Excise & Customs : Adjudicating authority, after having abandoned or let go of allegations made in show cause notice, cannot confirm demand on assumptions or presumptions
Wednesday 27 August 2014
Security deposit was to be taxed as income from house property if it was circumventing real rent fro
IT: Where it did not come out from facts that payment of security deposit was to circumvent real rent, same could not be considered for computing income from house property
ITAT deletes TP adjustment as it was made by TPO without applying any prescribed method
IT/ILT : Where TPO did not accept TP analysis made by assessee without giving any reasons and made TP adjustment without applying any prescribed method, TP adjustment was to be deleted
Parallel and Regular Colleges preparing students for obtaining recognised educational degrees aren't
Service Tax : Since parallel colleges and self financing colleges (just like regular colleges) are preparing students for acquiring University degrees, diploma certificate, etc. which is approved by law, they are not liable to tax
HC ordered publication of advertisement of winding-up petition as appellant didn't avail opportunity
CL : Publication of advertisement of admission of winding up petition was to be ordered when appellant company had not availed of opportunity granted to it by Division Bench to move an application for deferment of advertisement of petition
UP Govt. levies cess on sale of petrol and diesel; sets liability for wrong use of certificate or de
CST & VAT/Indian Acts & Rules : Uttar Pradesh Value Added Tax (Amendment) (Second) Ordinance, 2014 – Amendment in Sections 2, 3, 3a, 4, 6, 13, 17, 28, 29, 33, 42, 50, 54, 57; Substitution of Section 70 and Insertion of sections 3B and 8A
Jharkhand Govt. curtails min. time-limit to be provided in notice for producing books of accounts to
CST & VAT/Indian Acts & Rules : Jharkhand Value Added Tax (Amendment) Rules, 2014 – Amendment in rules 24 and 59
Govt. allows 100% FDI in specified areas for construction, operation and maintenance of Railway infr
FDI/FEMA/ILT : Policy for Private Investment in Rail Infrastructure through Domestic and Foreign Direct Investment – amendment In FDI Circular 2014 Effective From 17-4-2014
Rice Basmati Rises On Exports Deman
Rice basmati prices firmed up to Rs 200 per quintal at the wholesale grains market today on increased offtake by stockists driven by rising export demand.
However, other grains including wheat moved in a tight range in scattered deals and settled around previous levels.
Traders said increased offtake by stockists to meet rising demand from exporters, mainly influenced rice basmati prices.
In the national capital, rice basmati Pusa-1121 and basmati common variety rose by Rs 200 and Rs 100 to Rs 7,300-9,800 and Rs 9,000-9,700 per quintal respectively.
Wheat MP (deshi) 2,245-2,445, Wheat dara (for mills) 1,570-1,575, Chakki atta (delivery) 1,575-1,580, Atta Rajdhani (10 kg) 220, Shakti bhog (10 kg) 220, Roller flour mill 815-825 (50 kg), Maida 930-945 (50 kg) and Sooji 980-1,000 (50 kg).
Basmati rice (Lal Quila) 10,400, Shri Lal Mahal 10,000, Super Basmati Rice 9,500, Basmati common new 9,000-9,700, Rice Pusa- (1121) new 7,300-9,800, Permal raw 2,100-2,150, Permal wand 2,200-2,300, Sela 2,700-2,800 and Rice IR-8-1,900-1,950, Bajra 1,220-1,225, Jowar yellow 1,400-1,420, white 2,325-2,525, Maize 1,220-1,230, Barley 1,460-1,465.
Source;- business-standard.com
$8-Bn Export Orders At Risk As Companies Struggle To Get Insurance Cover
Export orders worth $8 billion are at risk as Indian companies are struggling to raise money due to absence of insurance cover.
"We have more than 50 corporates which have secured $8 billion project export orders in 25 countries. While the Indian companies have already secured these orders, we are not able to meet the loan disbursement (demand) as we also need insurance cover," Yaduvendra Mathur, chairman and managing director of Export-Import Bank of India (EXIM Bank), said on Wednesday.
"These orders could reinvigorate the manufacturing process in the country. But if the companies fail to get the insurance cover, they will probably lose those orders," he added. Mathur was speaking to reporters on the sidelines of a banking seminar organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) in Kolkata.
The limited capital base of Export Credit Guarantee Corporation of India (ECGC) has added to the problem. ECGC is a government enterprise that provides export credit insurance facilities to exporters and banks in the country.
"ECGC itself has got a small equity base... Unfortunately, development finance institutions in India has taken a back seat. Our ability to leverage is also small compared to other export-import banks. If both ECGC and EXIM Bank are strengthened we can finance more project exports. The government is aware of this situation and examining this issue closely," Mathur said.
EXIM Bank in India was allowed to lend 10 times its equity base. While the bank wanted to increase this cap to 15 times, the Reserve Bank of India (RBI) has permitted it to lend only 11 times its equity base till March, 2015. Compared to this, export-import bank in China can lend 70 times its equity base while the Korean export-import bank can leverage up to 30 times.
The government has infused Rs 1,300 crore in EXIM Bank during the current financial year taking its total equity base to Rs 5,000 crore. "The authorised equity capital for EXIM Bank is Rs 10,000 crore. Hence, we have requested the government to inject another Rs 5,000 crore in two tranches in the next couple of years," Mathur said.
Project development company
Separately, Mathur said EXIM Bank will partner Infrastructure Leasing & Financial Services (IL&FS), State Bank of India (SBI) and African Development Bank to create a project development company. The proposed joint venture will offer consultancy services to Indian corporates and facilitate exports to Africa.
"We are also talking to Bank of Baroda. Ideally, we want to have five partners with each of us investing $5 million. We have not yet identified a location for the headquarters. But hopefully we will set up this company during the current financial Year.
Source:- business-standard.com
India Earned Rs 86,822 Crore In Apr11-Jun14 On Steel Exports
The country earned a revenue of Rs 86,822 crore from steel exports during April 2011 to June 2014, the government said on Monday.
“The revenue earned through exports of alloy, non-alloy and semis between April 2014 and June 2014” stood at Rs 7,971 crore, Minister of State for Steel and Mines Vishnu Deo Sai told the Lok Sabha in a written reply.
Sai said the revenue on account of steel exports stood at Rs 29,994 crore in 2013-14, Rs 26,912 crore in 2012-13 and Rs 21,946 crore in 2011-12, respectively.
On high prices of steel in the domestic market, Sai said, “As the prices are essentially market driven, government has no role in fixation of prices.”
He, however, added that the government has taken a number of steps for corrective measures that include formation of an inter-ministerial group in the Ministry of Steel for expediting investment projects in the sector.
“To increase domestic value addition and improve iron ore availability for domestic steel industry at reasonable prices, duty on export of iron ore has been increased to 30 per cent. Recently the government has imposed export duty of 5 per cent ad valorem on export of iron ore.
Source:- ahmedabadmirror.com
Charges of clandestine removal of goods couldn’t be confirmed merely on basis of input-output ratio
Excise & Customs : Charges of clandestine removal cannot be upheld on basis of theoretical productions calculated on basis of chemical formula; there may be various factors directly or indirectly affecting production and, therefore, without any physical experiment to arrive at actual production, demand is invalid
Trust could claim sec. 80G relief even when it was not eligible to claim benefit of secs. 11 and 12
IT: Where assessee was denied exemption under section 11, income of assessee to be computed under general provisions of Income-tax Act
Sugar Export Rebound At Risk From Rising Domestic Prices
Sugar prices in India are firming on fears of short-term supply constraints and seasonal demand even as global prices are sliding, posing a threat to a recent recovery in exports from the world's second-biggest producer of the sweetener.
A raised sugar import duty in India, festival demand and an expected delay in cane crushing in a key producing state have helped push domestic prices to a $70 a tonne premium to international prices, making it more lucrative to sell domestically. A year ago the premium was just $20 a tonne.
Lower exports from India could provide short-term support to global sugar prices that hit a seven-month low on Monday and give leading sugar exporters such as Brazil and Thailand an opportunity to take more of the market.
India last week raised the import duty on the sweetener to 25 percent from 15 percent to help mills, which are struggling with overflowing warehouses due to bumper crops over the past few years. Government-set prices for sugar cane are also hurting them.
"The import duty hike has isolated the Indian market from global price trends. Local prices won't fall due to global surplus," said Ashok Jain, president of the Bombay Sugar Merchants Association.
Thailand is offering white sugar at around $430 per tonne, but Indian mills won't offer below $500 due to relatively higher local prices, said a Mumbai-based dealer, who declined to be named as he is not authorised to talk to media.
India's local prices have risen 10 percent so far in 2014, while global prices have fallen 4.3 percent.
"Exports are not possible unless local prices drop by at least 15 to 20 percent," said the dealer with a global trading firm that has been one of the top sugar exporters this season ending September. "I don't see that happening in 2014."
India celebrates the religious festivals of Dussehra and Diwali in the next two months, when sugar demand goes up and prices rise.
Since the start of the 2013/14 sugar marketing year last October, Indian mills have aggressively exported to reduce surplus sugar. India usually produces white sugar, but this year it also produced raw sugar, especially to cater to demand from the growth of refining capacity in Asia and Africa.
Exports are likely to swell to 2.5 million tonnes in the current year ending Sept. 30, compared with just 35,000 tonnes a year earlier. But in 2014/15 India is likely to ship much less than the current year as mills are not interested in producing raw sugar, industry executives say.
"Mills are not keen to produce raw sugar as they are getting a higher price for white sugar (in the domestic market) than the realization for raw sugar from exports," said a senior official at the Maharashtra State Cooperative Sugar Factories federation.
Sugar mills in India's second-biggest sugar producing state of Uttar Pradesh have threatened to not crush cane in the new season starting in October, saying they will not be able to pay a high state-set cane price to farmers.
The mills suspended crushing this sugar year too for two months and had halted operations in earlier years as well.
"If crushing gets delayed, it will obviously support sugar prices. But it is unlikely to lead to shortfall due to ample carry-forward stock," said Ashwini Bansod, a senior analyst at Phillip Commodities India Pvt Ltd.
India is likely to start the new sugar year with an opening stock of 7.5 million tonnes, down from 9.3 million tonnes a year ago.
Source:- in.reuters.com
Nepal Blowing Earnings On Imports
Nepal has been spending almost all of its foreign currency earnings on importing goods, said Nepal Rastra Bank (NRB). In the last fiscal year, the country’s combined income from remittance, grants, pensions and exports amounted to Rs 723.47 billion while its import bill came to Rs 708.76 billion, said the central bank.
According to NRB’s annual report on the country’s macro economy, remittance inflow reached Rs 543.29 billion, export revenues came to Rs 90.29 billion, grants totalled Rs 48.51 billion and pensions totalled Rs 41.37 billion.
Due to runaway growth in imports, the country’s trade deficit jumped 28.9 percent to Rs 618 billion. The trade deficit with India and third countries soared 30.8 percent and 25.3 percent respectively, said NRB. Posh Raj Pandey, executive chairman at South Asia Watch on Trade, Economics and Environment (Sawtee), blamed a weak supply capacity for the massive trade deficit. He said that poor government policies failed to channelise remittance into investments leading to low exports.
The government had projected exports of Rs 100 billion in the last fiscal year, but shipments fell short of the target.
The government has set the same export goal for the current fiscal year. “The government should think of providing incentives to potential investors of remittance in productive sectors to improve the situation.”
In the last fiscal year, Nepal’s imports from India soared 28.8 percent to Rs 472.73 billion. The figure represented 66.69 percent of the country’s total imports.
Petroleum products were the largest import with a bill totalling Rs 131.33 billion. Similarly, vehicles and spare parts, MS billet, machinery and parts, medicines and rice were the major imports.
Meanwhile, the country’s imports from third countries leapt 24.4 percent to Rs 236.03 billion. Gold came at the top of the list with imports valued at Rs 24.79 billion. Crude soybean oil, telecommunication equipment and parts, silver, machinery and parts and electrical goods were the other major imports from overseas countries.
NRB records show that exports to India increased 16.5 percent to Rs 59.41 billion, representing 65.79 percent of the country’s total exports. Zinc sheet, textiles, polyester yarn, cardamom, juice, jute products and GI pipe were the major exports to India.
Similarly, the country’s exports to overseas countries rose 19.1 percent to Rs 30.87 billion. Woollen carpets stood first among the products that were exported to third countries with revenues totalling Rs 7.36 billion. Other major export products were readymade garments, pashmina products, pulses and hides.
Source:- ekantipur.com
Apex Court Order May Alter Coal Import Dynamics
Power, mining, and banking stocks fell on Tuesday, as companies in each of the sectors wait for a 1 September verdict in which the Supreme Court, which ruled on Monday that all coal block allocations since 1993 are illegal, could actually cancel the assignments.
Meanwhile, international coal traders immediately downed a gear in talks for supply contracts with Indian companies because a cancellation could mean they could command higher prices from customers in the country. If that happens, global coal prices could increase, say experts, as could shipping rates.
While power and mining companies will be directly affected by the cancellation, banks could see the volume of bad loans on their books increasing with the viability of power and steel projects they have funded coming under question.
Shares of power and banking stocks fell for the second consecutive day on Tuesday, following the verdict. The S&P BSE Power index fell 1.32%, the S&P BSE Bankex index lost 0.24% and the BSE Metal Index rose 0.75%.
At stake are around 289 coal blocks given out to companies of all sizes individually or in consortiums, of which around 21 are producing mines with an output of about 35 million tonnes (mt) a year, according to a Macquarie report.A cancellation could mean more imports. India imported around 160mt of coal in 2013-14.
Foreign traders have been quick to spot the opportunity in the court’s ruling.“Indonesian miners are delaying any long-term negotiations…They are trying to assess the impact (of the ruling),” said Prakash Duvvuri, head of research at natural resources website OreTeam.
The ruling comes at an opportune time for them.Global coal prices have slipped over the past year. Premium hard coking coal from Australia was priced at $113 a tonne on Tuesday, free-on-board (without freight charges) at the east coast, down 19% from a year ago, data from Bloomberg showed.
“It is too early to say if prices will move but there will be an increase in demand of imported coal if running mines are cancelled,” said Vinay Prakash, chief executive officer (coal and carbon credit) at Adani Enterprises Ltd, one of the largest coal importers in India.
“If mass deallocations do happen, both coal prices and freight rates will shoot up on an expected increase in import volumes,” added Punit Oza, vice-president and head of Supramax Pacific at ship operator Torvald Klaveness Group in Singapore.
A top government official, requesting anonymity, said, “Clarity will only emerge after 1 September.”
Banks that have exposure to metals and power companies are vulnerable in the wake of the Supreme Court’s verdict, and may see their bad loans rise, UBS said in a report on Tuesday.
“We believe a portion of banks’ exposure to metals/power would be vulnerable to becoming NPLs (non-performing loans) if the process of reallocation of coal blocks extends beyond six months,” UBS said.
A Morgan Stanley report said the development could have a serious impact on the economy.
“Near-term coal deficit in the country may deepen and dependence on Coal India Ltd may grow for coal supplies,” the Morgan Stanley report said.
Analysts attributed the sharp fall in stock prices to fears of a spurt in their cost of production if the apex court imposes a penalty or cancels allocations.
In a note on Monday, Macquarie Capital Securities (India) Pvt. Ltd termed the move “really harsh.”
“We believe that, in the case of operational coal blocks, possible options could be penalties to regularize the coal blocks or a hand-over to Coal India. Unopened coal blocks could face deallocation. It is difficult to imagine that all this could be done quickly,” Macquarie analysts Rakesh Arora and Sumangal Nevatia said in the note.
According to Karvy Stock Broking Ltd, banks have an exposure of Rs.5.01 trillion to the power sector, and exposure to the sector has grown from 4.3% of the non-food credit in March 2008 to 8.83% in the June 2014.
Bankers fear the worst if the coal blocks are deallocated.
“Not only bank assets, coal is such an important item for practically everything, and if a sizeable share of the private producers shut suddenly, the impact on economy will be unimaginable,” said a senior banker who did not wish to be named.
According to the Reserve Bank of India, state-run banks’ gross bad debts as a percentage of total loans was 4.7% in March 2014.
Analysts say power, steel, and infrastructure, so-called core sectors, will be hit hard. These sectors, along with textiles and aviation, account for 24% of the money loaned by banks, but half of the bad loans on the books of lenders.
As on 30 June, 16 cases involving loans worth Rs.20,253 crore in the power sector were being restructured, according to information available on the website of the corporate debt restructuring (CDR) cell.
“We expect part of this exposure to turn into NPAs (non performing assets) over the next 18 months as many of these projects will become unviable. We maintain our cautious view on the sector, specially on the public sector banks, which have relatively higher exposure to the sector,” Karvy analyst Asutosh Kumar Mishra said in a note.
Source:- livemint.com
Indian Rupee Opens Lower At 60.48 Per Dollar
The Indian rupee opened lower at 60.48 per dollar on Wednesday, down 5 paise compared to previous day's closing value of 60.43 a dollar.
The dollar hovered just under a 13-month peak against a basket of major currencies early with the euro still struggling amid expectations of further policy easing from the European Central Bank.
Also Read - Rupee to outperform Asian peers in near-term: StanChart
Himanshu Arora, Currency Analyst at Religare said, "USD-INR pair is expected to trade higher today. Mass de-allocation of coal blocks could probably push imports higher leading to widening of the trade deficit given the impact on domestic production."
"Rupee may also weaken ahead of the GDP data for the April-June quarter expected on Friday. Expect USD-INR to trade in the range of 60.22-60.75/dollar," he added.
According to Emkay report, SPOT USDINR prices have crucial support at 60.30 and as far as prices are holding this support, prices are expected to trade sideways to higher. Immediate resistance at 60.60. A breakdown below 60.3 0 can take prices further lower towards 60.10.
Source:- moneycontrol.com
Maharashtra Govt. increases VAT audit limit to Rs one crore
CST & VAT : Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2014 - Amendments in Maharashtra Value Added Tax Act, 2002
Jharkhand Govt. hikes interest rate for return related defaults and penalty for turnover escaping as
CST & VAT : Jharkhand Value Added Tax (Amendment) Act, 2013 – Amendment of Sections 4, 26, 30, 35, 37, 40, 72 and 80
Specified dealers have to furnish details of sales/purchases alongwith each VAT return under Maharas
CST & VAT : Maharashtra Value Added Tax (Third Amendment) Rules, 2014 - Amendment in Rules 17 and form 101
Maharashtra Govt. extends limitation period of assessment for specified dealers
CST & VAT : Maharashtra Value Added Tax (Amendment) Act, 2014 – Amendment in Section 23
Delay in filing appeal due to transmission of order at various offices of assessee was condonable
Excise & Customs : Where delay in filing appeal had occurred due to transmission of impugned order of to various offices of assessee, same was condonable; Tribunal must condone said delay based on sufficiency of reasons, even if same is not highlighted by assessee's counsel in hearing
Construction cost on leasehold land disallowed as assessee had been holding land after expiry of lea
IT : Where assessee had been in possession of property after expiry of lease period, benefit of written down value of cost of construction could not be allowed
Pre-operative exp.won’t form part of capital investment while deciding eligibility for VAT exemption
CST & VAT: Where assessee had established a new unit for manufacturing and sale of C.R. Strips and it was issued an eligibility certificate under section 4A of U.P. Trade Tax Act, 1948, preoperative expenses incurred by assessee would not form part of additional fixed capital investment for purposes of computing exemption under section 4A; but transformer/CVT installed in factory premises would fall within meaning of expression fixed capital investment for purposes of computing exemption under s
No question of law arises when ITAT had allowed payments to sub-contractor for job work after examin
IT : Where Tribunal after considering totality of facts allowed payment made by assessee to sub-contractors for carrying out job work contracted out to assessee, no question of law did arise from Tribunal's order
Brand name assigned to assessee after family settlement to be deemed as his own brand; SSI exemption
Excise & Customs : Brand/trade name assigned in favour of assessee after family settlement becomes assessee's own brand/trade name even if, in trademark records, same is shown in name of family members; therefore, goods bearing said brand name are eligible for SSI-exemption
Income generated from sale of carbon credits won't be eligible for sec. 80-IA relief
IT/ILT : Where assessee deputed some of its employees to AE to render services of commercial value, TPO was justified in making addition to assessee's ALP holding that a markup of 5 per cent should have been charged in addition to reimbursement of salary expenses by AE
CLB rejects arbitration application as shareholder's agreement required mutual consent of parties
Arbitration Act: Where respondent No. 2 filed instant application for referring parties to arbitration, since in terms of SHA referral to arbitration was possible only by mutual consent of parties which was absent, instant application was to be rejected
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