IT/ILT : Where assessee was paying to third party to get custom clearance service done on high value packages, for and on behalf of AE and payment was reimbursed by AE, said payment could not be included in total cost of assessee for determining profit margin for benchmarking arm's length price
Sunday, 18 January 2015
Registrar of co-operative society can't be deemed as an enterprise; outside the jurisdiction of CCI
Competition Act : Registrar of co-operative society while discharging its regulatory and statutory mandate cannot be said to fall within purview of terms enterprise as defined in section 2(h)
Refund of excise duty is to be treated as part of business profits; eligible for sec. 80-IB relief
IT : Refund of excise duty paid on manufacturing and sale of goods produced by assessee was to be treated as business profit and same was eligible for section 80-IB deduction
Interest payable to supplier for construction of property is an allowable deduction under sec. 24
IT : Interest payable to sundry creditors, who supplied material for construction of property, is an allowable deduction under section 24(b)
AO couldn't make addition on basis of income surrendered in survey without any evidence to substanti
IT : Where assessee had surrendered lesser sum instead what he admitted during course of survey, in absence of any exercise made by Assessing Officer to hold that said surrendered value was not proper, addition made was to be deleted
Smaller Bench of Tribunal has to follow majority view of Larger Bench of Tribunal, rules High Court
CST & VAT : It is bounden duty of smaller Bench of Tribunal to follow applicable judgment rendered by larger Bench of Tribunal, i.e., majority view, and not to follow minority view which has got no application
Delay in filing appeal due to personal reasons causing stress to person-in-charge of matter was cond
Excise & Customs : Where delay in filing appeal occurred due to personal reasons attributed to stress undergone by person-in-charge handling matter, said delay was due to "sufficient cause" and was condonable
No TDS liability of buyer when capital gain arose to NR wasn't taxable due to sec. 54 relief
IT/ILT : Where on date of purchase of house property from non-resident vendor, assessee was aware of fact that capital gain was not taxable in vendor's hands due to availability of deduction under section 54, he was not required to deduct tax at source while making payment of sales consideration
Lorry drivers couldn’t be held as agents of transporter; cash payment to them was disallowable under
IT : Where assessee transporter was neither owner of goods nor owner of vehicle carrying goods, lorry hire charges paid to lorry owners in cash was disallowable under section 40A(3)
Seeks Extension Of Subsidy On Raw Sugar Exports
Maharashtra Chief Minister Devendra Fadnavis on Saturday met Union Food Minister Ram Vilas Paswan and sought extension of subsidy on raw sugar exports and hike in import duty on the sweetener to 40 percent to help cash-starved mills clear cane arrears to farmers.
"Met with a delegation led by the Maharashtra Chief Minister. We discussed on issues marring the sugar industry," Paswan told PTI after the meeting.
The Food Minister assured the delegation that the Centre would take steps in the interest of both the farmers as well as the industry. "The suggestions given are for long and short term implementation. Whatever be the best possible solution, it will be taken," he said.
Amid surplus sugar stocks depressing local prices, the delegation led by the Maharashtra Chief Minister demanded curbs on inward shipments of sugar by raising import duty to 40 percent from the existing 25 percent, said a senior Food Ministry official present at the meeting.
To encourage exports, he sought extension of export subsidy scheme on raw sugar for the 2014-15 season (October-September), which the Centre is considering actively, he added.
Last year, the Centre had announced a subsidy on export of raw sugar up to 4 million tonnes in order to help the cash-starved industry pay sugarcane arrears to farmers. The subsidy scheme ended in September 2014.
Besides, the Maharashtra government has sought interest-free loans, restructuring of term financing of sugar mills and providing interest-free bridge loans from the Sugar Development Fund.
The state government has also demanded creation of buffer stock of 50 lakh tonnes of sugar at factory level in the state and increase mandatory ethanol blending with petrol from the current 5 percent to 10 percent.
State BJP President Raosaheb Patil Danve, Maharashtra Cooperative Minister Chandrakant Patil, Leader of Opposition in the state Dhananjay Munde and three MPs -- Vijaysinh Mohite Patil, Sanjay Kaka Patil and Raju Shetty -- were part of the delegation.
The sugar industry is seeking extension of the export subsidy for this year as mills are facing liquidity crunch to make cane payment in the wake of depressed local prices due to higher production in the last few years.
Sugar production in India -- the world's second biggest producer after Brazil -- has increased by 27.3 percent to 7.46 million tonnes in the first three months of the current 2014-15 season, according to the Indian Sugar Mills Association (ISMA).
The ISMA estimates sugar production at 25-25.5 million tonnes for this season, while the government's projection is 25.05 million tonnes for the same period.During the 2013-14 season, the country had produced 24.4 million tonnes sugar and exported 2.11 million tonnes.
Source:- zeenews.india.com
China Import Curbs To Hit Cotton Growers
Cotton growers in Vidarbha may have to face another year of recession as China, the major consumer of Indian cotton, plans to keep imports of the commodity under control, said trade representatives from this country attending the Textile Association-India (TAI) conference in the city. Chinese demand is an important factor for determining market prices of raw cotton and lint. Due to a fall in Chinese demand, cotton prices have touched the minimum support price of Rs4050 a quintal in India, bringing tough times for Vidarbha farmers.
Representatives of Hurai Information, a textile consultancy firm from Hangzhou in China, told TOI that their government is not keen to release cotton import quotas beyond 89,4000 metric tons committed under WTO agreement. This will keep the imports from India down.
"The Chinese government wants to promote the domestic cotton. Moreover, the focus is on chemical textile industry rather than cotton. As a result, cotton textile business has seen a slump in China too," said a representative from Hurai.
Back in India, stakeholders in textile business say the industry is feeling the heat of falling crude prices. Though it may have been beneficial for the domestic economy, it has led to an adverse impact on the textile industry, said Arvind Sinha, president of TAI.
The fall in crude prices has hampered the economy in countries like Russia and Venezuela, which make major export market for Indian apparel industry. The middle-east countries are also in a cautious mode apprehending a slump, with the demand already low in the US, said Sinha. There has been a close to 30% slide in the price of fibre and cotton prices are at an all-time low. The next quarter release of garments may see a cheaper range being launched. As against $50 shirts, the price range may be set around $20, said Sinha.
"But at the same time there has been no cut in capacity utilization as reducing or shutting down operations can mean more losses for the units. However, the recession can be taken as an opportunity by coming up with innovations and value addition in products," said Sinha.
'Forest officials delaying Ngp-Jabalpur highway work' Union transport and shipping minister Nitin Gadkari said the Centre has cleared widening of the Nagpur-Jabalpur highway but forest department officials deliberately sent the file back to the government. This can cause further delay as the whole process will have to be followed again. However, the issue will be sorted out soon as a joint meeting to be attended by him, union minister for forest and environment Prakash Javadekar and state's chief minister Devendra Fadnavis has been planned on Sunday, said Gadkari.
Earlier, at the inaugural session of the TAI conference, Gadkari said the government is planning to develop inland waterways which can be used for transport of cotton. He said a port will be developed on the banks of Godavari river in Nanded, which can eventually transport cotton in smaller vessels to the textile industry hubs in South India. Transporting by water can bring down the cost by almost 75%.
Source:- timesofindia.indiatimes.com
India’S Oil Imports From Iran Jump Sharply In ’14
India imported 42% more Iranian oil last year over 2013 levels as its refiners increased purchases to take advantage of an easing in sanctions targeting Tehran’s nuclear programme.The jump came with an end-of-the-year boost as imports in December surged 84% from a year ago to 348,400 barrels per day (bpd),the highest since March.
Iranian and US officials are meeting in Geneva this week ahead of talks between Tehran and world powers tomorrow focused on
reaching a final deal to end the sanctions against Iran in return for curbs to its nuclear programme.
Diplomatic efforts to reach a final agreement last year failed for a second time in November, and a self-imposed deadline was
extended to June 30 this year.
Tehran says its uranium enrichment programme is for peaceful purposes only and not aimed at building a weapon.
India – Iran’s top oil customer after China – imported 276,800 bpd of oil and condensate last year, compared with 195,600 bpd in2013, according to tanker arrival data obtained from trade sources and Thomson Reuters Oil Research & Forecasts.
Indian refiners bought about 39% more Iranian oil in December compared with November, the data also showed.
Annual imports of Iranian oil rose sharply last year as refiners ramped up purchases in the first quarter to make up for a big
decline in shipments in 2013 as insurers had not extended coverage for processing oil from the sanctions-hit nation.
Private-refiner Essar Oil was the biggest Indian client of Iran in 2014, followed by Mangalore Refinery and Petrochemicals Ltd
and Indian Oil Corp.
Iran remained the seventh-biggest oil supplier to India in 2014, while its share in overall purchases rose to 7.3% last year,
compared with 5.1% in 2013, the data showed.
The current sanctions allow Iran access to some of its frozen oil revenue overseas and restrict its oil sales at about 1mn to 1.1mn bpd.
Overall, India imported 3.84mn bpd of oil in December, up 9.4% from a year earlier. Imports for the full year fell 1.4% to 3.81mn bpd.In the January-December period India imported about 3.9% more oil from Latin America, with the region accounting for about 20.1% of overall imports, up from about 19.1% a year ago.
The Middle East region supplied about 59% of India’s oil imports in January to December, compared with 62.3% a year ago.
Africa’s share jumped to 16.7% from 15.4%. In the fiscal year to March 31, 2014, India cut its imports from Iran by 15% to 220,000 bpd to get a waiver from US sanctions on
the Islamic republic. India’s annual oil contracts with Iran follow the country’s April-March fiscal cycle.
In the first nine months of the year to end March 31, 2015, Indian refiners have shipped in about 250,200 bpd of Iranian oil, up 41% from the same period a year.
Source:- gulf-times.com
India May Seek Obama’S Intervention To Ease Gas Imports From Us
The steep fall in oil and gas prices offers India the perfect timing to press the US to ease norms for importing gas.During US President Barack Obama’s Republic Day visit, Prime Minister Narendra Modi is expected to raise the complexities Indian businesses face in importing gas from America.
According to those associated with the business, importing gas from the US is not easy as New Delhi does not have a free trade agreement with Washington. Gas can be sourced only from projects that are approved to sell to non-FTA countries.
To complicate issues, Washington, according to the sources, has decided to invoke a law that mandates that the ships carrying gas should fly the US flag and have an American crew.
This is likely to become effective from 2018, just around the time India expects to get its first US packet — GAIL (India) will get a liquefied natural gas shipment from Sabine Pass Liquefaction LLC, a subsidiary of Cheniere Energy Partners, LP.
In 2011, GAIL entered a contract for 20-year supply of 3.5 million tonnes per annum of LNG from the project.
Legal aspects
“According to the agreement, GAIL will buy gas at Henry Hub, the US gas price indexation.
“The deal also stipulates that LNG will be loaded onto a GAIL vessel. GAIL is now looking at the legal aspects of the US law on ships,” another official said. During Obama’s visit, Modi is likely to urge the US to be considerate towards Indian firms that buy crude oil from nations hit by Western sanctions.
As another source said, “Intensive discussions are on the cards on the energy front — nuclear, gas imports, and consideration towards Indian companies which are doing oil business with sanction-hit countries in West Asia or Russia.”
Though the sources did not give out any details, they said the Ministry for Petroleum and Natural Gas has flagged the issues with the Prime Minister’s Office and the External Affairs Ministry ahead of the Obama visit.
Source:- timesofindia.indiatimes.com
Falling Gold Imports Trim India's Trade Gap To 10-Month Low
The gold imports by India declined sharply during the month of December last year. The drop in gold imports together with plunging crude oil prices have cut India’s trade deficit to multi-month lows during the month.
As per data, gold imports during Dec ’14 amounted to $1.34 billion, which is even less than one-fourth of the $5.61 billion worth imports recorded during Nov ’14. The gold imports by the country have been in an uptrend since August last year. However, the sharp 76% month-on-month drop in gold imports has done well to check the trade deficit. The lackluster demand for the yellow metal due to volatility in prices and stocking of adequate quantities ahead of wedding season has resulted in low gold imports during Dec ’14. On the other hand, gold imports during Dec ’14 were higher by 7.4% when matched with the imports of $1.25 billion during Dec ’13.
Much to the relief of India’s Current Account Deficit, the cut in gold imports and crude prices helped to trim the trade deficit to its lowest level since Feb ’14. The deficit fell to $9.43 million, almost 44% down when matched with the previous month. The oil import bill during Dec ’14 has declined by nearly 15% over the previous month.
However, the trade data indicates that the merchandise exports by the country fell marginally from nearly $26 billion in the prior month to $25.4 billion in Dec ’14.
The narrowing trade deficit figures give room for the Reserve Bank of India (RBI) to come up with more monetary easing measures in near future. The RBI had announced quarter-point cut in rates recently.
Source:- metal.com
Rupee Strengthens 0.4% To 61.64 Per Dollar
The Indian rupee on Monday strengthened for the third consecutive session against the dollar after the government raised excise duty on both petrol and diesel on Friday.At 9.12am, the Indian currency was trading at 61.64 per dollar, up 0.38%. The rupee had opened at 61.62 per dollar compared with its previous close of 61.87.
The four excise duty hikes will result in about Rs.20,000 crore in additional revenue this fiscal year and will help the government meet its fiscal deficit target of 4.1% of gross domestic product (GDP).The buying by foreign institutional investors in equity and debt on Thursday and Friday also boosted sentiment on hopes that such buying will continue even this week. Since Thursday and Friday, FIIs bought Indian equities worth Rs.2,838.17 crore, BSE and NSE provisional data showed.
India’s benchmark equity index, BSE Sensex, was trading at 28,250 points, up 0.45%.The yield on India’s 10-year benchmark bond stood at 7.715% compared with its Friday’s close of 7.707%. Bond yields and prices move in opposite directions.
Since the beginning of this year, the rupee has strengthened 2.3% against the dollar, while foreign institutional investors have sold $41.3 million during the period from local equity markets and bought $1,803.3 million from debt markets.
Asian currencies were trading mixed against the dollar. The Japanese yen was up 0.41%, Taiwan dollar 0.18% and China offshore spot 0.16%. However, Malaysian ringgit was down 0.17%, China renminbi 0.11%, South Korean won 0.1% and the Indonesian rupiah 0.06%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 92.69, up 0.18% from its previous close of 92.52.
Source:- livemint.com
Interest paid to AE was at ALP if it was lower than rate of interest paid by AE to independent party
IT/ILT : Where loans taken by assessee from its AE were interest free for initial period of seven years and when said period of moratorium was taken into account, effective rate of interest incurred by assessee was lower than arm's length rate of interest considered by TPO, adjustment made to assessee's ALP on aforesaid ground was to be set aside
Services used in exempted job-work are eligible for credit; Cenvat rule 6 doesn't apply thereto
Cenvat Credit : Rule 6(1) of CENVAT Credit Rules, 2004 cannot be invoked for denying credit of input services used by job-worker for manufacture of goods claiming exemption under Notification No. 214/86-CE
SAT allowed appellant to make disclosure under Takeover Code as it had disclosed violations to SEBI
SEBI: Where appellant approached SEBI on its own and thereby brought violation of regulation 8(3) of takeover code for non-disclosure of shareholding to notice of SEBI, appellant was to be afforded an opportunity to make required disclosure to stock exchanges in question
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