IT/ILT : The basic condition to be satisfied for applicability of section 44BB is that the plant or machinery(which term includes ship) supplied or rented on hire by the assessee-non-resident should be used in the prospecting for or extraction or production of minerals oils or where equipment has been supplied, such equipment should have been used for the purposes of prospecting for or extraction or production of mineral oils. There is nothing in the said provision so as to disentitle a sub-cont
Thursday, 19 February 2015
In anti-competitive agreements, onus to rebut presumption of adverse effect on competition lies with
Competition Act : In case of agreements as listed in section 3(3), once it is established that such an agreement exists, it will be presumed that agreement has an appreciable adverse effect on competition; onus to rebut this presumption would lie upon opposite party
ITAT invoked sec. 40(a)(ia) disallowance as payment was made for labour contract work without deduct
IT : Where assessee had disclosed relevant particulars at time of original assessment, but they are found to be untrue on basis of material discovered by a later date by Assessing Officer, assessment would be validly re-opened section 147(a)
Inputs destroyed by fire at WIP stage were deemed to be used in manufacture; no reversal of credit
Cenvat Credit : Where inputs have been destroyed by fire while work was in progress, inputs must be regarded as 'used in manufacture'; hence, if there is no claim of remission by assessee, department cannot seek reversal of credit on inputs
No extended period if demand arose out of correct figures shown in ST-3 returns
Service Tax : Once correct calculations have been shown in ST-3 returns and demand arose solely out of correct figures shown in ST-3 returns, there cannot be any intention to evade service tax; hence, extended period cannot be invoked
No disallowance of depository charges paid by broker without deducting tax as Stock Exchange paid ta
IT : Where assessee made payment of depository charges on account of services provided with regard to transactions in securities through stock exchange without deducting tax at source, since taxes on said amount were already paid by recipient, impugned disallowance made by authorities below was not sustainable
Suspension of CHA licence couldn't be sustained if show cause notice wasn't issued in statutory time
Excise & Customs : Suspension of license of Customs House Agent cannot be sustained, when no show-cause notice was issued to said CHA under regulation 22 of Customs House Agents Licensing Regulations, 2004 within statutory time-limit
Prior to 1-4-2013, TDS disallowance was attracted in payer’s hand even when payee paid taxes thereon
IT : Position prior to 1-4-2013 - Where assessee-partners borrowed amounts from their respective partnership firms, assessee would be required to deduct TDS on interest payment made even firm paid taxes
Writ couldn't be filed to recover export benefit after expiry of 3 years of rejection of export bene
Excise & Customs : In case of rejection of deemed export benefits, writ petition thereagainst must be filed within 3 years from date of rejection; any writ petition filed beyond said period is barred by limitation
Appellant was to be held guilty of violating FEMA as he failed to prove that he was coerced while ma
FERA: Where appellant failed to disclose as to how he was pressurized, coerced, or tortured, and by whom, when he made earlier confessional statement, plea of appellant that he could not be held guilty founded upon his highly belatedly retraction of his confessional statement, had to be rejected
Income of Swiss shipping Co. is taxable only in Switzerland and not in India as per India-Switzerlan
IT/ILT : Where assessee, a Switzerland based company, was engaged in business of operation of ships in international water, in terms of article 22 of India-Switzerland DTAA, freight income earned by assessee was taxable in Switzerland and not in India
India Among Top 10 Asian Export Markets For Uk-Built Cars
Society of Motor Manufacturers and Traders (SMMT) reports car exports to China have increased five-fold since 2009. In 2014, 137,410 UK-built cars were exported to China, at 14.5 pct over 2013.
In 2014, Only UK bought more British-built cars than China. Exports to China is greater than combined UK exports to Brazil, India and Russia. China’s sales trend reflects substantial growth in the wider Asian market. UK-built cars exported to Asia has trebled in five years (220,682 in 2014 over 60,804 in 2009). Asia is UK automotive industry’s largest export market after Europe. 18.5 pct of all cars built in UK are used in the Asia region.
For 2014, UK automotive exports accounted for 11.2 pct of export generated revenue, valued at £26.2 billion. UK exported 1,195,190 cars to more than 100 countries at 54.7 pct increase over 2009, when 772,210 cars were exported.
Mike Hawes, SMMT Chief Executive says economic growth in Asia in these five years has resulted in increased demand for new cars. Demand for high-quality premium vehicles with a strong brand heritage puts UK in a prime position to cater to an emerging market owing to quality of globally competitive products. UK automotive sector is important to the UK economy leasing to highest share of UK exports in history.
Significant investment in British auto manufacturers (Aston Martin, Bentley, Jaguar Land Rover, Mini, McLaren and Rolls-Royce) means 60 pct of all UK-built cars on offer are from premium luxury brands. Average export value of UK-built cars has increased from £10,200 in 2004 to £21,900 in 2014 in the Asian market. Growth is ubiquitous in almost all Asian export markets since 2009. South Korea is now UK’s eighth largest export market outside of Europe up from 16th in 2009 at 13,337 vehicles over 2,315 units in 2009, equating to 476.1 pct growth.
Growth in India equates to 817.8 pct at 2,836 cars in 2014, over 309 cars exported in 2009. Jaguar Land Rover sold 226 cars in India in FY 2009-10. Export volumes remain modest in a number of Asian markets, owing to high import duty. The situation is similar in India and has resulted in driving local production. However, significant growth in cars exported to most Asian countries underlines a strong demand for UK-built. UK car exports to India places the country as one of UK’s Top 10 Asian export markets. Export of UK-built cars to India were higher than in Kuwait (2,548), Hong Kong (2,362), and Qatar (2,085) in 2014.
Source:rushlane.com
Hot Water Treatment For Indian Mangoes For Eu Market
India's prized Alphonso mangoes will be treated with "hot water" as part of procedures to remove any contaminants like fruit flies before being exported to Europe, especially Britain, where they have a large market, a top EU trade official said.
Maurizio Cellini, First Counsellor, Head of Trade and Economic Affairs team of the European Union to India, told IANS that among the procedures India has to abide by to export mangoes to the 28-member bloc is of treating fruit with hot water.
Cellini also said that while the mango has been allowed for export, the ban on four other Indian products - eggplant, bitter gourd (karela), taro plant (arbi) and snake gourd (chichinda) - has not been lifted.
The EU had last May slapped a ban on the Indian mango and the vegetables following concerns over contamination, mainly from non-European fruit flies. The European Commission voted to lift the ban on Indian mangoes in late January and the final decision was taken on Valentine's Day Feb 14.
Cellini said a number of controls have been put in place by India, including some conditions for the packaging.
"There has been a commitment by India to treat mangoes with hot water, which was an additional requirement which is apparently important in order to guarantee that the products are free of contaminants like mosquitoes, insects which may come with the fruit," Cellini told IANS.
"I know that Indian mangoes are very popular in Britain, so there will be strong export to Britain; other European countries import mangoes from Africa and Brazil," he added.
Regarding the other four vegetables, he said India has not been able to provide the necessary guarantees yet that the packaging and treatment would be done in a way to eliminate the insects.
"Our experts came to India and made an inspection a few months ago. The result of the inspection was that things were making progress for the mango but for the other products they were not there at the right point," he added.
On the dragging India-EU free trade agreement negotiations that have been going on since 2007 but are stuck on certain niggling issues, Cellini said that EU is fully committed to negotiations and if completed "it would be a boost to the European Union and to India alike.
"There are some difficult points still to discuss and we need to get back to the table and see whether India is willing to consider certain sensitive points of the negotiation which for the EU are important.
"If we see positive signals, I'm sure the negotiations can continue and we are hoping to reach a mutually satisfactory solution in a short time," he added.
The negotiations are stuck over the EU demand for duty cut on European automobiles, auto components and wines and spirits. India has been asking for greater access to the European markets, mainly the UK and Germany for its professionals.
Cellini also said the EU can contribute to the Narendra Modi government's initiatives like Make in India, Smart Cities, infrastructure and renewable energy.
"Europe is very advanced; We have the right technology and right solutions and we think cooperation in this area could be mutually beneficial," he said.
On the Modi government's Make in India initiative, Cellini said the initiative signals improvement in ease of doing business, in transparency and in predictability, reforms in taxation system, and improvement in the general business climate.
"If this is done then I am pretty sure the EU companies, multinationals and small and medium enterprises will be encouraged to come to India to do business. It is important that these reforms become a reality and are translated into real facts and realised and that life for entrepreneurs becomes easier in India. If that happens I'm sure that activity of EU business will increase in India," Cellini told IANS.
He said the government's initiatives signal good business sentiment. "Business sentiment is a good thing, but you still have to be convinced to make the investment and to take action; probably we are not there yet but the sentiment is certainly positive and has improved, compared to a few months ago.
"The outlook is good, let's wait another few months maybe in order to see all this becomes real; I think it takes some time, the government is not in place for a very long time.. Reforms are not done in a day," he added.
Source:business-standard.com
Myanmar An Option For Indian Textile Entrepreneurs
Favourable government policies, low wages, shorter sea route and growing garment exports make Myanmar an attractive option for Indian textile entrepreneurs, says Rajesh Kumar Shah
The garment sector in Myanmar has grown enormously since the lifting of economic sanctions by Western nations in 2012, after a gap of 15 years. Today, it employs over 250,000 people and accounts for 10 per cent of export revenues earned by the country.
In 2014, Myanmar’s garment exports were estimated at US$ 1.5 billion in terms of FOB value, which has doubled in the last three years alone. The National Export Strategy (of Myanmar) wants to increase the country’s garment exports to about $4 billion by 2020.
Like Vietnam, Myanmar too is not self-sufficient in raw materials and imports many of its garment sector requirements. Second, unlike Bangladesh which has strong knitwear and woven apparel segments, most of the apparel exported by Myanmar are non-knitwear.
On the other hand, India is rich in cotton, and manufactures various kinds of yarn and fabric in large quantities, which are both supplied to the domestic industry and exported. This presents an opportunity for India to export its textiles, and also to invest in the Southeast Asian country for setting up textile and garment manufacturing units.
India is the fourth largest trade partner of Myanmar (third largest export destination for Myanmar and fifth largest source of imports into Myanmar), according to data with the Embassy of India in Yangon. Trade between India and Myanmar also takes place via third country (Singapore) and across the 1,624 km land border, in addition to direct trade. However, textiles is certainly not among the top traded items between the two countries.
“Trade (between the two) has been small. Almost no garment exports go to India and not too many textiles are imported from India. The vast majority comes from China,” notes Jacob A Clere, project manager, Myanmar Garment Manufacturers Association (MGMA).
Source:fibre2fashion.com
No sec. 115E benefit on short-term cap gain from sale of foreign exchange asset as it isn't an inves
IT/ILT : Short-term capital gains arising on sale of assets is not income 'derived from' foreign exchange asset so as to qualify as 'investment income' within the meaning of section 115E of the Act so as to be entitled to concessional tax rate of 20%
Capital gain arose on sale of land as assessee didn’t bring evidence to prove that land was held as
IT : Where assessee failed to bring any evidence on record showing that land was purchased by him as stock-in-trade for business purpose, Assessing Officer was justified in treating it as investment and computing capital gain arising from sale of land on basis of guidance value determined by State Government for stamp duty purposes
"Router" is computer peripheral and not an external device; taxable at 4% under Tamil Nadu VAT Act
CST & VAT : Tamil Nadu VAT - Where assessee, a dealer in computers and spares, sold router, commodity in question was a computer peripheral falling under Serial No. 22 of Entry No. 68 of Part B of First Schedule to Tamil Nadu VAT Act
Four Surat Firms Fined Rs 100 Crore For Duty Evasion
Directorate General of Foreign Trade (DGFT) on Monday has imposed a Rs 100-crore penalty on four Surat-based textile companies for misusing Export Promotion of Capital Goods (EPCG) schemes to claim duty-free imports without fulfilling the conditions required.
The four companies – Nirmal Polyesters Pvt Ltd, Krishna Trading company, Pradeep Kumar Nirmal Kumar Ltd and Meenu Exim Pvt Ltd – have allegedly defaulted on their export obligations, which were mandatory under the EPGC schemes where imports of raw-materials were exempt from cess.
Additional DGFT of Mumbai and the Appellate Authority upheld the order passed by the joint director general of Surat and also imposed a penalty of Rs 25 crore each on the respective firms, for misuse of the Advance Authorization Schemes. Hence, the violation of foreign trade policy rules, said the DGFT order.
"EPCG authorisation holder has to fulfill export obligations against the scheme specified. The action taken by the authorities was to recover the import customs duty on defaulters through an institutional mechanism," a senior official of DGFT told dna.
In the said order, these four companies had obtained advance licence during 2001-05, from joint DGFT Surat for duty-free imports of polyester filament yarn with condition to supply 100% of the finished goods to export oriented units (EOUs). Fabrics made out of such imported yarn should have been towards discharge of export obligation, but this was not the case here, according to DGFT. Each of the firm had obtained advance license for import worth around Rs 70 crore.
As per the Foreign Trade Policy 2009, Under the zero per cent duty, EPCG Authorization holder is required to undertake export obligation equivalent to six times of the duty saved within a period of six years from the date of issue of authorization.
In 2006, the joint-DGFT, Surat, received a report from Directorate-General of Revenue Intelligence (DRI), Ahmedabad informing that all the above companies had misused the Advance Licensing Scheme by selling the duty free imported raw materials in the local market instead of exporting or supplying to EOUs.
On the basis of the said report, the joint DGFT, Surat conducted an investigation and adjudicated the cases by passing order in August 2013, thereby refusing issuance of further license.
Further, all of the four entities filled appeal before Additional DGFT, Mumbai, the Appellate Authority.
After hearing the companies arguments and analysing the reports received from the Central Excise authorities confirming that the firms had not effected any supply of manufactured goods to EOU units, as claimed. Hence the decision to penalise the firms.
Under advance authorisation scheme, any exporter can import raw-materials and related inputs under 100% duty exemption schemes but only after obtaining the license from DGFT, the licensing authority under this category.
The government fixes value addition as per the standard input-output norms. Once the export obligation will be fulfilled with the licensing authority, importers can sell the manufactured products in domestic market.
Source:dnaindia.com
India's Gold Imports To Rise As Rbi Eases Curbs Ahead Of Budget
Gold imports to top consumer India are set to jump in coming months after the central bank eased gold import curbs, ahead of an expected cut in import duty in next week's federal budget.
The Reserve Bank of India said on Wednesday banks would again be allowed to import gold on a "consignment basis", under which they act as intermediaries and don't pay for the stock until a buyer has been found, which is usually quickly. Trading houses will be allowed to bring in gold with no conditions attached.
Gold flows into the country have slowed despite the removal in November of the so-called 80-20 rule that required importing agencies to re-export a fifth of total imports, as importers and customs officials waited for more clarity.
"These clarifications were pending for a long time and should boost sentiment. Gold imports may increase to 75-90 tonnes in coming months as against about 40 tonnes in recent months," said Prithviraj Kothari, executive director of the India Bullion & Jewellers' Association.
Imports had dropped despite the reversal of the rule as the industry was taken aback by the sudden change in the central bank's position and banks remained wary, fearing customs officials would hold up incoming shipments.
"Some imports had been stuck at the airport, but not huge quantities, as customs officials were awaiting clarification from the RBI. They will be cleared now," said Sudheesh Nambiath, an analyst at precious metals consultancy GFMS, owned by Thomson Reuters.
Nambiath said imports could average 80 tonnes a month, boosted by the RBI move and expectations of a duty cut. The central bank acted just days ahead of the government budget, due on February 28.
Expectations are high that Narendra Modi's government will reduce the import duty on gold from a record 10 per cent, set in 2013 by the previous government as part of efforts to cut the current account deficit.
"We view the clarification by the RBI on the 80-20 rule relaxation as positive for the bullion market as it is a step in the right direction towards the possibility of a relaxation in gold import duty," HSBC analyst James Steel said in a note.
"Indian gold demand would undoubtedly benefit if the government decided to cut gold import tariffs in response to the big drop in its current account deficit," he said.
The deficit has narrowed recently due to the drop in gold imports plus a sharp slide in oil prices. Gold is a popular gift at weddings in India and is also bought for auspicious occasions.
Demand should therefore pick up from March for the wedding season, which continues until July, while Akshya Tritiya, a major festival associated with gold-buying, falls in April.
Source:thehindubusinessline.com
Rupee Ends Weaker At 62.34/Dollar
The rupee closed weaker at 62.34 against the dollar on Wednesday hurt by demand for the American currency from oil importers. The rupee had closed at 62.16 on Monday.
The currency markets were closed on Tuesday for a national holiday. The Indian unit’s movement during the day mirrored that of its Asian peers, which were seen trading weaker against the American currency.
Suresh Nair, Director, Admisi Forex, said, “The rupee depreciated to near a week’s low on Wednesday against the US dollar, tracking most of its Asian peers, on caution ahead of the Federal Reserve’s January policy meeting minutes.”
Source:thehindubusinessline.com
HC remands case to Tribunal as it failed to consider issue raised by revenue
Excise & Customs : Where Tribunal : (a) failed to consider an issue raised by revenue and therefore, did not render a finding thereon and (b) merely stated that it need not interfere, matter was remanded back to Tribunal
Exp. on domestic transaction with non-AE not to be held as an operating exp. for international trans
IT/ILT : Expenditure incurred on account of domestic transaction with non-AE cannot be considered as operating expenditure in relation to international transactions with AE while computing profit margin of assessee
No recalling of ITAT's order if it disallowed interest when borrowed sum wasn't used in business of
IT: Where Tribunal specifically found that borrowed money was not used in money lending business by assessee, and, hence giving any credit towards payment of interest on borrowed fund did not arise, recalling of Tribunal's order was not justified
Sale of shares couldn't be treated as unexplained when AO failed to prove that share transaction was
IT : Where DMAT account and contract note showed details of share transaction, and Assessing Officer had not proved said transaction as bogus, capital gain earned on said transaction could not be treated as unaccounted income under section 68
RBI lifts ban on import of gold coins/medallions and allows import of gold on consignment basis
FEMA/ILT : Guidelines on Import of Gold by Nominated Banks/agencies
Reimbursement of technical exp. to foreign head office without making available technical service wa
IT/ILT: Technical expenses allocated by head office to assessee-Indian division was in nature of reimbursement of technical expenses to head office and not on account of any specific technical services having been 'made available' and, therefore, such amount could not be brought to tax in hands of assessee under article 13 of Indo-French Tax Treaty
Reversal and lapsing of credit under Cenvat Rule 11(3) applies only when all final products are whol
Cenvat Credit : Rule 11(3) of CENVAT Credit Rules, 2004 is applicable only when all final products become fully exempt from duty; said rule would have no application if from common Cenvat credit availed inputs or input services more than one final product are manufactured and some of them have remained dutiable
Glass bottles and plastic crates are eligible for credit as their cost is included in value of aerat
Cenvat Credit : Glass bottles and plastic crates, whose cost has been included on pro rata basis in value of aerated beverages, are eligible for credit to manufacturer of said beverages
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