IT/ILT: Activity of assessee-liaison office of a foreign company being confined to purchase of goods in India for purpose of export, fall under purview of Explanation 1(b) to section 9(1)(i) and, thus, not exigible to tax
Tuesday 14 April 2015
A software product Company isn't comparable to software development service provider
IT/ILT : A software product company cannot be regarded as a comparable to a company engaged in software development services
ST is leviable on entire consideration received from manpower supply services and not merely on serv
Service Tax : In case of manpower supply services, prima facie, service tax is leviable on entire consideration charged from service recipient and not merely service charges
'Agricultural tree climbing apparatus unipole manually operated' is exempt from Karnataka VAT
CST & VAT : Karnataka VAT - Product 'Agricultural tree climbing apparatus - Unipole - manually operated' is an agricultural implement falling under Serial No. 1 of First Schedule to VAT Act and is exempted from tax
Overdue sum towards maintenance of asset wouldn't be treated as overriding preferential payments
CL : Amounts paid or payable towards maintenance and other allied expenses, necessary to keep assets in good repair or protect them, cannot be characterized as secured debts so as to be covered by section 529A; they are undoubtedly expenses within meaning of section 476
Firm couldn't be assessed for transfer of tenancy rights vested in individual partners of firm
IT : Where on examination of evidence it was clear that tenancy of rental premises belonged to individual partners and not to assessee-firm and consideration was received by partners in individual capacity, addition made in income of assessee-firm was not justified
HC allowed revenue exp. even if it was claimed for first time in course in assessment proceedings
IT: Claim of revenue expenditure made for first time in course of assessment proceeding without revising return of income, was allowable under section 37(1)
Sum paid by trust to other trusts registered either u/s 12AA or u/s 10(23C) won't be held as applica
IT : Where assessee trusts advanced loan to other trusts which exceeded 15 per cent of their income, claim of exemption was to be decided in view of Explanation to section 11(2) and section 11(3)(d)
SEBI prescribes mechanism for tendering of shares via Stock exchanges pursuant to takeovers, buy bac
SEBI : Mechanism for Acquisition of Shares through Stock Exchange Pursuant to Tender-Offers under Takeovers, Buy Back and Delisting
IRDA announces norms to regulate Insurance business in SEZs
INSURANCE/INDIAN ACTS & RULES : IRDA (Regulation of Insurance Business in Special Economic Zone) Rules, 2015
Now Judges of Apex Court to be appointed by Judicial Appointment Commission; amended Constitution Ac
CL/INDIAN ACTS & RULES : Section 1 of the Constitution (Ninety Ninth Amendment) Act, 2014 – Act – Enforcement of – Notified Date for Enforcement of Said Act
No TP addition for variation between actual price and ALP of fixed asset but depreciation to be re-c
IT/ILT: If there is an international transaction in the capital field, which does not otherwise give rise to any income in itself, then even though its ALP may be computed in consonance with the provisions, but no adjustment can be made for the difference between the declared value and the ALP of such international transaction
Iran Keen To Increase Tea, Medicine Imports From India
Iran has expressed keenness to increase imports of tea and medicines from India as the Islamic country is looking at ways to boost bilateral trade ties between the two nations, a top Commerce Ministry official has said.
During the recent visit of Commerce Secretary Rajeev Kher to Tehran, both the sides deliberated on ways to enhance trade in the two commodities.
At present, Iran imports tea and pharmaceuticals from India but the value is low. Tea exports to Iran are low because the Islamic nation follows 'Codex' international norms which are not observed by Indian manufacturers. As regards medicines, Iran mainly imports from the US and European countries. Now, Iranian traders have recognised the potential of Indian generic drugs and have shown interest in increasing imports from India.
"Iran has now acknowledged that India is the best generic drug producers. We have invited their FDA (food and drug administration) regulators to visit India," Kher told PTI.
He said that India has also invited tea experts from Iran and have asked them to visit domestic tea gardens and factories to study the quality and standards followed here. Meanwhile, a Greenpeace India report on Indian tea has also impacted the country's exports.
Greenpeace India has published a research paper titled 'Trouble Brewing on Indian Tea' where it has claimed that the beverage has hazardous pesticides.
Indian officials have asked Iran not to trust that report. An industry expert said that huge potential exists in Iran for Indian tea and pharma sector.
"Several Iranain delegations have recognised the potential of Indian generic medicines. Our exports are only USD 15-16 million per year. They have huge potential. We can invite them and show our regulatory processes and standards," Federation of Indian Export Organisations (FIEO) Director General & CEO Ajay Sahai said.
Sahai said Sri Lanka and Kenya are the main exporters of tea to Iran but Indian companies too can enhance standards and quality norms to increase their exports.
Increase in exports would help India to bridge the widening trade deficit with Iran. In 2013-14, India's exports stood at USD 4.97 billion while imports are USD 10.3 billion.
Besides, the government is pitching to increase exports to Iran as it wants to boost the country's outbound shipments which are hovering at around USD 300 billion for last four years.
Source:business-standard.com
National Policy To Address Issues Of Rubber Sector
The Central government is in the process of formulating a national rubber policy and an insurance-based scheme to address issues pertaining to the sector and boost the production of the plantation crop. The Commerce Ministry has started an exercise of resetting the goals and functions of the Rubber Board.
To formulate the national rubber policy, a committee consisting of experts and stakeholders has already been set up, a senior Commerce Ministry official said on Monday.
“The policy is being formulated to address demands of the rubber industry and growers. The committee is looking into all the issues concerning the sector and it would evolve a suitable regime for production, consumption, manufacture and import of rubber in the short and long term,” the official added.
Further, an insurance-based scheme to operate the price stabilisation fund for the commodity has been prepared and submitted to the Finance Ministry for its approval. The scheme is designed to cover losses to growers arising from fluctuations in yield and prices. It will be implemented in cooperation with insurance companies. To reset the goals and functions of the Rubber Board, the Ministry has consulted the stakeholders.
“The Ministry has identified the changes needed at the policy, institutional and organisational level. The work regarding this is on,” the official said.
The persistent fall in the price of natural rubber has caused concern among rubber farmers in Kerala, which accounts for more than 94 per cent of the commodity’s total production in the country. Farmers had also raised concerns over increasing rubber imports.
Last year India imported over 3 lakh tonnes of rubber and this year it is expected to touch about 4 lakh tonnes. Rubber price, which ruled around Rs.220 per kg in January 2011, touched a low of Rs.123 per kg in the domestic market.
The total area under rubber cultivation in Kerala is 5.45 lakh hectares. It is the livelihood of as many as 11.50 lakh farmers with most of them small-holders having less than 1.5 hectares under rubber.
The total rubber production in Kerala for 2012-13 stood at 8 lakh tonnes. India’s import has reached 4 lakh tonnes annually. Imports increased notwithstanding the Centre raising import duty on natural rubber to Rs.30 per kg or 20 per cent, whichever is lower, in December 2013.
Source:thehindu.com
Oil To Remain Subdued On Low Demand, Oversupply
India’s energy demand is expected to grow from 691 million tonnes of oil equivalent (mtoe) in 2010 to 1,500 mtoe in 2030, based on GDP estimates, composition of the economy and demand growth from industry, buildings and transport sectors, in a business-as-usual scenario. That’s what a recent study by McKinsey suggested.
The same report has also projected India’s import of primary energy requirements to increase from 30 per cent in 2010 to 51 per cent in 2030, assuming efficiency gains and a dip in energy intensity from 0.56 kg of oil equivalent (koe) per dollar in 2010 to 0.47 koe per dollar in 2030.
In this context, what prime minister Narendra Modi said last week assumes great significance. Modi had said India must aim to reduce its dependence on imports for meeting its energy needs by 50 per cent over a decade and a half. The prime minister said India’s dependence on imports for 77 per cent of its energy requirement should decline 10 per cent by 2022 and 50 per cent by 2030. There was, however, no clarity on whether the prime minister had referred to crude oil import only or it included crude, natural gas and coal as well.
There are two different sets of data – both official – on India’s crude imports. The Union ministry of statistics and programme implementation’s figures suggest that India imported 189 million tonnes (mt) of crude oil in 2013-14 and its total consumption during that year was 222 mt, implying that India met 85 per cent of its demand through imports, an increase from 76 per cent in 2005-06, when India had imported 99 mt crude oil.
Interestingly, statistics from the Union ministry of petroleum and natural gas shows that India’s import dependence in the petroleum sector in 2013-14 stood at 77.6 per cent, slightly higher than 76 per cent in 2011-12.
India has already brought down import of crude from Nigeria by 38 per cent. This was despite the fact that India has recently replaced the US as Nigeria’s biggest oil market. India’s import of Nigerian crude tumbled to 5.2 million barrels in December, from 13.7 million barrels in October and 12.4 million barrels in November 2014.
Last month, India did not import oil from Iran either. This was the first time in a decade that India did not import oil from Iran. Mind you, India is Iran’s second-biggest buyer of oil annually after China. Significantly though, most analysts feel the landmark interim nuclear deal between Iran and permanent members of the UN security council apart from Germany and EU, which India described as a significant step, has the potential to once again increase Delhi’s oil imports from Tehran and make the payment process much easier.
Iran has the world’s fourth-largest proved oil and gas reserves. But since the imposition of US sanctions, Indian companies have been wary of importing oil from Iran. Till 2006, Iran was India’s second largest supplier of crude oil, but dropped to the number seven spot by 2013-14.
On the pricing front, oil prices rose more than 6 per cent after Saudi Arabia, the world’s biggest crude exporter, and its allies launched air strikes on rebel targets in Yemen. Yemen lies on one side of Bab el-Mandeb, the fourth-busiest shipping bottleneck in the world by volume, while neighbouring Saudi Arabia exports more crude than any other country.
In the US, crude inventories expanded by 8.2 million barrels to 466.7 million through March 20, the highest level, according to the weekly data compiled by EIA since August 1982, says an Emkay Commodity research.
“In march, crude have shown extreme movement in the prices. It rose more than 4 per cent initially on rising conflicts between Saudi Arabia and Yemen and later on the gains capped by Iran nuclear deal. Oil trimmed its biggest weekly advance in four years on speculation that conflicts between Yemen and Saudi Arabia will reduce ample crude supplies.
“Of late, crude oil futures plunged sharply after western powers negotiated a tentative nuclear deal with Tehran, which could add more crude to the already oversupplied market. WTI crude is unlikely to reach $51.80 levels unless situation in the West Asia worsens.
“Crude oil prices have been consolidating in a broad range of 3,438 to 2,643 levels since the past two months. Prices rallied to a high of 3,368 following the geo-political tensions but could not sustain at higher levels. Prices need to sustain above 3,200 levels for it to re-test 3,325/3,360 areas on the upside. Levels between 2,940 and 2,950 are the crucial support zones for prices and a correction towards 2,700 levels again,” said the Emkay Commodity research report.
Source:hellenicshippingnews.com
Now NBFCs can appoint young independent directors; RBI removes age criteria of directors specified u
NBFCs/INDIAN ACTS & RULES : Review of Guidelines on Corporate Governance
Non-mentioning of block period in notice doesn’t invalidate notice or vitiate block proceedings; SLP
IT : SLP dismissed against High Court ruling that non-mentioning of block period in notice issued under section 158BC would not invalidate notice nor would vitiate proceedings as one without jurisdiction
Chief CIT can't condone delay in filing exemption application under sec. 10(23C)
IT : Where assessee's application under section 10(23C)(vi) was rejected on ground that it was filed beyond prescribed date, in view of fact that Chief Commissioner in whom power is vested for condonation of delay is not a Court within meaning of section 5 of Limitation Act, 1963, impugned order rejecting said application was to be confirmed
Penalty waived off as unintentional default in payment of ST was caused in course of running a sick
Service Tax : Where default relating to payment of service tax was unintentional and was caused in course of running a sick unit, no penalty could be levied under section 78 and accordingly, penalty was waived giving benefit of section 80
Jute Imports Up By 24%, Exports Dip By 22% In April-Jan Fy15
The country's jute sector continues to face double whammy as imports of finished goods have jumped by 24%, while exports have declined by 22% in the April to January period of financial year 2014-15.
"According to National Jute Board estimates, jute exports for the period April-January of FY15 have declined sharply to Rs 1,115 crore, down 22% in rupee terms and 20% in dollar terms as compared to corresponding period of FY14," said a senior official of Indian Jute Mills Association (IJMA).
In terms of quantity, the decline was 37%, or 98,500 tonnes, during the April-January period over the corresponding period of FY14. Regarding import of jute products, there was a jump of 24%, or Rs 511 crore, in value terms for such products in April-February period of FY15.
The unfavourable trend seems to be gaining momentum as in February 2015 alone, imports were higher by 75% in value terms and 79% in volume terms as compared to the corresponding month of the previous year. IJMA sources have attributed higher imports to lack of monitoring and check in end-use of jute products.
On top of this, a subsidy of 7.5% by Bangladesh for export, has resulted in flooding into Indian market. When the government rate is Rs 63,000 a tonne for jute, the same product is available at Rs 53,000 a tonne in the open market, they said.
Source:business-standard.com
India To Invest $6 Billion More In Rovuma Gas Field
India will double its investment in the Mozambique's Rovuma gas field by spending another $6 billion by 2019, said oil minister Dharmendra Pradhan who has just returned from a visit to the African nation.
State-run firms ONGC Videsh, Oil India and Bharat Petroleum have already invested that much in the field and hold a combined 30% interest in the Rovuma Area-1, which is estimated to have recoverable gas reserves of up to 75 trillion cubic feet.
"Mozambique is an important destination for India's energy security," Pradhan said, adding that the two countries are working on enhancing cooperation.
The Rovuma field will have its first output on the market by 2019. India may or may not import liquefied natural gas (LNG) from Rovuma fields and the decision to import will depend on the market situation, including the price available to gas produced in Mozambique, Pradhan said. Indian firms are discussing the prospects of imports from Rovuma at present, he said. The early monetisation of Rovuma offshore is a priority but "we must also respect the sovereign laws of Mozambique", Pradhan said.
India desperately needs gas to power its electricity generation, which has been far below the country's requirement.
The government recently announced a policy to offer subsidised imported gas to about 24,000 MW of gasfired plants lying idle or underutilised. India's gas production has fallen far short of expectation in the past few years, making unviable many gas-based power plants that were built on the hopes of securing cheap local gas.
Source:economictimes.indiatimes.com
India’S Potash Imports Forecast To Rise
Indian potash imports will likely increase to a four-year high of about five-million tonnes in the 2015 financial year, which started on April 1. This will be the highest level of imports since 2011, when India went into a self-imposed “potash import holiday”.
With the Indian rupee stabilising and the rise in domestic potash prices checked, farmers’ consumption of the nutrient was seen to be on an upward curve, resulting in the likelihood of higher imports during the current year, an official in the Department of Fertilisers said. However, importers are expected to conclude transactions at a maximum of $322/t on a cost-and-freight basis.
Government-owned trading houses MMTC Limited, STC Limited, and India Potash Limited were designated authorised potash importers. The government subsidised the retail price of potash through part reimbursements to potassic fertiliser manufacturers. However, for 2014/15 the government cut the subsidy by 20% to a maximum of $151/t resulting in a rise in retail price and a drop in consumption during the year.
The issue at hand for importers was the differing trends in offers, which saw potash exporters in Russia and North America seeking an increase over previous average offers, whereas exporters like Belarusian Potash Company Limited (BPC) were willing to keep offers in check, the official added.
Citing recent reports in local media, the official said that indications were that BPC in its offer to China earlier this month had increased offers by $10/t to $15/t to around $315/t while other potash producer exporters had been seeking a hike in the range of $25/t to $30/t for exports to China.
He said that this was a favourable indication for Indian importers as offers to China set the benchmark and export offers to India was normally marginally higher, factoring in higher freight rates, with an import ceiling set at $322/t being "realistic".
The government was expected to maintain a subsidy on potassic fertilisers at $151/t, and if exporters declined to maintain offers at previous year’s levels, the government would have no other option but to reduce imports as retail prices would increase and the upturn in demand would be reversed, the official added.
Source:miningweekly.com
Indian Rupee Declines 7 Paisa Against Us Dollar
Indian rupee has depreciated on Monday against US dollar. Indian currency fell 7 paise or 0.11 percent against dollar to trade at 62.40.
Rupee has witnessed a high of 62.33 and a low of 62.41. Its 52-week range was 58.34-63.89. The Dollar index, a measure of the value of the US dollar relative to a basket of foreign currencies, rose 0.16 percent to trade at 99.50.
Source:customstoday.com.pk
National Judicial Appointments Commission Act, 2014 comes into force wef. April 13, 2015
CL/INDIAN ACTS & RULES : Section 1 of the National Judicial Appointments Commission Act, 2014 – Act – Enforcement of – Notified Date for Enforcement of Said Act
Review of guidelines on corporate governance
NBFCs/INDIAN ACTS & RULES : Now NBFCs can appoint young independent directors; RBI removes age criteria of directors specified under NBFC norms
Super built area couldn't be equated with built-up area while allowing relief under sec. 80-IB
IT : Super-built up area cannot be equated with built-up area to determine area of a residential flat to allow deduction under section 80-IB
Burden to prove taxability of service lies on department
Service Tax : Demand cannot be confirmed on presumption of department; burden to show that service provided by assessee is a taxable service, is on revenue
HC denied to admit writ against Setcom's order as its admission would lead to abatement of applicati
IT : Revenue's writ petition against order of Settlement Commission was not entertained having regard to fact that entertaining same would result in expiry of 18 months time-limit stipulated in section 245D(4A)(iii) and abatement of settlement application, but revenue was given liberty to raise its contention at hearing under section 245D(4)
Depreciation claimed on basis of incorrect valuation calls for reassessment
IT: Where assessee was allowed depreciation on intangible assets but thereafter during survey assessee's managing director agreed to withdraw 50 per cent of such depreciation and valuer of said assets stated that his valuation could not be used for claiming depreciation, there was tangible material for reopening of assessment
Co. providing services to its AE from off-shore location couldn't be compared with a co. rendering o
IT/ILT : A company providing off-shore services to its associated enterprise stands on a different footing from a company rendering on-site services to clients
Penalty for short payment of advance tax was justified as tax due was more than 15% of advance tax p
CST & VAT : Karnataka VAT - Where Assessing Authority had levied penalty upon assessee under section 12B(4) of Karnataka Sales Tax Act on plea that difference between tax due after final assessment and advance tax paid by assessee was more than 15 per cent, levy of penalty was justified
Pre-deposit is mandatory to file appeal; no discretion vested in Tribunal to waive off pre-deposit r
CST & VAT : Karnataka VAT - Where assessee filed appeal before Tribunal and thereafter it filed writ seeking a direction to Tribunal to admit its appeal without insisting on pre deposit of 30 per cent of disputed amount, in view of sub-section (4) of section 63, appeal would not be entertained by Tribunal until said deposit was made
Arbitration Act can be applied to Arbitrations held outside India unless parties have agreed to act
Arbitration Act : Arbitration Act is applicable to arbitrations held outside India unless parties have either expressly or impliedly excluded provisions of Act
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