Excise & Customs : Where, due to cancellation of export order, assessee made deemed exports by way of supply to foreign tourists against foreign exchange, such 'deemed exports' were to be counted for purposes of export obligation under advance licenses
Monday, 15 December 2014
Co. Court couldn’t transfer proceedings to it which was pending before DRT
CL : Company Court on petition filed under provisions of Companies Act, 1956, could not transfer proceedings under Recovery of Debts Due to Banks and Financial Institutions Act, 1993 from DRT to Company Court
Manufacturer of printer’s toners couldn’t be a comparable for co. engaged in manufacturing of printi
IT/ILT: Manufacturer of printer's toners couldn't be a comparable for co. engaged in manufacturing of printing inks
Govt. notifies 'Karnataka Electricity Regulatory Commission' for the purpose of Sec. 10(46) exemptio
IT : Section 10(46) of the Income-Tax Act, 1961 - Exemptions - Statutory Body/authority/board/commission - Notified Body or Authority – Karnataka Electricity Regulatory Commission
Sec. 271AA penalty couldn’t be imposed when assessee had maintained docs required under sec. 92B
IT/ILT : Where clause by clause documentation required under rule 10D, had been maintained by assessee in respect of international transactions with AEs, levy of penalty under section 271AA was not justified
No revocation of registration and only sec. 11 relief was to be denied when commercial receipt thres
IT : Where assessee trust's objects and activities were genuine, registration under section 12AA could not be cancelled merely because receipts exceeded threshold limit as provided under second proviso to section 2(15)
HC directs AO to consider details furnished by legal representative of deceased before initiating pe
IT : In case of deceased assessee, details given by legal representatives had to be considered by Authority before it proceeded to invoke section 271(1)(c)
Hiring of machinery for excavation work on monthly basis wasn’t work contract; not liable to sec. 19
IT : Machinery taken on monthly rental was not covered under term 'work contract' and hence, no disallowance could be made on account of non-deduction of TDS under section 194C on payment
Income from growing of mushrooms in residential area under controlled conditions isn’t agricultural
IT: Where assessee had carried on entire activity of growing mushroom in residential area under controlled conditions, as basic element of agricultural activity was missing, income from same could not be treated as his agricultural income
Compensation awarded under Motor Vehicle Act and interest accrued thereon in bank weren’t taxable
IT : Compensation awarded under Motor Vehicles Act is in lieu of death of a person or bodily injury suffered in a vehicular accident and it cannot be said to be taxable income; Circular No. 8/2011, dated 14-10-2011 quashed
Forex loss couldn’t be considered while computing ALP of purchases if sale/purchase wasn’t at pre-de
IT/ILT : Where assessee-company having purchased bearings and other products from its AE located abroad, sold said products to Indian customers, in absence of any documentary evidence to show that purchases and sales were made against pre-determined rates, foreign exchange fluctuation loss could not be adjusted in hands of assessee
Bombay High Court advises Tribunal to reduce and resolve difference of opinions expeditiously
Service Tax : It is possible for Members of Tribunal to record differing opinions on any point including 'facts'; however, Tribunal must reduce difference of opinions and resolve them expeditiously and on priority basis to avoid judicial uncertainty
'Coal India' abused its dominant position by imposing unequal terms in e-auction of non-coking coal:
Competition Law : Opposite parties i.e., CIL, abused their dominant position in relevant market of sale of non-coking coal to bidders under spot-auction scheme in India by imposing unequal terms and conditions
Tricky Sugar Export Subsidy
With the crisis in the sugar industry continuing in the current season (which began in October), the Modi government is in a dilemma over the question of extending export subsidies for the sweetener.
Sugar exporters across the country are demanding extension of the export subsidy on raw sugar, but the government is wary about international reaction. Other major sugar producing nations including Brazil (the world’s largest producer of the commodity), Thailand and Columbia, besides the European Union and Australia have opposed the export subsidy scheme.
In sugar year 2013-14 (which ended on September 30, 2014), the government extended subsidies to help sugar mills clear dues to farmers and to reduce their stockpiles. Earlier in the year, the government announced a subsidy of Rs3,300 per tonne for February and March. The subsidy was reduced to Rs2,277 a tonne for the following two months.
The export incentive for June-July was raised to Rs3,300 a tonne and there was a further hike to Rs3,371 a tonne for August-September. But the new BJP government, which came to power in May, has not taken a decision on extending the scheme or scrapping it.
The scheme, however, did not really take-off. While the government was offering the subsidy for exports of four million tonnes of raw sugar during 2013-14 and 2014-15, in the first year India exported a mere 700,000 tonnes of raw sugar, much of it by mills in Maharashtra. Total sugar exports from India — both white and raw — added up to 2.1m tonnes last year. Raw sugar exports alone added up to 1.2m (including 700,000 tonnes with export incentives).
With opposition from many other sugar exporting nations, the Indian government claimed that the subsidy policy was meant to encourage diversification from white sugar to raw sugar and that it was within the policy framework of the World Trade Organisation’s norms for developing countries.
Indian mills mostly produce white sugar, but with export incentives, many switched to raw sugar. However, in the absence of export incentives, production of raw sugar has virtually come to a halt.
In August, the WTO rejected the Indian argument, forcing the government to reconsider the scheme.
Last week, Food Minister Ram Vilas Paswan said that the government was considering the industry’s demand for extending the scheme in sugar year 2014-15. “We are reviewing whether to extend the scheme, which was originally meant for two sugar seasons,” said Paswan.
The sugar industry lobby has been demanding an extension of the export incentives. The Indian Sugar Mills Association (ISMA) claims that the subsidy should be extended in the current year to help stabilise the domestic price of sugar, a highly, politically-sensitive commodity. It will also help the industry clear the stockpile, it argues.
India’s sugar stock added up to 7.5m tonnes at the start of the new season in October. Good rainfall and an increase in acreage of sugarcane is likely to result in a bumper crop this year, leading to pressures on domestic prices.
Both the government and the ISMA have projected total production of around 25 million tonnes of sugar in the current marketing year, as against 24.4m tonnes last year. Sugar production in October and November soared to 1.78m tonnes, nearly a third more than in the corresponding period last year.
ISMA and other lobbies have not only demanded extension of the export subsidy scheme, they also want the government’s help in creating a buffer stock and a hike in import duty to 40 per cent. In August, the government raised the import duty on sugar from 15 per cent to 25 per cent.
According to the association, with sugar prices dipping to Rs28 a kg, the lowest in 2014, mills are sustaining huge losses as the cost of production itself is upwards of Rs35. The government itself pays Rs32 a kg while buying sugar for its public distribution system.
Of course, because of the wide variations, sugar mills are unable to clear their dues to cane farmers. Sugarcane arrears had peaked at Rs140 billion in May. According to the government, they fell to around Rs77.6 billion in September.
International sugar prices have also fluctuated for much of 2014. After declining to five-year lows in the beginning of the year, they perked up in recent months. The International Sugar Organisation (ISO) recently has predicted “the beginning of a new deficit phase in the world sugar cycle,” which could result in increased prices.
The global sugar body expects a shortfall in output next year mainly because of drought in key areas of Brazil which account for 90pc of its production. The ISO expects a deficit of about 2 to 2.5m tonnes of sugar, heralding the start of a new deficit phase.
Last week, in a bid to help the sugar mills, the Indian government decided to sharply hike the price for ethanol. Oil marketing companies will now have to pay between Rs48.5 and Rs49.5 a litre of ethanol, which is blended with petrol. Oil companies were earlier paying just Rs29 a litre for ethanol.About two years ago, the Indian government had made it compulsory for refineries to blend five per cent of ethanol with petrol.
The sugar lobby, however, is not satisfied with these measures by the government. The Uttar Pradesh Sugar Mills Association has warned the government of a crisis in the sector, which could lead to further arrears and delays in payments to cane growers this season.
Source:dawn.com
After Sluggish 2014, India Awaits 'Promising' 2015 For Exports
Pinning hopes on dividends from 'Make in India' campaign and a conducive business environment, India expects a promising year ahead for its exports and improve on its estimated $300-billion plus tally in 2014.
However, it would be the revival in global economy that would matter the most for the shipments leaving Indian shores, said the government officials and exporters while striking a note of caution for 2015. This cautious optimism follows a subdued performance on exports front for several years now, largely because of a fragile global economic situation.
"2015 will be a promising year. We are hoping that whatever measures we have put in place (this year) for ease of doing business, trade facilitation and initiatives in the area of boosting manufacturing, those should show sustained growth in exports in 2015," Commerce Secretary Rajeev Kher told PTI. However, the global environment is still not conducive for trade as big markets like the EU are not doing well, he added.
India's exports are estimated to have remained at around $312 billion in 2013, while the final figures for 2014 could be around this figure only. The overall exports during the first ten months of calendar year 2014 stood at about $270 billion.
Exporters, as also the Commerce Ministry, are keeping their fingers crossed on account of tepid situation in markets like the European Union, Japan, Russia and Middle East, which account for over 20 per cent of the total Indian exports.
The country's monthly merchandise shipments have so far shown a mixed trend this year -- from a robust growth of 12.4 per cent in May to entering into negative territory in October. According to Mr Kher, Indian exporters will have to focus more on standards, services sector and enhancing their product competitiveness in the global market.
Exporters body Federation of Indian Export Organisations (FIEO) also said that "there cannot be a drastic increase in exports growth next year", given the global demand economic situation. "We are keeping our fingers crossed. Situation is getting worse in EU, Japan and Russia. Decline in oil prices are adding further woes for us," FIEO President Rafeeq Ahmed said.
Besides the global economic scenario, the exporters are also concerned about delay in the announcement of the country's new Foreign Trade Policy (FTP). "Timely release of the FTP would help exporters in finalising their deals. Government should announce fiscal and non-fiscal incentives for exporters soon," Ahmed said.
India's exports in last three years have been hovering around $300 billion. Falling short of the $325 billion target, India's exports in 2013-14 stood at $312.35 billion. The figures for 2012-13 were $300.4 billion, after $307 billion in 2011-12.
Special Economic Zones (SEZs), which contribute about 23 per cent of the country's total exports, too are facing problems and the developers are demanding to roll back minimum alternative tax and dividend distribution tax to revive investors sentiment for these zones.
To boost manufacturing, the government has launched 'Make in India' campaign. It aims at attracting global investments and put thrust on 25 major sectors, including automobile, textiles and chemicals.
The government has fixed an export target of $340 billion for the current fiscal, ending March 31, 2015, but high gold imports have pushed the country's trade deficit higher and it touched $83.75 billion during April-October 2014.
Gold imports surged by nearly four-fold to $4.17 billion in October to meet the festival season demand.Besides, top exporting sectors showed a decline in export figures during October. These include engineering (-9.18 per cent), pharma (-8.33 per cent), gems and jewellery (-2.25 per cent), cotton yarn/fabrics (-13.84 per cent) and petroleum products (-0.16 per cent).
A widening trade gap also directly impacts the current account deficit (CAD) and the rupee. The CAD widened to 2.1 per cent due to rising gold imports in the second quarter of this fiscal, up from 1.2 per cent a year-ago. The rupee touched an over 10-month low of 62.33 earlier this month.
Source:profit.ndtv.com
India Rules Out Banning, Limiting Iron Ore Exports
India will not ban or limit exports of iron ore but will adopt "appropriate fiscal measures" to conserve the steelmaking raw material, the junior steel and mines minister said on Monday.
Action against illegal mining has sharply cut production of iron ore in the country at a time when international prices have halved, prompting Indian companies such as JSW Steel (JSTL.NS) to import heavily.
Steel companies have regularly urged the government to either ban the export of high-quality iron ore or increase the export duty from the current 30 percent to discourage overseas sales. But minister Vishnu Deo Sai ruled out any ban on overseas sales from what used to be the third-largest iron ore exporter.
"The government has decided that although conservation of iron ore resources is of paramount importance, the same may not be achieved by banning or capping export of iron ore but by taking recourse to appropriate fiscal measures," Sai said in a statement.
Source:in.reuters.com
After Sluggish 2014, India Awaits 'Promising' 2015 For Exports
Pinning hopes on dividends from 'Make in India' campaign and a conducive business environment, India expects a promising year ahead for its exports and improve on its estimated $300-billion plus tally in 2014.
However, it would be the revival in global economy that would matter the most for the shipments leaving country's shores, said the government officials and exporters while striking a note of caution for 2015.
This cautious optimism follows a subdued performance on exports front for several years now, largely because of a fragile global economic situation.
"2015 will be a promising year. We are hoping that whatever measures we have put in place (this year) for ease of doing business, trade facilitation and initiatives in the area of boosting manufacturing, those should show sustained growth in exports in 2015," Commerce Secretary Rajeev Kher told PTI. However, the global environment is still not conducive for trade as big markets like the EU are not doing well, he added.
Country's exports are estimated to have remained at around $312 billion in 2013, while the final figures for 2014 could be around this figure only. The overall exports during the first ten months of calendar year 2014 stood at about $270 billion.
Exporters, as also the Commerce Ministry, are keeping their fingers crossed on account of tepid situation in markets like the European Union, Japan, Russia and Middle East, which account for over 20 per cent of the total Indian exports.
The country's monthly merchandise shipments have so far shown a mixed trend this year -from a robust growth of 12.4 per cent in May to entering into negative territory in October. According to Kher, Indian exporters will have to focus more on standards, services sector and enhancing their product competitiveness in the global market.
Exporters body Federation of Indian Export Organisations (FIEO) also said that "there cannot be a drastic increase in exports growth next year", given the global demand economic situation.
"We are keeping our fingers crossed. Situation is getting worse in EU, Japan and Russia. Decline in oil prices are adding further woes for us," FIEO President Rafeeq Ahmed said.
Besides the global economic scenario, the exporters are also concerned about delay in the announcement of the country's new Foreign Trade Policy (FTP). "Timely release of the FTP would help exporters in finalising their deals. Government should announce fiscal and non-fiscal incentives for exporters soon," Ahmed said.
India's exports in last three years have been hovering around $300 billion. Falling short of the $325 billion target, India's exports in 2013-14 stood at $312.35 billion. The figures for 2012-13 were $300.4 billion, after $307 billion in 2011-12.
Special Economic Zones (SEZs), which contribute about 23 per cent of the country's total exports, too are facing problems and the developers are demanding to roll back minimum alternative tax and dividend distribution tax to revive investors sentiment for these zones.
To boost manufacturing, the government has launched 'Make in India' campaign. It aims at attracting global investments and put thrust on 25 major sectors, including automobile, textiles and chemicals.
The government has fixed an export target of $ 340 billion for the current fiscal, ending March 31, 2015, but high gold imports have pushed the country's trade deficit higher and it touched $ 83.75 billion during April-October 2014. Gold imports surged by nearly four-fold to $ 4.17 billion in October to meet the festival season demand.
Besides, top exporting sectors showed a decline in export figures during October. These include engineering (-9.18 per cent), pharma (-8.33 per cent), gems and jewellery (-2.25 per cent), cotton yarn/fabrics (-13.84 per cent) and petroleum products (-0.16 per cent).
A widening trade gap also directly impacts the current account deficit (CAD) and the rupee. The CAD widened to 2.1 per cent due to rising gold imports in the second quarter of this fiscal, up from 1.2 per cent a year-ago. The rupee touched an over 10-month low of 62.33 earlier this month.
Source:businesstoday.intoday.in
India Gold Premiums Rebound As Imports Plunge On Thin Demand
The gold premiums in Mumbai climbed higher during the week. The premiums jumped from $4 to $6 during the previous week to $5-$8 per ounce over London spot prices. Meantime, the gold imports by the country have dropped in anticipation of further clarification by the government on removal of 80:20 gold import norm.
According to sources, the gold imports are set to drop sharply during the month of December this year. The country had imported nearly 110 tonnes of gold during Nov ’14. The monthly imports are likely to reduce to almost one-third during this month. The gold shipped into the country during initial ten days of the month totaled approximately 10 tonnes. Further fall in gold imports may force the government to lower gold import duty structure in the upcoming financial budget, sources added.
Currently, there seems to be less clarity on abolition of 80:20 gold import rule. Moreover, the peak demand witnessed during wedding season has subsided. Both these factors have resulted in sharp drop in gold import demand. However, jewelers indicate that large stockpiles of gold are still left with warehouses, as importers stocked up on rumors that RBI was planning to tighten gold import norms. The stock would be sufficient to meet the demand for December. According to them, gold sales for the entire year 2014 are likely to end higher by at least 5% in comparison with the previous year.
Elsewhere, spot premiums at Chinese Shanghai Gold Exchange remained steady at $2 per ounce over spot prices on 1 kilogram bars. The premiums in Hong Kong and Singapore remained lower at $1.10 per ounce and $1.20 per ounce respectively. Meanwhile, the gold premiums in Dubai edged higher to $1 during the week.
Source:metal.com
No TDS disallowance on payment of taxes by payee; proviso to sec. 40(a)(ia) effective prospectively
IT : Benefit of second proviso to section 40(a)(ia) giving concession to assessee from deducting TDS in case receipient of amount in question had already paid taxes on such amount would be available with effect from 1-4-2013 only
TRO could pass garnishee order to freeze overdraft facility of a habitual tax defaulter
IT : Where on assurance given by assessee to pay amount due, garnishee order issued against it was uplifted but despite that assessee did not pay tax, authorities were competent to issue garnishee order/notices freezing /attaching credit facilities allowed by banks to assessee
SC : Claim of 'BSE', being secured creditor of defaulting member, had priority over dues of Income-t
IT : By virtue of lien on securities under rule 43 of Bombay Stock Exchange Rules, BSE being secured creditor of defaulting member would have priority over dues of Income - tax department
Stock transfers by 100% EOU to DTA unit wasn’t liable to SAD
Excise & Customs : Stock transfers made by 100% EOU to DTA units are exempt from SAD duty portion of excise duty (which is levied as equal to customs duty)
Sec. 69C also covers exp. unearthed during search against which no explanation was given by assessee
IT : It is only such adverse material, as is unearthed during search, alone can be basis for purpose of completing block assessment, and not one, that is already disclosed in books of account in earlier assessment years
Composition Scheme is for dealers engaged in construction, selling of flats and not for works contra
CST & VAT : A.P. VAT : Where assessee, a works contractor, entered into agreement for executing works contract of construction of residential apartments and it opted to pay tax by way of composition under section 4(7)(d), since section 4(7)(d) was applicable only to a dealer engaged both in construction and selling of residential apartments, assessee was not entitled for composition
Rupee Weak Against Us Dollar
The rupee made day's low of 62.73 against the US dollar to trade at over 10-month low against the greenback due to increased demand for the US currency from importers and a weak opening in domestic equity markets.
Forex dealers said besides fresh demand from importers for the American unit at the Interbank Foreign Exchange here, a lower opening in the domestic equity market after industrial output contracted by 4.2 per cent in October -- the sharpest decline in at least two years -- put pressure on the rupee. Besides, dollar's gains against other currencies overseas weighed on the rupee, they added.
The rupee after falling to over ten-month low of 62.50 against the greenback, bounced back to end 4 paise higher at 62.29 on Friday on selling of dollars by state-run banks on behalf of the RBI.
Source:economictimes.indiatimes.com
CBDT redistributes work among its chairperson and members
IT : Distribution of Work among Chairperson and Members of CBDT
Mere decline in gross profit rate and uneven increase in exp. won't be a valid ground to reject audi
IT : Where assessee maintained regular books of account which were duly audited, decline in gross profit and disproportionate increase in expenses in certain heads cannot, by itself, be ground to reject book results
Property of accused had to be lifted on his acquittal from offence under Money Laundering Act
CL: Where person accused of a scheduled offence under prevention of Money Laundering Act has been acquitted, attachment of his property must be lifted
No reassessment due to change of opinion of AO when he failed to interpret materials disclosed durin
IT : Reassessment to disallow exercise depreciation allowed on reappreciation of facts not justified
Sec. 11D doesn’t bar filing of civil suit by buyer to recover excess duty collected by seller
Excise & Customs : Section 11D of Central Excise Act, 1944 does not bar a civil suit by buyer to recover excess collection of excise duty made by seller
Amalgamation of service provider with receiver with retro-effect doesn't invalidate credit availed o
Cenvat Credit : Where service provider had provided services to receiver during 2006-07, service recipient would be entitled to credit thereof even if, after provision of service, service provider is amalgamated into recipient retrospectively from 1-4-2006
Sec. 44BBB: ITAT remands case as assessee didn't provide agreement from which nature of contract cou
IT/ILT : Where assessee offered income from supervisory service fee under section 44BBB, but relevant agreements were not placed for consideration, matter was to be readjudicated
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