Asia Rice-Trading Slows On Thin Demand; Prices Mixed

Trading in Asia's rice market weakened on thin demand amid price declines in Vietnam, but rates held up in Thailand as exporters stockpiled the grain before the holidays, traders said on Wednesday.

"A major exporter has been buying a lot of rice from the market for the past few days," a Bangkok-based trader said, adding fears prices could rise after the holidays prompted more buying.

"Thai rice prices have never been this low so they probably think it is a good time to buy," he said. Thai benchmark 5 percent broken grade rice edged up to $418 per tonne on Wednesday, free-on-board (FOB), from $413-$415 a week ago, thanks to the domestic purchases.

On Monday, Thailand's military junta approved the sale of 247,000 tonnes of rice in an open tender, part of continued efforts to offload rice from huge stockpiles accumulated under the previous regime.

On Friday, Thailand struck a deal to sell 2 million tonnes to China, also the biggest buyer of Vietnamese rice this year.

In Vietnam, prices eased as buyers stayed away during the holiday-shortened week while stocks thinned, traders said.

The 5 percent broken rice dipped to $385-$390 a tonne, FOB Saigon Port, from $390-$395 a tonne last Wednesday. The 25 percent broken rice stood unchanged at $360-$365 a tonne.

"The remaining stocks are very low now and only from late February can Vietnam offer its fresh winter-spring rice," a trader in Ho Chi Minh City said, referring to the country's biggest rice crop with its harvest peaking in March/April.

Thai rice exports this year could touch 10.2 million tonnes, just 500,000 tonnes below its 2011 record high, a level that could help it displace India as the top exporter, the UN Food and Agriculture Organization (FAO) said in a quarterly report issued earlier this month.

It projected India's exports at 10 million tonnes and said Vietnam will ship 6.6 million tonnes during the whole of 2014. The three countries would account for 67 percent of global rice trade in 2014, the FAO data showed.

Source:brecorder.com

India To Reap $12 Bn-Plus Budget Windfall From Oil Slide

The savings would come in the form of reduced fuel subsidy costs and higher petrol and diesel levies, the sources said. In addition, finance ministry officials have proposed restoring a crude oil import duty that was scrapped in 2011.

A plunge of nearly half in oil prices could help Indian Finance Minister Arun Jaitley reap a fiscal windfall of at least USD 12 billion when he presents his 2015/16 budget in February, two government sources told Reuters.

The savings would come in the form of reduced fuel subsidy costs and higher petrol and diesel levies, the sources said. In addition, finance ministry officials have proposed restoring a crude oil import duty that was scrapped in 2011.

As a result, the government would claw back most of the money that India saves on oil

imports. That would help Jaitley hit borrowing targets but dilute any boost to consumption in Asia's third-largest economy.

Energy-hungry India imports around 4 million barrels of oil per day and the net cost of the country's oil imports is expected to total USD 88 billion in the fiscal year to next March, based on a budgeted oil price of USD 105 per barrel.

Officials drawing up Jaitley's first full-year budget are penciling in a view that oil prices will average USD 65-USD 70 in 2015/16. That would cut the national import bill by USD 18 billion - or 0.9 percent of GDP, they reckon.

"Benefits from the fall in oil prices would reflect in the budget through lower oil subsidies and higher tax projections next year," one senior finance ministry official told Reuters.The sources estimate that the overall fiscal boost can total 750 billion rupees (USD 12 billion). More than half, 400 billion rupees, would come from savings on oil subsidies.

Source:moneycontrol.com

Electrical fittings and cables are integral parts of windmill; eligible for depreciation at 80%, say

IT : Electrical cables, fittings and other electrical works connected with windmill are a single composite unit and, hence, eligible for depreciation at rate of 80 per cent

No concealment penalty if income surrendered by director during search was honoured by Co. by filing

IT : When surrender of undisclosed income made by director under section 132(4) was honoured by assessee-company in return, assessee was not liable to pay penalty

No concealment penalty for claiming excess deduction under I-T Act if assessee was liable to pay MAT

IT : Where assessee company had paid MAT, book profit disclosed by it was not income determined under Income-tax Act; therefore claim of extra depreciation did not lead to tax evasion and, hence, no penalty could be levied

No revision under sec. 254 on issue of double addition if it wasn't raised in grounds of appeal befo

IT : Where issue of double addition was not raised before Tribunal in grounds of appeal or in course of arguments, Tribunal was not bound to consider said issue; rectification of Tribunal's order would not be required

Steel Sector Stares At Tough Times In 2015, But Hope Afloat

With an above-global average output growth, India has retained its position as the world's fourth-largest steel producer this year but faces tough times ahead in 2015 amid growing imports and other concerns.

While production has grown at a pace faster than the global average for a significant part of 2014, demand has broadly remained sluggish and the sector is looking for a boost from the new government's stated emphasis on manufacturing and infrastructure sectors.

Hoping to benefit from the 'Make in India' programme, all steel producers would look to expand their capacity from about 100 million tonnes per annum currently. The total output stood at above 76 million tonnes in the first eleven months of 2014, cementing India's position as the fourth-largest steel producer for fifth year now.

The sector is also looking to benefit from the fall in iron ore prices to five-year low levels, as also from the declining coking coal prices. The sector, however, continues to lag on a host of parameters, while production cost remains high, particularly for PSUs, limiting its prospects in various export markets.

On the other hand, China is enhancing exports to India and other countries, while there is also a suspicion that the neighbouring country may be circumventing various duties. Among other Asian countries, Japan and Korea have started to reap benefits of free trade agreements, while imports have been rising from India sharply and exports have been falling.

The problem has got compounded due to sluggish trends in the domestic consumption, which has left a lot of unused capacity utilisation. In the current quarter itself, the steel producers have been forced to cut prices by 5-6 per cent due to higher imports, subdued domestic consumption and non-conducive global pricing trends.

The global prices are unlikely to rebound soon, which may come in way of any potential price hike by Indian steel makers, thus affecting their margins. India's per capita consumption is around one-fourth of the international average and this keeps the hope afloat for an eventual recovery. There is hope on the raw material front as well.

The closed iron ore mines in Karnataka and Goa are expected to start soon, making the situation better for domestic steel makers, many of which had to resort to imports. Coking coal mine acquisition by ICVL in Mozambique would also help PSUs and analysts believe that prices of this raw material are also unlikely to rise in the near term.

"The next year could be a 'mixed' year for steel makers if we can resist surge in imports. Demand will be there. With raw material prices set to remain lower, we are hopeful," head of a PSU steel maker said. SAIL Chairman C S Verma, on his part, hopes for a 8-9 per cent production growth next year even as during April-November period, it grew by just 1.3 per cent.

Source:asianage.com

Need To Revisit Long-Term Iron Ore Export Pricing Mechanism

With commodity prices dropping to their lowest level since the global financial crisis, the department of industrial policy and promotion (DIPP) has suggested that export prices of NMDC Ltd’s iron ore should be fixed to ensure adequate sales realisation. The state-run firm only exports to Japan and South Korea.

If the DIPP suggestions are taken into account, the government’s mineral trading arm MMTC Limited, which also finalises the export rates for NMDC under long-term agreements (LTA), may have to re-negotiate the prices.

“The department is also concerned about the fact that commodity prices are down and India should not end up getting low prices negotiated now for the LTA,” the DIPP said to the commerce ministry on December 15.

The DIPP’s suggestion is likely to get support from the domestic steel industry, which has been clamouring for stoppage of ore exports due to heightened demand in India. Both NMDC and the steel ministry have been traditionally opposed to iron ore exports. Global iron ore prices have dipped to a 5-year low at around $70 a tonne due to dip in demand from China. Tumbling global prices led to the state-run miner lowering the prices of ore lumps by Rs 200 a tonne and Rs 100 per tonne earlier this month.

Source:indianexpress.com

Delhi High Court imposes cost on taxpayer for artificial splitting-up of sale consideration to avoid

IT : It is abusive tax avoidance if taxpayer artificially splits consideration for sale of shares to competitor involving transfer of controlling interest and termination of control and management into two parts

HC initiates contempt proceedings against Superintendent for making coercive recovery pending stay a

Excise & Customs : Where revenue had initiated coercive recovery during pendency of stay application of assessee, said proceedings were stayed and contempt proceedings against Superintendent were directed to be registered suo motu

Supply of electricity from power plant set up by lessee was captive power plant; assessee could take

Cenvat Credit : Where assessee had leased out its land only with a view to set up power plant by lessee under an exclusive agreement to supply electricity to assessee for use in manufacture by assessee; said plant was captive power plant of assessee and was eligible for credit in hands of assessee

Aptma Urges Government To Impose Safeguard Measures On Yarn Import From India

All Pakistan Textile Mills Association (APTMA) has approached the Ministry of Textile Industry to take consequent and reciprocal measures by providing level playing field to compete with the international market place and immediately impose safeguard measures on import of Indian yarn into Pakistani commerce to stop the attrition of competitiveness of domestic textile industry.

As, India is the biggest competitor of Pakistan in the international textile arena and it is a matter of grave concern that Pakistani export markets are being slowly taken over by aggressive Indian marketing; during last one year, the Pakistani Rupee has appreciated and the differential between Pak and Indian Rupee has dropped from Rs 44.92 to current value of Rs 36.89 thus appreciating by Rs 8.03 (18 percent).

The impact of appreciation has been further aggravated by massive subsidies given by Indian Government to its export industry in the form of export subsidy @ 3% of export value, 5% relief in interest payment on capital expenditure, subsidy of Rs 1 on electricity tariff and numerous other incentives.

The import of Indian yarn into Pakistan is increasing day by day and during last three years the import of Indian Yarn has increased from 4,927 tons to 25,839 tons. It is a matter of serious concern that India has erected an invincible wall particularly against yarn imports, as a result of which there are no meaningful yarn imports into India.

APTMA in its letter to Federal Ministries of Finance and Commerce as requested that this matter involving survival of the largest industry of Pakistan be taken up with appropriate quarters including the Federal Ministries of Finance and Commerce. In view of the crisis situation they have called for action on an urgent basis.

source:ccfgroup.com

Rupee Opens Lower At 63.43 Per Dollar

The Indian rupee on Wednesday weakened against the US dollar, tracking the greenback’s strength against Asian currencies.

The local currency opened at 63.435. At 9.08am, the home currency was trading at 63.455, down 0.26%, from previous close of 63.2925 on the expectations that US interest rates will go up next year.

The dollar index, which measures the US currency’s strength against major currencies, rose to a five year high on Tuesday, now trading at 90.035, down 0.03%, from the previous close of 90.064.

Most of the Asian currencies were trading lower. Taiwanese Dollar lost 0.380% , South Korean Won lost 0.080%, Philippines Peso down 0.090%, Malaysian Ringgit lost 0.043%, Hong Kong Dollar lost 0.024%, and Indonesian Rupiah lost 0.016%.

10-year bond yield was trading at 7.937% compared with its Tuesday’s close of 7.922%. Bond yields and prices move in opposite directions.

Since the beginning of this year, the rupee has lost 2.61%, while foreign institutional investors have bought $42.65 billion during the period from local equity and bond markets.

Source:livemint.com

Interest on securities was to be taxed when it become due and not when it only accrued at end of ass

IT : Interest on securities would be taxable only on specified dates when it becomes due for payment, and not on that accrued as at end of assessment year

Where appellant insisted on bank guarantee from respondent, appellant must bear cost thereof

Service Tax : Where, though not required as per consent arbitration award, appellant insisted upon bank guarantee from respondent, it is logical and consequential that appellant must bear costs for securing such bank guarantee

HC remands issue of levying penal rate on inter-State sales to unregistered dealers without filing '

CST & VAT : CST - Where assessee made inter-State sales to unregistered dealers for which 'C' forms could not be produced and thereupon Deputy Commissioner levied tax at penal rate on such sales and Single Judge of High Court upheld same, matter was remitted for reconsideration

Forex loss on Foreign Currency Lone was in nature of revenue exp. as loan was raised for redemption

IT : Where assessee-company incurred loss on account of foreign currency non-resident loan and payment made on said loss in foreign currency was expenditure incurred to protect itself from foreign exchange fluctuation loss, therefore, said payment would be of revenue nature

ST Valuation Rule 2B in respect of money changing services isn't ultra vires to section 67, rules Hi

Service Tax : Valuation as per rule 2B of Service Tax (Determination of Value) Rules, 2006 of 'money changing services' is in consonance with provisions under section 67, as tax is levied on ostensible consideration with reference to RBI rate

Revenue Officers can't challenge order of Trial Court due to inadequate sentence as only Govt. can d

Excise & Customs : Section 377 of Code of Criminal Procedure read with section 135 of Customs Act, provides for Appeal by State or Union Government against sentence; hence, Assistant Commissioner of Customs could not prefer an appeal against inadequacy of sentence

HC rejected writ directing assessee to pursue his claim for compounded scheme before appropriate for

CST & VAT : Kerala VAT : Where assessee opted to pay tax at compounded rate and Assessing Authority granted sanction in that regard and later he passed an order cancelling above sanction, assessee was directed to pursue grievances before appropriate forum

Receipt of share premium via banking route wouldn't prove it as genuine unless AO had made proper en

IT : Where assessee-company received share application money with huge and unjustified share premium from corporate entities, merely because said amount was received through banking channel, Assessing Officer was not justified in accepting said transactions as genuine without making proper enquiries

Processing of waste of other units wasn’t manufacture; CIT made revision to deny sec.10B relief

IT : Allowing claim under section 10B to assessee without making an enquiry will indicate that order is erroneous and prejudicial to interest of revenue

HC treats application money of non-convertible debentures as cost of acquisition of detachable warra

IT: Where assessee was issued non-convertible debentures with detachable warrants and debentures were sold at loss of application money, sale proceeds of detachable warrants would be assessed as business income after deducting amount of application money

Penalty for delay in furnishing of AIR upheld as assessee a habitual defaulter failed to explain re

IT: Where Assessing Authority on appreciation of material had concluded that assessee was a habitual defaulter, in absence of any satisfactory explanation having been furnished by him for delay in furnishing annual information return, levy of penalty under section 271FA could not be faulted

CLB's order disposing of oppression plea in terms of family settlement wouldn't amount to an executa

CL: Where oppression and mismanagement petition was disposed off in terms of memorandum of family settlement arrived at between parties seeking withdrawal of petition, such an order would not amount to decree executable under section 634A