year.

The monthly palm oil imports also hit this year's highest level, reflecting poor domestic supplies of cooking oils ahead of the festival season that starts from August.

Source:- in.reuters.com

India Gold Imports Seen Dropping As Rajan Protects Rupee

Gold imports by India, the world’s biggest consumer after China, will probably decline for a third year as the government keeps curbs on shipments to prevent the current-account deficit from widening and to support the rupee.

Foreign purchases may drop 15 percent to 700 metric tons in 2014, according to the median of estimates from nine analysts and jewelers including Gitanjali Gems Ltd. (GITG) and Rajesh Exports Ltd. (RJEX) compiled by Bloomberg. Imports fell 44 percent to 350 tons in the first half, government and World Gold Council data show.

Weakening demand from China and India, which account for half of global consumption, may limit increases in bullion prices which advanced 9 percent this year on increasing tensions in Ukraine and the Middle East. Usage in China dropped 19 percent in the first half as investors bought fewer bars and coins. Indian Finance Minister Arun Jaitley retained import curbs in his annual budget last month.

“I don’t see the measures going away immediately,” said Devendra Pant, chief economist at India Ratings & Research, the local unit of Fitch Ratings. “If we allow gold imports to grow, that will have an impact on our current account,” he said by phone from New Delhi.

Gold for immediate delivery traded at $1,309.09 an ounce at 5:10 p.m. in Singapore today. Futures on the Multi Commodity Exchange of India, which have risen 0.9 percent this year, dropped 0.1 percent to 28,690 rupees per 10 grams.

India increased the gold import duty three times last year to 10 percent as it sought to narrow the record current-account deficit and stem a decline in the currency. Importers also have to supply 20 percent of their cargo to jewelers for re-export.

Gitanjali Gems

“We can see a pick-up in imports only next year as things are slowly opening up,” said Mehul Choksi, chairman of Gitanjali Gems, the biggest listed gold and diamond jewelry retailer by revenue. “The government has taken some measures such as allowing star trading houses to import, but the measures are still evolving, so it will take some time for the momentum to increase,” he said by phone from Mumbai.

Inbound shipments surged 65 percent in value to $3.12 billion in June from a year earlier after the central bank allowed more banks and traders to buy gold overseas. Rising imports could pressure the current-account deficit and prompt a strategy change from easing to more curbs, UBS AG said July 17.

“June imports were very high so the decision on easing the restrictions took a back seat,” said Bachhraj Bamalwa, a director with the All India Gems & Jewellery Trade Federation. Purchases in the second half may be 250 tons to 300 tons, he said by phone from Kolkata.

Festival Season

The controls helped narrow the deficit to $32.4 billion in the year ended March 31 from a record $87.8 billion a year earlier, the central bank estimates. That was the lowest shortfall since 2008-2009, according to central bank data.

Supply is probably sufficient to meet demand during the festival season with more agencies allowed to ship gold, said Rajesh Mehta, chairman of Rajesh Exports. The government may not alter the rules anytime soon, he said by phone from Bengaluru.

“More evidence will be required, this could mean a few more months of gold import data, particularly around this peak seasonal period, before the government feels comfortable enough to make an assessment of where gold market policy should be headed,” UBS AG analysts Edel Tully and Joni Teves said in a report today.

Premiums

The central bank is monitoring imports and isn’t worried by the surge in June, Governor Raghuram Rajan said Aug. 5. “I don’t think it’s the government’s intent to sit on the special measures forever. As the economy improves, as exports improve, it will create room for unwinding these measures,” he said.

Premiums or the fees that jewelers pay to buy gold from importing banks and agencies have plunged to $8 an ounce over the cash price in London from as high as $160 in December, according to Bamalwa. “Once demand picks up during the festival season, we can see them rising by maybe $10-$20,” he said.

Gold is bought during festivals in India and for weddings as part of the bridal trousseau. The festival season runs from late August to October and is followed by the wedding season.

“The government will be happy with annual imports of 700 tons to 750 tons,” said Prithviraj Kothari, vice president of the Indian Bullion and Jewellers Association Ltd. “India’s economy is in much better shape now compared to last year so we can expect the government to ease the restrictions in couple of months,” he said by phone from Mumbai.

Source;- bloomberg.com

HC denies quashing of pre-deposit order and extends time-limit for its deposit; restores appeal befo

Service Tax : On non-compliance with pre-deposit order, considering submissions of assessee's counsel, High Court extended time-limit of making pre-deposit and restored appeal before Tribunal

Donations made to political parties are allowable under IT Act subject to limit specified under Comp

IT : Where assessee's claim for set off of loss incurred in trading activities in commodities against other business income was rejected on ground that said transactions were sham, in view of fact that Assessing Officer did not furnish assessee any material of non-service of notice to various parties even when he had option for calling attendance of those parties in terms of section 131, impugned order was to be set aside and matter was to be remanded back for disposal afresh

MCA provides one time opportunity for defaulting-Cos to file annual docs; grants immunity from prose

COMPANIES ACT, 2013 : Company Law Settlement Scheme, 2014

Issues relating to either marketability or levy of duty can’t be referred to single member bench of

Excise & Customs : Issue regarding marketability and leviability of a product that comes into existence and also interpretation of exemption notification cannot be transferred to Single Member Bench

Recovery proceedings couldn’t be initiated if bank guarantee was already furnished by assessee

IT: Where petitioner in response to notice of demand of tax had already produced to satisfaction of Additional Commissioner of Income-tax that bank guarantee for balance amount was still in force, no recovery proceedings could be enforced against petitioner

Supreme Court allows assessee to raise all grounds including grounds raised in VAT assessment procee

CST & VAT : Where assessee submitted before Supreme Court that it may be permitted to raise all such grounds available to it including grounds taken in instant appeal at stage of assessment that may be initiated by Assessing Authority, assessee was permitted to raise all such grounds

Retention money received by a contractor to be taxed in the year of completion of contract

IT: Where assessee engaged in construction business, received certain amount as retention money, in such a case, irrespective of fact that assessee had adopted mercantile system of accounting, said amount was to be brought to tax in year in which contract was successfully completed

If two exemption notifications are operative simultaneously, assessee can choose one which is most b

Excise & Customs : When two exemption notifications, one granting absolute unconditional exemption and other granting unconditional partial exemption, are operative simultaneously, it is choice of assessee to opt for that notification which is more beneficial to him and provisions of section 5A(1A) would not apply

Approval granted to charitable institution under sec. 10(23C) would remain in force till it is withd

IT: Where assessee was granted approval after 1-12-2006 by Chief Commissioner under section 10(23C), same would be a one time affair and continues to remain in force till it is withdrawn; hence, assessee's application for extention of approval would be redundant

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