Service-tax : Since service tax law itself permits filing of belated return and payment of tax belatedly, every delay in payment cannot attract penalties; section 73(3) regarding non-issuance of notice if entire tax and interest is paid before notice, cannot be rendered redundant
Monday 16 March 2015
At the time of Sec. 80G approval object of trust needs to be examined without considering applicatio
IT: At time of granting approval under section 80G, only object of trust is required to be examined
HC accepts cash method of accounting in respect of money retained by customers for fulfilment of war
IT : Where assessee was consistently following system of accounting of crediting money retained by customers from sale proceeds as and when received and Assessing Officer accepted such method in earlier years, there was no need to disturb method of accounting followed by assessee
No working capital adjustment in TP proceedings if assessee neither pay any interest nor bear workin
IT/ILT : Where assessee did not pay interest on working capital loans and did not bear any working capital risk, revenue authorities were not justified in making negative working capital adjustment in course of transfer pricing proceedings
Proceedings quashed against bank officials for violating FERA as ED had already dropped allegation a
FEMA: Where Enforcement Directorate had dropped allegations of consent and connivance on part of appellant - bank officials in show cause notice alleging contravention of sections 6 and 49 of FERA, complaint levelling allegations of consent and connivance by appellants was to be quashed
No reversal on inputs issued from section to be used in manufacture of final product
Cenvat Credit : Inputs issued from store section to be used in manufacture of final product, have to be treated as inputs used in manufacture and no Cenvat credit reversal is required even if WIP is destroyed by fire; however, loss by fire of inputs lying in store as such is ineligible for credit
Indian Refiners Restock With West African Oil Ahead Of Strategic Reserve Launch
India has nearly doubled the amount of West African oil it will import in the first half of April, traders said, in a buying spree aimed at refiners building stocks ahead of purchases to fill the country's new strategic petroleum reserve (SPR).
The world's fourth-largest energy consumer has stepped up purchases of the Nigerian and Angolan crude for March and April, sparking interest from a market that is watching for stockpiling after oil prices crashed by more than 60 per cent between last June and January 2015.
Traders said Indian state-backed refiners, led by Indian Oil Corp, booked roughly 15 million barrels of West African oil to arrive in the first part of April - double what they usually import.
The stream of bookings has continued; in the past week, state-controlled oil refiners have booked a further 5 supertankers as part of a fleet of vessels that will load in West Africa in early April.
"We have heard many things - filling storage, buying less Iranian and coming out of (refinery) maintenance during April," one trader said. "IOC has done the bulk of the buying."
Indian refinery sources said they were forced into the current buying frenzy due to stock drawdowns at the end of the financial year. While these are normal moves, state refiners this year, caught out by the plunge in crude prices, have lost at least Rs 30,000 crore ($4.76 billion) on oil inventories.
"We are buying oil for our own use and not for SPR," said IOC's head of finance A.K. Sharma. State-controlled refiners Bharat Petroleum and Hindustan Petroleum have also been buying West African crudes, booking several vessels over the past few weeks.
Sources at the refineries said their lifting plans for March and April were as per schedule. A drive to virtually eliminate Iranian imports in March also made West African grades more attractive.
India is building SPRs at three locations that together can hold more than 36 million barrels of crude to help protect the energy import-reliant economy from supply disruptions and price volatility.
While the first underground storage cavern at Vizag on the east coast, with space for 9.75 million barrels of oil, is ready to be filled, sources said none of the barrels booked now will end up there. The other two SPR facilities will be ready by October.
India has provided about $388 million (Rs 2,400 crore) to buy crude for the reserve in this budget year, enough to purchase approximately 6.5 million barrels at current prices, but the buying has not yet begun. The International Energy Agency in its monthly report on Friday said that cheaper oil with help encourage India, as well as China and South Korea, to beef up strategic storage.
Any effort to fill India's strategic reserves, which will amount to roughly one-third of daily global oil demand, would absorb some of the global glut of oil and could help shore up benchmark prices. Already, the spring purchases have boosted West African crude oil differentials versus the benchmark dated Brent price.
Grades popular among Indian refineries, such as Bonny Light and Qua Iboe, have seen their differentials rise to their highest level since the oil price started its near 60 percent slide in June last year.
Source:thehindubusinessline.com
Coffee Prices Decline On Good Crop Prospects In Brazil
Coffee growers are once again facing sleepless nights as bean prices are on the downward curve in the last few weeks. As the news that Brazil would harvest a better than expected crops for 2015-16 spread, prices have started falling and in the last two months, Arabica prices have declined 30%.
Currently, Arabica bean prices are ruling at 125 cents per lb compared to 180 cents per lb in October 2014. Since February 9, prices have declined 15% compared to 148 cents per lb. The ICO Composite Indicator prices stood at 127.97 cents per lb on March 12, the last trading session, the lowest price in the current month.
LIFFE Robusta coffee futures extended losses to a 13-month low on March 12, on fund and technical selling. LIFFE May Robusta coffee futures closed down $52, or 2.9%, at $1,768 per tonne, after touching $1,756, the lowest level since February 2014, the Coffee Board said.
"The long dry weather prevailing in Brazil last year had led to a belief that the country would harvest shorter crop in 2015-16. However, good rains in January and February in that country has now changed the outlook and it is expected to harvest a better crop than expected. This resulted in price fall everywhere," Ramesh Rajah, President, Coffee Exporters' Association told Business Standard.
The news of improved weather in Brazil added to the selling pressure. Farm gate prices in Karnataka, which contributes 70% of India's coffee output, have crashed by 20-22% since early January. Arabica prices have declined to Rs 8,750 per bag (each bag is 50 kgs) from Rs 11,000 per bag, showing a decline of 20%. Robusta prices have also declined by 20% to Rs 2,800 per bag from Rs 3,500 a bag in December and January. The harvesting for the current crop is nearing completion in major growing regions of South India including Karnataka.
"We expect the bearish sentiment will continue through the rest of this year and prices will move sideways in the coming months. The situation may slightly change once Brazil starts its harvest in June this year," Rajah said.
The Coffee Board, in its post-monsoon estimates, projected 331,000 tonnes of bean production for 2014-15, about 8.7% higher than the last year's production of 304,500 tonnes. This comprises of 231,400 tonnes of Robusta and 99,600 tonnes of Arabica. Coffee exports, during January 1, 2015 to March 12, 2015, declined 18.2% to 61,142 tonnes as against 74,741 tonnes.
Despite the downward pressure on prices, world production is expected to come to 142 million bags in crop year 2014-15, about 3.2% less than 2013-14 and its lowest level in three years. This puts the coffee market into a deficit for the current year, although stocks in exporting countries have so far allowed exports to continue at a strong pace, International Coffee Organisation (ICO) said in its latest report.
Source:business-standard.com
India Keen On Service Exports To China For Balanced Trade
There is a need for India to expand its presence in Chinese markets so as to overcome the issues of trade imbalance with China, without interrupting the bilateral trade flow between the two economies.
In a move towards bridging a widening trade deficit with China, the Government of India (GoI) is keen on promoting its services in China, so as to fill the existing trade gap between the two economies.
In this regard, the Ministry of Commerce & Industry, GoI, is focusing on promoting services from key Indian sectors like information technology, pharmaceuticals, tourism, textiles and agricultural products, in the Chinese markets.
The Indian government is also keen on setting up a joint working group with Beijing, to discuss growth prospects and further plan a strategy to market Indian services in China.
India is seeking to fill the gap that occurred due to decrease in service exports from China, which was a result of the latter’s tilt towards high-end technology products, said an official, according to the sources.
India is further mulling to boost the tourism cooperation with China, with an aim to make the nation a most favoured tourism destination for Chinese, added the official, while also pitching for higher export market scope for Indian generic products in China, which lags significance in the sector compared to that of India.
According to Reserve Bank of India (RBI), while China ascended to become largest trading partner of India from 2008, its exports to India increased so sharply that, it is inflicting an unsustainable trade deficit on India.
According to RBI, the total bilateral export potential of India to China was estimated at $ 28.4 billion in 2008 and it reached to $ 53.3 billion in 2012.
The export potential of India was nearly three times than that of actual bilateral export with China in 2008 and increased further to three and half times in 2012, due to the decline of bilateral exports in 2012, the RBI said.
In this regard, the RBI says there is a need for India to expand its presence in Chinese markets so as to overcome the issues of trade imbalance with China, without interrupting the bilateral trade flow between the two economies.
Earlier in February 2015, the Reserve Bank of India (RBI) had said in its annual survey report on ‘Computer Software and Information Technology Enabled Services Exports: 2013-14’ that the exports of the computer services and ITES services registered a growth of 14.6% in dollar terms, over the exports during previous financial year.
The RBI 2015 report also said that in the current year, engineering design and product development stood as the fastest growing segments, driven by value-added solutions from existing players and newer global in-house centres being established in India.
Expressing his dissatisfaction over 15% decline in India’s trade in February 2015, M Rafeeque Ahmed, President, Federation of Indian Export Organisations (FIEO) also said on Friday, that ‘Indian exporters are losing out particularly in the case of China, which has fixed exchange rate against Euro and other currencies, while Indian Rupee is fast fluctuating except against the US dollar. This partly explains 48% growth in China’s exports in February, 2015.’
The FIEO president urged the government to implement the Foreign Trade Policy, may be effective from April 1, 2015, so as to provide a long term stable regime for exports and asked to immediately introduce Interest Subvention for the exporters.
Source:thedollarbusiness.com
Mining Halt Fuels Iron Ore Imports
There has been a sudden spurt in import of iron ore in Odisha this year apparently due to shortage of raw material from local sources due to slowdown in mining activities.
According to recent written reply submitted by steel and mines minister Prafulla Mallik in the assembly, various companies imported 9.49 lakh million tonne of ore in 2014-15 compared to no import in 2013-14 and 1,404 MT in 2012-13. There was no iron ore import in 2011-12, 2010-11, 2009-10. Similarly, 1.32 lakh MT iron ore pellets were imported in the year compared to just 296 MT in 2013-14.
Mallik said the import depends on number of factors such as prices of raw material, demand of end-products, marketability and market price of end products.
Operational steel mills such as Tata Steel and Visa Steel were among the largest importers of iron ores while Jindal Steel and Power Limited and Simec Indus Resources are importing pellets.
Official sources said the situation has arisen because mining has stopped in several big mines thanks to expiry of statutory clearances.
Sources said during 2013-14, 77.84 MT of iron ore was produced in the state. However, only 16.925 MT were consumed domestically. The domestic consumption of iron ore was less than 30 per cent of total iron ore production during the last three financial years. In a separate written reply, the minister said of the 200 mining lease holders involved in excess mining, 140 lease holders had approached the re-visional authority.
Of them, 44 mining lease holders got interim stay. He said the case pertaining to excess mining was sub-judice in the Supreme Court.The government would take next course of action after the SC verdict.
The minister said after the recent MMDR ordinance the state government has started accessing the minerals for e-auction in tune with the central government norms.
The government is taking help of the Geological Survey of India, Mineral Exploration Corporation, Orissa Mining Corporation and directorate of geology for estimating the minerals, he added.
Source:timesofindia.indiatimes.com
Use of MS pipes/angles to manufacture capital goods is eligible for credit as they are used within t
Cenvat Credit : 'MS pipes/channels/angles, girders, bars, structures, plates, shapes and sections' used in manufacturing capital goods being 'cefixime, sterile, new solvent recovery, new pipe rack, etc.' are eligible for credit as capital goods, as they are used within factory
Credit of outward transportation is available upto customer's premises if goods to be delivered on F
Cenvat Credit : Where purchase order shows that goods are to be delivered on FOR basis and assessee had complied with other conditions of Circular, dated 23-8-2007, assessee is entitled to credit of 'outward transportation' upto customer's premises
CBDT notifies Rules for rollback of an Advance Pricing Agreement
IT/ILT : Income-Tax (Third Amendment) Rules, 2015 – Amendment in Rules 10F, 10H, 10-I, 10K, 10M, Form 3CEC & 3CED and Insertion of Rules 10MA, 10RA & Form 3 CEDA
Department can't raise demand on basis of actual production if duty is paid on basis of production c
Excise & Customs : In case of duty based on capacity of production, it is deemed production rather than actual production, which is relevant for calculation of duty; hence, actual production, even if higher than capacity, cannot be used to raise demand
Exp. incurred on expansion of existing business is allowable as revenue exp.
IT : When certain profit is to be excluded from claim of deduction under sections 80HH, 80-I and 80HHC, it is not gross profit but net thereof, that is gross profit minus expenditure incurred for earning such profit, which should be excluded
TPO has to accept price charged by assessee on his failure to find a comparable under CUP method
IT/ILT: Where TPO has expressed his inability in finding a comparable under CUP method, there is no other choice left to TPO but to accept price charged by assessee as ALP
NI Act: Order of Magistrate was to be set-aside as it took cognizance of complaint without verifying
Negotiable Instruments Act : Where Magistrate had taken cognizance of complaint without prima facie establishing fact as to whether power of attorney existed in first place and whether it was in order, order passed by Magistrate was to be set aside
Consideration received by apex co-operative for monitoring/ guiding its member co-operatives wasn't
Service Tax : Consideration received by apex co-operative for monitoring/guiding its member co-operatives is classifiable under 'club or association' service and does not amount to 'Management Consultancy Service' and not liable to service tax
ITAT isn't precluded from considering additional ground raised by assessee even if it isn't raised b
IT : Even if Commissioner (Appeals) may or may not have rendered any view on issue raised, does not mean that Tribunal is precluded in law from considering same after it is specifically raised by assessee before it
Phosphate and potassium components of fertilizer ‘NPK’ exempt from UP VAT
CST & VAT : U.P. VAT - Where assessee was engaged in business of manufacture and sale of chemical fertilizers [NPK], which contained nitrogen, phosphate and potassium components in ratio of 10:26:26 and during year it sold NPK, assessee was entitled to exemption from payment of tax on phosphate and potassium components of NPK
'Served From India Scheme' is applicable to all Indian service providers including subsidiaries of f
FTDR : 'Served From India Scheme' is applicable to all Indian service providers including subsidiaries of foreign Companies
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