IT/ILT : In case of 'royalty', the complete ownership in the equipment is never transferred to the other party. What is envisaged in section 9(1)(vi) read with Explanation thereto, is consideration for use or rights to use of any equipment. Where consideration is received by foreign company from Indian Co. for sale of capacity involving transfer of ownership of cable system to Indian company as distinguished from a mere payment for simply user of capacity, the consideration is not taxable as roy
Monday, 9 February 2015
Transfer of rights in land takes place when developer takes its possession and initiates development
IT : Where developer took possession of assessee's land and started development work, said transaction was to be treated as transfer of right in property covered under section 2(47)(v)
Unaccounted stock found during survey, prior to search, couldn't become subject matter of block proc
IT : Where certain unaccounted stock was noticed in survey commenced prior to search, could not be subject matter of block assessment proceedings
CBDT takes prompt action in investigating cases of black money stashed abroad; seeks further info in
IT/ILT : Section 276C, Read with Section 276D of the Income-Tax Act, 1961 - Wilful Attempt to Evade Tax, Etc. - Vigorous and Pro-Active Measures Taken by Income-Tax Department to Expedite Investigations in Cases of Indians Holding Undisclosed Foreign Accounts/assets Abroad
Plastic Crates used for internal movement of goods within factory are eligible for credit as capital
Cenvat Credit : 'Plastic crates' used to carry intermediate goods from one section to another for further processing is eligible for credit as 'capital goods', being 'accessories' to machineries
High Court granted stay on demand following earlier order wherein stay was granted on identical issu
IT: Where appeal arising out of earlier assessment orders in identical issue of assessee were pending and conditional order of stay had been granted there assessee was to be granted stay on demand during relevant assessment years
Comparable whose financial data is lacking credibility is excludible from list of comparables for TP
IT/ILT : Where adoption of a comparable would lead to skewed results or financial data of a particular comparable is otherwise devoid of credibility, such comparable would deserve to be excluded from list of comparables even if such an exercise would involve examination of data of comparables for more than one financial year
Bank selling goods of borrowers in auction to recover outstanding dues of loan held as dealer under
CST & VAT : Odisha VAT - Where a bank had sold goods of its borrowers in auction conducted by it to recover outstanding loan dues, bank was a dealer within meaning of section 2(12) of Odisha VAT Act
Liquidator lifts Corporate veil to find out whether contract labourers were workmen of principal emp
CL: Where official liquidator had no occasion to consider agreement between contractors and principal employer nor had they recorded any finding to disassociate linkage between contract labourers and principal employer, lifting of corporate veil was to be adopted to ascertain whether those contract labourers were in fact workmen under establishment of principal employer who was having a submersive control over them
Plastic Industry Body Moots Higher Duty On Chinese Imports
All India Plastics Manufacturers' Association (AIPMA), India's apex plastic industry body expressed hope here today that ahead of the Union Budget, the Centre will accept their three major demands, including higher import duty on Chinese products.
AIPMA president Rituraj Gupta said that the plastic industry has high hopes from the next Union budget. "In our recent representation to the Centre, we have put forward three of our main demands.
We want excise duty relief for the plastic industry. We also want significant increase in import duty on plastic goods imported from China. It should be increased from the current 5 percent to 15 percent," Gupta said during his interaction with reporters at a press conference here.
"Our third demand is related to Goods and Service Tax (GST). We have requested that it should not be more than 18 to 20 percent for the plastic industry. The government has accepted all our demands and we are hopeful that it will be reflected in the next union budget," Gupta said.
He announced that AIPMA plans to promote the use of plastic products in a big way to help the central government implement various initiatives like 'Swachh Bharat Abhiyan', 'More Crop Per Drop', 'Housing for All' and smart city projects.
"We are interested in the successful implementation of various central government programmes. We believe that success of initiatives like 'Clean India' and 'Make In India', relies greatly on how we use plastic, which is one of the best alternative materials," Gupta said.
Source:moneycontrol.com
Advantage Indian Tea, As Dry Weather Hurts Kenya Output
Kenya’s loss is India’s gain, at least when it comes to tea. The Indian tea industry had been losing out to Kenyan tea in the international market, thanks to unprecedented high production for two consecutive years.
The international market had been flush with Kenyan tea; that too at a much cheaper price compared with Indian tea. As a result, India’s tea exports were affected severely.
Subsequently, Kenya experienced dry weather, affecting its tea production, but it came as a boon for the Indian tea industry. Tea exports from India dropped by a substantial 10.43 per cent to 126.28 million kg in the first eight months of financial year 2014-15 between April and November. Price realisation had fallen to Rs 199.24 per kg from Rs 207.38 in FY15.
Now with Kenya experiencing dry weather, there is huge uncertainty in the market over the availability of Kenyan tea. This has pushed up prices of Kenyan tea in the international market by at least 60 per cent, much to the relief of the Indian tea industry, exporters in particular.
There are indications that Indian tea exports may be less by 15-20 million kg this year, but even then it should be better than last year. India exported 226 million kg last year. Industry officials said India’s tea exports suffered mostly in markets like the US, the UAE, Iran, Bangladesh and Pakistan. Higher price of Indian tea due to a sharp rise in the cost of production was one of the reasons India’s tea exports to these markets suffered all these years.
With the possibility of the crop size coming down in Kenya, Indian tea producers are expecting demand to pick up in global markets once again, which may help them regain their markets in Pakistan, the UK, Egypt and north America.
The other good news is that Indian Tea Association (ITA) is taking a delegation to Iran in February as India tries to sort out the issue of maximum residue limit, which has been hurting Indian exports to that country.
A four-member Iranian delegation visited Kolkata late last year to meet senior Tea Board officials and other stakeholders, including members from industry associations, traders associations and tea research institutes to discuss various food safety and quality issues of Indian tea and its smooth export to Iran.
Members from industry and tea research institutes also participated in the discussion and interacted with the members from Iran on different regulatory issues, including the pesticide residue problem, fixation and harmonisation of maximum residue levels (MRLs), presence of heavy metals and other contaminants. The ITA delegation’s visit to Iran is expected to take these discussions to the next level and possibly to a logical culmination.
Besides, both the government and other stakeholders from the tea industry need to do a lot more to enhance the brand equity of Indian tea in the international arena and to increase exports. The Centre, jointly with various stakeholders, is trying to sort out various issues such as increasing productivity of Indian tea, value addition, product diversification, boosting exports, improving soil health and steps for the welfare of small tea growers.
Analysts pointed out that normally demand for tea is always higher than the output in India. Therefore, prices are likely to remain firm in the new season that begins in April. India’s tea crop, which was down by 14.7 million kg last year, is expected to recover fast this year.
Source:mydigitalfc.com
Rubber Smes Confident Of Inverted Duty Correction
Over 6,000 Small and medium rubber units (SMEs) scattered in different clusters across the country are confident of correction in inverted duty structure in the upcoming budget presentation.
"India levies amongst the highest duties on import of raw materials and one of the lowest duties on import of finished rubber goods. Given Modi Government's emphasis on domestic manufacturing, it is critical that the inverted duty is corrected. We are confident that the Finance Minister will take cognizance of the same in the Budget", said Mohinder Gupta, President All India Rubber Industries Association (AIRIA).
Many small rubber goods manufacturers have turned to trading of rubber goods as small manufacturers can't compete with cheaper goods imported from China and other countries leading to loss to exchequer and also loss of employment.
According to AIRIA the finished products can be easily imported as the import duty on rubber products is between 0 to 10 per cent, while the duty on raw materials for rubber industry is between 5 to 70 per cent.
Not only import duty on raw materials is higher, the duty is levied even on those raw materials like some grades of synthetic rubbers which are not produced in the country. That certainly doesn't augur well for Make-in-India initiative, he added.
A survey by AIRIA last year showed that from 2,450 rubber products manufacturing units supposed to be existing, 990 units (40 per cent) of the units had closed down in the states of Punjab, Maharashtra, Kerala and Tamilnadu during the last five years as they couldn't face the onslaught of cheap imports of rubber goods.
Quoting Capexil data, AIRIA has stated that the import duty on raw materials is highest in India when compared to other rubber product manufacturing countries. For instance import duty on Natural Rubber in China is 10 per cent as against 20 per cent or Rs 30 per Kg in India. On Natural Rubber Latex the import duty is 70 per cent in India while it is just 10 per cent in China. Similarly, in case of Synthetic Rubbers the import duty is 7.5 per cent in China as against 10 per cent in India. India is deficient in both natural rubber and synthetic rubbers.
On the other hand, the import duty on finished rubber goods is lowest in India facilitating import of cheap goods to India. For instance on tubes, pipes and hoses, the import duty in China is 10 per cent and above, in India these can be imported even at as low as 6 per cent. Rubber Rice De-husking Rolls, which are widely used in rice mills across the country, can be imported duty free in India while China levies up to 80 per cent duty on the same.
As a result, imports of rubber products in India has gone up almost 100 per cent from Rs 3810 crore to Rs 7608 crore in three years between 2009-10 to 2012-13. Of that import, 80-90 per cent is avoidable as domestic capacity and capabilities exist to fulfil this demand .
There is a lot of potential for growth of rubber manufacturing industry in India as the consumption of rubber in India is amongst the lowest in the world. As against per capita consumption of 5 kgs in China and the world average of 3 kg, in India the per capita rubber consumption is just 1.1 kg. Rubber industry is also labour intensive and the industry provides employment to over two million people. Developing a robust domestic rubber sector will help meet new Government's objective for Make-in-India by aiding the SME manufacturing sector, AIRIA has stated.
Source:business-standard.com
Amendments to trust deed won't lead to denial of registration to trust if its charitable objects wer
IT : Merely because some amendments were carried out in trust deed, registration could not be denied, particularly when objects of trust were fulfilled
ITAT granted sec. 80-IB relief on Pro-rata basis as commercial area in housing project exceeded maxi
IT: Where in case of a housing project, there is a partial compliance in respect of maximum limit of commercial area, deduction under section 80-IB(10) is allowable on pro rata basis
Don’T Hike Excise Duty: India Inc
India Inc has asked the finance minister Arun Jaitley that for the success of ‘Make in India’ the forthcoming Union Budget should avoid the temptation of raising excise duty or reducing peak custom duty. “While we understand the imperative to garner fiscal resources, CII feels that demand is still fragile.
Moreover, the manufacturing sector continues to be vulnerable. Under these circumstances, it would be prudent to allow excise duties to remain at current 12 per cent,” said Chandrajit Banerjee, director general, CII.
The general rate of excise duty has been raised and lowered in conjunction with prevalent economic conditions and stands at 12 per cent as of now. To provide a stimulus to the manufacturing sector, excise duties on automobiles, capital goods, consumer durables, and so on were lowered in February 2014, but this rebate expired in December, 2014.
However, CII said that the demand continues to be weak. “While adding that reduction in rates was desirable but may not be aligned to government’s fiscal situation,” said CII. CII advocated for reduction in excise duty on automotive parts where the applicable rate is higher than that applicable on the automobiles, thus leading to anomalies.
Source:deccanchronicle.com
Goa Govt. debars input tax credit for military canteens in excess of output tax liability; amends Go
CST & VAT/INDIAN ACTS & RULES : Goa Value Added Tax (Ninth Amendment) Rules, 2014 – Amendment in Rules 2, 6, 7, 15, 16, 17, 23, 24, 27, 33, 44, 52 and First Schedule; Substitution of Rules 4A, 42, 46 & Form Vat-Iii and Insertion of Rules 4B, 7A, 9B, 14A, 28A, 41A, 42A, 44A, 44B, Fourth Schedule, Forms VAT XXXV, VAT XXXVI, VAT XXXVII & XXXVIII
India's Coal Imports Soften As Local Supply Improves
India's coal imports in January fell 21 percent month-on-month as state-owned Coal India Ltd ramped up supply from new and existing mines, online trader mjunction said, a trend that is likely to continue this month.
Imports into the world's third-largest coal buyer is estimated to have risen 3 percent to 15.79 million tonnes in January from a year earlier. Shipments were, however, much lower than the revised figure of 20 million tonnes for December, mjunction said.
January imports were also affected by Christmas and New Year holidays, said Viresh Oberoi, chief executive and managing director of mjunction.
"We anticipate that imports in February will not deviate much from the January levels largely on account of better availability of domestic coal even as prices were soft in January for steam coal of almost all origin, which Indian companies generally import," Oberoi said in an email.
Though below target, Coal India's April-January output rose 6 percent to 389 million tonnes as it opened new mines and got environmental clearances to raise output from operating mines.
India's January imports included 12.76 million tonnes of power-generating thermal coal and 2.40 million steelmaking coking coal, according to port data from mjunction, a joint venture of Tata Steel and the Steel Authority of India Ltd.
Source:reuters.com
Making Iron Ore Industry Globally Competitive
THE iron ore industry in India, which has been undergoing a harrowing time over the past few years, is hoping for some relief from the union budget to be presented by Finance Minister Arun Jaitley later this month.
The industry has demanded that the government abolish the 30pc export duty, which has made Indian iron ore non-competitive in the global markets, on low-grade fines. Sources in the industry believe that the government will scrap the export duty in the budget. The government imposed the duty to protect the country’s steel industry, which was facing a shortage of raw materials following the Supreme Court order banning mining in several states.
The iron ore mining sector attracted the ire of the apex court after it was found that corrupt politicians in several states — including Goa, Karnataka and Odisha — had allowed mining rights to their favourite industrialists, even in areas they were not supposed to mine.
The crackdown on iron ore mining has hurt the sector badly. India was the world’s third-largest iron ore supplier before the court imposed the ban in 2010. Exports of iron ore plunged from a high of 100m tonnes that year to 62m tonnes in 2011-12, less than 20m a year later and under 15m tonnes in 2013-14.
Last April, the Supreme Court lifted the mining ban in Goa, though it imposed a cap of 20m tonnes. Goa is the largest producer of iron ore in India. Other major ore producing states include Karnataka, Odisha and Jharkhand.
Domestic demand for iron ore — mainly from steel producers — is estimated at 140m tonnes annually, as against an expected production of 130m tonne. Domestic production peaked at 220m tonnes in 2009-10 and fell to 150m tonnes last year, when the country became a net importer of iron ore, with imports touching 8m tonnes, as against exports of less than 7m tonnes.
Even Tata Steel, one of the largest and oldest steel manufacturers in the country — which had its own captive mines to feed its mills — had to resort to imports to tackle the crisis following the Supreme Court ban on mining. Most of the leading steel producers including Tata Steel, Essar Steel and JSW Steel had to import raw material to meet their requirements.
Imports of high quality iron ore have risen steadily, from around 0.5m tonnes in 2011 to 8m tonnes in 2014. This year, imports are expected to touch the 15m-tonne mark. Imports are mainly from South Africa, Australia and Brazil.
According to the Associated Chambers of Commerce of India (Assocham), India’s ore production has fallen at a time when steel output has gone up from 65m tonnes in 2009-10 to more than 90m tonnes in 2014-15.
The Iron Ore Exporters’ Association has told the government that there is a huge stock of low-grade ore lying in ports and warehouses in Odisha and West Bengal. It has warned the government that stocking the stuff at ports and warehouses could also result in an environmental crisis, as the fines could spill over into nearby water bodies.
By withdrawing the export duty, iron ore producers would be able to sell it in markets such as China and earn foreign exchange. India’s domestic steel producers do not have an appetite for the low-grade fines, which are ultimately used as landfills.
THE iron ore crisis in India has coincided with the sharp decline in the price of the raw material globally. Last year, iron ore prices fell by a whopping 50pc, as demand from China — the world’s largest producer of steel — tumbled.
China’s steel production, which added up to over 820m tonnes last year, is projected to breach the billion-tonne mark by 2030. However, the slowdown in the Chinese economy has hurt the price of several commodities including iron ore. Globally, many miners have boosted their production of iron ore to fill the breach caused by a fall in exports from India.
The cost of imported iron ore — 62pc Fe grade ore — is about Rs3,500 a tonne in India, as against a price of Rs4,000 for the domestically produced mineral. Domestic steel producers have also complained that iron ore producers — including state-owned NMDC Ltd — have been raising prices, in contrast to global prices.
According to JSW Steel, NMDC hiked the price of 64 Fe iron ore by almost 15pc last year, even though the international price for the same grade ore fell by 50pc. This has reduced the cost competitiveness of domestic steel producers, who are now facing the brunt of a glut in steel supplies in countries such as China and Russia. Steelmakers from these two countries are dumping the metal on India, hurting the local producers.
With the domestic steel lobby taking up the issue with the government, NMDC — the state-owned miner — recently decided to cut the price of iron ore.
While the domestic supply situation is expected to ease in 2015, with the government having decided to open up the mining sector to private — and even international — miners, and states like Goa expected to resume mining, pressures on prices will continue for much of the year, say analysts.
If the government withdraws the export duty of 30pc, miners will once again enter the international market, further dampening prices.
But even as miners are demanding a withdrawal — or reduction — in export duty, the government will be under pressure to restrict export of iron ore. Prime Minister Narendra Modi has been focusing on his ‘Make in India’ initiative at global events. By restricting iron ore exports, it would help in ‘making’ more steel in the country.
The steel industry wants the iron ore produced in India to be used for making steel, instead of selling it cheap to Chinese steel mills, who later dump the finished products in the Indian market.
Source:dawn.com
Aptma's Clarification About Import Of Cotton Yarn From India
A spokesman of All Pakistan Textile Mills Association (Aptma) has clarified that Aptma has demanded 15 percent Regulatory Duty on import of subsidised fine count cotton yarn, predominantly from India, without disturbing the DTRE scheme or import under manufacturing bond.
He said the official data suggests that Pakistan produces 200,000 tons fine count cotton yarn annually, out of which only 65000 tons is exported while 135,000 tons is consumed in the domestic market. However, India has offered 10 percent rebate on export of fine count cotton yarn simply to dump it in domestic commerce of Pakistan. The future of 30 mills manufacturing fine count cotton yarn is at stake and employment of hundreds and thousands of workers is under threat, he added.
According to him, the Aptma concern over the situation has been taken mistakenly by the apparel sector and an immediate clarification is urgently needed.
He said Aptma is itself major stakeholder but it is still asking for imposing regulatory duty on a specific product in the larger interest of domestic industry.
He said Aptma has repeatedly being clarifying that it is in favour of free market mechanism and seeking countervailing/regulatory duty on domestic use of imported fine count cotton yarn. It is alarming to note that import of fine count cotton yarn has reached to 30000 tons in 2014 against 6500 tons in 2012. The import data of fist six months of current fiscal reveals that 3000 tons per month fine count cotton yarn is entering Pakistan from India, he said and added that 90 percent of imports are originating from India on the basis of unstructured rebate to its manufacturers.
Source:brecorder.com
India To Take Pragmatic Steps To Boost Chinese Investments
In an effort to woo Chinese investment as part of its 'Make In India' pitch, the government will now be aggressively encouraging Chinese companies to set up their manufacturing units in India.
The home ministry is said to have conceded to the foreign ministry's plea that there need not be an "alarmist" attitude to Chinese investments in India. In an effort to get other ministries on board, home secretary LC Goyal will chair a meeting on Monday with senior representatives from the ministries of communication and information technology, power, Directorate General of Foreign Trade (DGFT), Department of Industrial Promotion (DIPP) and home ministry officials in charge of J&K, North-East and Border Management Divisions.
The effort is to ease up security regulations for Chinese investments here and not have an "arbitrary or unpredictable system" to clear proposals of Chinese investments, a senior foreign ministry official told ET.
The government is trying to now identify sensitive government locations where such Chinese manufacturing units will not be located and also identify those sectors or areas of high technology in which investments from Chinese companies or setting up of manufacturing units by them will not be allowed in India. "Cyber security and areas such as J&K and North-East will still be a no-go for Chinese companies but we wish for concessions to be made elsewhere for making the atmosphere conducive for more Chinese investments in India," the senior foreign ministry official has told ET.
The larger idea is that if China sets up its manufacturing units in India, security concerns will be addressed as a majority of employees and management would be Indians, the official said. "That would also help in employment generation in India and contribute to economic growth," the official added. ET was the first to report on February 6 that the government is planning to make it easier for Chinese companies to invest in India, as it seeks to attract investment from its neighbour and pave the way for friendlier relations between the two countries ahead of Prime Minister Narendra Modi's visit in May.
On the foreign ministry's push, the home ministry is now preparing a more pragmatic policy as so far the Indian security establishment has prevailed over the government and discouraged or stopped Chinese investments in telecom, power, and other sectors on the grounds that these could have implications on national security. There have been concerns about the linkages between the Chinese army and intelligence agencies with their companies, particularly in the telecom sector.
Chinese President Xi Jinping during his visit to India last year promised a $20 billion investment over five years. "But China has complained that this can't happen if it continues to be bracketed with Pakistan, Iran, Somalia, and Sudan in the list of countries whose business houses have to meet stringent visa and security clearance requirements before investing in India," added the official.
Foreign minister Sushma Swaraj, who was in China last week, told an India-China Media Forum that India will make it easier for Chinese companies to do business in India.
There have been a series of meetings between the home and foreign ministries and Intelligence agencies since January on this issue, with India's Ambassador to China, Ashok K Kantha attending at least two of them.
Source:economictimes.indiatimes.com
Rupee Plunges Past 62 Level Against Dollar
The rupee plunged below the 62 level by falling 36 paise against the US dollar. The rupee fell to 62.06 against the US dollar in early trade at the Interbank Foreign Exchange due to fresh demand for the American currency from importers. The rupee had closed at 61.70 on Friday.
Besides, a lower opening in domestic equity markets and forex outflows due to selling by foreign institutional investors kept pressure on the rupee, forex dealers said.
Foreign institutional investors sold shares worth Rs 96.45 crore on Friday. However, the dollar's weakness against other currencies overseas, capped the losses, they added.
Meanwhile, the benchmark BSE Sensex tumbled by 286.49 points, or 0.99 per cent, at 28,431.42 in early trade today.
Source:profit.ndtv.com
Activity of converting heena leaves into herbal heena powder would amount to manufacture for sec. 80
IT : Condition specified in section 80-IB(2)(iv) requiring employment of ten or more workers in process carried out could not be said to have been complied with, when most of workers had not actually worked for more than four months during year
ITAT's cryptic order allowing sec. 80-IB relief on sale of adjacent flats beyond built-up area limit
IT : Matter was remanded for fresh consideration where Tribunal allowed deduction under section 80-IB on profit on sale of flats in housing project constructed by assessee by a cryptic order and without recording any finding on disputed facts
SC directs HC to re-scrutinize search order of revenue on basis of materials available before quash
IT : Where High Court had not tried to see reasons recorded or scrutinized file to find out whether authority had formed opinion on basis of acceptable materials or not before quashing search and seizure order of revenue, matter was to be remanded back
RBI accepts new rating scale of Brickwork Ratings, being minimum investment grade for long-term FD p
NBFCs : Credit Rating of Fixed Deposits of NBFCs - Change in Rating Scale of Brickwork Ratings India Private Limited (Brickwork)
FPIs can invest in amortised debt instruments with minimum maturity of 3 years but not in commercial
FEMA/ILT : Foreign Investment in India by Foreign Portfolio Investors
No writ challenging order of authority on exemption on intravenous fluids as assessee had remedy of
Excise & Customs : Where assessee has statutory remedy against order of Adjudicating Authority by way of appeal before Tribunal, writ petition filed against adjudication order was liable to be dismissed
Legal exp. incurred on feasibility report preparation for acquisition of a new brand was revenue exp
IT : Where legal expenses incurred by assessee was to ensure proper acquisition of brand which was in existing line of assessee's business and same was in nature of consultancy, therefore said expenditure was to be treated as revenue in nature
Petitioner who was held as guilty while deciding jurisdictional issue by CCI couldn't ask for re-adj
Competition Act : Where while deciding issue of jurisdiction both CCI and COMPAT held that petitioner was guilty of violating section4, it would be futile to ask CCI to re-decide issue of jurisdiction
Amendment restricting scope of exemption couldn't operate with retro-effect
Excise & Customs : Where amendment restricting scope of exemption was made on 16-3-1995, said restriction would apply only from 16-3-1995 and cannot be made applicable for entire financial year 1994-95, as that would amount to giving retrospective effect thereto
ALP determination is to be restricted to international transactions with AE without extending it to
IT/ILT : Transfer pricing adjustment, if any, is required to be made then same will be limited dealings of assessee with its AE in respect of international transaction and ALP cannot be determined on basis of turnover at entity level
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