Over-invoicing of export consignment would invite penalties and confiscation of consignment

Excise & Customs : Provisions of section 113(d) would get attracted and goods may be liable for confiscation when value of export goods in invoices is exaggerated

No tax on interest income if assessee hadn't charged any interest, pending litigation on recovery of

IT : Pending litigation for recovery of loans given to co-operative housing societies, interest income could not be brought to tax in hands of housing finance corporation

Denial of sec. 10(23C) relief was justified on failure of assessee to produce audited books of accou

IT: Where assessee-educational institution seeking approval for exemption under section 10(23C)(vi) failed to produce audited accounts and balance-sheet for relevant assessment year despite opportunities granted, approval was denied

Oppression plea of petitioner couldn't be rejected at the outset without giving a reasonable opportu

CL : When dispute in petition filed under section 397/398 was with regard to legal or illegal transfer of shares, petition could not be rejected at threshold without giving reasonable opportunity to parties to establish their case

No disallowance if employees’ contribution to PF was deposited by employer before due date of filing

IT: Even employees' contribution towards provident fund made by assessee/employer on or before due date of filing return under section 139 would be eligible for deduction under section 43B(b)

IRDA specifies additional norms for insurers on handling of the unclaimed funds of policy holders

INSURANCE : Handling of Unclaimed amounts Pertaining to Policyholders

IRDA unveils revised norms on safety of electronic data and issuance of e-insurance policies

INSURANCE : Revised Guidelines on Insurance Repositories and Electronic Issuance of Insurance Policies

Refund of excise duty would be taxable u/s 41(1)

IT : Where excise duty refund received by assessee under section 41(1), same would be taxable

High Court debars co-operative society from carrying out banking business as it didn’t obtain licens

CL : A Cooperative Society registered under the Rajasthan Cooperative Societies Act, 2001 or a Multi-State Cooperative Society registered under the Multi-State Cooperative Societies Act, 2002 is not entitled to carry on banking business without obtaining licence from RBI.

Assessee engaged in manufacture of limestone powder in Himachal Pradesh is entitled to sec. 80-IC re

IT: Where assessee was engaged in business of manufacture of limestone powder and poultry grit claim of assessee under section 80-IC was to be allowed

Settlement under Bombay Sales Tax was denied to assessee as there was no statutory provision in this

CST & VAT : Maharashtra VAT - Where appellant, a partner in a firm, had addressed a letter to State Minister for Finance seeking settlement of sales tax dues payable by him as a partner of firm and said Minister accepted offer of settlement, in absence of any provision in Act and Rules, there could be no settlement with appellant so as to discharge him from his obligation to pay sales tax dues payable by firm

Sales commission and discounts aren't AMP exp.; ITAT directs adjudication in accordance with LG spec

IT/ILT: Sales Commission, discount, etc. are in nature of expenses directly connected with sales and, hence, would not be included within overall AMP expenses for processing under transfer pricing provisions; matter was to be decided following L.G. Electronics India (P.) Ltd. v. Asstt. CIT [2013] 140 ITD 41/29 taxmann.com 300 (Delhi – Trib.) (SB)

Indian Co. was AE of Singaporean Co. as their common director participated in their management and c

IT/ILT: Where assessee, an Indian company, made purchases of textiles, yarn etc. on commission basis for 'K', a Singapore based company, in view of fact that one 'G' was holding 99.9 per cent shares in assessee-company and he was also a common director in both companies who participated in management of both companies, condition of one enterprise participating directly or indirectly or through one or more intermediaries in its management or control or capital as prescribed under clause (a) and (

Sum paid to overseas liaisoning agent isn't 'FTS'

IT/ILT : Remuneration paid to overseas liaison agent is not 'consultancy fees' and is not FTS u/s 9(1)(vii)

High Court denied to interfere with discretionary powers of SEBI to order investigation into delisti

SEBI: The petitioner-company filed writ petition before the High Court for directing SEBI to investigate into and to stay the proposed delisting of equity shares of the respondent-company. The High Court held that power of SEBI to order investigation under Regulation 5 of SEBI (Prohibition of Fraudulent and Unfair Practice Relating to Securities Market) Regulations, 2003 was discretionary.

Now furnishing of Self-certified copy of PAN is mandatory to apply for registration under MP VAT Act

VAT/MADHYA PRADESH/INDIAN ACTS & RULES : Madhya Pradesh Value Added Tax Rules, 2006 – Amendment In Rules 11 and 75

MP VAT Rules specifies new maximum turnover limits to attract purchase tax

VAT/MADHYA PRADESH/INDIAN ACTS & RULES : Madhya Pradesh Value Added Tax Rules, 2006 – Substitution of Rule 5A

Jharkhand VAT: Now only Joint Commissioner can condone delay in filing of refund claim

VAT/JHARKHAND/Indian Acts & Rules : Jharkhand Value Added Tax Rules, 2006 – Amendment In Rule 19, Form Jvat 200, Jvat 204, Jvat 206 & Jvat 207

Input credit is available even if goods are sold at a price lower than their purchase cost

CST & VAT: Rajasthan VAT - Once a whole seller has issued VAT invoice to purchaser of goods, then input tax credit is allowable as per said invoice alone even if goods are sold at a price lower than their purchase cost

Contract of manufacturing goods as per specification without supply of material isn't a work contrac

IT: Where assessee entered into an agreement with PHL under which PHL had agreed to manufacture and sell to assessee certain pharmaceutical products as per specifications but assessee had not supplied any material to PHL, transaction could not be treated as contract for carrying out work liable to TDS under section 194C

Forced stay' in India due to invalid impounding of passport to be excluded for determining residenti

IT/ILT : Assessee will not lose non-resident status due to forced stay in India due to invalid impounding of passport

Loading of mined coal at pit-heads for transport to stockyards/crushing sites was 'Cargo Handling Se

Service Tax : Loading of 'Mined coal' at pit-heads for transport to stockyards or crushing sites from mine area was 'cargo' and liable to service tax under Cargo Handling Agency's Services

No sec. 36(1)(viii) deduction to co-operative bank as it failed to create special reserve in audited

IT : Where, assessee, a co-operative bank, failed to create a special reserve in its books of account out of eligible profits of relevant year, it was not eligible to claim benefit of deduction under section 36(1)(viii)

No transfer u/s 2(47) if developer was given only license to enter into property without transferrin

IT: Where assessee entered into a development agreement and had given only licence to developer to enter into property but no possession thereof was given, transfer of property did not take place on date of execution of development agreement

No transfer u/s 2(47) id developer was given only license to enter into property without transferrin

IT: Where assessee entered into a development agreement and had given only licence to developer to enter into property but no possession thereof was given, transfer of property did not take place on date of execution of development agreement

No recovery of duty on violation of conditions for claiming exemption if duty isn't mentioned in not

Excise & Customs : In case of violation of exemption notification, notice demanding duty may be issued under that notification; hence, where neither notice demanded duty nor option to pay redemption fine in lieu of confiscation was exercised by assessee under section 125, no duty could be demanded

Concealment penalty levied as loss on sale of fixed assets was claimed in P&L account and in IT retu

IT : Where against basic principle of accountancy, assessee claimed capital loss on sale of fixed assets in profit and loss account and had not revised return voluntarily, penalty for concealment of income was justified

Refund arising due to retro-reduction in duty can be filed within 1 year of issue of notification re

Excise & Customs : Where rate of excise duty reduced retrospectively vide Notification dated 31-10-2000, time-limit of 1 year to file refund claim would start from 31-10-2000

CAT orders CCI to reconsider charges of abuse of dominance by BCCI

Competition Act : Where Commission did not independently consider issue of abuse of dominance by BCCI and disposed of information by simply relying upon its previous order, impugned order of Commission was to be set aside and matter was to be remitted to Commission for consideration afresh

No reassessment to disallow alleged excess deduction of exp. if its details were made available duri

IT: Where assessee made available details of labour charges which was duly accepted by Assessing Officer during regular proceedings, re-opening of same for current year on basis of material obtained during subsequent year, was unjustified

ITAT imposes cost on CAs for intimidating RTI application when appeal is heard and pending for order

IT : ITAT imposes costs on assessee's counsels(CAs) and forwards matter to HC for punishment for contempt and to ICAI for disciplinary action for relying on a seemingly improbable proposition that an anonymous letter was received by him from benami employee of the Income Tax Department mentioning that some conspiracy was hatched by some income tax officers against the assessee which fact was not born out by record and not filing comprehensive affidavit as per Rule 10

No disallowance due to cash payment exceeding Rs. 20,000 for purchase of goods as assessee had no ba

IT : Where assessee had no bank account at place of purchase and cash payments were made on demand of seller, disallowance under section 40A(3) was not justified

RBI fixes USD 2,50,000 for remittances by individual for aggregate of certain current account transa

FEMA/ILT/INDIAN ACTS & RULES : Fem (Current Account Transactions) Amendment Regulations, 2015 – Substitution of Rule 5 & Schedule III

On sale of asset acquired after partition of HUF, CII had to be taken of the year in which asset was

IT : Where capital asset was property of HUF prior to 1-4-1981 and assessee acquired absolute ownership on 19-5-1998 by way of partition, assessee was entitled to calculate capital gains tax by taking Cost Inflation Index for financial year 1981-82

ITAT directs AO to made TP adjustment on proportionate turnover based on ratio of transactions with

IT/ILT : Where following binding judicial precedent assessee argued that TP adjustment could be made only on proportionate turnover in respect of transactions with AE, but argument of assessee were not considered by lower authorities, matter was to be remanded

RBI asks banks to create awareness among agricultural borrowers for hedging of commodity price risk

BANKING : Hedging of Commodity Price Risk – Creating Awareness Among Borrowers

No transfer of property under income-tax Act on execution of power of attorney without any considera

IT : Where owner of property executed power of attorney in favour of assessee without any consideration and thereafter property was registered in name of assessee's wife for certain sum, since property rights had not been handed over to assessee, he could not be treated as owner of property for computing capital gain in his hands

No rectification application for an issue not raised at the time of hearing of main case

Excise & Customs : No rectification of mistake application can be filed raising issue, which was not argued at time of hearing of main case

No ‘transfer’ arose if possession of asset was never given under an agreement to sell

IT : Where there was nothing to show that possession was ever delivered by assessee to purchaser in part performance of agreement for sale, there was no transfer within meaning of section 2(47)(v)

RBI hikes limit of forex remittance for Individuals to USD 2,50,000

FEMA/ILT/INDIAN ACTS & RULES : Fem (Current Account Transactions) Amendment Regulations, 2015 – Substitution of Rule 5 & Schedule III

RBI doubles limit of forex drawl for capital account transactions

FEMA/ILT/INDIAN ACTS & RULES : Fem (Permissible Capital Account Transactions) (Third Amendment) Regulations, 2015 – Amendment in Regulation 4

No interest on differential duty if it is paid prior to finalization of provisional assessment

Excise & Customs : In case of provisional assessment, if differential duty is paid even prior to finalization of provisional assessment, no interest can be demanded under Rule 7(4) of Central Excise Rules, 2002, because amount determined as payable on finalization is 'NIL'

No addition of notional interest on belated payments of customers if builder didn’t have right to re

IT : Section 68 permits an addition to be made only where any sum was found to be credited in books of account of assessee for that year

High Court denied excise exemption to assessee as he had violated condition of not availing credit

Excise & Customs : If assessee : (a) avails conditional exemption subject to non-taking of credit, (b) violates condition of exemption by taking credit and (c) does not reverse credit at any time before or after removal of goods, then, assessee would not be entitled to said exemption and it would be a case of 'clandestine removal

Trust working for relief of poor on behalf of NGOs like UNICEF or Care India would be entitled to Se

IT : Where assessee-society was engaged in providing consultancy, workshop training program, conducting research for and on behalf of NGOs related to WHO, UNO, etc. as these had no experience, said activity would fall within scope of section 2(15) entitled for exemption

Manufacturers exporting goods via Port of Mundra are also eligible to receive duty free intermediate

EXCISE LAWS/NNT : Exemption to Gold Potassium Cyanide used Within Factory of Production for Manufacture of Gold Jewellery – Amendment in Notification No. 44/2001-C.E., Dated 25-9-2001

Loss assessed couldn't be carried forward if return declaring income was filed belatedly

IT: Where assessee filed return declaring income after expiry of time extended by Assessing Officer for filing return but assessment was made at loss, assessee would not be allowed benefit of carry forward of losses under section 80

Uttar Pradesh VAT : Seizure of goods was justified as it were destined to unregistered dealer

CST & VAT: U.P. VAT - Where Competent Authority intercepted a truck carrying PVC dana from Delhi to Patna (Bihar) and found that neither consignee was a registered dealer in Bihar nor Suvidha number had been generated by him, an attempt to evade payment of tax was made by assessee and, therefore, seizure of dana and demand of security for release of same was justified

Company whose promoters were involved in fraud couldn't be selected as comparable for TP study

IT/ILT : Where TPO made addition to assessee's ALP in respect of rendering ITES services to its AE, in view of fact that one comparable selected by TPO was improper as it was rendering high end services involving specialized knowledge and domain expertise whereas promoters of another comparable were involved in fraud for earlier years and, hence, financial results of said company could not be relied upon, impugned addition was to be set aside

Burden was on accused to disprove existence of debt if he had accepted that dishonoured cheque bore

Negotiable Instruments Act : Where dishonoured cheque as well as signature had been accepted by accused respondent, presumption under section 139 would operate and burden was on accused to disprove cheque or existence of any legally recoverable debt or liability

Redemption fine has to be determined after ascertaining market price as per market survey

Excise & Customs : It is requirement of law that redemption fine should not exceed 'market price of confiscated goods less duty' and such market price can be obtained only on market survey, which must be done prior to determining redemption fine

Loss on writing off slow moving items in P&L account is allowable

IT: Where assessee's non moving stores and spares were corroded over a period of time due to wear and tear, assessee would be entitled to write off same in profit and loss account

AO gets flak from High Court for initiating block assessment even when info unearthed in search was

IT : If information discovered in course of search against one assessee has already been reflected in returns or assessment of other assessee, there is no basis to proceed/against other assessee under section 158BB

Nissan Exports 500,000Th 'Made In India' Car

In a record period of five years since the start of exports from India, Nissan has achieved a new milestone: exporting 500,000 cars to over 106 countries. In financial year 2014, Nissan was the second largest exporter of passenger cars from India and Nissan Micra has been regarded as the most exported car.

Demonstrating its commitment to India, Nissan, along with its alliance partner, made significant investment of INR 45 billion in a world-class manufacturing plant at Oragadam, near Chennai. The manufacturing plant not only caters to the growing domestic demand but also leverages India’s competitive advantage as an export-oriented hub.

Commenting on the new milestone achievement, Mr. Guillaume Sicard, President, Nissan India Operations said, “India is a key strategic market for Nissan. We have major manufacturing and R&D operations which support us to be one of India’s biggest exporters of cars.

While exports help us in optimal utilization of our manufacturing capacity, it also helps showcase world-class Indian production quality on the global stage and expands the scope for widening the export base for India-built cars. Datsun Go which is developed and manufactured in India, is a good example of ‘Made in India’ and ‘Made by India’.”

Nissan entered into a strategic understanding with Kamarajar Port Ltd. (Ennore Port Ltd.) and has been the first car maker to use the Kamarajar Port Ltd. as the export gateway since 2010. Nissan has been exporting vehicles to various regions including Europe, Middle East, Latin America, Australia, New Zealand, Asia and Africa.

While Nissan Micra constitutes 73% of exports from India, Nissan Sunny and Datsun Go are the other two export models from Nissan portfolio. Nissan started the exports of Datsun GO in 2014 to South Africa and Nepal.

For Nissan, India is not only a key hub for completely built units but also for parts supply. Nissan exports over 1800 types of manufacturing parts to 34 plants across 24 countries. Nissan India stands in the 2nd position in volume of shipping parts within the Nissan world.

Source:moneycontrol.com

Truck And Bus Tyre Imports Rise 60 Per Cent In 2014-2015: Automotive Tyre Manufacturers’ Association

Import of truck and bus radial tyres (TBR) has increased 60% in 2014-15 over the previous year much to the frustration of the domestic tyre industry, which is struggling to come out of a protracted slump.

TBR imports rose to 7.8 lakh tyres from 4.9 lakh tyres in 2013-14. Roughly 25 per cent of domestic replacement demand for TBRs is being met by imported tyres, according to Automotive Tyre Manufacturers' Association (ATMA).

"Tyre industry has been promoting the usage of radial tyres in commercial vehicles for reasons of fuel efficiency and safety and has invested heavily so as to be ahead of the demand curve. However imports of tyres, particularly truck & bus radials have been taking place indiscriminately and at low prices which, in some cases of Chinese imports, are even below the cost of raw materials that go in the making of a truck & bus tyre. This is causing huge injury to the domestic tyre manufacturers", said Dr Raghupati Singhania, chairman of ATMA.

Import of TBRs from China has gone up three times from 1.9 lakh tyres in 2013-14 to 5.5 lakh tyres in 2014-15 and China has come to account for 70 per cent of total TBR import by volumes in India. According to ATMA, huge surplus capacities in China are abetting dumping of tyres in India.

In a communication to Ministry of Commerce, ATMA has stated, "There is a concerted move to dump radial tyres in India so as to blunt India's edge in technologically superior radial tyre manufacturing. Indian tyre industry has invested Rs 20,000 crore in manufacturing state-of-the-art radial tyres in the last 3-4 years. However, a significant capacity is lying unutilised since demand is being met by imported radials, largely dumped into India from China.

Source:economictimes.indiatimes.com

Vedanta Says Will Work To Lift Cap On India Iron Ore Output

India-focused Vedanta Resources Plc (VED.L) will aim to lift a court-imposed cap on its iron ore output in Goa, the country’s top state for exporting the commodity, as it prepares to resume mining there in October after a three-year lull.

A mining ban that had been in place in Goa since September 2012 was lifted last year, but the resumption of operations was delayed while the government gave environmental clearance. The Supreme Court imposed a production cap of 20 million tonnes, of which Vedanta has been allocated 5.5 million tonnes.

“We believe that we can mine at much higher rates and we look forward to working with the government on lifting the cap,” Vedanta Chief Executive Tom Albanese told Reuters on the sidelines of an industry conference. He is also head of the company’s Indian unit, Vedanta Ltd.

Albanese said it would be up to a court-appointed panel to determine how much more Vedanta could produce. Increased supply from India would pressure prices for the steelmaking material that have recovered from a decade-low hit in April, but are still down more than 50 percent from last year’s peak.

India said last month it would cut export taxes on low-grade iron ore from Goa to 10 percent from 30 percent, in a move aimed at making it more feasible for miners to sell overseas amid the plunge in global prices.

“We do feel that the circumstances on the ground in Goa, with proper operating practices should support an industry much larger than 20 million tonnes per year,” Albanese said.

Goa exported about 50 million tonnes of iron ore a year before the ban was imposed in 2012 as part of a clampdown on illegal mining.

The state produced low-quality iron ore, with iron content of less than 58 percent, that was shipped mostly to China as Indian steelmakers prefer higher grade material.

But more Chinese mills have opted for high-grade iron ore following the drop in prices. Albanese believes there is still Chinese appetite for Goan ore, but said it would be tough to recover market share.

“Even in this current market where the buyer has a lot of choices … I do believe we will be able to find some market for our material,” he said.

“But I do think it’s important for Indian policymakers to recognise that we have lost a huge amount of market share over the past three years with these mining closures that it will be very difficult to recover from.”

Source:hellenicshippingnews.com

No reversal of Cenvat while writing off inputs/WIP for period prior to introduction of provisions fo

Cenvat Credit : Rule 3(5B) providing for reversal on inputs/capital goods written off 'fully' was introduced only from 11-5-2007 and provision regarding 'partial' write-off was introduced only in year 2011; therefore, same could not be applied for period prior thereto to seek reversal on partially written of inputs/WIP

Software development service provider couldn't be compared with a software developer under TP study

IT/ILT : Where TPO made addition to assessee's ALP in respect of rendering software development service to its AE, in view of fact that two comparables selected by TPO were improper on account of their huge turnover, brand value whereas another comparable selected by TPO was found inappropriate as it was developing its own software products, impugned addition was to be deleted

India Yarn Prices: Domestic And Export Markets

Spun yarn prices have partially declined in the last seven days in India, in line with a fall of cotton and polyester prices.

Our comprehensive review of Indian yarn markets covers the domestic markets in Ludhiana (Punjab) and Indore (Madhya Pradesh), with a wide range of products and counts, including cotton yarns (carded and combed), polyester spun, polyester-cotton, polyester-viscose and polyester-acrylic. Export market prices are also available for both cotton and polyester-cotton.

Source:emergingtextiles.com

Coffee Prices Falling; Tough Year For Indian Exporters

Indian coffee exporters are bracing themselves for a tough year as the coffee prices have plummeted with the latest forecast suggesting a good crop in Brazil and Vietnam, the top two producers of coffee in the world. Coffee exports from India have been weak with main buyers like European countries going slow on purchases.

The plans of the growers who have been holding on to the stock anticipating better prices have come unstuck as the prices may not rise in the immediate future.

"Globally the prices have fallen, but the growers here are not willing to sell at lower prices. As a result, there is a mismatch in rates. The export-trend is also weak.

So we are adopting a wait-and-watch policy," said M P Devaiah, general manager of Allanasons, a major exporter of coffee. What has upset the calculations is the coffee supply from Brazil.

Source:economictimes.indiatimes.com
 

Daimler To Export Mercedes Benz Buses From India

Daimler AG, the world's largest truck maker is preparing to export its fully built luxury buses under the Mercedes Benz brand to markets in Africa and South East Asia.

This will be the first instance when the luxury vehicle maker with the three pointed star logo will export a high end product out of India. These buses have been designed, engineered in India and adapted to the local market with a significant localisation level of 75% on bus body and overall localisation of over 50%.

Speaking on the side-lines of a bus manufacturing plant inauguration in Orgadam, Chennai, Hartmut Schick, head of Daimler Buses told ET, "We will be exporting both the bus chassis and fully built buses from India. The chassis exported will be used for Mercedes Benz Buses. We have already exported 150 chassis to Egypt, we are negotiating with Indonesia, Africa, so there are lot of markets to cater to. For fully built buses we may look at Nigeria in Africa and some of the South East Asian Markets."

Apart from Germany, Daimler uses its manufacturing base in Brazil and Spain to export MB buses, India will emerge as a key gateway to Africa and South East Asia. The company is currently analysing the specific markets in these two continents and may begin export next year.

On the similar lines, the largest luxury bus maker Volvo too is planning to export buses to some of the developed markets in the coming quarters.

India with quality and cost advantage has established itself firmly as an export base. Over the past few years, India has migrated from just being a small car exports hub to bigger cars like sedans and utility vehicles and now even the luxury cars like Chrysler Jeep SUVs will be exported to overseas markets.

Set up with an investment of Rs 425 crore, the new bus manufacturing facility in Chennai will have an initial capacity of 1500 units, which can be further expanded to 4000 units. The new plant will manufacture buses with gross vehicle weight of 9, 16 and above 16 ton range, in both double and triple axles with front and rear engine configuration.

The company will launch the buses in the domestic market in the third quarter of 2015. With these new range of buses, Daimler will cater to both private and government buys, which includes school buses, tourist buses and intercity coach buses accounting for 15,000 units per annum said the company.

Schick expects the volume of the Indian market for buses weighing over eight tons to more than double by the year 2020. "Our two-brand strategy allows us to offer our customers in the region the right products and services for them," he said.

The new bus plant will create 1,300 job opportunities in the state, 300 for DICV and additional 1,000 at Wrightbus International, the bus body builder for Daimler.

Calling it the second wave of growth in India, Daimler India Commercial Vehicle on Wednesday unveiled a range of trucks and buses - under Bharat Benz and Mercedes Benz brand and higher horsepower 31 tonner deep mining trucks and 49 tonner local heavy duty tractor.

In a short span of four years, Daimler has already captured the number 3 position in the heavy duty truck space by selling over 22,000 units. With the localised new mining trucks, company will take on the imported models of Volvo and Scania. Daimler India has already secured orders for 600 mining trucks in a market that has an annual appetite for 2000 trucks.

Source:economictimes.indiatimes.com
 

India, Second-Biggest Wheat Grower, Reaping Smallest Crop Since 2008

India is probably heading for the smallest wheat harvest in seven years after rains and hail ravaged farms, forcing bread and pizza makers to boost imports.

Production is set to drop as much as 17% to 80 million tonnes from a record 95.9 million tonnes a year earlier, said Pravin Dongre, chairman of the India pulses and grains association. That’s the lowest since 2008, official data show. The government estimates output at 90.78 million tonnes.

Unseasonal rains have ruined crops and lowered the quality of wheat in the world’s largest producer after China. That’s spurred flour mills to increase imports for blending with local grain as global prices trade near the lowest level since 2010. The harvest normally starts in April and ends by June.

“We’re shattered as almost all my wheat, potato and mustard crops were damaged by the untimely rains,” said Sateesh Kumar, a farmer from Uttar Pradesh. He harvested 5.2 tonnes from 11 acres, down from 22 tonnes last year.

Crops from wheat to rapeseed and vegetables were damaged on about 19 million hectares as rainfall more than double the 50-year average in February and March drenched fields, according to government data. The main wheat-producing regions had almost five times the average, data show. That’s discoloured the grain and raised moisture content.

“What we are hearing from our sources is that there is huge damage to the crops,” Dongre said. “In some areas, there is no grain at all.”

Mills in southern India, which depend on supplies from growing regions in the north, say imports from Australia are cheaper and of better quality. The grain transported from central and northern India to Chennai and Coimbatore in the south sells at about Rs.18,500 a tonne, compared with Australian wheat which is available for $265 to $270 a tonne in bulk at Tuticorin port, according to P. Gunasekaran, president of the Tamil Nadu roller flour mills association.

Wheat traded in Chicago, which entered a bear market in January, tumbled 24% in the past year, more than the 4% decline in Mumbai prices. The contract for delivery in July was little changed at $4.87 1/2 a bushel on Chicago board of trade on Thursday.

“We have to import as the quality of Indian wheat has been affected by the untimely rains,” said M.K. Dattaraj, managing director of Krishna Flour Mills Bangalore Pvt. Ltd, which processes about 84,000 tonnes annually. “We are blending Australian wheat with Indian varieties to meet specific requirements from bakeries and quick-service restaurants.”

Imports may surge to 1 million tonnes from 45,000 tonnes a year earlier if purchases from Russia and the Black Sea region are allowed, said Faiyaz Hudani, associate vice president at Kotak Commodity Services Ltd in Mumbai. Supplies from that area depend on the government easing phytosanitary requirements, according to Dongre.

Source:livemint.com

Gail Ties Up Shell As A Buyer For Lng From Its Us Portfolio

India’s flagship gas trading and marketing company GAIL (India) on Wednesday said it has entered into an agreement to sell liquefied natural gas (LNG) to Shell. GAIL’s chairman and managing director BC Tripathi said that a definitive agreement has been signed with Shell through its subsidiary in Singapore. However, he did not divulge the volumes or price at which the agreement has been sealed.

In December 2011, GAIL signed a deal with Cheniere Energy Partners to buy 3.5 million tonnes per annum (mtpa) of LNG from the Sabine Pass Terminal in Louisiana on FoB basis. Deliveries would start from January 2018. In April 2013, GAIL booked another 2.3 mtpa capacity to export LNG from the Dominion Cover Point terminal in Maryland.

Tripathi said that the gas to be imported from the US is expected to land on Indian shores at less than $9 per million British thermal units (mBtu). It has also firmed up another 0.5 mt sales with domestic buyers with retail and fertiliser units.

“We are not nervous, but we are cautious. We are evaluating the domestic market,” Tripathi said when asked if GAIL would be able to sell the entire LNG imported from the US in India. He did not ruled out the possibility of selling more volumes overseas in a similar contracts as with Shell. “Many companies have shown interest (to buy LNG),” he added.

Currently, spot LNG prices hover around $8-8.50 per mBtu, while LNG purchased through long-term contract arrives at $13-13.50 per mBtu. India buys 7.5 mtpa of LNG from Qatar’s Rasgas. The imported gas procured by Petronet LNG (of which GAIL is liable to take 60%) on long-term take-or-pay basis is now expensive compared with spot cargoes.

Tripathi said that supplies from Qatar had been reduced by 30-35%. GAIL has lost allocation of cheap domestic gas from the Reliance Industries-operated KG-D6 block for its petrochemical business and was forced to use LNG from Qatar, hurting its petrochemical earnings. GAIL is replacing the expensive long-term gas with cheaper spot buys to improve petrochemical revenues.

Meanwhile, GAIL would reissue the multi-billion-dollar tender to buy LNG ships with “changed norms” in July. Tripathi said that in recent months Indian shipbuilders such as Larsen & Toubro, Cochin Shipyard and Pipavav Shipyard have joined hands with Korean ship manufacturers to build LNG vessels here.

GAIL may hire LNG ships on short- or medium-term basis to import LNG from the US starting January 2018 if the new ‘Made in India’ ships are not ready by then, said Tripathi, adding that the new tender would seek the companies to build one ship in India and the remaining two overseas.

The government-owned company plans a capital expenditure of Rs 2,700 crore in FY16 against Rs 1,633 crore in FY15. It borrowed Rs 500 crore in FY15 and targets to raise another Rs 1,000 crore via bond issue in FY16.

GAIL reported a 47.42% drop in its fourth quarter net profit at Rs 511 crore against Rs 972 crore in the same quarter last year. The drop in profit is because of less gas trading and transmission volumes.

The firm reported a turnover of Rs 14,235 crore in the fourth quarter of FY15 against Rs 14,464 crore in the corresponding quarter in the last financial year.

Source:financialexpress.com

Rupee Up At 63.82 On Dollar Sales By Foreign Banks

The rupee rose against the dollar on Thursday afternoon due to dollar sales by some foreign banks, likely on behalf of their clients. Weak dollar demand, particularly from state-owned banks, also supported the rupee.

 

At 2.05pm, the home currency was trading at 63.82, up 0.32% from its previous close of 64.03. The local unit opened at 63.99 per dollar and touched a high and a low of 63.80 and 63.99, respectively.

 

“A couple of foreign banks are selling, particularly one based in London. There are definitely inflows in the market, but no one knows where are these flows from because even the stock market is weak,” said a dealer with a private bank. The local benchmark equity index Sensex was down 0.58%, or 157.02, points at 27,407.60 points.

 

Dealers are awaiting two key economic developments in the next couple of days. On Friday, the government will release the fourth quarter gross domestic product (GDP) growth numbers while on Tuesday, the Reserve Bank of India (RBI) will announce its interest rate decision.

 

The yield on India’s 10-year benchmark bond was trading at 7.65% compared with its Wednesday’s close of 7.67%. Bond yields and prices move in opposite directions.

 

Since the beginning of this year, the rupee has lost 1.25%, while foreign institutional investors have bought $6.84 billion from local equity and $6.11 billion from bond markets.

 

The dollar index, which measures the US currency’s strength against major currencies, was trading at 97, down 0.38% from its previous close of 97.371.

 

Source:livemint.com

Interest earned by co-operative society on idle funds kept with bank wasn't eligible for sec. 80P re

IT : Where assessee, a co-operative society, having accepted deposits from its members, kept idle funds with bank, since there was no nexus between interest earned on said deposits and business of assessee providing credit facilities to its members, it could not claim deduction under section 80P(2)(d) in respect of interest income in question

Penalty couldn't be upheld when revenue reviewed a matter after a whopping period of 10 years

IT : Where all authorities and Tribunal gave concurrent finding that agricultural income declared under amnesty scheme was required to be assessed in year under consideration as undisclosed income, same was to be upheld

Freight would form part of transaction value if place of removal is buyer's premises

Excise & Customs : Freight and other costs is included in value upto 'place of removal'; hence, where transfer of property takes place at buyer's premises, place of removal will be 'buyer's premises' and freight and other costs would form part of value upto that stage

Manufacturer exporting goods via Port of Mundra are also eligible to receive duty free intermediate

EXCISE LAWS/NNT : Exemption to Gold Potassium Cyanide used Within Factory of Production for Manufacture of Gold Jewellery – Amendment in Notification No. 44/2001-C.E., Dated 25-9-2001

TDS liability doesn't arise on payments made to NR shipping Cos or its agents

IT : Where assessee made payments to agent of non-resident shipping companies, assessee was not required to deduct TDS under section 194C in respect of said payment

No reassessment on basis of info of DDIT (Investigation) that cash seized from director belonged to

IT : Where certain cash was seized by police from director of assessee-company, merely on basis of information received from DDIT (Inv.), AO could not initiate reassessment proceedings by recording reason that creditworthiness of assessee had to be proved beyond doubt to accept claim of its director that money seized infact belonged to assessee-company

Stock statements given to banks for availing credit facilities don't establish undervaluation of goo

Excise & Customs : Stock statements given by assessee to banks for purposes of getting credit facilities do not prove undervaluation in absence of any evidence of flowback of additional consideration from buyer to manufacturer

Pension Fund Authority notifies norms for operational conduct and governance of Central record keepi

INSURANCE/INDIAN ACTS & RULES : Pension Fund and Development Authority (Central Record keeping Agency) Regulations, 2015

Cost of Acquisition of land to partner would be deemed as its book value on date of transfer on diss

IT : In case of transfer of land on dissolution of partnership firm, book value of land as on date of transfer would be deemed as cost of acquisition of said land in hands of transferee

Assessee who pursued writ after appeal was time-barred couldn't seek condonation of delay before Com

Service Tax : Appeal filed beyond total 3 months from receipt of adjudication order is beyond condonable period of delay of Commissioner (Appeals) and is liable to be dismissed; and, in that regard, benefit of section 14 of Limitation Act cannot be availed by person who pursued writ remedy after appeal was time-barred

CCI negates abuse of dominance by opposite party as it wasn't dominant in the relevant market of e-g

Competition Act : Where opposite party was not dominant in relevant market for provision of e-services through CSC network in India, proceeding against it for contravention of section 4 were to be closed

Interest earned on sums kept in FD out of sums granted by Govt. for infra development wasn't taxable

IT: Where sum granted by State Government to assessee-government company acting as nodal agency for increasing export of horticultural produce, was kept in fixed deposit before utilisation, interest earned could not be treated as income of assessee

Non-refundable membership fee has to be apportioned and taxed during period of membership, rules Guj

IT: Where assessee-company was providing facility cards to members on payment of one-time fee, and services were rendered partially in a year, revenue earning was to be spread over period of membership

Construction of railway siding to transport ‘coal’ to captive power generating plant amounts to ‘inp

Cenvat Credit : Construction and related services availed for getting a railway siding constructed for transport of 'coal' to captive power plant for generation of electricity for use in manufacture, amounts to 'services used in or in relation to procurement of inputs' and eligible for input service credit

AO couldn't initiate reassessment again on same ground on which previous reassessment was cancelled

IT: Once first reassessment initiated on ground that assessee had availed deduction in respect of ceased liability without offering it to tax, was cancelled, second reassessment could not be initiated if no new information is available

A fraudulent company can't be chosen as comparable for TP study as its financial results aren't reli

IT/ILT : Where TPO made addition to assessee's ALP in respect of rendering call centre services to its parent company located abroad, since comparables selected by TPO were involved in fraud on account of which their financial results could not be considered as correct and reliable, impugned addition was to be set aside

Delay of more than 90 days in filing appeal before Commissioner (A) cannot be condoned even by High

Excise & Customs : In case of delay beyond 90 days in filing of appeal before Commissioner (Appeals), no appeal can be entertained by Commissioner (Appeals) and even High Court cannot condone such delay

CLB grants 30 days’ time to ‘Unitech Ltd.’ for repayment of deposits; appoints committee to monitor

Companies Act: Where Unitech Ltd. failed to repay matured FDs despite making profits yet it wanted to reschedule payment thereof, it was to be directed to repay the deposits as rescheduling of deposits was not allowed under new Companies Act, 2013 and, accordingly, directed the 'Unitech Ltd' to repay deposits within 30 days.

Construction of railway siding for transportation of ‘coal’ to captive power generating plant amount

Cenvat Credit : Construction and related services availed for getting a railway siding constructed for transport of 'coal' to captive power plant for generation of electricity for use in manufacture, amounts to 'services used in or in relation to procurement of inputs' and eligible for input service credit

Sec. 80-IC relief couldn't be restricted on ad hoc basis to 50% as manufacturing was started in mid

IT : Certificate of Deputy Director of Industries showing date of commencement of commercial production is a positive proof that assessee was manufacturing/assembling unit, entitled to deduction under section 80-IC

Process of sterilization of 'syringes and needles' for medical purposes does not amount to manufactu

Central Excise : Sterilization does not produce a transformation in 'syringes and needles' and does not lead to any value addition in said product; it merely removes bacteria which settles on syringe's and needle's surface and therefore, process of sterilization of 'syringes and needles' for medical purposes does not amount to manufacture

Cessation of liability to repay loan wasn't taxable as revenue receipts as loan was raised to purcha

IT : Where assessee, a sick industrial unit, took loan from bank to purchase capital assets, subsequent waiver of said loan by bank in one time settlement did not result in revenue receipt which could be brought to tax in hands of assessee under section 28(iv)

No denial of sec. 11 relief to hospital just because it didn't provide concessional treatment to poo

IT: Where assessee-hospital was providing medical relief to people at large, merely because surplus was generated from hospital activities could not be ground to deny exemption under section 11 to assessee

SEBI issues master circular for stock exchange and clearing corporations

SEBI : Master Circular for Stock Exchange and Clearing Corporation

Even development of housing projects for DDA would provide sec. 80-IB relief to assessee

IT : Where assessee, after development of infrastructure facility project, transferred same to Government for which it was paid cost plus margin of income by Government, it would be entitled to deduction under section 80-IB

Karnataka VAT : Segregation of value of goods and labour of works contract isn't permissible in Comp

CST & VAT: Karnataka VAT - In a works contract involving transfer of goods and labour, composition tax is payable under section 15(1)(b) on total consideration of works contract and segregation of composite contract is not permissible under section 15(1)(b)

A software service provider can't be compared with a software developer for TP study

IT/ILT: Company engaged in rendering of provision of software services to its AEs is not comparable to a company engaged in development of software products

SEBI releases revised FAQs on FPIs

SEBI : FAQs on SEBI (Foreign Portfolio Investors) Regulations, 2014

Cutting of large plates into smaller size using gas cutting machines amounts to manufacture

Excise & Customs : Extended period cannot be invoked, if, even as per department, there were doubts as to whether process amounted to manufacture

Action of real estate Cos of legitimizing their illegal acts by using political links was outside th

Competition Act: Where informant was aggrieved by fact that real estate companies were using political connections to seek approvals from Government of Haryana to legitimise their otherwise illegal actions, same could not come within purview of section 3

Gifts couldn’t be held as unexplained if identity and relationship of donor were known

IT : Where identity and relationship of donor was known, amount received by assessee by way of gifts from said donor could not be treated as income from undisclosed source

High Court allows depreciation on goodwill following ratio laid down by Apex Court in case of Smifs

IT : Assessee was entitled to claim depreciation on consideration paid and accounted for as goodwill

Sum paid to AE for use of its trademark couldn't be disallowed even if assessee's own trademark was

IT/ILT : Where TPO disallowed payment of royalty made by assessee to its AE on sales, in view of fact that there were no comparable companies offering similar services comparison made by TPO on basis of transactions of assessee's subsidiary company much prior to year under consideration could not be considered as internal CUP and, consequently, impugned disallowance was to be deleted

Haryana VAT : Levy of interest through order other than assessment order is valid, however, such pra

CST & VAT: Haryana VAT - Where Assessing Authority issued on assessee a notice proposing to levy penalty and interest and after framing assessment he passed a separate order dropping penalty proceeding but levying interest, Assessing Authority should have decided question of penalty and interest along with assessment order, but his failure to do so did not render impugned order null and void

No cancellation of trust's registration on ground that it was covered under first proviso to sec. 2(

IT : If case of assessee falls in first proviso to section 2(15) and, therefore, benefit of registration under section 12A is not available, this is a matter to be considered by Assessing Officer but, registration cannot be cancelled on that ground

Time lost in pursuing remedy before wrong forum is excludible from time-limit for filing appeal befo

Excise & Customs : Application seeking exclusion of time spent in remedy before non-jurisdictional forum bona fide, amounts to invocation of section 14 of Limitation Act

A developer can change its method of accounting if there is uncertainty in ultimate collection of re

IT : Uncertainty in ultimate collectibility of revenue justifies change of method of accounting by property developer from percentage of completion to recognition of income based on registration of agreements for sale or completion of possession and consequential reversal of revenue on cancellations/legal cases. This is so especially where such uncertainty is evidenced by cancellations of property bookings and National Consumer Dispute Redressal Commission upholding cancellation and dismissal

Time-limit to install capital goods by EOU has to be reckoned on basis of validity period of letter

EXCISE LAWS/NT : Exemption to Specified Goods when Brought into 100% EOU/STP Complex – Amendment in Notification No.22/2003-C.e., Dated 31-3-2003

Govt. tweaks scheme for goods procured by EOUs

EXCISE LAWS/NT : Exemption to Specified Goods when Brought into 100% EOU/STP Complex – Amendment in Notification No.22/2003-C.E. & Notification No.23/2003-C.E., Both Dated 31-3-2003

No reassessment by AO to withdraw sec. 80-IB relief without bringing any new materials to justify su

IT : Where Assessing Officer allowed deduction under section 80-IB(10) assessee being small scale industrial unit but sought to reopen assessment for withdrawing same on ground that total value of plant and machinery exceeded limit of Rs. 1 crore but he had not brought any new material which came to his notice, initiation of reassessment was bad in law

Using initials of buyer's brand name amounts to use of brand/trade name; such clearances not eligibl

Excise & Customs : Usage of mark/initials of buyer's name (say, HM for Hindustan Motors) amounts to use of buyer's brand/trade name on goods and same is neither eligible for SSI-exemption, nor includible for purposes determining eligibility limit of SSI-turnover of previous year

Interest paid on borrowed funds used by dealer to buy property for his showroom was deductible

IT : Where assessee, a dealer of vehicles, having taken loan, used certain amount for booking of showroom, in view of fact that assessee had sufficient surplus funds for making said advance and, moreover, it was a commercial decision which could not have been gone into unless Assessing Officer had concrete material to contend that transaction was a sham, assessee's claim for interest on borrowed capital could not be rejected

Declaration of additional income pursuant to survey doesn’t invite penalty in absence of any conceal

IT : Where assessee, consequent to survey, declared additional income which was accepted by Assessing Officer, imposition of penalty under section 271(1)(c) was not justified

Clearances of intermediate parts by job-worker to its principal has to be valued as per general rule

Excise & Customs : Clearances of 'motor vehicles parts' manufactured by job-worker for use in manufacture of 'motor vehicles' by principals, would be valued as per rule 11 and valuation rules 8 and 9 cannot apply thereto

Jewellery can be released after furnishing bank guarantee even if its actual ownership is to be dete

IT : Seized jewellery could be released on furnishing of bank guarantee by Karta of HUFs even if it was not cleared whether jewellery belonged to HUFs or Karta

Assessee liable to pay secs. 234B and 234C interest if he didn’t discharge advance tax liability on

IT: Where assessee's liability to pay advance-tax within time prescribed under section 211 existed on last date for payment of advance tax or at least on last date of financial year, on failure to pay advance tax on stipulated dates, interest was to be levied

Gujarat VAT : Replacement of spare parts during warranty period amounts to sale and liable to VAT

CST & VAT : Gujarat VAT - Where assessee, a motor car dealer, purchased spare parts and replaced same in place of defective spare parts during warranty period for which manufacturer issued credit notes, transaction of replacement of spare parts amounted to sale and levy of tax on said sale was justified

Stay granted by ITAT as TP adjustment were made on basis of comparable which were rejected in earlie

IT/ILT : Where comparables rejected by TPO were accepted to be good comparables in subsequent years/earlier years, assessee had a prima facie case for partial stay of demand arising mainly out of transfer pricing adjustment

Vinyl sheets printed with advertisement picture/slogan thereon is classifiable as 'printed matter'

Excise & Customs : Vinyl sheets printed with a picture and slogan thereon using thermocopied machine and meant for use as advertising material, is classifiable as 'printed matter' (Heading 49.01) and not as 'Illuminated signs, illuminated name plates, etc. not elsewhere specified' (Heading 94.05)

IT dept. couldn't object to arrangement scheme as transferor had given undertaking to discharge tax

CL : Where undertaking was given by company that in event of any demand raised by Income-tax Department, transferee company would duly discharge same in accordance with law, objection of income-tax department to sanction of proposed scheme of amalgamation was irrelevant

No reassessment after 4 years to deny sec. 10A relief if assessee had disclosed all material facts i

IT : Where section 10A exemption was allowed during assessment proceedings after examining return and accompanying document, reassessment to deny said exemption after expiry of 4 years is not justified unless there is allegation that facts were not truely and fully disclosed

Retracted statement of assessee couldn’t invalidate block assessment if it was also based on seized

IT: Where block assessment was not only based upon statement of assessee but was also based on seized documents, retracted statement of assessee could not invalidate said assessment

A.P. VAT : SC granted SLP to determine eligibility for composition scheme on construction of residen

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 and High Court held that assessee was not entitled for composition, SLP deserved to be granted

High Court directs ITAT to re-consider issue of allowing depreciation on goodwill

IT : Where Tribunal had not made any finding on merits of issue of depreciation, matter be reconsidered afresh

TPO to re-consider additions as assessee had filed details which were not available at the time of a

IT/ILT : Where assessee submitted necessary details in respect of management, technical and consulting services received from AEs for its civil construction work, ALP determined by it could not be disregarded without considering said details

Subsidy for setting-up industry in backward area couldn’t be reduced from actual cost of asset to co

IT: Assessee is eligible for additional 50 per cent depreciation in subsequent year when in earlier year 180 days period was not completed

Transit insurance of capital goods is eligible for input service credit

Cenvat Credit : Insurance of capital goods whether in factory or in transit and group insurance of workers and staff is indirectly related to manufacture and being 'activities relating to business', are eligible for input service credit

Honda Now Exporting Jazz From Indian Factory To South African Markets

Japanese car maker Honda has started shipping the premium hatchback Jazz to South Africa from its plant in Rajasthan in advance of the upcoming launch of the new version of the vehicle in India.

The company is manufacturing the new Jazz at Tapukara plant where it is spending Rs 380 crore to enlarge production capacity from 1.20 lakh units to 1.80 lakh units annually.

Honda Cars India Ltd (HCIL) Senior Vice-President (Marketing and Sales) Jnaneswar Sen told PTI, "We have already started the export of the new Jazz to South Africa from here. The vehicle is being produced at our Tapukara facility."

Last month the company shipped around 600 units of Jazz, City, Amaze and Brio to South Africa. A few cars were also exported to Nepal.

In India, the Jazz was first introduced in 2009 with a price of over Rs 7 lakh which was later reduced by Rs 1.6 lakh.

In 2013 the company put a stop to the production of the car in the country. The company expects to increase its sales network in the domestic market to around 200 cities and towns from the present 152.

Sen held, "In the current fiscal, we plan to expand sales network to over 300 outlets in around 200 locations from the current 232 showrooms in 152 cities. We are looking to expand more in smaller cities and towns."

By the end of 2016-17 fiscal, HCIL targets to touch 3 lakh unit sales milestones per annum. The company presently sells compact car compact sedan Amaze, compact car Brio, multipurpose vehicle Mobilio, mid-sized sedan City and premium sports utility vehicle CR-V.

Source:- delhidailynews.com

Russia To Export Poultry To India

Russia will start exporting poultry and poultry products to India within its program of diversifiying export supplies, reports the deputy head of the Russian veterinary body, Alexei Alexeenko.

"We have looked at what demand there is in India when it comes to our meat production, and in the first place there's a big demand for poultry. Our Indian partners show a lot of interest in our poultry," Alexeenko says.

Russia currently is actively seeking export markets for its poultry production, as the devaluation of the Russian ruble makes exporting much more profitable than a year ago. According to data from the Russian Institute of Agricultural Market Studies in 2014 Russia exported 57,000 tonnes of poultry, which is 5% more than in 2013.

The exports to Hong Kong saw a 45% increase, Vietnam a 201% year-on-year increase. At the same time, the Russian Agricultural Ministry expects that export of poultry will increase fourfold within the coming five years to about 200,000 tonnes by 2020. The most promising markets according to experts are South-East Asia and the Middle East, which Russia eyes to supply with halal poultry. The Chinese and Indian markets also look quite promising.

Source:worldpoultry.net

India Containerized Shredded Scrap Import Prices Stay Stable; Plastic Scrap Prices Show Mixed Trend

Indian containerized shredded scrap import prices continued to stay stable in the week ended May 15, while Indian plastic scrap prices on Scrap Register Price Index showed mixed trend.
 
The major plastic scrap commodities showed a mixed tread on Scrap Register Price Index during the week. The plastic scrap like HD blowing, HD moulding(colour), PVC resin desi, LLDP Blowing are traded up, while acrylic, C.P.W, hips(baff), PVC pest grade showed a down treand.
 
According to the Steel Index, imports of scrap into India remained uninspiring the week as a number of factors conspired to keep the market depressed.
 
The prices of sponge iron and locally sourced scrap are still low, ensuring imported scrap struggles to remain competitive. Demand for finished long products is still poor and, despite the potential for increased exports to Nepal after the recent earthquakes, the market remains pessimistic.
 
With talk of an increase in duties on imported steel once again flattering to deceive and the monsoon season fast approaching, market participants are struggling to see any meaningful positive demand or pricing movements until Q3 this year.

Source:metal.com

India Seeks To Tap Into Vast Private Gold Hoards

Indian policy makers have long sought to curb their citizens’ rapacious appetite for imported gold — tonnes of which are believed to be stashed away under mattresses, in cupboards and in the hidden vaults of Hindu temples.

But after the failure of gold import bans, restrictions and high tariffs, Prime Minister Narendra Modi’s administration is trying a new tack to reduce India’s hunger for imported gold.

It is planning to launch a new scheme to try to entice institutions and individuals to deposit their gold holding with banks, in exchange for interest payments — which could even be tax-free.

By tapping into India’s vast treasure trove of domestic gold — which the World Gold Council estimates could be as much as 22,000 tonnes, New Delhi hopes to provide a domestic source of the precious metal for jewellers to meet growing demand for wedding ornaments, thus pruning the country’s import bill.

But there is a catch: gold depositors must consent to having their precious metal melted down and recycled, which may be acceptable to those holding gold biscuits or bullion but will deter those with sentimental attachment to their jewellery.

Though the scheme’s precise details are still being worked out, analysts say the government hopes to woo affluent families now keeping savings as gold bullion, or Hindu temples, many of which — like the Sree Padmanabhaswamy Temple in Kerala — also have large stashes of gold donated by devotees, much of it biscuit or bullion form, hidden in their vaults.

“If you have sentimental reasons for attachment to the jewellery or its designs, then you are not the target audience for the scheme,” says Sonal Varma, chief India economist at Nomura. “It should be high net worth individuals, or middle-income households storing gold for investment. The temple trusts are also a primary target.”

Indians last year imported nearly 900 tonnes of gold — its second-largest import item after fuel. In 2013, India’s hunger for gold was blamed for the soaring current account deficit and heavy pressure on the currency, and prompted an attempted clampdown on imports. Restrictions have since been relaxed, and gold imports are again rising — up 78 per cent in value terms to $3.1bn year-on-year in April.

At least 65 per cent of gold imported into India is used to make jewellery for Indian brides, who wear the ornaments on their wedding day and then keep them as long-term financial assets, hedged against inflation and currency volatility. In emergencies, Indians routinely use gold ornaments as collateral to secure loans from informal money lenders.

Puran Doshi, who owns a jewellery shop in Mumbai, said he was doubtful that many Indian families would entrust their gold to a bank fixed-deposit style scheme, which would turn what is now a fairly liquid asset into an illiquid asset.

“Women are possessive about their jewellery — even if their husbands ask for it they don’t give it straight,” said Mr Doshi, who also gives customers loans against gold deposits. “They will only give it for emergencies, and only for cash.”

India had previously tried a gold deposit scheme in 1999 but results were poor, with interest rates too low to give customers an incentive to participate. Banks have also expressed doubts about the costs of running such complex schemes.

But Ms Varma said even if a small minority of Indians or wealthy temples participate in the scheme — and it raises 100 to 200 metric tons of gold a year — it would help cut India’s gold import bill by billions of dollars. “It’s an interesting concept,” she said.

Source:ft.com

Even refund of excess self-assessment tax paid by assessee would be entitled to interest

IT: Assessee would be entitled to interest under section 244A(1)(b) on amount of refund which was deposited by it by way of self assessment tax under section 140A

Karnataka VAT : Revisional authority cannot pass fresh assessment order as it can only direct AO to

CST & VAT : Karnataka VAT - Where Revisional Authority after setting aside assessment order proceeded to pass a fresh reassessment order under section 63A on assessee, Revisional Authority could only direct Assessing Officer for a fresh assessment order and could not proceed to pass a fresh reassessment order

Exemption not claimed at initial stage of import amounts to 'forgoing exemption'; it can't be claime

Excise & Customs : Where benefit of exemption notification was not claimed at initial stage of import, i.e., when such benefit was forgone, same cannot be claimed by a subsequent act at later stage

Food tasting and development exp. incurred by 'Yum Restaurant' to develop new recipes was revenue ex

IT : Where assessee provided support services to KFC franchisees in India and to US brand holders of KFC as well, in a systematic and organized way continuously over a period, service income earned was to be treated as business income

Rupee Opens Lower At 63.62 Per Dollar

The Indian rupee on Monday weakened against the dollar, tracking the losses in the Asian currencies market. The local unit opened at 63.62 per dollar and touched a high and low of 63.62 and 63.59, respectively. At 9.08am, the home currency was trading at 63.62, down 0.15% from its previous close of 63.52.

 

The Sensex fell 0.21% or 59.56 points to 27,897.84 points. The yield on India’s 10-year benchmark bond was trading at 7.862% compared with its Friday’s close of 7.857%. Bond yields and prices move in opposite directions.

 

Since the beginning of this year, the rupee has lost 0.75%, while foreign institutional investors have bought $6.80 billion from local equity and $6.02 billion from bond markets.

 

Most of the Asian currencies were trading lower. South Korean won was down 0.81%, Malaysian ringgit was down 0.51%, Thai baht was down 0.2%, Indonesian rupiah was down 0.14%, Philippines peso was down 0.11%, Singapore dollar was down 0.11% and Japanese yen was down 0.1%.

 

The dollar index, which measures the US currency’s strength against major currencies, was trading at 99.285, up 0.28% from its previous close of 96.014.

 

On Friday, Federal Reserve chairwoman Janet Yellen said a rate hike would be warranted this year if the economy keeps improving as expected.

 

Source:livemint.com

Receipt on transfer of units at initial construction stage are taxable as per percentage of completi

IT: Where assessee, a developer, having constructed commercial units, transferred same at initial stage of construction alongwith significant risks and rewards of ownership to buyers, assessee's income had to be taxed on year to year basis by applying percentage completion method

Deptt had to return bank guarantee once Director General of Foreign Trade discharged assessee’s expo

Excise & Customs : Bank guarantees/pay orders furnished by assessee, pending grant of Export Obligation Discharge Certificate ('EODC') must be returned back to assessee after Director General of Foreign Trade has granted EODC to assessee; department continues to have liberty to initiate legal proceedings permissible in law

Comparable earning commission couldn’t be taken as benchmark for an entity working on ‘cost-plus’ mo

IT/ILT : Where assessee operating as a procurement support services company for its AE i.e. GAP US, declared income on model of reimbursement of operating cost plus a markup of 15 per cent, TPO could not make addition to assessee's ALP by adopting a specific rate of commission on value of goods procured by GAP US directly from third party vendors from India

Sec. 33AB relief given to tea manufacturer on profit arising from tea grown by it after its blending

IT : Where assessee had utilized entire tea grown by it in its garden and by blending same with tea purchased from outside manufacturers, it had manufactured final product, entire profit arising out of such manufacture would get the benefit of section 33AB as only 11 per cent tea was purchased from outside manufacturers

No invocation of extended period if all facts were disclosed in letter addressed to Deptt. after fil

Excise & Customs : Where subsequent to filing of bill of entry, full facts were disclosed in letter addressed to Department, it was not a case of wilful misstatement/wrong declaration and, hence, extended period could not be invoked

High Court's Division Bench is competent to re-schedule payment of sums due in winding up petition

CL : Company Court and Division Bench being an extension of Company Court under section 483 is competent to re-schedule payment of sum due in a petition for winding up

Sec. 33AB relief given to tea manufacturer on profit arising from tea grown by it after its blending

IT : Where assessee had utilized entire tea grown by it in its garden and by blending same with tea purchased from outside manufacturers, it had manufactured final product, entire profit arising out of such manufacture would get the benefit of section 33AB as only 11 per cent tea was purchased from outside manufacturers

Profit rightly estimated on gross receipt as assessee failed to produce evidence in support of expen

IT : Where a civil contractor did not produce salary and wage register and other evidences in support of expenses incurred, Assessing Officer was justified in estimating profit at 8 per cent of gross contract receipts

Tribunal can't condone delay in filing applications for 'Rectification of Mistake'

Excise & Customs : There is no power to condone delay in filing Rectification of Mistake (ROM) applications; hence, ROM applications beyond 6 months from date of final order, must be rejected as barred by limitation

No mandatory pre-deposit of duty for disputes arose before August 6, 2014

Excise & Customs : In cases where lis between assessee and department commenced prior to introduction of mandatory pre-deposit in section 129E (i.e., before amendment by Finance (No. 2) Act, 2014 i.e., before 6-8-2014), same would be governed by erstwhile section 129E and mandatory pre-deposit would not apply thereto

ITAT slams AO for not adjudicating on contention that sum paid to AE wasn't taxable on grounds of mu

IT/ILT: Revenue should have adjudicated assessee's plea relating to non-taxability of payment made to foreign associate on basis of principle of mutuality

Addition of dehydrated vegetables and spices to raw rice to sell it as 'rice and spice' doesn't amou

Excise & Customs : Mere addition of dehydrated vegetables and certain spices to raw rice to sell it as 'rice and spice' would not make it a different product, as its primary and essential character still remains same; hence, it is not manufacture

COMPAT could revive application alleging unfair trade practice if same was filed prior to repeal of

Competition Act : Inability of MRTP Commission to dispose of application for revival of complaint containing allegations of unfair trade practices till repeal of MRTP Act cannot operate as detriment of complainant and Tribunal would have jurisdiction to entertain revival application

Trade advances given to shareholder won’t be held as deemed dividend

IT : Even if trade advance is given to shareholder or a concern out of accumulated profits, same would not fall within ambit of provisions of section 2(22)(e)

Sec. 80-IA: Profit on sub-leasing of land was deductible, being integral part of business of develop

IT : Assessee-company was incorporated as a Special Purpose Vehicle (SPV) for developing operating and maintaining toll roads. Assessee entered into a concession agreement with Taj Expressway Development Authority (TEA) in terms of which assessee was to develop, operate and maintain six lane access controlled expressway toll road, it was granted by TEA, rights for land development of 25 million sq. mts. of land along proposed Expressway for commercial amusement, industrial, institutional and res

Provision for obsolete stock was excludible for computing operating margin if it wasn't made by any

IT/ILT: Where assessee had created a provision for obsolete stock which had not been made by any comparable company, to determine ALP of international transaction of assessee, provision being an extraordinary item, suitable adjustments be made

Deptt. has to adjust legible tax credit against tax liability even if assessee has claimed excess cr

CST & VAT : Gujarat VAT - Once on assessment or reassessment a final amount of input tax credit is assessed and determined, a dealer is entitled to adjust such input tax credit against its output tax liability of current year

Brought forward losses couldn’t be set-off against interest income as such income wasn’t proved as b

IT : In absence of any material to show that interest income was business income, such income could not be treated as business income of assessee in order to allow set off of brought forward business loss from earlier years against said interest income

Provisional figures of census data are to be considered to determine status of bank as 'rural branch

IT: In order to determine status of a bank as a 'rural branch' for allowing claim of deduction under section 36(1)(viia) even provisional figures of census data available on first day of relevant financial year can be taken into consideration and if figure shown in provisional population total exceeds 10,000, then bank would not be entitled to benefit granted for rural branch

IRDA unveils report of expert committee on health insurance

INSURANCE : Report of Expert Committee on Health Insurance

ICSI appoints Atul Hasmukhrai Mehta as new nominee of National Advisory Committee on AS

COMPANIES ACT, 1956 : Section 133 of the Companies Act, 2013, Read with Section 210A of the Companies Act, 1956 - Central Government to Prescribe Accounting Standards - Constitution of National Advisory Committee on Accounting Standards - Notified Persons – Amendment in Notification No. SO 2425(E) [F.No.1/5/2001-Cl.v (Part V)], Dated 18-9-2014

Govt. withdraws old Ind AS notified in 2011

COMPANIES ACT, 1956/AAA/INDIAN ACTS & RULES : Companies (Accounting Standards) (Amendment) Rules, 2011 - Notified Ind AS – Rescission of Notification No. GSR 179(E), Dated 3-3-2011 and Notification No. GSR 650(E), Dated 29-8-2011

Interest paid on tax dues couldn't be set-off against interest earned on tax refund

IT : Where power is generated through steam and said industrial undertaking complies with all other conditions as stipulated under section 80-IA, it would be an eligible undertaking for claiming deduction in terms of section 80-IA(4)

No revision to disallow interest due to borrowings in making FD as this case was revenue neutral

IT : Where assessee used a part of loan taken from bank for making fixed deposits, even if income from interest on 'fixed deposit' was considered as income from other sources, still interest incurred by assessee on borrowings used for making said deposits would be allowable as deduction

AO to transfer VAT collected on activation on SIM cards to ST Deptt. as such transaction is a servic

CST & VAT : Haryana VAT - Where collection of VAT from assessee was without authority of law and Service Tax department had raised service tax demand upon assessee for period for which Assessing Authority had levied and collected VAT, Assessing Authority was to be directed to transfer amount of VAT to Service Tax department

Manufacture of 'route markers' by cutting pipes and painting would be valid activity u/s 80-IC

IT : Manufacturing of 'Route Markers' by undertaking process of cutting stainless steel pipes of larger sizes with electrical cutter including painting and welding of pipes, amounts to 'manufacture or production' entitling assessee to deduction under section 80-IC

Income from letting out of equipment and rendering of services to oil exploration co. is taxable und

IT/ILT : Income of assessee, a foreign company, from hiring of equipments and rendering services to entities engaged in oil exploration in India, was to be taxed on presumptive basis under section 44BB

SLP admitted against HC’s order holding that rule 8D was applicable as mixed funds were utilized for

IT : SLP granted against order of High Court where it was held that since funds utilized by assessee being mixed funds, interest paid on borrowed fund relatable to investment made in tax free funds was to be computed under provisions of rule 8D(2)(ii)

Grinding of wheat into wheat products like Maida, Atta, Suji amounts to manufacture; not liable to S

Service Tax : Conversion of wheat into wheat products (maida, atta, suji and bran) using process such as cleaning, grinding, milling, etc. amounts to 'manufacture' and not liable to service tax under Business Auxiliary Services

Proceedings before SetCom should abate if delay in passing order is due to any reason attributable t

IT : Only such proceedings would abate under section 245HA(1)(iv) which had been delayed on account of any reason attributable on part of applicant

Freight was includible in value of goods as assessee failed to prove that freight was charged separa

CST & VAT : Rajasthan VAT - Where assessee sold diesel to railways and delivered same by road through tanks at delivery point, since assessee was unable to lead any evidence to effect that freight was charged separately and was paid separately by railways, freight formed part of sale price

SAT upheld penalty on failure of Co. to obtain registration of SCORES within stipulated time

SEBI : Failure to obtain SCORES Login ID and password for redressing investor grievances within time stipulated by SEBI would constitute violation of section 15C

No reassessment to disallow exp. due to verdict of SC in other case if impugned issue was examined i

IT: Where Assessing Officer and Transfer Pricing Officer were not only aware of payment of royalty but had taken same into consideration at every stage, reopening of assessment on ground that on account of Supreme Court's ruling part of royalty was to be treated as capital expenditure, would be case of change of opinion which is not permissible in law

Subway doesn’t have dominant position in fast foods restaurant chains due to presence of Pizza Hut,

Competition Act : Due to the presence of many competitors in the market of fast food restaurant chains, like Pizza Hut, KFC, Mc. Donald's, Cafe Coffee Day, etc., consumers have several options to choose from. Subway neither has strength to operate independently of its competitors, nor the ability to affect its competitors and consumers. Therefore, Subway does not enjoy a dominant position in the relevant market of fast food restaurant chains

ITAT not to hear appeal ex-parte if new date wasn't intimated to assessee after adjournment of previ

IT : Where request for adjournment of hearing was made by assessee and it was not clear as to whether assessee was put on notice about new date of hearing, Tribunal ought not to have heard appeals ex parte

Deptt has to prove payment as bogus in order to deny credit availed on such payment

Cenvat Credit : Supplementary duty paid by job-worker at direction of assessee-principal on 'excess value', cannot be denied as credit in hands of assessee, unless transaction itself is questioned as bogus and department proves that there was no payment of excess value and duty thereon by assessee to job-worker

No denial of depreciation due to non-usage of plant in particular period once it had been used for b

IT : Where assessee company paid management consultancy fees and had filed evidence in support of said services rendered to assessee, matter was to be readjudicated to decide claim under section 37(1)

No disallowance of interest on loans if it was shown that borrowed funds were utilised to earn busin

IT : Where in case of assessee, engaged in construction activities, there was clear nexus of utilization of borrowed fund for earning income in form of interest, rent and business income of construction, his claim for deduction in respect of interest on borrowed capital was to be allowed

Export transactions can't be compared with domestic transactions for TP study

IT/ILT : Profit margins of transaction of export of parts and components could not be compared with domestic sale of manufactured products in computing ALP

Goods purchased by branch office and transferred to head office situated in other State wasn't 'inte

CST & VAT : CST - Where branch office of assessee situated in State of Andhra Pradesh had purchased Beedi leaves by participating in auction conducted by Forest Department of Andhra Pradesh and received them subsequent to payment made to seller and thereafter transferred said leaves to head office in State of Maharashtra, transaction was not an inter-State sale under section 3(a)

CLB isn't empowered to enquire that acquirers acting in concert acquired shares in violation of Take

CL: CLB, in exercise of its rights and powers conferred upon it by virtue of provisions contained in section 59(4) is not empowered to make investigation/enquiry into allegation that acquirers acting in concert have acquired shares in violation of Takeover Code

State development authority works with predominant object of public welfare; out of ambit of proviso

IT : Proviso to section 2(15) was not applicable to assessee-city development authority established for providing housing, roads, sewerage system, etc.

Now non-resident ECB lenders can undertake swap transactions with overseas banks to extend loan in I

FEMA/ILT : External Commercial Borrowings (ECB) Denominated in Indian Rupees (INR) – Mobilisation of INR

Trading limit under rupee drawing arrangement raised to Rs 15 lakhs

FEMA/ILT : Rupee Drawing Arrangement – Increase In Trade Related Remittance Limit

NBFCs can use historical spot gold price data published by Commodity Exchange for valuation of gold

NBFCs : Lending against Security of Single Product – Gold Jewellery

Banks gets one more year to spread losses on early sale of NPAs

BANKING : Prudential Norms on Income Recognition, Asset Classification and Provisioning Pertaining to Advances – Spread Over of Shortfall

Deptt. couldn't allege suppression if all facts were conveyed to it through applications/certificate

Excise & Customs : Extended period cannot be invoked, if details of clearance made without payment of duty to 100 per cent EOU were already informed to department vide CT-3 certificates and department was aware of all facts

Brought forward business loss is to be set-off while computing income u/s 10A

IT : Post amendment from assessment year 2001-02, claim of set-off of business loss for assessment year 2002-03 against profits of erstwhile section 10A unit for assessment year 2005-06 were allowable

Value of free of cost supplies made by recipient isn't includible in gross amount charged for abatem

Service Tax : For availing 67 per cent abatement in respect of construction services by service provider, value of 'free of cost' supplies made by service recipient would not form part of 'gross amount charged'.

Sum paid for transmission of electricity couldn't be held as 'FTS'

IT : Where in terms of agreement, assessee purchased electricity from UPPCL which was transmitted through UPPTCL, payment of transmission charges was not payment for fee for technical services, therefore provisions of section 194J were not attracted

CBEC puts in place a system to regularly monitor cases of litigation

EL : Putting of System to Monitor Regularly Litigation Cases for Safeguarding Interests of Union of India

CBEC strives to improve indirect tax administration

EL : Steps Needed to Be Taken to Improve Indirect Tax Administration

CBDT unveils draft rules to apply multiple year's data and 'range concept' for determination of ALP

IT/ILT : Section 92C of the Income-Tax Act, 1961 - Transfer Pricing - Computation of Arm’S Length Price – Draft Scheme of Proposed Rules for Computation of Arm's Length Price (ALP) of An International Transaction or Specified Domestic Transaction Undertaken on or after 1-4-2014

Doctors not entitled to gratuity and PF aren't employees of hospitals; sums paid to them would attra

IT: Remuneration paid to consultant doctors employed by assessee hospital would be subject to TDS under section 194J and not under section 192

Mere expressing unhappiness with compounded scheme doesn't tantamount to opting out of such scheme

Excise & Customs : Where assessee filed declarations opting for compounded levy scheme and assessee merely expressed unhappiness with scheme but never formally opted out of scheme, said scheme would apply for subsequent years

Steamer agent's services provided to foreign clients on Indian shores against foreign exchange amoun

Service Tax : Steamer agent's services provided to foreign client against consideration in convertible foreign exchange amounted to 'export services' and not liable to service tax, even if services have been rendered on Indian shores

Export transactions can't be compared with domestic transactions for TP study

IT/ILT : Where, assessee exported goods to its AEs and made sales in domestic markets, keeping in view material differences which affected substantially profitability of export transactions vis-a-vis domestic transactions, it would not be fair and proper to compare exports made by assessee to its AE with sales made by assessee-company to in domestic segment

Imported decorative items predominantly made by hand held as ‘Handicrafts’; taxable at 4% and not 12

CST & VAT : Delhi VAT - Where assessee was in business of sale of decorative items of glass and it imported said items from Italy, since above items were predominantly made by hand and were graced with visual appeal, they would fall in category of 'Handicrafts' under Entry No. 128 of Third Schedule to VAT Act

Accused abused process of law by filing criminal complaint as a counter blast against complaint of c

Negotiable Instruments Act : Where accused filed criminal complaint against appellant as a counter blast for complaint filed by appellant against accused under section 138, complaint filed by accused was in abuse of process of law

Losses already set-off against other income couldn't be set-off again while computing relief u/s 80-

IT : Where assessee, engaged in windmill power generation, claimed deduction under section 80-IA, since losses incurred by assessee had already been set off against other income of business enterprise, profits earned by its industrial undertaking would be eligible for deduction

No denial of sec. 80G approval due to non-registration of land in name of trust, being held for char

IT : Where assessee-charitable society had fulfilled requisite conditions of section 80G, approval under section 80G could not be denied merely because land required for establishing its activities had not been registered in its name

Assessee wasn't 'assessee-in-default' in absence of demand notice; provisional attachment of propert

IT : In absence of any notice of demand under section 156, assessee could not be treated as 'assessee in default'

Income can be determined on estimation basis only after rejection of books of account with a valid r

IT : Where Commissioner (Appeals) had accepted assessee's explanation regarding set off of unabsorbed loss and both members of Tribunal agreed that claim of assessee was acceptable if such explanation was correct, there was no need to send matter back to Assessing Officer for examining such explanation

Delayed appeal isn’t condonable even if ITAT decides it subsequently in favour of assessee on simila

IT: Where assessee took voluntary decision not to assail order of Tribunal and accepted same, only because assessee succeeded on same issue 5 years later, same could not be a sufficient cause to condone delay of 5 years in filing appeal before High Court

West Bengal VAT : AO couldn't cancel registration certificate on assessee's failure to file e-return

CST & VAT: West Bengal VAT - Cancellation of registration certificate of assessee on ground that he had not filed returns electronically was wrong and if assessee had complied with requirements of sub-section (4) of section 29, registration certificate had to be restored

No reassessment to disallow exp. due to TDS default by treating it as royalty if its details were di

IT/ILT : Where at time of making assessment, assessee disclosed all material facts showing that software licence fee paid to foreign company was in nature of revenue expenditure, AO could not initiate reassessment proceedings subsequently merely on basis of change of opinion that fee so paid was in nature of royalty and thus, assessee was required to deduct tax at source while making said payment

Sec. 80-IB relief allowed following order of ITAT couldn't be denied even if such was challenged in

IT: Where Commissioner (Appeals) allowed assessee's claim for deduction under section 80-IB by following earlier order of Tribunal in assessee's own case, merely because department had preferred an appeal before High Court against said order of Tribunal, it could not be a ground for rejecting assessee's claim

India Looks To Increase Oil Imports From Mexico

 India is looking at raising crude oil import from Mexico as it looks to broaden its import basket and cut reliance on volatile Middle-East.

Oil Minister Dharmendra Pradhan on his maiden visit to Mexico sought deeper collaboration with the Latin American nation that is opening up to foreign companies.

As part of strengthening bilateral ties through enhanced cooperation in the energy sector, ONGC Videsh Ltd (OVL), the overseas arm of state-owned explorer ONGC, has decided to open a dedicated office in the Latin American nation, an official statement said here.

Pradhan on a two-day official visit to Mexico held talks with his counterpart, Minister of Energy of Mexico Pedro Joaquin Caldwell. He also met Minister of Economy Ildefonso Guajardo Villareal and CEO of national oil company of Mexico PEMEX, EmilioLozoya Austin.

"India is trying to diversify its import sources of energy and more than 20 per cent of crude import of India is presently sourced from Latin America. Mexico figures high on the priority of India to enhance bilateral energy ties," Pradhan said during his meeting.

Presently, Indian Oil Corp (IOC), Reliance Industries and Essar Oil buy about 6 million tons of crude oil annually from Mexico.

India imports 78 per cent of its crude oil needs, close to 60 per cent of which come from Middle-East Asia.

Mexico last year opened up the energy sector for private and foreign participation. "The energy reforms in Mexico provides a window to transform the relationship from buyer-seller relationship to that of an energy partnership," the statement said.

During the meetings, Pradhan stressed Indian companies are keen to participate in the exploration and production activities in Mexico including in deep water and unconventional resources.

He also highlighted the fact that India has emerged as a modern refining hub with expertise to develop complex refineries at most cost effective manner.

OVL signed an MoU with PEMEX for cooperation in upstream sector.

The Mexican Energy Minister and CEO, PEMEX invited Indian investment in all streams of hydrocarbon sector, the statement said.

"The two sides agreed that it would be a win-win situation for both countries to intensify energy cooperation. The two ministers agreed to set up a joint working group on hydrocarbon at the official level to identify concrete areas of cooperation in the oil and gas sector," it added.

Source:- economictimes.indiatimes.com

India’S Auto Exports Hit A Record High In 2014-15

I want to appeal all the people world over from the ramparts of the Red Fort,” Prime Minister Narendra Modi said in August last year, “come, make in India; come, manufacture in India. Sell in any country of the world, but manufacture here.”

For inspiration, his target audience need not have looked beyond India’s vast automobile factories that build millions of vehicles for global markets every year. Just to illustrate, South Korean car maker Hyundai, which set up shop in the southern city of Chennai in 1996, now exports to 119 countries, shipping over 190,000 cars in 2014-15.

Exports of cars, utility vehicles, commercial vehicles and two-wheelers have grown every year since 2000. In the financial year that ended in March, Indian factories exported a record 3.5 million vehicles which, according to industry figures, was 15% more than what they managed a year back. This compares with domestic sales of just above 2.6 million units during the same period, up 5% from a year ago.

Exports have helped automobile companies mitigate risks from the cyclical demand in home and overseas markets. The tepid demand in the local market in the last three years saw a renewed exports thrust by automobile firms, particularly those that saw a sharp decline in domestic volumes.

Car sales in India contracted by 7% and 5% in fiscal 2012-13 and 2013-14, rising 5% in fiscal 2014-15.

Even as overall automobile exports rose, car exports fell 1.66% to 542,082 units in 2014-15 from 551,218 units in 2013-14. The reason: an 18% fall in overseas shipments by top exporter Hyundai Motor India Ltd to 191,221 units. An HMIL spokesperson attributed this to the sharper focus on domestic markets, adding that the maker of i20 small cars, Verna sedans and Santa Fe SUVs will “keep penetrating the existing markets and expand our business in the newer markets in the future”.

There is another reason, though. In September, Hyundai stopped shipments to Europe from its Chennai facility, assigning the task to its plants in Turkey and Czech Republic. The Indian operation continues to be the hub for Asia, Latin America and Australia, but it was Europe that accounted for 40% of HMIL’s exports.

“The decision to shift a product export to a specific overseas plant such as Turkey is a strategic decision to meet the customer demand in that specific market while balancing the domestic market demand,” the HMIL spokesperson said.

Where Hyundai slowed, others have leapt ahead. The local arm of Volkswagen AG, which makes Polo small cars and Vento sedans, raised 2014-15 exports by 95% to 64,994 units even as its domestic sales slipped by 14.3% to 45,018 units. Similarly, the local arm of Ford Motor Co., which saw domestic sales fall 11% to 75,138 units in 2014-15, raised exports by 70% to 81,703 units.
Ford, which makes Fiesta sedans, Figo small cars and EcoSport SUVs at its Chennai plant, is now building a second plant at Sanand in Gujarat, which will triple its exports. The $1 billion factory will produce 240,000 units per annum, out of which at least half will be shipped overseas.
The higher proportion of exports in overall volume was seen at the local arm of the local unit of Japan’s Nissan Motor Co. Ltd as well. Albeit a small base, local sales at the firm rose 25% to 47,474 units while exports rose 3.45% to 120,331 units in 2014-15.

Nissan’s India operations head Guillaume Sicard said this year could be even better for exports, with the government’s focus on manufacturing. “They have already streamlined documentation and consolidated schemes into simple and clear objectives for the enhancement of the automobile industry. We are also seeing increase in incentives for exports, especially for Europe,” Sicard said.

He, however, disagreed that exports are a strategy to compensate for poor domestic sales.
“We do not use exports as a strategy to tide over the slowdown in a market; we particularly prefer a robust environment in our domestic markets, as well as exports.”

Rakesh Batra, who heads the auto practice at consultancy EY India, said exports from India will continue to be the preserve of global automakers and not homegrown ones.
According to Batra, “unlike a Tata Motors Ltd or a Mahindra and Mahindra Ltd who need to invest in all the three areas—product, brand and distribution—making exports a strategic play, for the multinational firms it’s all about a sourcing decision”, since they own strong brands and networks.

With limited scope for products made in India, the addressable markets will also be select, he added, referring to countries in West Asia, Latin America, Africa and Southeast Asia. Trade agreements between South Korea and the European Union, too, have prompted companies such as Hyundai to shift some production out of India.

Sugato Sen, director general of industry body Society of Indian Automobile Manufacturers, said automobile export volumes are largely driven by smaller-ticket models like two-wheelers. Close to seven out of 10 automobiles shipped out of India in 2014-15 were either a scooter or a motorcycle. Two-wheeler exports rose by 15% to 2.4 million units.

The auto industry contributes to more than 40% of India’s manufacturing sector, according to R. Raghuttama Rao managing director at IMaCS (Icra management consulting services).
Most global vehicle makers have set up shop in India, clearly endorsing the point that India is competitive and capable of delivering quality despite several negative perceptions still associated with the country.

The auto industry provides guidance for the general manufacturing industry in terms of how to straddle the two ends of being a high quality player and cost competitive,” says Rao.
Nissan’s Sicard points out that taxation and sectoral reforms to encourage exports of made-in-India vehicles and lower cost of capital will help raise investments in manufacturing.
For now, though, global carmakers are sold on making in India.

On Monday, after meeting Prime Minister Modi in Seoul along with chiefs of several other companies, Chung Mong-koo, group chairman of Hyundai, said his company is looking at building a third plant in India. According to Reuters, Hyundai’s affiliate Kia Motors is also reported to be keen on building a factory in India. For global car makers at least, Make in India is truly on.

Source:- livemint.com

Duty On Rice Imports Fails To Cheer Farmers Despite Increase In Boro Paddy Prices, Say Experts

Bangladesh rice farmers are expressing concern that the imposition of import duty of 10% on rice imports has increased Boro (January - May) paddy prices by about 20% since its imposition last week but the increase has not benefited them apparently, according to local sources. Paddy prices are said to have increased to around Tk 600 - Tk 650 per 40 kilograms (around $193 - $209 per ton) from last week's Tk 500 - Tk 550 per 40 kilograms (around $161 - $177 per ton)

Local sources say most of the farmers had sold their output from the ongoing Boro harvest season even before the duty imposition and are now not left with any stocks to take advantage of the increased prices. Moreover, the prices are below the average production costs of around Tk 800 per 40 kilograms (around $260 per ton), say farmers.

They say the government's decision will only benefit big millers who have stocked enough paddy from the ongoing Boro harvest.

Some rice experts in the country told local sources that domestic paddy and rice prices had declined sharply before the Boro harvest due to higher imports, especially from India, despite sufficient production in the country. According to Food Ministry data, Bangladesh's private rice traders have imported around 1.36 million tons of rice from July 1, 2014 - May 7, 2015, compared to only 374,560 tons imported in the whole of 2013-14.

Absence of import duty on rice was said to be the main reason for a surge in imports. Therefore the government had imposed a duty of 10% on rice imports, with effect from May 10, 2015.

Millers and traders also expressed concern that the government's imposition of duty had led to a sharp decline in rice prices in India, especially in the eastern states and Andhra Pradesh, which usually export non-aromatic parboiled rice to Bangladesh. The duty hike may not protect the interests of farmers in this situation, they said. Some experts suggested that the government could either ban imports from India or increase the procurement price.

The government will reportedly procure one million tons of 2015 Boro paddy and 100,000 tons of Boro rice between May 1, 2015 and August 31, 2015. It has fixed the procurement price for paddy at Tk 22 per kilogram (around $283 per ton) and that for rice at Tk 32 per kilogram (around $412 per ton).

Source:- oryza.com

‘HR sheets and steel plates’ used for maintenance of ‘storage tanks’ are eligible for input credit

Cenvat Credit : HR Steel Sheets, Plates etc. used for repair and maintenance of storage tank (which is specifically covered under definition of 'capital goods'), are eligible for credit as 'inputs'

Mandap Keeper's services related to marriage were liable to service tax

Service Tax : Marriage is a social institution that existed much before religions came into being; hence, marriage is a social function and cannot be held as a religious function and services relating to thereto are taxable under Mandap Keeper's services

Lump sum payment made for procurement of right to use technical know-how is deductible u/s 37 and no

IT : In case of assessee, engaged in production of engineering related products, expenditure incurred towards procurement of right to use technical know-how by paying a lump sum consideration in course of business was a revenue expenditure falling under section 37 and provisions of section 35AB were not applicable to assessee's case

Seller was in default as he didn't collect TCS at time of sales without obtaining Form 27C from buye

IT : Furnishing of Form No. 27C by buyer at time when collection of tax at source is contemplated under section 206C, has to be construed as mandatory

India Eyes 15% Jump In Medicine Exports This Fiscal

Indian drug makers are hopeful of achieving double digit growth in exports this fiscal after being confined to single digit growth for two years, helped by factors such as several medicines going off patent, strengthening dollar and access to new markets in Asia.

"We hope to achieve 10-15 per cent growth in export of pharmaceutical products during the current fiscal," said PV Appaji, director general at Pharmaceuticals Export Promotion Council (Pharmexcil). This optimism is driven mainly by anticipated increase in the US Food & Drug Administration (FDA) approvals as a large quantum of medicines are going off patent.

"Increased focus of Indian drug makers on complex and high value generics and growing acceptance to our generics in key new markets like Japan and appreciating dollar should also help us achieve the targeted exports," Appaji told ET.

India failed to achieve targeted growth in export of medicines in the last two years. As against the targeted growth of 10 per cent during 2014-15 set by the commerce ministry, the country's pharmaceutical exports saw only 5 per cent growth at Rs 95,000 crore, largely on account of delayed regulatory approvals and price erosion due to increased global competition.

The North American market, which accounts for nearly a third of the country's pharmaceutical exports, proved a drag on revenues of several domestic drug makers, owing to slower product approvals in the US and piled up applications before USFDA.

Increased scrutiny and import alerts by the global drug regulators on facilities and products of Indian drug makers over the last couple of years, too, had adversely affected exports and profitability of several large medicine manufacturers, Appaji said.

Currency devaluations and geopolitical uncertainties in certain countries like Russia, Ukraine, Venezuela and Brazil also contributed to lower than anticipated exports.

Things are expected to improve this year. Large Indian drug makers such as Dr Reddy's Laboratories, Lupin, Sun Pharma, Glenmark and Aurobindo Pharma have lined up several complex generics for launch and are waiting for global regulatory approvals.

Many of them expect double-digit growth in sales this fiscal, anticipating quicker approvals.

GV Prasad, co-chairman and chief executive officer at Dr Reddy's, said India's second largest drug maker is targeting double digit growth this year. "Europe started to turn around and it is profitable now due to new launches. We are looking at working with a partner to enter in to the lucrative, however difficult, Japanese market," he said. The Hyderabad-headquartered company's chief operating officer Abhijit Mukherjee said the company was expecting increased ANDA approvals this fiscal.

Dr Reddy's, which has clocked $1 billion revenue from the US market alone, has 68 ANDAs pending for approval before the FDA for months. Analysts tracking the sector project faster regulatory approvals to drug applications under the FDA's new Generic Drug User Fee Act in the place of existing system that took at least 30 months for approvals.

"The target set by India of achieving double digit growth in exports appears to be feasible," said Alok Dalal, pharmaceutical analyst with CLSA.

Nitin Agarwal, analyst with IDFC Securities, expects FDA to review and act on 75 per cent of the ANDA applications within 15 months of submission.

Neha Manpuria, analyst with JP Morgan, in a report released in January had said, "Growth in the US has been affected by the lag in new product launches. While the trend so far has been tepid, any pickup in ANDA approvals would be a key driver for growth in the near term."

Source:economictimes.indiatimes.com
 

Indian Dgft Announces Relaxation On Scrap Metal Import Regulation

India’s Directorate General of Foreign Trade (DGFT) has announced certain relaxations to the earlier announced regulations on scrap metal imports into the country. The revised rule is on the back of concerns raised by several recycling bodies including Institute of Scrap Recycling Industries (ISRI), Bureau of International Recycling (BIR) and the Metal Recycling Association of India (MRAI).

The metal scrap import regulations will come into effect from July 1st. Current pre-shipment inspection certificates are valid only until June 30th, 2015. All existing certifications will go invalid by that time. According to DGFT, pre-shipment inspection agencies need to reapply for certification by an Inter-Ministerial Committee on or before 7th June. The status will be renewed once in every three years, DGFT public notice stated.

As per the stringent scrap import policy announced by Indian authorities in April this year, the Pre-Shipment Inspection Agency (PSIA) in the source country was required to make a video of duration between 3 to 5 minutes covering the inspection process carried out at containers. However, May 18 notice states that photos would be acceptable as an alternative.

The DGFT is believed to have come ahead with the new regulations after scrap shipments into the country were found containing radioactive and explosive materials in it. The Indian administrators stated that the country’s security is their top priority, while admitting that the new rules may lead to lesser scrap imports into India.

Meantime, MRAI has sought for several concessions in the proposed rule. The recycling association has urged to allow self-certification of scrap yards. In addition they also called upon DGFT to exempt shredded scrap from inspection certification requirement.

Source:metal.com

Rupee Opens Higher At 63.74 Per Dollar

The Indian rupee on Thursday strengthened against the dollar, tracking the gains in the local and Asian currencies market. The local unit opened at 63.74 per dollar and touched a high and a low of 63.68 and 63.74, respectively. At 9.07am, the home currency was trading at 63.69, up 0.22% from its previous close of 63.83. The Sensex rose 0.17% or 47.34 points to 27,884.55 points.

The yield on India’s 10-year benchmark bond was trading at 7.847% compared with its Wednesday’s close of 7.858%. Bond yields and prices move in opposite directions.

Since the beginning of this year, the rupee has lost 1%, while foreign institutional investors have bought $6.76 billion from local equity and $6.03 billion from bond markets.

Most of the Asian currencies were trading higher. Thai baht was up 0.34%, Malaysian ringgit was up 0.32%, Taiwan dollar was up 0.19%, Japanese yen was up 0.16%, South Korean won was up 0.15%, Philippines peso was up 0.14%, Singapore dollar was up 0.14% and Indonesian rupiah was up 0.08%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 95.396, down 0.05% from its previous close of 95.448.

Federal Reserve officials signalled they are unlikely to raise interest rates in June, while leaving open the option of tightening later in the year, Bloomberg reported.

Minutes of their April meeting released on Wednesday also confirmed that the Fed expects growth to pick up after stalling in the first quarter, even as officials fretted about the strength of consumer spending that makes up two-thirds of the economy, it added.

Source:livemint.com

Tribunal cannot follow discriminatory approach on same issues

Service Tax : Where, in earlier matters, pre-deposit had been waived and matter was remanded back to Commissioner (Appeals) for disposal on merits, Tribunal cannot adopt a different approach and order pre-deposit in other matters involving same issue

CESTAT applies brakes on assessee’s practice of taking back-dated credit after departmental audit

Cenvat Credit : If some credit is admissible on basis of cenvatable documents existing with assessee on date of visit of audit officers, but credit is not taken, then same can be taken only after date of visit of audit officers; assessee cannot take back-dated credit and file revised returns

Notice asking assessee to file block return couldn't be challenged in writ as assessee could file ap

IT : Against notice issued to assessee requiring him to file block assessment return as a result of disclosure made in search of premises of other person, assessee had remedies under Income-tax Act to file an appeal against said notice; writ petition against same was not maintainable

Condition of mandatory pre-deposit isn’t onerous as deposit is to be refunded if assessee succeeds i

Excise & Customs : Since : (a) right of appeal granted by statute is a conditional right; (b) condition of mandatory pre-deposit of 'small percentage' (i.e., 7.5 per cent) of duty/penalty confirmed, prior to filing appeal, is 'not so onerous' as to deprive assessee of an effective right of appeal, and (c) same is refunded in event of assessee succeeding in appeal; hence, said condition of pre-deposit is valid

Cash expense incurred by Actor in excess of Rs. 20,000 on travelling, costumes and makeup was allowa

IT: Where assessee was a film artist and incurred expenditure in cash in excess of Rs. 20,000 on costumes, makeup, wig material, travelling expenses etc., at different places of shooting same was to be allowed

CIT(A) gets flak from ITAT for holding that assessee didn't have PE in India as per DTAA without giv

IT/ILT: Where Commissioner(Appeals) had dealt with DTAA but had not discussed actual work and nature of job done by assessee nor had he given reasons as to how he arrived at conclusion that provisions of article 5 of DTAA of Indo-Netherland were not applicable, matter required readjudication

Duty paid goods’ doesn’t mean duty has to be paid before using the goods in manufacture

Excise & Customs : Goods on which duty is paid by 5th/6th of next month must be regarded as 'duty paid' goods; and therefore, if an exemption is conditional upon use of 'duty paid' motor spirit, said exemption may be availed in respect of final product using 'motor spirit', on which duty is paid by 5th/6th of next month

Vendor abused its dominance by forcing appellant to purchase software kit alongwith electronic ticke

Competition Act : Where OP having dominant position in relevant market of Point of Sale (POS) terminals in India had forced informant to purchase Software Development Kit (SDK) with Electronic Ticketing Machine (ETM), OP abused its dominant position

Sum paid to affiliate as per formula provided by Govt. for wind-farm taken on lease couldn't be held

IT : in absence of any material on record, Assessing Officer could not reject assessee's claim for depreciation on purchase of windmills taking a view that cost of said windmills had been inflated

Interest would be leviable if assessee doesn’t contest demand on merits

Cenvat Credit : If assessee has not contested on merits, liability to pay interest is automatic; however, evasion penalty alleging suppression/fraud cannot be levied, if notice fails to invoke reasons leading to said allegations

Matter remanded as assessee was dealing in securities frequently which rebutted his claim of being i

IT : Matter was to be reconsidered where assessee claimed that he was an investor in securities but facts revealed that he was both trader and investor in securities

SEBI allows AMCs to provide management and advisory services to category-1 FPIs

SEBI/INDIAN ACTS & RULES : SEBI (Mutual Funds) (Amendment) Regulations, 2015 – Amendment in Regulation 24

Govt. announces major initiatives on improving 'Ease of Doing Business in India'

Competition Act : Major Initiatives on Improving 'ease of Doing Business' in India – Simplification and Rationalization of Existing Rules and Introduction of Information Technology to Make Governance More Efficient and Effective