Andhra Pradesh VAT : Exemption granted under old Sales Tax Law couldn't be continued under new VAT L

CST & VAT: Andhra Pradesh VAT - Where State Government of Andhra Pradesh, under a concession agreement dated 17-9-2004, had granted exemption to assessee, a works contractor, from payment of sales tax under Andhra Pradesh General Sales Tax Act, 1957 for a period of 50 years and in meantime Andhra Pradesh Value Added Tax Act, 2005 came into force from 1-4-2005, since VAT Act unlike 1957 Act did not confer any power on Government to grant exemption, assessee was statutorily obligated to deduct tax

Signature of CIT on show cause notice revealed that he had obtained satisfaction for making revision

IT : Having put his signature in approval of draft show-cause notice, Commissioner had complied with provisions contained in section 263, and, thus challenge by assessee on account of non-recording of requisite satisfaction in said notice was not sustainable

Tribunal can't dismiss restoration application by citing lack of power of review

Service Tax : Restoration application filed, under rule 20 of CESTAT (Procedure) Rules, for setting aside an ex parte order cannot be regarded as an application for review; same must be allowed if assessee's non-appearance was for sufficient cause

FDI Policy prohibits non-equity investment in real estate sector

FEMA : FDI Policy prohibits non-equity investment in real estate sector

Chit dividend paid by Chit fund Co. to its members couldn't be treated as interest; not liable to se

IT : Chit dividend paid by chit fund company to its members is not interest falling under section 2(28A) and, consequently, no deduction of TDS under section 194A is required to be made

Addition of AMP exp. couldn't be deleted because profit margin of assessee matched with that of comp

IT/ILT : Addition for AMP expenses cant be deleted only because assessee's profit margin matches those of comparables

Department had to release seized cheque as it would not impede investigation

Excise & Customs : Since return of cheques cannot be said to stifle or impede investigation, hence, department was directed to release cheques seized from assessee

HC affirms Set Com order as application was rightly admitted and there was true disclosure of additi

IT: Where at time of filing application before Settlement Commission, assessment proceedings were still pending and, moreover, disclosure of additional income appeared to be prima facie full and true, impugned order passed by Settlement Commission to proceed with application did not require any interference

Renting of tents, cutlery and furniture on occasion of marriage is deemed sales under Rajasthan VAT

CST & VAT : Rajasthan VAT - Renting out of tents, cutlery, furnitures and carpets by assessee, a tent house, would be covered by definition of sale in section 2(35)(iv)

No exclusion of comparable due to business restructuring if it doesn't affect segment comparable wit

IT/ILT : A company earning income from infrastructure management services and e-learning and digital consulting is incomparable to company providing software design and development services

'LED video display boards' are temporary structures; entitled to 100% depreciation

IT : Where pre-requisite conditions for allowance of deduction under section 80-IA(4) had been satisfied in initial year, same could not be questioned in succeeding years unless and until revenue disturbed finding for initial assessment year

Notice served at old address of assessee was void when assessee had already informed new address to

Excise & Customs : When assessee has informed of his changed address to department, service of order/notices, etc. ought to be effected at changed address; hence, sending at old address cannot be regarded as complete service so as to set time-limits in motion

Offering additional income to end a scuffle couldn't be deemed as failure to make fair disclosure be

IT : Where there was no material with department to justify a demand of further amount from assessee and a sum was offered by assessee to put a quietus to matter, order passed by Settlement Commission to grant immunity from penalty and presecution in terms of section 245H could not be interfered with

New Circular couldn't be used to demand tax for prior period if first Circular had provided exemptio

CST & VAT : Karnataka VAT : Where first clarification dated 3-6-2006 had provided that 'white oats were exempt' and subsequent clarification dated 20-1-2010 provided that 'white oats were taxable', said subsequent clarification would be effective only from 20-1-2010 and no demand can be raised prior to said date

Sum received on sale of carbon credit is capital receipt

IT: Amount received by assessee on account of clean development mechanism (Carbon credits) was capital in nature

AO couldn't treat payer as assessee-in-default without examining his submission justifying non-deduc

IT: Assessing Officer couldn't treat payer as assessee-in-default without examining his submission justifying non-deduction of tax

Lacquering, lamination and conversion of films into various shapes for packaging amounts to manufact

Excise & Customs : 'Lacquering and laminating' of films and converting it into several shapes/sizes for use in packaging amounts to 'manufacture' and therefore, credit may be taken and used for payment of duty thereon

No disallowance due to TDS default on reimbursement if agent had already deducted TDS while making p

IT : No disallowance can be made under section 40(a)(ia) on account of reimbursement of expenses incurred by agent on behalf of assessee for transportation when obligation to deduct tax at source was complied with by agent for and on behalf of assessee

Delay in filing appeal due to misplacement of papers in counsel's office was condonable

Service Tax/Excise/Customs : Delay in filing appeal due to misplacement of papers in counsel's office must be condoned in interests of justice, as : (a) appeal involved substantive issues, (b) delay was not mala fide and (c) delay was not inordinate but only of 92 days

'OLA' abused its dominance by providing huge discount to customers and incentives to drivers in Beng

Competition Act: Where OP running radio taxi services under brand name OLA was dominant in relevant market of radio taxi services in city of Bengaluru and was offering huge discounts to its customers and incentives to drivers at cost of bearing losses, OLA was following predatory pricing to oust other players and was abusing its dominant position in relevant market

Cost of additions or improvements on habitable house is also eligible for sec. 54F relief

IT: Where assessee while computing indexed cost of acquisition had taken value of sold asset as on 1-4-1981 at Rs. 280 per sq. ft. but as per Govt. notification value was at Rs. 45 per sq. ft., assessing authority was right in recording opinion that income chargeable to tax escaped assessment under section 147

After Delhi HC Gujarat HC also held that ITAT can extend stay beyond 365 days if delay isn’t due to

IT : ITAT may extend stay of demand beyond 365 days if delay in disposing appeal not attributable to assessee

After Delhi HC Gujarat HC also allows extension of stay by ITAT beyond 365 days as delay wasn't due

IT : ITAT may extend stay of demand beyond 365 days if delay in disposing appeal not attributable to assessee

Cash deposit couldn't be held as unexplained if such amount was surrendered during search and reflec

IT: Where Assessing Officer made addition to income of assessee on account of cash deposited by assessee in bank, fact that such amount was surrendered during search and tax had been duly paid and cash had been duly reflected in wealth tax return, no addition was called for

Arranger fee paid to bank for mobilizing deposits isn't 'FTS' and not liable to TDS

IT/ILT: Admissibility of head office expenditure of a PE is to be governed by article 7(3) of Treaty between India and UAE with effect from 1-4-2008

Exporters Warn Of Layoffs From Continuing Export Decline

The Federation of Indian Export Organisations (FIEO) has warned that the continuing decline in exports would result in layoffs besides putting pressure on the current account deficit (CAD).

The statement came a day after Reserve Bank of India Governor Raghuram Rajan's warning that the global economy is on the brink of a 1930s-type Great Depression.

"The global economy, which hitherto was in challenging phase, is entering into a dangerous stage which will have ominous implications for India and the world," FIEO president S.C. Ralhan on Saturday said in a statement here.

Ralhan said that based on the current order booking position, he is apprehensive that exports may significantly decline in volume in the months ahead, which will result in layoffs in jobs.

"It would be a big setback for the country, which has kept employment creation its top priority and is aiming to create 10 million jobs every year," he said.

"If exports continue to move in negative territory, it will sooner or later put pressure on the CAD (current account deficit) also and may derail rebuilding of the economy which the new government is keen to do as forex reserves will not provide the cushion which the exports provide," Ralhan added.

India's merchandise exports continued to decline for the second month this fiscal, this time down by over 20 percent at $22.35 billion in May from $27.99 billion in the like month of the previous year, official data showed earlier this month.

Cumulatively, for the first two months of this fiscal, exports at $44.40 billion were down 17.21 percent over that during April-May
2015.

Saying that he was in full agreement with the RBI governor, Ralhan also said that the consecutive six-month decline in exports shows that the current level of state support for exports is not sufficient.

Rajan, who had predicted the 2008 US financial collapse, has been warning that global markets are now at the risk of a crash due to the competitive loose monetary policies being adopted by developed economies.

Pointing to the very low interest rate policies of the US Federal Reserve, the Bank of Japan and the Bank of England in a bid to stimulate their economies, Rajan has been warning that emerging markets are especially vulnerable to big shifts in capital flows triggered by the unprecedented monetary accommodation in rich countries.

Source:thestatesman.com

 

Volkswagen, Ford And Nissan Car Exports From India Exceed Domestic Sales

Foreign carmakers that entered India in a bid to target domestic markets have seen increased exports, which are well over their local sales.

FY15 saw car exports from India increase substantially. Three of the manufacturers- Volkswagen, Ford and Nissan have exported more cars than they have sold in India for the period 1st April 2014 to 31st March 2015.

These new companies have set up operations in India to cater to the demands of local markets as well as that of exports. This has allowed the companies to maintain optimum capacity utilization during periods when domestic demand is lower than expectations.

German automaker, Volkswagen exports of Vento increased by 74.45% to 56,064 units as against exports of 32,447 units in FY14. VW Vento was created for the Indian market but found increased acceptance in countries like Mexico and South Africa. Nissan exported substantial volumes of both the Micra and Sunny.

Nissan produced 82,271 units of Micra out of which 76,120 were exported while 44,593 units of Sunny were produced with 38,759 units exported. Nissan exports for period FY15 stood at 65-75% of total vehicles produced in the country. Ford also increased exports from India during the same period with added demand for its compact SUV EcoSport.

While exports of foreign car makers increased substantially, exports of Hyundai and Maruti Suzuki also improved significantly with India exporting 19.3% of 3.22 million passenger vehicles produced during 2014-15. FY15 saw Hyundai retain the title of being the largest PV exporter from India, followed by Nissan and Maruti. Overall, the five major automakers – Hyundai, Maruti, Nissan, Ford and VW contributed over 93% of exports volumes during the period FY15.

Source:rushlane.com

Sugar Prices Continue Bearish Trend, Mills Hunt Export Orders

The country has received 21 per cent more rainfall than normal till now, according to the India Meteorological Department (IMD). IMD data shows the quantum of rainfall between June 1 and 22 stood at 126.1 mm, which is 21 per cent above normal from the benchmark of 103.8 mm arrived on the basis of a 50-year average.

By June 25, the southwest monsoon covered the whole of the country more than two weeks ahead of the normal schedule in a year that was forecast to see below-average rains. This is certainly bound to bring cheers to farmers of all kharif crops, including sugarcane. The rain god would certainly help sowing activities over the next few weeks. The Met department has predicted that rainfall over the country is likely to be 92 per cent of long period average (LPA) during July and 90 per cent of LPA during August. LPA is calculated on the basis of the average annual rainfall recorded between 1951 and 2000 (89 cm) during the June-September period.

India produces around 300-350 million tonne of sugarcane, 24-26 million tonne of white sugar and 6-8 million tonne of jaggery and khandsari a year. The sugar industry also produces about 2,700 million litres of alcohol, 2,300 mw power and multiple allied products. A recent Care Ratings report said India is expected to remain a major sugar producer globally and the industry is expected be a net exporter during the 2015-16 marketing year for the sixth sugar season (SS), which runs from October to September in a row.

This is notwithstanding the fact that the area under cane cultivation in India has dropped to 4.16 million hectares as of June 19 compared with 4.39 million hectares a year earlier, according to the Union agriculture ministry. According to estimates made by different sugar mills, exports reached 558,000 tonne from October to May. As farmers prepare to harvest the third-biggest crop ever, extending the country’s surplus for a sixth consecutive year, sugar exports from the country are set to double. In all likelihood, shipments will be 2 million tonne in the 12 months starting October 1, analysts say.

Indian sugar mills have already contracted exports of 50,000 tonne of white sugar to Sri Lanka, Myanmar, Afghanistan and Turkmenistan at $340-$345 a tonne. The cargoes are for July shipment. Sugar stocks are now expected to touch 10.3 million tonne as of October 1, when the new season starts, up 37 per cent from the previous year.

Sugar mills are getting increasingly interested in booking export orders. This can be attributed to falling prices in the domestic market, coupled with growing carry-forward stock. Last year, prices fell below the cost of production to a seven-year-low because of weak demand and mounting stockpiles, according to analysts and sugar industry officials.

The cabinet earlier this month approved interest-free loans of Rs 6,000 crore ($943 million) to help sugar mills clear Rs 21,000 crore dues to farmers. The government has also pledged a subsidy of Rs 4,000 per tonne for raw sugar exports as domestic rates have risen above global prices. Despite all these, sugar prices continue to fall.

Last week, sugar prices continued their bearish trend as a few producers sold the commodity at a discount on June 20 to ease stock burden amid limited demand. Mill-level prices dropped by Rs 20-40 a quintal, pulling down spot rates by Rs 20-30 a quintal. In futures trading, sugar prices fell by 0.73 per cent to Rs 2,169 per quintal in futures trading, as speculators trimmed positions, triggered by higher supplies from millers against low demand from bulk consumers.

Source:mydigitalfc.com

India Iron Ore Exports Plunged In March

According to latest trade statistics released by the Ministry of Commerce in India, the iron ore exports by the country dropped sharply during the month of March this year. Huge cuts were seen in export prices too. This is when compared with the same month a year ago.
 
The iron ore exports by India during March 2015 totaled 804,233 tonnes, sharply down by 56.7% when compared with the exports during same month in 2014. The country had exported 1.857 million tonnes of iron ore during March last year.

Also, export prices dropped by 25.8% over the year. The iron ore export prices averaged at $71.4 per tonne in Mar ’15 as against $96.20 per tonne in March 2014. The iron ore exports during the month valued at $27.22 million.
 
The largest destination of Indian iron ore export was Japan. The Japanese imports totaled 289,813 tonnes, accounting for nearly 36% of the total exports by Canada. The second largest export destination was China with 287,238 tonnes, followed by Iran with 198,159 tonnes. The other importers of iron ore from India during March this year were Oman (27,500 tonnes) and Nepal (1,523 tonnes).
 
The cumulative iron ore exports by India during the three-month period from January to March in 2015 totaled 1.672 million tonnes. The primary importer of Indian iron ore during the three-month period was China.

The imports by China totaled 718,558 tonnes, dropping sharply by nearly 80% when compared with the total imports of 3.561 million tonnes during Jan-Mar ’14. The other key export destinations were Japan (576,712 tonnes, +13.5%) and Iran (198,159 tonnes, +482.5%).
 
The export price during this period averaged at $63.0 per tonne, dropping by almost one-third when compared with $94.6 per tonne. The total value of exports touched $105.42 million.

Source:metal.com

Charges for setting up of import plant in India is post-importation activity, not includible in valu

Excise & Customs : Charges paid under technical services agreement entered into with foreign seller, not as a condition of sale, but, only to successfully set up, commission and operate plant after it has been imported into India, cannot be included in customs value, as they related to post-importation activity

General testing/inspection and repair of vehicles don't amount to 'Technical Inspection and Certific

Service Tax : General testing, pre-delivery inspection and rectification/repair of defects by a motor shop cannot amount to 'Technical Inspection and Certification Services'; for classification under said services, inspection and certification must be with respect to standards of functionality, utility, quality or safety 'laid down in some statute or some Guidelines'

No deduction of employee's contribution to PF if paid before due date of filing return but after due

IT: Belated payment of employees' contributions to provident fund cannot be allowed as deduction in terms of section 36(1)(va)

Fci Stuck With 24M Tonnes Of Poor Wheat

The Food Corporation of India (FCI) is saddled with 27 million tonnes of wheat. Since 90% of grain procured this year were under relaxed norms, these stocks have a shorter shelf life and must be used in 8 to 10 months.

FCI, sources said, is releasing these stocks to the public distribution system (PDS). This grain is shrivelled, broken and lacks lustre and the challenge is to release the grain into the market in less than a year.

Officials said PDS needs roughly 20 million tonnes and FCI has to sell the rest in the open market. But officials say they're worried over imports of wheat, which sells cheaper than the government-fixed rates of FCI wheat.

"If we allow more wheat to be imported by private players over and above what they've already lined up, there'll be fewer takers for FCI grain. This will result in huge waste and losses to the public exchequer," an official said.

The government, he said, should come out with a norm stipulating that the price of imported wheat can't be less than the price at which FCI is offering the grain in the open market.

"The government took a bold step relaxing norms to help farmers whose crops were hit in the unseasonal rain and hailstorm. There's need to protect domestic interest," said another official.

TOI has learnt that private players have concluded contracts to import about 5 lakh tonnes of wheat and so far about 67,000 tonnes have been imported. Another 50,000 tonnes are likely to reach India soon.

"Going by this trend we feel imports would be around 5 lakh tonne in this fiscal. Some import is needed to make maida and suji. The imports can be mixed with the domestic wheat which has suffered luster loss for this purpose," said a government official.

Source:timesofindia.indiatimes.com

 

Bangladeshi Importers Fear Price Hike Of Indian Onions Could Leave Market In Tears

Bangladeshi importers are fearing market instability after India declared it is hiking onion prices by $175 per tonne to $430, saying the news from across the border came when demands are high due to Ramadan.

Mangager of Ahmed Enterprise in Jessore, Tuhin Saha, told bdnews24.com, “Even when we were importing onions at $255 per tonne, the prices ranged between Tk 22-25 per kilogramme at the land port depending on quality.”

He added the hike would push up prices to Tk 30-35, which would destabilise the market further.“Currently, onion prices are already unstable and the rise could cause the market for local onions to become unstable.”

Milton Saha, an onion importer in Khulna, told bdnews24.com, “The decision by the Indian government to hike onion prices a second time will raise our import costs, which will affect the local market.Prices of onion rose at the end of last month ahead of the Ramadan.

Indian exporters are attributing the rise of onion prices declared by India’s National Agriculture Cooperative Marketing Federation on Friday to a fall in supply.

“There was a crisis for onions in India since last month. The arrival of fresh supply from southern India could not lower the prices,” Kartik Chakrabarty, general secretary of Petrapole Port Clearing and Forwarding Staff Welfare Association, told bdnews24.com.

“As a result, NAFED increased the price to decrease exports on the advice of the government to control prices in India.” He confirmed a fax instructing export of onions at the new price reached Petrapole LC Station from Kolkata on Sunday.

Source:bdnews24.com

Pibc Chairman For Importing Electricity From India

Chairman Pak-India Business Council (PIBC), Noor Muhammad Kasuri here Sunday said electricity, gas and petroleum products import from India was the best option for resolving energy crisis in Pakistan.

Elaborating, he said, Indian electricity transmission network was situated at a very short distance with Pakistan. “It is much easier for both the countries to connect electricity lines of each other as compared to any other country and same is the case for import of oil and gas,” he said talking to APP. He also stressed the need for boosting trade ties between India and Pakistan on the basis of mutual interest.

Kasuri said India produced more than 200,000MW electricity and has made power trade agreements with its neighboring countries like Sri Lanka, Nepal, Bhutan, Bangladesh. He said the same method could be adopted for making a deal between India and Pakistan. The Indian private and public sector companies ere ready to export electricity to Pakistan, he added. Kasuri said the option of LNG and petroleum products import from India must also be weighed as per merit.

Source:dailytimes.com.pk

Rupee Opens Lower At 63.84 Against Us Dollar

The Indian rupee on Monday weakened against the dollar, tracking losses in Asian currencies. The local unit opened at 63.84 per dollar, down 0.31% from previous close of 63.64. The Sensex index lost 1.30% or 360.77 points to 27,451.07 points in pre-opening trade.

Uncertainty led to a weak rupee as Greece stunned creditors by calling a public vote on austerity, and the European Central Bank (ECB) startled Athens by freezing aid to Greek lenders.

 

Most of the Asian currencies were trading lower. South Korean won was trading down 0.564%, Malaysian ringgit was down 0.402%, Indonesian rupiah 0.262%, Philippine peso 0.239%, Thai baht 0.224%, Singapore dollar 0.155%, Taiwan dollar 0.136% and Hong Kong dollar 0.001%.

 

The yield on India’s 10-year benchmark bond was trading at 7.85% compared with its Friday’s close of 7.81%. Bond yields and prices move in opposite directions.

 

Since the beginning of this year, the rupee has lost 1.32%, while foreign institutional investors have bought $12.82 billion from local equity and bond markets.

 

The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.141, up 0.70% from the previous close of 95.47.

 

Source:livemint.com

'Keo Karpin Baby Oil' is taxable as medicine and not as cosmetics under Rajasthan Sales Tax Act

CST & VAT : Rajasthan VAT - Keo Karpin Baby Oil is taxable as medicine under Sales Tax Act and not as a cosmetics

No sec. 68 additions without making detailed scrutiny of creditors

IT: Where assessee derived income from transportation work, keeping in view assessee's turnover and nature of business, assessee's business income was to be estimated at 5 per cent

Bombay HC annoyed due to non-appointment of advocates, can dispose of revenue's appeals in their abs

Excise & Customs : High Court expresses its displeasure with non-appointment of advocates to argue appeals on behalf of revenue and warns Commissioners to take immediate steps to replace old Advocates, otherwise Court would be constrained to dispose of them in their absence

No disallowance of bad-debts just because it wasn't recognized as exp. in books of debtor

IT : Where assessee credited certain amount in its books and when it did not get any portion of it, wrote off same from books in subsequent year, claim of bad debts was to be allowed

Concentrate-manufacturer having quality control over beverage-manufacturer can't take credit of serv

Cenvat Credit : For a manufacturer of concentrates, final product is concentrate; hence, he cannot take credit of input services received by bottler (engaged in manufacture of beverages) for manufacture of beverages from concentrate

Illegally encroached land is not a capital asset; profit arising on its sale is taxable as income fr

IT: Property illegally encroached by assessee would not be considered as 'Capital asset' under section 2(14) and, consequently, gain arising from transfer of such property could not be assessed as capital gain but as income from other sources

HC acquitted respondent, accused of unauthorized dealing in Forex, as he had produced docs to prove

FEMA : Where except statement of co-accused there was no other independent witness and accused had proved his innocence by way of marked documents, accused was to be acquitted for offences under section 9 of FERA

Uniform allowance paid to employees isn’t exempt if no dress code has been specified for employees

IT : No exemption under section 10(14) shall be granted in respect of uniform allowance paid to employees if there is no dress code and the employees are free to wear any dress. ITAT has directed assessee-employer to include such allowance in salary of the employees for the purpose of deduction of tax under section 192

No need to reverse Cenvat credit when waste/scrap arising at end of job-worker isn't received back i

Cenvat Credit : There is no provision for reversal of input credit in case of clearance of waste and scrap and/or their non-return from job worker's premises

Increased profit due to TP adjustment not brought into India in foreign exchange was excludible for

IT/ILT : Where assessee having under priced its services to AEs, made transfer pricing adjustment suo moto, in view of fact that assessee could not bring increased profit on account of said adjustment in India in convertible foreign exchange within stipulated time, assessee's claim for exemption under section 10B was to be recalculated after excluding aforesaid amount

ITAT quashed reassessment as revenue failed to establish service of reassessment notice to assessee

IT : Service of notice under section 148, for purpose of initiating proceedings for reassessment is not a mere procedural requirement but it is a condition precedent to initiation of proceedings for reassessment

Department can't attach new properties if it already attached assets having value more than the tax

CST & VAT : Gujarat VAT - Where against estimated liability of assessee of Rs. 4.5 crores, his immovable property worth Rs. 5 crores was already under attachment, interest of Government revenue had been fully protected and, therefore, provisional attachment of bank accounts of assessee under section 45 was not justified

Govt. notifies Aditya Birla Nuva, Marico and DCM Shriram to undertake agriculture extension project

IT : NOTIFICATION NO. 52/2015 [F.NO.203/20/2015-ITA.II], NOTIFICATION NO. 53/2015 [F.NO.203/21/2015-ITA.II], NOTIFICATION NO. 54/2015 [F.NO.203/23/2015-ITA.II], DATED 26-6-2015

CBDT invites suggestions from officials for augmenting tax collections and widening of tax base

IT : Suggestions on Augmenting Tax Collections

If dispute involves penalty then pre-deposit may be ordered even if goods are lying under control of

Excise & Customs : When issue involved is of penalty and not of duty, pre-deposit of penalty may be ordered even if goods are in custody of department

No denial of sec. 80-IB relief due to violation of condition of max built-up area by a few housing u

IT: Where assessee had violated provisions of section 80-IB(10)(C) in respect of two units of housing project, denial of deduction under section 80-IB would be limited only to said two units and for balance units assessee would be entitled to deduction

Assessee can't be insisted to pay any amount for hearing appeal if department already had sufficient

CST & VAT : Gujarat VAT - Where sufficient security was available with department by way of attachment of properties of assessee, appeal filed by assessee against order of assessment was required to be heard on merits without payment of any amount

ITAT rightly held that transaction in shares were investment and not business transaction: HC

IT: Where both appellate authorities concurrently on basis of evidence held that transaction in shares held by assessee was in nature of investment, no interference was called for

Income from letting out of property of educational institution not taxable if same was used for educ

IT : Where assessee-trust generated income by giving hall and premises of its educational institution on rentals and said income was used for educational institution itself, such income could not be brought to tax

Bench of same strength can't disagree with a view taken by earlier bench; it must refer matter to la

Excise & Customs : Second bench of same strength cannot disagree with view taken by First Bench; instead, second Bench should refer matter to a Larger Bench for appropriate decision

Ongoing works contract commenced prior to 1-6-2007 may be reclassified under works contract service

Service Tax : In case of ongoing projects prior to 1-6-2007, assessee may seek reclassification under works contract services, but, assessee cannot switch over to Composition Scheme and cannot avail abatement under Notification No. 1/2006-ST; however, benefit of valuation rule 2A would be available subject to documentary evidences

Dealings by appellant opposite to predictions of market analysts doesn't prove that he was involved

SEBI : Where number of market analyst had recommended selling shares of LTFH in futures and options (F&O) segment and appellant had made profit by entering into such transaction, appellant could not be said to be privy to unpublished price sensitive information in entering such transaction

Income from letting out of educational institution not taxable if same was used for educational purp

IT : Where assessee-trust generated income by giving hall and premises of its educational institution on rentals and said income was used for educational institution itself, such income could not be brought to tax

CBDT notifies nature of business relationship which CA can have with client to ensure his independen

IT/ILT : Income-Tax (Ninth Amendment) Rules, 2015 – Insertion of Rule 51A

Trust's registration denied as building of educational institution is under construction

IT: Where assessee claimed registration under section 12A to administer educational institution but it was found that buildings for starting educational institution were under construction, assessee was not entitled for registration since no charitable activity was carried out during year

Auditor's certificate can't be a substitute for TP study to benchmark international transaction

IT/ILT : Auditor's certificate spelling out Head Office 'HO' overheads as a percentage of revenues of Indian Entity cannot be accepted as the basis for determining whether reimbursement for head office expenses received from overseas JV under agreement is on arm's length basis. The same will have to be benchmarked to an external comparable for determining Arm's Length Price. Auditor's certificate cant be substitute for Transfer Pricing study (TP Study) even though such certificate as basis for

Duty paid 'voluntarily' isn't 'duty paid under protest' for purpose of extending time limit for refu

Excise & Customs : Where it was found that assessee had paid duty voluntarily without insistence of department, same could not be regarded as 'duty paid under protest' for purpose of extended time-limit for refund claim

Co. providing Pharma support services can't be compared with a Co. providing consulting in infra sec

IT/ILT : Where TPO made certain addition to assessee's ALP in respect of rendering pharma support services to its AE, in view of fact that some comparables selected by TPO were Government companies engaged in providing consultancy services in water, power and infrastructure development and thus there existed functional difference, impugned addition deserved to be set aside

Govt. grants TDS exemption on all incomes other than business profits received by Category I and II

IT : SECTION 197A of the Income-Tax Act, 1961 - Deduction of Tax at Source - No Deduction in Certain Cases - Specified Payment under Section 197A(1F)

Bought out items cleared along with finished goods for being used outside factory are ineligible for

Cenvat Credit : Where assessee, a manufacturer of tower parts, had cleared bought out items like Nuts, Bolts and Washer along with tower parts for erection of towers 'at site' outside factory, said bought out items could not be regarded as inputs and were, therefore, ineligible for credit

Just because assessee was employee of landlord couldn't mean that he was deriving perquisite u/s 17(

IT: Where assessee took accommodation on rent belonged to his employer and paid rent thereon, merely because assessee was employee of his landlord, no perquisite could be added in income of assessee

Assessee can't opt out of compounded levy scheme in middle of year

CST & VAT: Kerala VAT - Where for assessment year 2010-11 assessee opted for payment of tax at compounded rate under section 7(1) and it had paid tax upto August, 2010 at compounded rate and thereafter it sought for withdrawal of permission to pay tax at compounded rate, it was not open to assessee to turn around and extricate itself from liability to pay tax at compounded rate

Order signed by two out of five members of CCI after one month of hearing wasn't valid-COMPAT

Competition Act : Where two of five members who signed impugned order had joined Commission after more than 1-1/2 months of date of hearing, such members had mechanically signed order and order was vitiated due to flagrant violation of basis of natural justice

Advance received by contractor in excess of bill raised by him couldn't be taxed on receipt basis

IT: Where actual work carried out by sub-contractor during relevant year was to extent of bill raised, Assessing Officer was not justified in making prima facie adjustment of excess payment made by contractor under section 143(1)(a)

Now AD- banks needn't require case-by-case approval of RBI for borrowing overseas funds

FEMA/ILT : Overseas Foreign Currency Borrowings by Authorised Dealer Banks

Now Non-Deposit taking NBFCs can act as sub-agents under Money Transfer Service Scheme without RBI's

NBFCs : Appointment of Non-Deposit Accepting NBFCs with Asset Size of Rs.100 Crore and above as Sub-Agents under Money Transfer Service Scheme (MTSS)

SEBI adopts e-route for service of notice; allows service via email and fax by adjudicating officer

SEBI/INDIAN ACTS & RULES : SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Amendment Rules, 2015 – Amendment in Rule 7

Mumbai ITAT interprets Article 5 of India-Singapore DTAA to decide constitution of installation PE i

IT/ILT: The assessee, a tax resident of Singapore, had undertaken installation and construction activity in respect of certain projects. The DRP held that the presence of assessee in India in excess of 90 days constituted PE in India under Article 5(6) of India-Singapore DTAA. The ld. Counsel of assessee argued that threshold limit of 183 days was applicable as activities of assessee would fall within Article 5(3).ITAT held that as activities related to construction or installation are specifica

TNMM to get priority over CUP method if price of product varies due to volume of transaction and geo

IT/ILT: Where prices varies on account of various issues, i.e., timing of transaction, volume of order and geographical location, then CUP method cannot be applied and it is most appropriate to apply TNMM method

India Signs Biggest Wheat Import Deals In Over A Decade - Trade Sources

Indian flour millers and the local units of global trading giants have sewn up deals to import 500,000 tonnes of premium Australian wheat since March, trade sources said, the biggest such purchases in over a decade, despite surplus stocks at home.

Concerns that untimely rains in February and March would cut wheat output, especially of high-protein varieties grown in central India, first drove flour millers in the country's southern ports to place the orders.

Attractive prices then prompted traders such as Cargill, Louis Dreyfus and Glencore to follow, said three sources directly involved in the deals.

The traders and millers could import another 500,000 tonnes from France and Russia, where harvests are around the corner. The deals could further push up benchmark prices that have jumped recently on concerns about crop quality in the United States.

"There are strong chances French and Russian wheat will find their way to India because of attractive prices and surplus stocks there, and if the euro goes down, I expect more French wheat coming to India," said one source.

Almost half of the already-contracted quantity, bought at $255 to $275 per tonne, has reached India and the rest is scheduled for July delivery, said the sources, who declined to be identified because of the sensitivity of the subject. Although rains and hailstorms wilted the wheat crop, India, the world's second-biggest producer of the grain, has large stockpiles accumulated after eight straight years of bumper harvests.

Industry and government officials estimate this year's wheat output at about 90 million tonnes, nearly 5 percent lower than the 2014 harvest, but still exceeding domestic demand of about 72 million tonnes.

Since wheat is largely grown in India's central and northern plains, flour millers from southern states, hemmed in by the Indian Ocean, sometimes find it attractive to import high-protein grades from Australia. But this year's unusually large volumes have surprised some.

"Other than large amounts of wheat that we're importing, we see two other significant changes," said one of the sources."Perhaps for the first time some imports are taking place in vessels and perhaps for the first time millers will end up buying French and Russian wheat as well."

At about $185 to $190 a tonne free on board, French and Russian wheat is attractive for India, said another source.
High-protein wheat in India costs more than $300 a tonne and imports could ebb if prices fall to about $283, the sources said.

But Russian wheat may not meet India's quality requirements, despite its higher protein content than French wheat, said Tajinder Narang, a New Delhi-based trade analyst.

Source:news.sudanvisiondaily.com

Hyundai India Reworks Export Basket With Fresh Models

Hyundai Motor India, the country's largest passenger vehicle exporter, is reorganising its export basket with new products. The company says the drive is aimed at maintaining its leadership in exports.

"There is a shift taking place in our portfolio. We are still exporting older models like the Eon, i10 and Accent. But the major thrust is to find opportunities for new models like the Grandi10, Xcent and Elitei20. Our sports utility vehicle, Creta, due for launch this month, will also be exported," said Rakesh Srivastava, senior vice-president and division head (sales and marketing). Hyundai has retained its position of being India's largest passenger car exporter for a decade. It had close to one-third of the market share in the year ended March. The Indian subsidiary of the South Korean car manufacturer exports cars from India to 85 countries.

"The Grand i10, Eon, i10, Xcent and Verna are in demand in South Africa, Vietnam, Australia, Mexico, Colombia... We will keep penetrating the existing markets and expand in newer markets," Srivastava said.

Hyundai is facing capacity constraints and a high utilisation of over 98 per cent. With the growing local demand, it has scaled down exports. In 2014-15, its exports declined by 18 per cent, according to the Society of Indian Automobile Manufacturers, while local sales climbed over 10 per cent. In April-May, exports declined eight per cent, while local sales grew over six per cent. "We are continuously increasing our focus on the domestic market. We are balancing our export production as well to meet demand," Srivastava said.

Maruti Suzuki, Hyundai's closest competitor in the domestic and export markets, scaled up exports by 20 per cent last year, while local sales rose 11 per cent. The trend continued this year. In April-May, Maruti exported 34 per cent more vehicles and local sales grew over 19 per cent.

In the export market, the gap between the two is narrowing. Last year, Hyundai's export volume was 57 per cent more than Maruti's. This narrowed to 19 per cent in April-May. An analyst said Hyundai would have to look at more capacity to sustain its pace of growth in the domestic market and maintain its leadership in exports.

Source:business-standard.com

Sugar Export From India Seen Doubling As Bumper Harvest Looms

Sugar exports from India may double as farmers prepare to harvest the third-biggest crop ever, extending the country’s surplus for a sixth year.

Shipments will be 2 million metric tons in the 12 months starting 1 October , according to the median of six estimates from refiners, brokers and analysts compiled by Bloomberg. That compares with 700,000 tons to 800,000 tons this year, the Indian Sugar Mills Association says. Production will be 27.25 million tons from a record 28.4 million tons this year, estimates from eight survey participants show.

The glut in the world’s second-largest producer threatens to extend a 35% slump in New York futures in the past year. The decline in prices to the lowest since 2009 has forced the government to subsidize exports and waive interest on bank loans to processors. Stockpiles of 10 million tons will add to supplies and exceed demand of 25.5 million tons, the mills say. That will force producers to ship as much as possible.

“With high carryover stockpiles, you will again have a glut of 10 million tons next year and you will have to throw out the excess,” Rahil Shaikh, director at ED&F Man Commodities India Pvt., said in Pune on 19 June. “If the industry has to survive, they have to export.”

Prices have fallen below the cost of production to a seven- year low because of weak demand and mounting stockpiles, according to the mills. The cabinet approved interest-free loans of Rs6,000 crore ($943 million) this month to help mills clear Rs21,000 crore owed to farmers. The government has pledged a subsidy of Rs4,000 a ton for raw sugar exports as domestic rates are above global prices.

“Looking at the surplus stock in the world and lower prices prevailing in the international market, exports are not feasible” now, said Pallavi Munankar, analyst at Geofin Comtrade. “This leaves the industry with no other alternative but to continue to hold huge stocks and incur losses.”

Prices on the ICE Futures US fell to 11.52 cents a pound on 19 June, the lowest level since January 2009. The contract for October delivery traded at 12.02 cents on Wednesday. Prices in Mumbai were at Rs2,230 per 100 kilograms (220 pounds).

The area under cane in India dropped to 4.16 million hectares as of 19 June, compared with 4.39 million hectares a year earlier, the agriculture ministry said last week. Exports reached 558,000 tons from October to May, the mills estimate.

Source:livemint.com

Government Mulls Steps As Veg Oils Import Grows By Leaps And Bounds

The government is planning measures to increase domestic vegetable oils production, while also seeking suggestions from stakeholders following a 26 per cent surge in vegetable oil imports in six months to May.

India imported 78 lakh ton of vegetable oil between November and May, compared with 62 lakh tons in the year earlier period.  “Total import of vegetable oils could value Rs 60,000 crore this year,” said B V Mehta, executive director at Solvent Extractors Association of India.  This is the third largest after crude oil and lubricants, and gold.

“The government is concerned at the huge import, especially when we can take to increase local output and reduce imports,’’ Mehta said adding, “Domestic output has almost been stagnant for years while imports are rising.’’

Among factors he cited include drop in crude oil prices globally, which reduces the attractiveness to use bio-diesel as a substitute. Then, there is a lack of incentive for local farmers since oil crushing companies find cheaper imports economical instead of the local produce. Indonesia, as a case, has been dumping its vegetable oils to overcome surplus. The government is yet to react with any increase in import duties.

Over the years, domestic consumption of edible oil has increased with rise in per capita income, greater propensity to eat outside food that invariably contains more oil, and greater affordability. Since 1992-93, import has increased from 3 per cent to more than 55 per cent now.

Among measures the government is considering include expanding areas for cultivation, including the north-eastern states under its Mini Mission-II. States such as Punjab and Haryana could substitute wheat and rice with rapeseed, mustard and maize.

Changed crops would require less water, and help farmers switch from wheat and rice that the nation has in surplus to items that are being imported. The switch-over could help reduce imports for vegetable oils.

The government should consider raising import duties on refined oils to 25 per cent from 15 per cent, SEA has recommended to the government, among others.

Since India’s productivity is between 47 per cent and 69 per cent of global average for soybean, cotton, groundnut, sunflower and mustard, the country could introduce GM crop seeds and also rope in private companies for greater investment, it has recommended.

As the second largest producer of paddy, India could double its rice bran oil output from the current 9 lakh tons through policy and tax reforms, it said.

Source:newindianexpress.com

India's Oil Import Bill To Fall 21.7% To $88 Bn In Fy16

India's crude oil import bill is likely to fall by 21.7 perceny this fiscal to USD 88 billion on falling international oil prices, according to latest Petroleum Ministry estimates.

India, which is 80 perceny import dependent to meet its oil needs, spent USD 112.748 billion in 2014-15 on import of 189.43 million tonnes of crude oil. In rupee terms, it came to Rs 687,369 crore.

For the current fiscal, the ministry's Petroleum Planning and Analysis Cell (PPAC) has estimated USD 88.203 billion spending on import of 188.23 million tonnes of crude oil. In rupee terms, it comes to Rs 548,655 crore. India had paid a record USD 144.293 billion on import of 184.79 million tonnes of crude oil in 2012-13.

The import bill came down marginally to USD 142.962 billion in the following year even though the volume of oil imported went up to 189.238 million tonnes, but the slide in international oil prices from USD 115 per barrel to less than USD 50, helped bring it down to USD 112.748 billion in 2014-15, according to PPAC data.

India's crude oil import bill in 1998-99 was USD 3.518 billion on import of 39.8 million tonnes of crude oil and climbed to USD 9.2 billion in the following year on import of 57.8 million tonnes of crude oil.

It stayed below USD 20 billion for next five years. It started to climb from 2004-05 and saw the real jump happening in 2010-11 when it soared to USD 100.08 billion on import of 163.5 million tonnes of crude oil from USD 79.876 billion in 2009-10. In the first two months of current fiscal, India imported 32.99 million tonnes of crude oil for USD 13.806 billion.

PPAC said while the April-May 2015 imports are based on actuals and for June 2015 to March 2016, the imports are estimated at USD 65 per barrel and foreign currency exchange rate of Rs 62 to a US dollar.

"If crude prices increases by USD one per barrel, net import bill increases by Rs 7,096 crore (USD 1.14 billion). And if exchange rate increases by Rs 1 to a USD, net import bill increases by Rs 7,440 crore (USD 1.18 billion)," it said.

Source:moneycontrol.com

Rupee Trades Marginally Higher Against Us Dollar At 63.56

The Indian rupee on Thursday strengthened marginally against the US dollar, tracking the gains in the local equity markets.

At 2.35pm, the home currency was trading at 63.56, up 0.07% from its previous close of 63.60. The local unit opened at 63.61 per dollar and touched a high and a low of 63.55 and 63.63, respectively in intra-day trade. The Sensex was trading at 27,889.76, up 0.58%, or 160.09 points.

 

Investors were cautious after Greece said international lenders had rejected its latest proposals. The European nation’s prime minister will resume talks with creditors early on Thursday after a meeting of euro-area finance ministers in Brussels was adjourned without an agreement on bailout aid.

 

Overnight, US gross domestic product (GDP) data showed that the final figure for the first quarter was a 0.2% contraction, much smaller than the previously estimated 0.7%. That reinforced expectations that the US Federal Reserve is on track to raise interest rates this year, perhaps as early as September, Reuters reported.

 

The yield on India’s 10-year benchmark bond was trading at 7.818% compared with its Wednesday’s close of 7.799%. Bond yields and prices move in opposite directions.

 

Since the beginning of this year, the rupee has lost 0.87%, while foreign institutional investors have bought $6.31 billion from local equity

markets and $6.44 billion from bond markets.

 

Most of the Asian currencies were trading lower. Indonesian rupiah was down 0.2%, Malaysian ringgit 0.17%, South Korean won 0.15%, Taiwan dollar 0.1%, while the China Offshore declined 0.09%. However, Japanese yen was up 0.15%.

 

The dollar index, which measures the US currency’s strength against major currencies, was trading at 95.343, up 0.16% from its previous close of 95.264.

 

Source:livemint.com

Benefit of export without payment of duty is available even when export proceeds aren't realized

Excise & Customs : In absence of any condition in rule 19 or notification issued thereunder as to realization of export proceeds, benefit of export without payment of duty cannot be denied even if export proceeds are not realized

No sec. 69 additions on basis of seized doc showing transaction in name of firm after its dissolutio

IT : Where assessee firm had been dissolved with effect from 31-3-2002, alleged unexplained income from transaction found recorded in assessee's name in month of December, 2003 in a document recovered from third party could not be taxable in hands of assessee in current year

Third member has to return reference to Division Bench where facts aren't settled

Excise & Customs : Where material facts and evidence are not recorded by Division Bench, Third Member must return reference to Division Bench to settle facts; this is so because, in a reference, Third Member neither has revisional jurisdiction nor appellate jurisdiction to hear appeal to settle facts

Volvo buses provided to DTC doesn't constitute deemed sale as ownership of buses remained with asses

CST & VAT: Delhi VAT - Where assessee had entered into agreement with DTC for providing two Volvo buses on hire charges and registration certificate and permits continued to be in control and possession of assessee and it remained responsible for maintenance, repairs, etc., transaction in question could not be treated as deemed sale under section 2(1)(zc)(vi)

No capital gain arose on sale of land as it wasn't treated as capital asset for other co-owners of s

IT : Where Assessing Officer made addition to assessee's income in respect of capital gain arising from sale of land, in view of fact that in case of other co-owners said piece of land was not regarded as capital asset being situated 8 Kms. away from local municipal limits, impugned addition deserved to be deleted in assessee's case as well

Sec. 10(10) relief given to SBI employee on ex-gratia received by him on 'VRS' as he satisfied condi

IT: Where assessee exercised option of voluntary retirement scheme and all conditions laid down in rule 2B were fulfilled, assessee would be entitled to exemption under section 10(10C) on ex gratia payment

India Plans To Ease Import Inspections

The Indian government has voiced plans to switch from checking 100 per cent of its imported food consignments to random inspections in a move that should reduce customs clearance times, according to the Times of India.

The Central Board of Excise and Customs has called for specified time frames for consignments to clear customs, potentially reducing clearance times from the current ten to 15 days down to as little as 12 hours.

Keith Sunderlal of Indian agribusiness consultancy The SCS Group has welcomed the news, with the move to risk-based checks of imported produce likely to reduce costs for importers, cut down on delays at ports, and increase the ease of doing business in India.

“India has being following a 100 per cent sample testing for all food imports for several years. Clearly this comes as a huge cost for importers who have to contend with delays in clearances and absorb cost of samples and tests,” Ketih Sunderlal of SCS Group said.

“Adopting a more common-sense approach, as just announced by [the Indian government], of risk-based sampling will facilitate imports and reduce unnecessary congestion at ports. We look forward to implementation of this policy.” India's total imports grew from US$450bn in 2013/14 to US$448bn in 2014/15, according to the Times.

Source:fruitnet.com

India Is Importing 500,000 Tonnes Of Wheat From Australia, Highest In A Decade, On Shortage Worries

Indian flour millers are concerned that there is not enough wheat in the market to feed the insatiable demand for pizzas and pastas in the country. That has led them to place import orders of 500,000 tonnes — or one and a half times the weight of the Empire State building in New York — of premium Australian wheat since March.

This is the biggest such purchase in more than a decade, despite excess stocks. The millers' concern stems from unseasonal rains in February and March, which might hit wheat output at a time when sales of flour-based products such as pizzas is booming. Millers in India's southern ports were the first to place the orders.

Pizzas and pastas require high-protein varieties of wheat. The millers got attractive prices for their orders, which has then prompted companies such as Cargill, Louis Dreyfus and Glencore to follow suit, said three sources directly involved in the deals.

The traders and millers could import a further 500,000 tonnes from France and Russia, where harvests are around the corner. The deals could push up benchmark prices that have already jumped on recent concerns about crop quality in the United States.

"There are strong chances French and Russian wheat will find their way to India because of attractive prices ... and if the euro goes down, I expect more French wheat coming to India," one source said.

Almost half of the quantity contracted so far -- bought at $255 to $275 a tonne -- has reached India and the rest is scheduled for July delivery, said the sources, who declined to be identified because they are not allowed to discuss trade-sensitive issues publicly.

Although rains and hailstorms wilted the Indian wheat crop, the world's second-biggest producer and consumer of the grain has large stockpiles accumulated after eight straight years of bumper harvests.

But the government is likely to draw heavily from its warehouses this year if monsoon rains, critical for farm irrigation, turn out to be deficient, thereby fueling food inflation. India's weather office has cut this year's monsoon forecast to 88 percent of a long-term average, raising fears of the first drought in six years.

Industry and government officials estimate this year's wheat output at about 90 million tonnes, nearly 5 percent lower than the 2014 harvest but still exceeding domestic demand of about 72 million tonnes.

Since wheat is largely grown in India's central and northern plains, flour millers from southern states, hemmed in by the Indian Ocean, sometimes find it attractive to import high-protein grades from Australia. But this year's unusually large volumes have surprised some.

"Other than large amounts of wheat that we're importing, we see two other significant changes," said one of the sources. "Perhaps for the first time, some imports are taking place in vessels and perhaps for the first time millers will end up buying French and Russian wheat as well."

At about $185 to $190 a tonne on a free-on-board basis, French and Russian wheat is attractive for India, another source said. High-protein wheat in India costs more than $300 a tonne and imports could ebb if prices fall to about $283, the sources said.

Russian wheat, however, could fall short of India's quality requirements despite a higher protein content than French wheat, said Tajinder Narang, a New Delhi-based trade analyst.

Source:huffingtonpost.in

No service tax liability on sub-contractor when full service tax was paid by contractor

Service Tax : Where there was practice of contractors to pay service tax on full value, separate confirmation of demand against sub-contractors would be unjustified, even if Cenvat credit rules may require otherwise; any such demand would be barred by principle of revenue neutrality

Second revision application against sec. 452 proceedings filed under garb of section 482 of Cr.P.C.

CL : Once revision against Magistrate's orders issuing process under section 630 of Companies Act, 1956 against petitioner was found unsubstantial by Sessions Judge, second revision application under garb of section 482 of Cr. P.C. was barred and not maintainable

Filing of petition for recovery didn't mean that payee had obtained right to receive income; HC dele

IT: Where there was no evidence on record that at any time during relevant period provisions of wages and salaries were ever made, assessee's claim for cost paid to 'H Ltd.' for wages and salaries pertained to earlier years was to be disallowed

CCI penalizes associations of film theatre owners and film distributors for anti-competitive conduct

Competition Act : Association of film theatre owners(KEFF) found guilty of anti-competitive conduct of not allowing screening of new films in theatres owned by members of rival association of film threatre-owners(KECA). Association of film distributors also held guilty for acting in concert with KEFF but reduced penalty imposed in view of mitigating factor that it succumbed to KFEF dictats to protect commercial interests of own members

Indian Rupee Down 8 Paise Against Us Dollar In Early Trade

Indian rupee depreciated by eight paise to 63.67 against US dollar in early trade today at the Interbank Foreign Exchange due to rise in greenback against other currencies overseas.

Dealers attributed the fall to the dollar’s gains against other currencies overseas and increased demand from importers for the US currency. However, a higher opening in domestic equity market, capped losses to some extent.

Yesterday, the rupee slipped by 7 paise to close at 63.59 on fresh demand for the American currency from banks and importers on the back of a firm dollar overseas. Meanwhile, the benchmark BSE Sensex was trading 72.48 points or 0.26 per cent higher at 27,876.85 in early trade today.

source:financialexpress.com

Delay in filing refund claim due to terrorist attack is condonable

Excise & Customs : Delay of 3 days in filing refund claim caused by reasons beyond control of assessee (terror attack in city) may be condoned and refund claim may be considered on merits

Limitation Act isn't applicable for condoning delay in filing appeals in respect of Company's law ma

CL: Companies Act specifies certain period for condoning delay in filing appeals and is a special statute within meaning of section 29(2) of Limitation Act and, therefore, section 14 of Limitation Act has no application in condoning delay in filing appeals

A Co. which had outsourced most of its work couldn't be compared with a Co. carrying out work by its

IT/ILT : A company which has outsourced most of its work to third party cannot be compared to a company carrying out work by itself

Construction of onshore terminal to transport gases would attract service tax under 'Construction Se

Service Tax : Onshore terminals are meant for onshore processing of extracted fluids and gases and subsequent transport thereof through pipelines; since transport is merely incidental, same cannot be regarded as 'transport terminal' and, therefore, same cannot be excluded from scope of construction services

Failure to obtain proper sanction for reassessment notice can't be cured by resorting to sec. 292BB

IT: As per proviso to section 151(1) sanction of Commissioner or Chief Commissioner is pre-requisite condition for issuance of notice under section 148 and, therefore, notice issued with sanction of Joint Commissioner would be invalid and such invalidity cannot be cured by resorting to provisions of section 292B

Jurisdictional CCIT can himself take decision of not filing appeal in HC even if station was having

IT : Section 251 of the Income-tax Act, 1961 – Commissioner (Appeals) – Powers of – Issue of appellate order within 15 days of last hearing – Strict compliance thereof

CIT(A) shall issue orders within 15 days of last hearing; CBDT reiterates

IT : Section 143, read with section 142 of the Income-tax Act, 1961 - Assessment - Scope of enquiry in cases selected for scrutiny - Further steps towards a non-adversarial tax regime

Assessee was entitled to set off purchase tax on manufactured goods which were sent outside State fo

CST & VAT : Maharashtra VAT - Where assessee, a manufacturer, had dispatched manufactured goods to its branches in States of Andhra Pradesh and Uttar Pradesh and branches had sold said goods, which were used in execution of works contract, assessee was entitled to set-off under rule 41D of tax paid on purchases

Insurers should pass on discount offered by hospitals to policyholders- IRDA directive

INSURANCE : Discounts on Bills Offered by Network Providers

Govt. prescribes upper limit of Rs. 4,375 on Clerkage fee payable to Counsel of income-tax departmen

IT : Guidelines for Engagement of Standing Counsels to Represent Income-Tax Department before High Courts and Other Judicial forums; Revision of Their Schedule of Fees and Other Related Matters

SEBI proposes to reduce listing time by half and relax listing norms for startups

SEBI : SEBI BOARD MEETING – Streamlining Process of Public Issues; Simplified Network for Capital Raising by Technologies Start-Ups and Other Companies; Fast Track Issuances through Fpos or Rights Issue etc.

No garnishee notice can be issued for recovery before expiry of 30 days from date of service of noti

CST & VAT: Karnataka VAT - Where Assessing Authority passed reassessment orders on 28-2-2015 and raised tax demand and thereafter he initiated recovery proceeding and issued garnishee notices on debtors of assessee on 28-3-2015, since orders of reassessment and demand notices had been served on assessee only on 9-4-2015, garnishee notices could not be sustained

A giant software development Co. not comparable with a Co. working as a captive unit with limited ri

IT/ILT : Giant company in area of development of software which assumed all risks leading to higher profits is not comparable with assessee which is a captive unit of parent company and assumed only a limited risk

Extra margin passed over by manufacturer to dealers under incentive schemes not allowable as deducti

Central Excise : Extra discounts/margins passed over by manufacturer to dealers under various incentives schemes run by manufacturer on manufacturer's own account cannot, prima facie, be allowed as deduction to manufacturer

ITAT rightly allowed sec. 80-IB relief as assessee had satisfied the limit of commercial space in ho

IT: Where assessee acquired development rights in respect of land, and criteria of minimum area was met by assessee and area was situated within 25 kms from limits of Mumbai city, deduction claimed under section 80-IB would be allowed

No abuse of dominance by opposite party as its share in market of civil construction was very less

Competition Act: Where market share of OP engaged in undertaking construction works of Government of Kerala such as roads, bridges, national highways, dams, canals and other public structures was very less, OP was not in a dominant position in relevant market for provision of services for civil construction work of Government in State of Kerala and, therefore, no case of abuse of dominance was made out

Tvs-Bmw K03 Exported From India To Germany With A Price Tag Of Rs 107,250 Per Unit

The strategic partnership between TVS and BMW Motorrad will soon reveal a new, jointly developed motorcycle, codenamed K03, for the Indian as well as for the global market.

This upcoming motorcycle, is reaching the final phase of its development cycle and is scheduled to be unveiled by the year end. Early this year, BMW Motorrad CEO Stephan Schaller had confirmed that the upcoming TVS-BMW motorcycle will be powered by a sub-500cc single cylinder motor and will be completely engineered by the German two-wheeler manufacturer. However, no further details about the upcoming motorcycle were revealed.

Now, latest reports from import/export data website Zauba reveals that TVS-BMW has exported as many as 32 units (two units with “dummy engines”) of the K03 motorcycle to Germany for R&D purposes. Each unit of the motorcycle is priced at around Rs 107,250. Now, that price, for a ‘sub-500cc’ motorcycle, if it is in reality close to the specified cubic capacity sounds a tad too less to us.

While no official details have yet emerged about the exact displacement and power output of the new product, that price leaves us baffled. Even for a product meant for R&D purposes, that sort of price is too conservative for a near-500cc product. Does that mean that the upcoming TVS-BMW product has a likelihood of being a 250-300cc product? We wish not, as the game has moved ahead, and bringing a product in that segment won’t help bolster the image of either of the companies for the performance enthusiast.

While the aforementioned cost of the exported models excludes the taxes and profit, we expect the price of the final product to hover around Rs 2 lakh mark which would place the K03 against the highly successful and much adored and admired KTM Duke 390. TVS-BMW are unlikely to be able to beat the KTM-Bajaj duo on the pricing front, and unless there is significant advantage in terms of performance for a similar or heftier price tag, we don’t see much of a point in this entire exercise.

An official statement earlier revealed that the new motorcycle will be 100% engineered by the German automaker while TVS will provide its facility to produce the bikes cost effectively.

Source:motoroids.com

India 2015 Soybean Output To Jump Over 10 Pct On Timely Rain -Industry

Indian soybean production is likely to jump just over 10 percent in 2015 from a year ago to more than 10 million tonnes, boosted by ample monsoon rains, said an industry body.

That should help the world’s top importer of edible oils curb overseas purchases in the marketing year that starts in November, dragging on international prices. It could also bolster India’s exports of animal feed ingredient soymeal, which is made from soybeans.

“The soybean area will remain steady this year, but productivity will go up due to good and timely rainfall,” Pravin Lunkad, president of Mumbai-based industry body the Solvent Extractors’ Association of India (SEA), told Reuters. “We are expecting 10 million tonnes plus this year compared to last year’s 9 million tonnes.”

The country’s two top growing states, Madhya Pradesh in the centre and Maharashtra in the west, have received significantly higher rainfall than normal since the beginning of the four-month monsoon season on June 1, Lunkad said on the sidelines of an industry conference. That has helped farmers accelerate sowing in the states, which account for over 85 percent of total soybean output.

Lunkad said that a rise in soybean production in 2015 could bring down local soymeal prices, making exports of the cattle feed feasible to South Asian countries and Iran.

Indian soymeal exports have plunged so far this year as prices remained way above global markets after a drought last year hit the earlier soybean crop.

The impact from that drought means that India’s edible oil imports in the 2014/15 marketing year ending October could jump 12 percent to 13 million tonnes, Lunkad said, adding that cheaper palm oil prices had also stoked appetite.

“Like May, we will see higher imports even in June. Local oilseeds supplies are limited for crushing and we are expecting delayed shipments to land this month.”

India’s edible oil imports hit a record 1.35 million tonnes in May. It mainly buys palm oil from Indonesia and Malaysia, with soyoil from Argentina and Brazil.

Lunkad also said that the groundnut area in the top producing state of Gujarat could jump 20 percent as poor returns from cotton prompt farmers to shift crops.

Meanwhile, Lunkad said China was likely to resume imports of Indian rapeseed meal in around a month after halting them in late 2011 on worries over contamination.

He said that both countries had signed a “sanitary protocol” during Indian Prime Minister Narendra Modi’s visit to China last month and agreed to ensure Indian meal meets Chinese standards.

“Anytime within a month exports will resume. China has identified five crushing plants. Those plants will be allowed to export,” he said. Prior to ban, China imported about 400,000 tonnes of rapeseed meal a year from India.

Source:hellenicshippingnews.com

India Eyeing Africa For Export Of Marine Food

Indian marine products are being showcased at the South African International Trade Exhibition (SAITEX) in Johannesburg, South Africa, which began on Sunday.

At this fair, India is being represented by a 50-member delegation from the Ministry of Commerce and Industry. It is regarded as Africa's biggest trade fair.

Leela Nair, the chairman of the Marine Products Export Development Authority (MPEDA), was quoted by reports, as saying that India is showcasing its marine exports prowess in South Africa for the first time. India is the biggest producer of vannamei and a host of other aqua-culture products with their land farming of fish.

The Spices Board of India has four stalls in the Indian section of the fair. Spices Board chairman A Jayathilak was quoted, as saying there is increasing demand for Indian spices in Africa and other parts of the world.

Opening the Indian stand at SAITEX, India's High Commissioner to South Africa Ruchi Ghanashyam said Indian business houses were participating in large numbers because South Africa has a mutually beneficial trade relationship with India.

Source:business-standard.com
 

Services Exports’ Decline Is A Worrying Fall

India’s services exports seem to be following the same path as merchandise exports—downhill. In April, they contracted almost 5% year-on-year. Average monthly exports of services this year is just 0.8% so far, compared to a 5% monthly average last year (2014). A trend decline is noticeable from 2013, when services’ export growth was far healthier at 9% each month on average; the latter was particularly encouraging as it represented a strong rebound from the 3% monthly average growth in April-December 2012.

 

That this is a cause for anxiety is supported by the chief economic adviser’s recent remark on the matter. Arvind Subramanian has been reported as saying, “The ratio of exports of services to GDP (gross domestic product), after growing in dollar terms at a rate of almost 30% for about eight to nine years, has now flattened out and may be even declining....For one percentage point growth of demand globally our exports have plummeted sharply.” (Indian Express, 23 June, 2015)

 

As share of GDP, India’s services exports have fallen steeply from their peak values in the booming years of global trade up to 2006-07, and then again after the crisis until 2009-10. Since 2010-11 however, services export shares in GDP haven’t really recovered that breakneck speed of growth. Given the robust support these have typically provided to India’s total exports (about 35% annually), flagging growth rates that are now turning abysmal and even negative is a serious issue. That these are falling at a time when the US economy is on a steady recovery path is even more of a concern; the US occupies the top slot by destination for Indian services exports, whose fortunes rise and ebb with that of the world’s largest economy.

 

Subramanian added there was need to understand more fully what was affecting Indian exports in general, including services exports. “There is something fundamentally wrong in terms of our competitiveness...a challenge we need to be alert going forward,” he said.

 

What then is ailing India’s services exports? Is it an uncompetitive exchange rate? At a time when the major advanced economies are indulging in currency depreciations to recoup growth, is it the case that services’ exports, which are especially susceptible to exchange rate movements, are bearing the brunt? Or is it declining internal efficiencies or falling productivity that is causing services export growth to tail off? Are changes in the nature and structures of global trade responsible?

 

Indisputably, these are questions for policymakers to confront, probe and respond to quickly. For, apart from growth and employment effects, the newly-issued foreign trade policy also incorporates substantial contribution from services (although not specified numerically) in realizing the $900 billion export target for the next five years. It would be a shame if India dimmed in a space where it has globally shined so far.

 

Source:livemint.com

Govt. notifies simplified ITR forms; now taxpayers earning exempt income above Rs 5,000 can file ITR

IT/ILT : The Government Substitutes ITR 1, 2 and 4S. a New Form Itr-2A Is Prescribed for the Individuals or Huf Who Don't Have Income from Capital Gain, Business or Profession or Foreign Sources.

No payment of interest under takeover code if consideration was timely paid to shareholder of acquir

SEBI : Where consideration was offered and paid to a shareholder by acquirer in open offer within date specified under regulation 22(12), question of, paying interest to appellant would not arise at all

Constitutional validity of a provision not to be considered without determination of facts and law

Excise & Customs : Constitutional validity should not be considered in vacuum; hence, before considering it, it is appropriate and proper if a primary determination of fact and law is made by adjudicating authority and show-cause notice is adjudicated

India Signs Biggest Wheat Import Deals In Over A Decade - Trade Sources

Indian flour millers and the local units of global trading giants have sewn up deals to import 500,000 tonnes of premium Australian wheat since March, trade sources said, the biggest such purchases in over a decade, despite surplus stocks at home.

Concerns that untimely rains in February and March would cut wheat output, especially of high-protein varieties grown in central India, first drove flour millers in the country's southern ports to place the orders.

Attractive prices then prompted traders such as Cargill, Louis Dreyfus and Glencore to follow, said three sources directly involved in the deals.

The traders and millers could import another 500,000 tonnes from France and Russia, where harvests are around the corner. The deals could further push up benchmark prices that have jumped recently on concerns about crop quality in the United States.

"There are strong chances French and Russian wheat will find their way to India because of attractive prices and surplus stocks there, and if the euro goes down, I expect more French wheat coming to India," said one source.

Almost half of the already-contracted quantity, bought at $255 to $275 per tonne, has reached India and the rest is scheduled for July delivery, said the sources, who declined to be identified because of the sensitivity of the subject.

Although rains and hailstorms wilted the wheat crop, India, the world's second-biggest producer of the grain, has large stockpiles accumulated after eight straight years of bumper harvests.

Industry and government officials estimate this year's wheat output at about 90 million tonnes, nearly 5 percent lower than the 2014 harvest, but still exceeding domestic demand of about 72 million tonnes.

Since wheat is largely grown in India's central and northern plains, flour millers from southern states, hemmed in by the Indian Ocean, sometimes find it attractive to import high-protein grades from Australia. But this year's unusually large volumes have surprised some.

"Other than large amounts of wheat that we're importing, we see two other significant changes," said one of the sources. "Perhaps for the first time some imports are taking place in vessels and perhaps for the first time millers will end up buying French and Russian wheat as well."

At about $185 to $190 a tonne free on board, French and Russian wheat is attractive for India, said another source. High-protein wheat in India costs more than $300 a tonne and imports could ebb if prices fall to about $283, the sources said.

But Russian wheat may not meet India's quality requirements, despite its higher protein content than French wheat, said Tajinder Narang, a New Delhi-based trade analyst.

Source:economictimes.indiatimes.com

Cbec Proposes To Widen Items Under Duty Drawback Scheme

The Central Board of Customs and Excise (CBEC) proposes to widen the ambit of goods eligible for duty drawback scheme in an attempt to incorporate the “Make in India” policy of the government.

While a committee has been set up to rework the existing duty drawback rates, it has also got the mandate to extend the drawback scheme to other items. According to industry sources, there is a possibility that  those products that are exported out of India after value addition and not just in raw form may be given priory tint he revamped rate scheme.  Besides, big ticket items with possibility of high turnover may also feature. Manufacturing, agriculture, food processing, electronic goods and   which involves skill and expertise may be preferred areas, said sources. ,     

As per the other issue that the committee will be dealing with is to work out the modalities for calculation of duty drawback and suggest all India rates (AIRs) of duty drawback for the year 2015 for the existing items as also for new item. Besides, the report will also examine the quantitative data and justification for materials being treated as deemed imported and to go into the details of the levels of all the ‘residuary’ AIRs of Duty Drawback.  Specifically, the committee will also examine and suggest the broad framework of AIRs of Duty Drawback in the context of Goods and Services Tax (GST)

“Considering the sluggish growth of exports, there is an urgent need for increasing export benefits to ensure the competitiveness of Indian products in international markets. Besides policy benefits, such as, continuation of interest subvention scheme, increase in rates of duty drawback to exporters,  introduction of simplified procedures to ensure timely processing of indirect tax refunds are some of the areas that  may boost exports”, said an industry source.

India’s latest export and import figures for May 2015 reflected the subdued economic scenario both globally and within the country. India’s exports contracted 20.2 per cent to $22.3 billion from what they were in May 2014, while its imports were down 16.5 per cent over the same period. Exports and imports have both contracted for six consecutive months, that is, from December 2014 onwards. As per reports, looking at the previous year, the December 2013 to May 2014 period also saw a continuous contraction in imports, except March 2014, which saw a marginal uptick in imports. Exports in this period, however, saw robust growth, especially in March, April and May 2014.

Source:business-standard.com
 

Rupee Weakens Against Us Dollar To 63.60

The Indian rupee on Tuesday weakened against the US dollar, following cues from the Asian currencies markets. At 2.23pm, the home currency was trading at 63.60, down 0.13% from its previous close of 63.52. The local unit opened at 63.60 per dollar and touched a high and a low of 63.55 and 63.66, respectively.

 

Most of the Asian currencies were trading lower. South Korean won was down 0.52%, Malaysian ringgit 0.29%, Taiwan dollar 0.24%, Japanese yen 0.22%, Singapore dollar 0.16%, while Philippines peso declined 0.16%.

 

The local equity market was trading higher for the eight consecutive session. The Sensex was trading at 27,799.72, up 0.25%, or 70.50 points. Since 11 June till date, the Sensex has gained 1,425 points, or 5.37%.

 

The yield on India’s 10-year benchmark bond was trading at 7.764% compared with its Monday’s close of 7.736%. Bond yields and prices move in opposite directions.

 

Since the beginning of this year, the rupee has lost 0.85%, while foreign institutional investors have bought $6.25 billion from local equity and $6.35 billion from bond markets.

 

The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.916, up 0.62% from its previous close of 94.329.

 

Source:livemint.com

Rule 16B of Excise permits removal of yarn to job-worker without payment of duty for manufacturing o

Excise & Customs : Yarn meant for further manufacture of fabrics by job-worker, is a 'semi-finished goods' for purpose of rule 16B; hence, same can be removed without payment of duty to job-worker, subject to permission from Commissioner

CBEC clarifies issues in respect of representation by Commissioners before HC on behalf of Govt.

EXCISE LAWS : Section 35G of the Central Excise Act, 1944 – High Court – Appeal to – Procedural Clarifications in Respect of Issues Relating to Authorization of Commissioners to Represent Union of India and Others in Matters before High Court

CBEC plans to create awareness of settlement scheme by issuing letter to taxpayers

EXCISE LAWS : Section 32 of the Central Excise Act, 1944 - Customs and Central Excise Settlement Commission – Creating Awareness of Provisions Relating to Settlement of Cases through Settlement Commission, by Informing Noticee about Said Provisions by a Follow up Letter after Issuance of Show Cause Notice

SLM method can be used to reverse credit on sale of capital goods even for period prior to February

Cenvat Credit : Straight line method prescribed vide amendment dated 27-2-2010 for computing 2.5 per cent quarterly on removal of used capital goods, may be applied even for periods prior to 27-2-2010

'Dessault Aviation' gets tax exemption on royalty or FTS arising from retrofitting of Indian defence

IT/ILT : Section 10(6c) of the Income-Tax Act, 1961 - Income Arising to Foreign Company by Way of Royalty or Fees for Technical Services - Notified Company – Dassault Aviation S.A., Paris

Limitation period to determine validity of an addendum to be counted from date of original notice

Excise & Customs : Where original notice merely sought levy of penalty, an addendum to said notice, to seek recovery of duty on same set of facts, cannot amount to issuance of fresh notice and therefore, said addendum cannot be set aside as barred by limitation

Mistake apparent from records if ITAT didn’t adjudicate on grounds of appeal properly

IT: Tribunal, while disallowing assessee's claim of scientific research expenditure under section 35(1), had not gone into applicability of section 35(3), such mistake was to be rectified

Payment of duty on exempted goods would be deemed as reversal of credit attributable to such goods

Cenvat Credit : By using credit for payment of duty on exempted goods, assessee is deemed to have reversed credit, thus making entire situation as revenue neutral; hence, demand cannot ask assessee to again reverse credit

Failure of directors to provide books for investigation doesn't prove them guilty of misfeasance

CL : Where in consequence to voluntary winding up of company its erstwhile directors could not produce books of account before Chartered Accountant, that by itself could not be taken to prove them guilty under section 543 as there was no evidence of company having done any business between period that they become directors

Provisions of sec. 292BB don't have retrospective effect

IT : Where notice under section 143(2) was served beyond 12 months from end of month in which block return was filed by assessee, subsequent scrutiny proceedings would be null and void

Govt Working On Export Strategy For Agri Products

Concerned over declining exports, the Commerce Ministry is preparing a strategy paper to boost overseas shipments of agricultural products, particularly the value-added goods, reports media.

Exports of six key agricultural products, including tea, spices and tobacco, have registered negative growth in 2014-15, mainly due to declining competitiveness of Indian products in the international market in terms of prices and variety of goods.

"We are working on an agri export strategy. There is a need to boost exports of processed products and value-added goods in agri sector. The country is not able to exploit the sector's potential," a senior Commerce Ministry official said.

The official said that so far Indian exporters are putting focus on export of processed and value-added goods in the agriculture sector and due to this they are not able to tap more and more markets.

"We are trying to get more markets for our agri exports. The whole aim is to get into the second line of agri exports that is processed goods, branding and packaging," the official added.

Contraction in exports of agri commodities was one of the reasons for decline in the country's total exports in 2014-15.

During 2014-15, exports of tea, spices and tobacco declined by about 16 percent, 1 percent and 5.2 percent, respectively, according to the Commerce Ministry data.

Other products which have reported negative growth Include cereals (27.33 percent), oil meals (52.73 percent), fruits and vegetables (8.85 percent).

India's exports dipped deeper into the negative zone, recording a decline of 21 percent in March, the biggest fall in last six years, pulling down total shipments for 2014-15 to USD 310.5 billion, missing the USD 340 billion target.

In May 2015, India's merchandise shipments dipped by 20.19 percent in May to USD 22.34 billion.

During the last four financial years, India's exports are hovering at around USD 300 billion.

Source:- smetimes.in

India Launches Credit Package For Vietnam Textile Park

The Indian Government has officially kicked off the preferential credit package of $300 million to promote India-Vietnam garment cooperation, the Vietnamese media has reported. India will invest in building an industrial park specialising in garment and textile material production near Ho Chi Min City.

The credit package will help Indian businesses develop factories in Vietnam, and promote Vietnamese businesses concerned to expand cooperation with Indian partners.

It will support Vietnam’s garment and textile businesses to develop material sources and implement weaving and dyeing projects.

Truong Van Cam, representative from the Vietnam Textile and Apparel Association (Vitas) said the Vietnam Export Import Commercial Joint-Stock Bank (Vietnam Eximbank) was selected to disburse the credit package.

The credit package also aims to fully tap opportunities after the Trans Pacific Partnership (TPP) agreement which is expected to be signed in the near future.

Source:fibre2fashion.com

Fieo To Organize Seminar To Help Msmes Have Clear Understanding About International Trade

Federation of India Export Organizations (FIEO) is organizing a seminar help the entrepreneurs, especially MSME’s to have a clear understanding about the international trade and various initiatives being taken by the government to promote exports.
 
The seminar, to be focusing on energising entrepreneurs for International Trade in association with Exim Bank of India, will be held in Noida on Tuesday. The MSMEs will get to know in detail about the current export business scenario.
 
Sudhir Garg, Principal Secretary, MSME, Government of Utter Pradesh will be the Chief Guest.  Meanwhile, N Shanker, Executive Director, Exim Bank and Amiya Chandra, Jt. DGFT (CLA) will give special address during the session. Besides, senior officers from Customs, Export Promotion Bureau of UP, IDBI etc will also address the exporters.

Source:knnindia.co.in

Transmission assembly arising in course of manufacture of tractors is a marketable commodity liable

Central Excise : 'Transmission Assembly' arising in course of manufacture of exempted tractors is an intermediate product, which is known in market as a separate commodity; therefore, same is a marketable product and liable to duty

Commission paid to NR agent for procuring export orders couldn't be held as 'FTS'

IT/ILT: 'Export Sales Commission' payments to non-resident agents for procuring export orders are not assessable to tax in India

Higher Import Duty To Ease Pressure On Domestic Steel Prices: Moody's

Higher import duty on flat and long steel products will help in reducing pressure on domestic prices which have been going down due to cheap imports from countries like China, ratings agency Moody's said today.

"The import duties will ease some of the downward pressure on domestic steel prices from cheaper Chinese steel imports. Indian steel prices have dropped 27 per cent over the past 12 months owing to a 70 per cent increase in cheaper imports, one third of which came from China," it said.

Last week in a much needed relief for domestic producers, the government increased the basic customs duty (BCD) on certain long and flat steel products by 2.5 per cent.

Import duty on flat steel products has been increased to 10 per cent from 7.5 per cent, whereas that on long steel products has been raised to 7.5 per cent from 5 per cent.

The ratings agency said that higher import duties on carbon steel products are credit positive for Tata Steel (Ba1 stable) and JSW Steel (Ba1 stable) as they will support Indian steel prices and contribute to steel producers' profitability.

"As of the quarter ended March 31, 2015, cheaper imports led to a 6 per cent decline in realised per tonne prices at Tata Steel, versus a year earlier, and a 10 per cent decline at JSW Steel during the same period," it added.

Although Indian steel demand is poised to outpace other emerging markets, competition from imported steel is likely to remain strong, keeping some pressure on Indian steel prices, Moody's said.

Global industry body World Steel Association expects steel demand in India to grow by 6.2 per cent in 2015 and 7.3 per cent in 2016, compared with a decline in all other large emerging countries except Turkey, it added.

Moody's expects lower Indian steel prices will likely help in reducing the cost of manufacturing and infrastructure building, which are two important pillars of the government's pro-growth agenda.

Country's steel imports rose 71 per cent to 9.3 MT in 2014-15, data from the government showed, with most of the increase due to shipments from China (around 3 MT), it said. However, last week another ratings agency Fitch projected a different scenario for the domestic steel industry.

Fitch Ratings said it does not expect Indian government's increase in customs duties on steel imports to alleviate much of the pressure on steel producers, which have been challenged by cheap imports and weak domestic demand.

The higher customs duty is likely to result in only a marginal increase (between Rs 500-1,100 per tonne) in the landed costs of imported steel products, which in the short term will help close the gap between domestic output and cheaper imports, it had said.

Source: profit.ndtv.com

Rupee Trades Higher At 63.54 Against Us Dollar

The rupee on Monday strengthened for the fourth consecutive session, even as the local stock market rose for the seventh consecutive session.

 

At 1.55pm, the local currency was trading at 63.54, up 0.04% from its previous close of 63.56. It opened at 63.49 and touched a high of 63.46, a last level seen on 15 May 2015.

 

Investors were encouraged by signs of a compromise in Greece’s debt talks with its creditors. Greek Prime Minister Alexis Tsipras will meet the heads of the European Commission, European Central Bank and International Monetary Fund on Monday ahead of a summit of euro zone leaders later in the day aimed at reaching a deal over debt talks, Reuters reported.

 

The stock market benchmark Sensex was trading higher for the seventh consecutive session. Since 11 June, it has gained over 1,358 points or 5.04%. At 1.55pm, the Sensex was trading at 27,730.94 points, up 1.52% or 414.77 points.

 

The yield on India’s 10-year benchmark bond was trading at 7.726% compared with its Friday’s close of 7.713%. Bond yields and prices move in opposite directions.

 

Since the beginning of this year, the rupee has lost 0.78%, while foreign institutional investors have bought $6.26 billion from local equity market and $6.32 billion from the bond market.

 

The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.277, up 0.2% from its previous close of 94.085.

 

Source:livemint.com

Prior to 10-10-07, deemed addition of handling charges was at 1% of CIF if actual charges were unasc

Customs : Deemed addition in respect of 'loading, unloading and handling charges' under rule 9(2)(b) of Customs Valuation Rules, 1988 at 1 per cent of CIF, even where actual charges are available, is ultra vires section 14; hence, said deemed addition at 1 per cent of CIF would apply only if actual charges are not ascertainable

AO couldn't levy penalty for furnishing 'inaccurate' particulars by invoking Explanation 1 to sectio

IT: Where Assessing Officer levied penalty on assessee for furnishing inaccurate particulars of income by invoking Explanation 1 to section 271(1)(c), same could not be sustained as Explanation 1 is applicable in respect of particulars which have been concealed and not for furnishing inaccurate particulars of income

Tax paid on cement used for constructing staff quarter's couldn't be set off under Bombay Sales Tax

CST & VAT : Maharashtra VAT - Where assessee, a manufacturer, had purchased cement, which was used for construction of staff quarters, and had also purchased scientific equipments and other materials, which were used for research and development of existing product and a new product, assessee was not entitled to set-off under rule 41D of tax paid on purchases of above goods

Jurisdictional CCIT can himself take decision of not filing appeal in HC even if station was having

IT : Section 143, read with section 142 of the Income-tax Act, 1961 - Assessment - Scope of enquiry in cases selected for scrutiny - Further steps towards a non-adversarial tax regime

India Seeks To Expand Marine Food Exports To Africa

India, which has made big impact at Africa's biggest trade shows, wants to start exporting its marine products to the African continent. A 50-member delegation from the Ministry of Commerce and Industry participated in Africa's biggest trade fair - the South African international trade exhibition (SAITEX) - that started here on Sunday.

"It is the first time we have come to such a large exhibition in South Africa to showcase India as the biggest producer of vannamei and a host of other aquaculture products with our land farming of fish," said Leena Nair, chairman of the marine products export development authority.

"We are looking at value-added processed seafood coming in here," Nair added. One of the marine product exhibitors is Preetha George, Executive Director of Starfish Exports.

The Spices Board of India took up four of the stalls in the Indian section as its members attempted to grow its markets in Africa.

"Many of our members have been very happy with our participation at this fair in the past, hence there are more this year," Spices Board chairman A Jayathilak told agency.

"There is increasing demand for Indian spices with the great growth in the number of Indian restaurants and popularity of the spices with other communities as well," Jayathilak said.

Jaspeer Kaur, deputy manager of the India Trade Promotion Organisation which brings out the delegation from India each year at SAITEX, said the subsidy provided by the Indian government enabled even the smallest companies participate in the event.

Opening the Indian stand at SAITEX, High Commissioner Ruchi Ghanashyam said Indian business houses were participating in large numbers because South Africa has a mutually beneficial trade relationship with India.

Source:moneycontrol.com

Deductions couldn't be denied if assessee submitted manual return, though e-filing was mandatory for

IT: Where a manual return was furnished before due date while electronic return after due date, provision of section 80-IC so as to claim deduction under section 80-IC was complied with

Karnataka VAT deptt. couldn't impose penalty on basis of original returns after accepting revised re

CST & VAT: Karnataka VAT - Once revised return filed by assessee has been accepted and acted upon by parties, then it is only revised return which has to be taken as sole return for purpose of imposition of penalty under sub-section (2) of section 72

Pulses Prices Soar Past Rs 100/Kg; No Tenders Yet For Import

Amid a supply crunch, retail prices of many pulses have crossed Rs 100 per kg mark in major cities across the country, but the government agencies are yet to float the tender for their import to check the price.

Barring gram and masoor dal, all major varieties of pulses -- including tur, urad and moong -- are being sold at prices above Rs 100 per kg in the four metro cities due to lower production of the key lentils during the last harvest. Consumers in Mumbai and Chennai are paying the maximum price for tur, urad and moong, followed by Delhi and Kolkata.

Prices have increased by more than 60 per cent in the last one year as the domestic production fell by nearly two million tonnes (MT) in 2014-15 crop year (July-June) due to unfavourable weather conditions.

To check the prices, the government has decided to boost supply by importing pulses in large quantities, while it has also finalised the modalities for the import through state-trading agencies like MMTC.

However, they are yet to float the import tenders. The government last week also announced a significant hike in the MSP of pulses by upto Rs 275/quintal to encourage domestic production and ensure adequate supply.

Though India produces 18-19 million tonnes of pulses, it also imports 3-4 million tonnes annually to meet the domestic shortages.

According to the data maintained by the Consumer Affairs Ministry, tur prices in Mumbai and Chennai have increased to Rs 116/kg at present, from Rs 72-79/kg in the year-ago period, while rates of urad dals have risen to Rs 121-123/kg from Rs 79-84/kg in the said period.

Similarly, moong prices in these two cities have shot up to Rs 111/kg from Rs 92-97/kg, while gram dal rates have increased to Rs 68-70/kg from Rs 47-61/kg in the period under review.

In Delhi and Kolkata, consumers are paying Rs 105-113/kg for tur at present, as against Rs 68-73/kg in the year-ago period. They are paying Rs 108-112/kg for urad, Rs 103-105/kg for moong, Rs 84-94/kg for masoor and Rs 64-68/kg for gram.

In the year-ago period, tur and urad were available in these two metro at Rs 68-73/kg, moong at 85-92/kg, masoor at Rs 60-70/kg and gram at Rs 44-49/kg, the data showed. A similar situation prevails in other cities in the country, where consumers are
feeling the pinch of price rise.

Source:economictimes.indiatimes.com

Repeal Proposed Quality Control Order For Steel Imports: Fii To Government

Government should repeal the proposed Quality Control Order with regard to steel imports else it would adversely impact India's international trade relations, an industry body has said.

Under the proposed Steel and Steel Products (Quality Control) Order, 2015, government is set to bring several steel products under a mandatory Bureau of Indian Standards (BIS) registration.

In its letter to the Steel Ministry, the Federation of Industries of India (FII) has said that Quality Control Order is nothing but an effort to create barrier to stop import of Hot Rolled (HR) Coil steel essentially required to bridge the gap between industry's demand and
supply by domestic steel producers.

"...the proposed Quality Control Order, 2015, if not withdrawn by the Steel Ministry, would have a massive adverse impact on our international trade relations as no foreign country or their companies, would go for cumbersome BIS registration procedure for the sake of exporting small quantities of steel, occasionally to a few engineering companies in India," FII said in the letter. It said the Control Order would dent relations with countries like Korea and Japan.

"The foreign companies are equally competent to introduce same kind of non-tariff restrictions on export from India. Under such restrictions, how our PM's Make In India programme would become a success here, if other countries stop our exports through similar non-tariff restrictions," it said.

FII also said that there is hardly any reason for the Steel Ministry to protect 4-5 major domestic steel producers through this route.

"The steel producers should follow anti-dumping or SG route to check dumping of steel, if any, happening in India and not through the mandatory Control Order route," FII added.

It has asked the Steel Ministry to give instructions to officials not to proceed with the proposed order and also spare time to discuss the issue with FII and other steel consumers likely to be affected by this order.

According to data provided by FII, India's imports of non-flat steel products constituted 2.3 per cent of domestic production in 2014-15.

While, import of flat products constituted 14.17 per cent of the domestic production and import of alloy steel made 28.7 per cent of domestic production.

Source:economictimes.indiatimes.com

Sovereign Gold Bonds: A Fresh Tool To Curb Import

The draft guidelines issued for the Sovereign Gold Bonds (SGBs) is the government second salvo as part of its plan to curb the import of gold. In its budget proposal in February, the government had proposed the introduction of the Gold Monetisation Scheme (GMS), which was introduced a month ago and now the SGB is the second measure.

SGBs are to be linked to the price of gold, and issued by the central bank (Reserve Bank of India). It is proposed that banks, non-banking finance companies (NBFCs) and post offices will be able to collect money and redeem the bonds on behalf of the government. The bonds are to be issued in denominations of two, five and 10 grams of gold with a minimum tenor of five to seven years.

“Any step that increases consumer choices and makes gold a fungible asset class is good. Our research confirms the growing interest among Indian consumers for interest-bearing gold-based investment products,’’ Somasundaram P.R. MD, India, World Gold Council, said.

“Unlike the GMS, where the primary objective is to ‘monetize’ India’s massive stock of physical gold, the SGBs scheme intends to convert the investment demand for physical gold into paper demand,’’ according to Sonal Varma, India economist at Nomura.

In 2014, India’s investment demand for gold was at 181 tonnes against an average annual demand of 345 tonnes from 2010 to 2013. “If the scheme is subscribed fully in the first year, then it would represent 27 per cent of the 2014 investment demand and would result in saving of $2 billion on gold imports at current prices,’’ the report said.

Importantly, a 2 per cent lower limit of interest rate has been indicated and will be paid in terms of gold grams. On maturity, the investor is to get an amount equivalent to the face value of gold in rupee terms.

As with the Gold Monetisation Scheme, the interest rate could determine its success. “It is an excellent scheme and is a new alternative investment avenue while having ‘gold’ tagged to it and will surely gain popularity among investors,’’ Prithviraj Kothari, Managing Director, Riddhi Siddhi Bullions and Vice-President of India Bullion and Jewellers’ Association, told this correspondent.

Source:thehindu.com