IT : Where assessee-company had given loans to parties whose identity had not been proved, their creditworthiness not established and genuineness of transactions not demonstrated, addition made was justified
Friday 28 November 2014
RBI removes restriction on gold import; withdraws 20:80 scheme
FEMA/ILT : Import of Gold (Under 20: 80 Scheme) by Nominated Banks / Agencies / Entities
Compensation received by assessee for surrendering rights of an industrial plot is capital receipt
IT : Where assessee had acquired an industrial shed for running a manufacturing business but said sale was set aside by Supreme Court, since assessee was clearly deprived of making future profits by surrendering its profit making structure compensation received against such surrender was to be treated as capital receipt
Airtime charges and license fee charged separately from subscribers of pager wouldn't form part of s
CST & VAT (Maharashtra) : Where assessee was importer and reseller of hardware in general and radio pagers in particular, airtime charges and license fees charged by assessee from subscribers under contract of selling activated pager did not form part of sale price within meaning of section 2(29) of Bombay Sales Tax Act
No penalty if AO didn't give independent opinion that old asset was acquired mainly to claim higher
IT : Where AO failed to give independent finding that there was a deliberate design on part of assessee to inflate cost of acquisition so as to claim higher depreciation, penalty could not be imposed
Co. dealing with software products isn't functionally comparable with a co. which is software servic
IT/ILT: A company being into software products is functionally different as it owns its own intangibles, has huge software product revenues, brand, etc. and cannot be considered as a comparable to a mere software service provider
One-time premium paid to lessor for transfer of interest in immovable property isn't liable to ST
Service Tax : All leases of immovable property would be covered for service tax whether lease is short-term or long-term or lease perpetuity; however, "premium" or "salami" paid by lessee to lessor for transfer of interest in property from lessor to lessee is not liable to service tax, as same is not for continued enjoyment of property leased
Liquidator couldn't direct creditor to refund excess payment when his claim was disbursed after due
CL: Where in winding-up of company, claim of appellant creditor had been disbursed after scrutiny and examination of relevant records, appellant creditor could not be harassed unreasonably by re-examining its claim and demanding any refund of excess payment made to him
India: Stainless Steel Mills Demand Protection Against Cheap Imports From China
The operating capacity of India’s stainless steel (SS) mills has declined to a low of 55 per cent, says the industry, due to cheap imports from China and other free trade agreement (FTA) countries, amid weak demand. The capacity utilisation was 65-70 per cent a year before.
Speaking on the sidelines of the announcement of Indinox 2015, a two-day SS industry event, scheduled to be held between January 24 and 27, 2015, at Gandhinagar, N C Mathur, president of the Indian Stainless Steel Development Association (ISSDA), said: “The SS mills have steadily invested $5 billion since its peak days of 2006-07, to create an overall installed capacity of around five million tonnes. Against that, we estimate a total production at 2.6-2.7 mt in 2014-15.”
This is because of dumping of Chinese goods into India, with some of these of substandard quality, he alleged.
Imports from China, Taiwan and Korea are estimated to have risen 150 per cent in about seven months. ISSDA says imports have gone up to around 40 per cent of annual consumption. In 2013-14, total import from all countries was 100,000 tonnes. However, says the body, imports from China alone have been 250,000 tonnes in the first half of the current financial year.
“The biggest problem Indian SS mills face is high electricity and logistics cost, unbearable rate of interest on working capital and continuous investment on pollution control equipment. Raw material exports from China attract a high duty of up to 40 per cent, to discourage shipment of inputs like SS scrap or ferro nickel. Over and above, the Chinese government is incentivising up to 13 per cent on export of SS, apart from low interest rates on working capital loans and cheap power. The industry will be protected only with a minimum differential duty of 7.5 per cent, which currently exists at five per cent,” said Hiten Bhalaria, managing director of Bhalaria Meal Craft, an SS utensil manufacturer and exporter.
Jindal Stainless has invested around Rs 12,000 crore in its 1-mt project in Odisha, currently at 30 per cent of its operating capacity. Its Hisar facility is currently operating at 60-70 per cent capacity.
“When Prime Minister Narendra Modi is emphasising on ‘Make in India’, here is an industry which is bleeding due to imports, despite having enough production capacity. We certainly need protection in terms of anti-dumping duty. The difference between raw material and finished product imports is currently five per cent in India as against 10 per cent in China,” said Mathur.
The industry also wants a relook at FTAs. The industry says import from countries with which we have signed such agreements are rising significantly, without any jump in our exports. India is the third largest global producer and second largest consumer of SS. The market for 2013-14 was at 2.5 mt, of which flat products accounted for about two mt. With a low per capita consumption of 2.1 kg (as against the world average of about five kg), there is a lot of potential for future growth. However, a slowing in the infrastructure sectors has been a major obstacle.\
Souce:hellenicshippingnews.com
Kakinada Anchorage Port To Become Rice Export Hub
The Anchorage Port in Kakinada has the potential to become rice export zone, provided the government focuses on developing infrastructure and facilities in the port, besides relaxing some norms pertaining to the exports.
As the East and West Godavari districts are known for paddy procurement and record yields every year, the surplus paddy is being exported to foreign countries through the anchorage port. Following the lifting of ban on rice exports in September 2011, there is a steady increase in rice exports and the exporters are focusing more on the African countries.
In 2012-13, 26.73 lakh metric tonnes of rice had been exported from the port. However, the year 2013-14 witnessed a drop in the export activity due to Samaikyandhra movement that lasted for over three months. The exports were to the tune of 22.67 lakh metric tonnes during the year.
Now, the government has changed the levy policy, providing an opportunity to improve the exports. Till the last crop season, the rice millers used to allocate 75 per cent of the rice purchased to the government towards the levy and sell the remaining 25 per cent in the open market that includes the exporters.
As per the revised policy, the levy is only 25 per cent and the remaining 75 per cent of the stocks can be sold in the open market. “This policy is going to be a boon for rice exports over a period of time. Moreover, it is going to be a win-win for both the farmer and the miller,” observes B.V. Krishna Rao, managing director of Pattabhi Agro Foods, one of the largest exporters of non-Basmathi rice from southern India.
East Godavari district alone produces 20-25 lakh metric tonnes of paddy every year and the West Godavari contributes more or less an equal quantum. Till now, the farmers are used to cultivate levy-oriented varieties such as ‘Common’ and ‘Grade A’ and the millers too encouraged the same, as they can clear a major chunk of stocks towards the levy. “Now, the farmers can focus on cultivating superfine variety of rice, which has a greater demand in the European market. By opting for these varieties, the farmers can earn more without increasing the investment and the millers and exporters too can get their margins,” explains Mr. Krishna Rao.
Echoing similar opinion, progressive farmer Kovvuri Trinadh Reddy says the government should come out with a clear policy on the levy and create awareness among farmers about the new cultivable varieties. “The farmer will get benefited only when the government ensures hassle-free export of rice,” he says.
Source:- thehindu.com
India To Reduce Export Documents From Nine To Three By April 1, 2015
The Indian government has fast-tracked efforts to reduce export barriers and improve Ease of Doing Business to boost manufacturing and revive exports.
India’s exports slipped into the negative list in October 2014 y/y for the first time since April 2014. Exports have declined due to several factors such as dipping global commodity prices, strengthening rupee against the USD, and a slowdown in Europe. Experts say that the uncertainty over the release of the new Foreign Trade Policy isn’t helping exporters and the government must take immediate steps to address the decline in exports.
Earlier this month, M Rafeeque Ahmed, President, FIEO, had said that the new Foreign Trade Policy (FTP 2014-19) must be announced soon or the previous one allowed to continue until March 31, 2015, to remove ambiguity among exporters. The new FTP should focus on Marketing, Branding, e-Commerce, Services exports, Project exports, High technology exports and improve Ease of Doing Business, the FIEO chief had said.
India is placed at the 142nd position among the 189 countries in the World Bank’s ease of 2015 Doing Business rankings. In the “Trading Across Borders” sub-index, India has slipped four points to the 126th rank this year.
In response, the Commerce Ministry has announced a slew of measures in the last few days to address the situation. It said that the government will reduce the number of documents required for exports from the current nine to three by April 2015. This will put India on par with other nations such as Singapore which top the list in both “Ease of Doing Business” and “Trading Across Borders” sub-index.
The government has also assured that the Goods and Service Tax (GST) Bill will be introduced in the ongoing Winter Session of the Parliament. GST is expected to play a major role in making Indian companies and goods competitive in the global markets and encourage investments in the manufacturing sector.
The government is also planning a single window clearance system for businessmen to set up projects in India and make use of technology to help get online approvals from various ministries. According to official sources, eight states have already implemented online registration of MSME companies, and talks are on with other states as well.
Approvals regarding labour procedures are expected to become easier with the launch of a labour portal which will help businesses get clearance of 16 labour laws at one place. Six states have also joined portal, according to official sources.
source:- thedollarbusiness.com
'Vijaya Bank' couldn't be treated as an assessee-in-default on non-submission of Form 15G/H before C
IT : Where assessee-bank had declaration of payees in prescribed form i.e., Forms 15G and 15H with it at time of payment of interest, but it could not deposit said Forms with Commissioner, assessee could not be held liable to deduct tax therefrom under section 194A as it was only a technical breach
In case of FOR sales, transportation upto customer's premises is eligible for credit
Cenvat Credit : If sales are on FOR basis, with risk being borne by manufacturer till delivery to customer and composite value of sales includes value of freight involved in delivery at customer's premises, place of removal would be at customer's premises and transport upto customer's premises would be eligible for credit
Fiscal Relief For India As Opec Maintains Output
Crude oil prices are set to decline further, with the Organization of the Petroleum Exporting Countries (Opec) deciding to maintain output at 30 million barrels per day, resisting calls from Venezuela that the group stem the slide in prices.
Minutes after the announcement, Brent crude slipped by $3 to $74.75 a barrel. Analysts now expect prices to inch closer to $65 a barrel. The Opec move is good news for emerging economies, such as India, which have seen deficits spiral with their oil import bills ballooning over the past few years.
India, which has been battling high inflation for several years, is heading for happier times from a macroeconomic point of view, as the inflation target set by the Reserve Bank of India can now be easily met. The central bank was earlier factoring in oil at around $100 a barrel. The 21 per cent decline in price from that level would help lower inflation. For every $10 a barrel fall in crude oil prices, the current account deficit can narrow by 40-50 basis points.
Barclays India economist Siddhartha Sanyal says: "Given that petrol and diesel prices are now determined by market, the fall in import costs will have an immediate impact on inflation. We are looking at retail inflation averaging around six per cent in 2015; that is significantly lower than the long-term average of 7.3 per cent. This is also true for the wholesale inflation rate, which can in 2015 average about 100 basis points lower than the long-term average. For the current account deficit, our estimate is $32 billion, or about 1.6 per cent of gross domestic product."
Others said India's import bill could meaningfully decline, helping Finance Minister Arun Jaitley meet his fiscal deficit target of 4.1 per cent of GDP. In fact, economists believe the fiscal deficit could contract to 3.9 per cent of GDP after Thursday's Opec decision.
Indranil Sen Gupta, India economist at Bank of America Merrill Lynch, says: "Lower crude oil prices obviously improve India's macro conditions. A five per cent decline in petrol and diesel prices bring Consumer Price Index-based inflation down by 45 basis points." He estimates fiscal deficit at 4.1 per cent of GDP in 2014-15 and 3.6 per cent the next year. Bank of America Merrill Lynch expects crude oil prices to average $96 a barrel in 2014-15 and $91 a barrel in 2015-16.
But weak oil prices are not so positive for upstream oil companies like Cairn India. Oil producers realisations will come under pressure if global crude oil prices continue to weaken. Chirag Dhifule of LKP Securities says any upside in crude oil prices would be positive for Cairn India and ONGC. Given that the production has not been lowered, it is a positive for state-run oil marketing companies. The subsidy burden would not return, given that both petrol and diesel prices do not factor in any subsidy at current prices.
For this reason, the fall in inflation will be sharper in coming months, as imported inflation has significantly moderated with oil prices declining and rupee remaining stable despite the unwinding of the quantitative easing programme of the US Federal Reserve. The outlook for India continues to improve with this latest move of Opec.
Source:- business-standard.com
Rupee Falls To 62/Dollar Tracking Broad Dollar Gains
The rupee fell to a low of 62 against the dollar compared with Thursday's 61.8750/8850 close. Month-end dollar demand from importers is likely to hurt the Indian unit.
Gains in shares and resulting capital inflows may limit a very sharp upside to the pair.
Indian shares rise to record highs ahead of GDP data, RBI policy.
Almost all Asian currencies are weaker compared against the dollar.
Index of the dollar against six major currencies trading up 0.5 per cent.
USD/INR pair is seen in a 61.70 to 62.10 range on Friday.
GDP data, due post market hours, and the RBI policy review on Tuesday are in focus.
Source:- ndtv.com
No penalty on incorrect imposition of interest when addition of interest was set-aside by appellate
IT : Penalty under section 271AAA can't be levied on account of incorrect imposition of interest which got deleted
Possession of assets taken over by secured creditor on default in repayment of loan couldn't be trea
IT: Where secured creditor took over possession and control of assets of assessee due to default committed in repayment of loan, it did not amount to transfer of assets within meaning of section 2(47)
Stay granted on condition that assessee couldn't seek adjournment won't be vacated on adjournment of
IT : Where assessee was granted stay of demand by Tribunal on condition that assessee would not seek adjournment of appeal but later on, Tribunal itself adjourned appeal, stay order did not stand vacated
Sludge and pulper waste emerged during manufacturing weren't liable to excise duty even if they were
Excise & Customs : Sludge and pulper waste emerges during course of manufacture of paper and paper board is : (i) not a manufactured product; hence, same is not liable to duty even if it is marketable; and (ii) not classifiable under tariff item 47 07 90 00
ITAT quashed sec. 148 notice as AO had taken approval of CIT instead of joint CIT for issuing notice
IT : Where Assessing Officer who was below rank of Joint Commissioner, reopened assessment in case of assessee by issuing notice under section 148 after taking permission from Commissioner instead of Joint Commissioner, it was to be regarded as invalid notice under section 151(2)
Banks can extend loans to individual investors against long-term bonds issued to them to finance inf
Banking : Issue of Long term Bonds by Banks – Financing of Infrastructure and Affordable Housing
Govt. tweaks norms for listing of securities on stock exchange
SEBI/INDIAN ACTS & RULES : Securities Contracts (Regulation) third Amendment Rules, 2014 – Amendment in Rules 19 and 19A
Sec. 148 notice quashed as it was issued after 6 yrs even when assessee didn't have any asset locate
IT : Where assessee did not have any asset outside India and, therefore, there was no question of having any income in relation to such an asset, in such a case, notice issued under section 148 after expiry of six years from end of relevant year relying upon provisions of section 149(1)(c) was not sustainable
HC directed Commissioner to decide rate of tax on aluminum conductor afresh as he hadn't passed spea
CST & VAT : Assam - Where order of Commissioner determining rate of tax on aluminium conductor, didn't contain any reason for coming to conclusion, matter was required to be remanded back
HC ordered refund of amount paid by bibber as seller had failed to deliver possession of auctioned a
CL: Petitioner was entitled to refund of amount paid by him pursuant to his successful bid, as seller had failed to deliver possession of auctioned assets
Subscribe to:
Posts (Atom)