Govt. extends initial validity of industrial license for Defence sector upto 7 years

FDI/FEMA/ILT : Streamlining Procedure for Grant of Industrial Licenses – Extension of Initial Validity of Industrial License for Defence Sector

No additions by TPO due to differential man hour rate if services of assessee couldn't be bifurcated

IT/ILT : Where in respect of software development services rendered by assessee to its AE, TPO made certain addition relying upon difference in man hours rate charged by assessee from its AE and non-AEs, since price charged by assessee for rendering final composite work of software development services was aggregate price, it could not be bifurcated on basis of man hour rate and, therefore, impugned addition was to be set aside

Reassessment proceedings aren't analogous to proceedings for compounding of offence; it can be chall

CST & VAT : Karnataka VAT - Proceeding for compounding concluded on basis of inspection, would become final and could not be subjected to any appeal but reassessment proceedings initiated thereafter are independent of proceedings for compounding of offence, can be challenged on merits

Detention order refraining gold smuggling by petitioner wasn't illegal if issued in continuation of

COFEPOSA : Where second detention order under section 3 of COFEPOSA Act was not by itself a separate detention order but was passed in continuation of earlier order, elucidating reasons why earlier detention order, should still be served and executed, there was no contravention of section 3

AO couldn’t deny refund by ignoring the return filed by assessee claiming refund of excess advance t

IT : Where assessee had effected payments of advance tax in respect of a receipt that was not taxable in his hands and department accepted said payment of tax without demur, revenue was directed to refund excess amount paid by assessee

Value of stamps sold by commission agent wasn’t includible in his turnover to ascertain liabililty f

IT: Where assessee, a licensed vendor for sale of stamps on commission was under a bona fide belief that he was not liable for audit of accounts under section 44AB as per circular No. 452 and ICAI guidelines, penalty under section 271B was not to be imposed

Payment under Cenvat Rule 6 isn't a duty; time-limit for refund & doctrine of unjust enrichment do n

Cenvat Credit : Payment under rule 6 of CENVAT Credit Rules, 2004 is not 'duty'; hence, refund thereof is not governed by section 11B (time-limit for refund and doctrine of unjust enrichment)

Co-operative society providing credit facilities only to its members was entitled to relief under se

IT : Assessee, a credit co-operative society, engaged in providing credit facilities to its members only, was entitled to claim deduction under section 80P(2)(a)(i).

Govt Asks Missions To Explore Avenues For Cotton Exports

The Textiles Ministry has asked high commissions and embassies in countries, including Indonesia and Thailand, to explore possibilities of increasing cotton exports, Parliament was informed today.

The move assumes significance as India's cotton exports have declined significantly and it has impacted prices in the domestic market.

Exports of raw cotton during April-February 2015 have declined by 41.32 per cent in quantity terms and 46.6 per cent in value terms as compared to same period 2013-14.

"For safeguarding the interests of cotton growers in general and disposal of cotton to be procured under the MSP (minimum support price) operations in particular, Textiles Ministry has written to Indian High Commissions/Embassies in cotton deficit countries like Bangaladesh, Vietnam, Indonesia, Turkey, Thailand, to explore new avenues for export of cotton for stabilising cotton prices in India," Commerce and Industry Minister Nirmala Sitharaman said in a written reply.

As exports account for a substantial share of India's production of cotton, the decline in exports has resulted in a surplus for the domestic market and has impacted the cotton growers, she said in the reply to the Rajya Sabha.
Cotton Corporation of India has undertaken large MSP operations in all cotton growing states, she said.

As per the second advance estimates of Ministry of Agriculture, India's cotton production during 2014-15 was 351.52 lakh bales (of 170 kg each) as compared to 359.02 lakh bales in 2013-14 and 356.02 lakh bales in 2012-13.

India is the world's second-biggest producer of cotton. China is the top cotton export market for India, followed by Bangladesh and Pakistan.

The prices are declining because of a plunge in exports to its biggest market, China, which had changed its policy on cotton imports.

Replying to a separate question on a India-EU free trade agreement, she said India has proposed to "re-energise" the the Broad-based Trade and Investment Agreement (BTIA).

Launched in June 2007, the negotiations for the proposed BTIA have missed several timelines due to differences over several crucial issues like data secure status and duty cuts on goods.

Source:business-standard.com

Iron Ore Exports At 4.38 Million Tn In Apr-Oct Fy15

Iron ore exports were at 4.38 million tonnes (MT) in April-October period of 2014-15 while there are 596 non-working mines in the country, Parliament was informed today.

In a written reply to the Rajya Sabha Minister of State for Steel and Mines Vishnu Deo Sai said that as per provisional data, the country exported 4.38 MT of iron ore April-October period of the last fiscal.

He said the country has "197 working and 597 non-working iron ore mines" while the estimated reserves of iron ore in the country stand at 31.32 billion tonnes.

The country exported 16.30 MT of iron ore in 2013-14, and 18.11 MT in 2012-13. In 2011-12, the outbound shipments stood at 47.14 MT, the minister said.

Sai said the key steel-making raw material was exported mainly to countries like China, Japan and Korea.

"To conserve natural resources and to meet the domestic requirement, duty on export of iron ore has been increased from 20 per cent to 30 per cent ad valorem basis on all grades of iron ore (except pellets) with effect from December 30, 2011," the minister said.

Export duty of 5 per cent has been imposed on iron ore pellets with effect from January 27, 2014. Once the world's third-largest suppliers of iron ore, India has become a net importer over the last few years after a series of mining bans in mineral-rich states like Odisha, Goa and Karnataka.

According to a Steel Ministry report earlier, Softening global metal prices and continuing mining ban in the country had pulled down India's iron ore exports by a whopping 61 per cent to USD 63.84 million in March. The country earned USD 165 million by exporting iron ore in the same month of last year.

Source:business-standard.com

India’S Foreign Trade Policy: Overlooking Downsides

India recently announced its foreign trade policy for the next five years (2015-2020). A five-year foreign trade policy structurally represents a medium-term economic plan aiming to achieve key goals.

The macroeconomic goal is to increase India’s share in world merchandise and services exports from 2% at present to 3.5%. Translated in numbers, the increase would imply doubling exports from just under $500 billion to close to $1 trillion over a five-year period with annual average increases of roughly 20%.

Around 65% of India’s current export earnings are from merchandise exports, while the rest is from services. It is not clear whether the total increase proposed by the policy assumes this current ratio to be maintained over time. If it does then it entails annual increases of around $65 billion and $35 billion respectively in merchandise and service exports from their baseline levels.

An annual increase of 20% in merchandise and service exports from India is a tall order given that during 2005-2013 these exports experienced average growth rates of 15% and 14%, respectively. Indian exports would have to expand beyond their skins for achieving the kind of growth rates the policy expects them to.

Trade is a two-way traffic. Indian exports are imports for other countries. Exports are not taken by importing countries as favours or acts of charity. They are imported either as necessities or because they come at cheaper prices and better quality than same products at home.

India is not a global producer of necessities. It does not have ample resources of oil, gas, minerals and nuclear material for feeding the rest of the world. Nor does it have as broad a manufacturing base producing as cheap and varied items as China.

Its exports can crack the world market only if they are efficient, say, for example, from cheap production, or from unique features, like design or other specific attributes like environment-friendly features.

The problem is that it is not only Indian producers that are aiming to secure efficiency-based comparative advantages. Most of the rest of the world is. And India does not appear to be doing too well in this regard.

Consider India’s export strongholds. As far as textiles are concerned, India no longer has the advantage in garments. Vietnam, Bangladesh, Cambodia and Nepal, just to mention the neighbouring countries, cut, stitch and sew fabric faster and cheaper than India. India’s only major hope in textiles now is as supplier of raw cotton.

But that would imply it getting confined to the upstream and lower end of the textile value chain. Almost similar implications are for leather products where the production advantages in leather uppers and footwear are increasingly shifting to other country producers with India left back looking only at raw hides.

Gems and jewellery? Yellow gold has lost its lustre all over the world. Except the Chinese and Indians, the rest of the world, particularly the West, is not fascinated by jewellery made of yellow gold. Diamonds, yes: India is still the largest diamond-processing centre in the world. But poor business conditions are driving out processors to other facilities like the Gemopolis export zone in Bangkok. Moreover, processors can’t perform their art unless they get the diamonds.

What the Indian gem processing industry doesn’t seem to realise is that world over, consumers are veering towards less pure, processed industrial diamonds for use as fashion and replaceable jewellery. This is where Indian diamond processors are yet to get a handle on global tastes and preferences.

Automobiles are another sector where great hopes are pinned on. Connection of automobile value chain locations—both at the lower and upper ends—through various regional agreements can cut off India from major final demand and intermediate markets. With major automobile lead firms from Japan, Korea, US and Germany getting neatly tucked into mega-regional agreements like the TPP (Trans-Pacific Partnership) and the Transatlantic Trade and Investment Partnership (TTIP), investments in component and design facilities in value chains will be confined within these agreements. It would hardly be surprising if Honda, Hyundai, Toyota and the rest of the auto majors increasingly begin relocating facilities in TPP members like Mexico, Malaysia, Peru and Vietnam for taking advantages of lower tariffs, common standards and uniform investment rules.

Finally, services. The game is already lost on business process outsourcing and IT-enabled services. Ireland, the Philippines and even Bangladesh, are speaking better English and working longer for providing outsourcing services.

While the non-English speaking world is desperately learning English to stay relevant, India is learning it lesser and does not mind giving up its BPO advantages. In services like nursing and basic education, India is unable to match the certification requirements of most countries.

There is little hope of these service providers travelling far and wide for boosting India’s service exports. Given its image as an unsafe destination and lack of budget travel facilities, ‘Incredible India’ might not be able to lure tourists despite visa-on-arrivals.

The foreign trade policy pitches for increasing exports by connecting it to the objectives and vision of  the Make-in-India initiative. But is Make-in-India aimed for Indians, or the rest of the world? Indian consumers might be denied access to imports and forced to buy substandard products. The rest of the world cannot be. The foreign trade policy appears to have overlooked some of the obvious downsides in taking India to the rest of the world.

Source:financialexpress.com

Irs Officer K Balaji Majumdar Appointed Private Secy To Minister Of State For Science & Technology

IRS officer K Balaji Majumdar was today appointed as Private Secretary to Minister of State for Science and Technology, and Earth Sciences Y S Chowdary.

Majumdar, a 1995-batch Indian Revenue Service (Customs and Central Excise) officer, has been appointed for five year period or on co-terminus basis with the Minister’s tenure, an order issued by the Department of Personnel and Training said.

Majumdar had served in the customs and Central Excise Departments under the Central Board of Excise and Customs (CBEC) in various capacities.

Majumdar got Presidential Award in 2014 for special distinguished record of service as Additional Director, DRI, Zonal Unit, Chennai.

Source:tkbsen.in

Irs Officer K Balaji Majumdar Appointed Private Secy To Minister Of State For Science & Technology

IRS officer K Balaji Majumdar was today appointed as Private Secretary to Minister of State for Science and Technology, and Earth Sciences Y S Chowdary.

Majumdar, a 1995-batch Indian Revenue Service (Customs and Central Excise) officer, has been appointed for five year period or on co-terminus basis with the Minister’s tenure, an order issued by the Department of Personnel and Training said.

Majumdar had served in the customs and Central Excise Departments under the Central Board of Excise and Customs (CBEC) in various capacities.

Majumdar got Presidential Award in 2014 for special distinguished record of service as Additional Director, DRI, Zonal Unit, Chennai.

Source:tkbsen.in

India Raises Sugar Import Tax To 40% From 25%

India has raised the import tax on sugar to 40 percent from 25 percent to help prop up falling local prices and protect local farmers who have not been paid by money-losing mills, the government said in a statement said on Wednesday.

India also slapped the tax on imports of raw sugar that refiners turn into whites, or refined sugar, to sell in world markets.

Five straight years of surplus output has led to a free fall in prices, hitting mills' financials. Sugar mills owe about 201 billion rupees (USD 3.18 billion) to farmers..

Source:moneycontrol.com

Steel Imports More Than Exports: Minister Expresses Concern

Sharing the concerns of a member in Rajya Sabha over the growing steel imports, Steel Minster Narendra Singh Tomar today said they are seized of the issue and discussing the matter with the Finance Ministry.

Replying to a question raised by Tapan Sen (CPI-M), Tomar said the import stood at nine million tonnes as against six million tonnes of export last year.

"The members concern is valid. We are seized of the matter and are holding discussion with the Finance Ministry," Tomar said.

Sen said the investment towards the ongoing capacity expansion would be of little use if steel import continues to rise.

About the ongoing expansion work, the Minister said work at the Rourkela and Bokaro steel plants have been completed and it would be wound up in Durgapur and Bhilai by the Seprember 2015 deadline, with the production capacity going up to 23 million tonnes.

He said Steel Authority of India has prepared a draft vision 2025 envisaging hot metal production target of 50 million tonnes by 2025 and the estimated investment for achieving the target would be 1.50 lakh crore.

While the investment proposal is yet to be firmed up, the source of funding would be through a mix of equity and debt, the Minister said.

Source:business-standard.com

AO rightly rejected certain transactions on failure of assessee to prove them as inter-State sales

CST & VAT : CST - Where assessee claimed that 26 transactions in question were inter-State sale and Assessing Officer rejected 6 out of 26 transactions, since in respect of 6 transactions assessee had been unable to discharge burden of proving that they were, in fact, inter-State sale, said transactions were not inter-State sale

ITAT rightly deleted penalty as assessee had paid full tax along with interest for income disclosed

IT : Where assessee had not paid full amount of tax at time of filing block return and paid balance amount of tax along with interest, assessee could not be penalised under section 158BFA(2)

Goods cleared on job-work basis can't be considered as exempted goods; Cenvat Rule 6 inapplicable th

Cenvat Credit : Goods cleared without payment of duty on job work basis under Notification 214/86-C.E., dated 25-3-1986 cannot be considered as 'exempted goods' and therefore, job-worker is entitled to credit of inputs used therein and rule 6 of CENVAT Credit Rules, 2004 cannot be invoked to demand reversal/payment

Indian Rupee Opens Marginally Lower At 63.22 Per Dollar

The Indian rupee opened marginally lower at 63.22 per dollar on Wednesday against 63.15 Tuesday.

The dollar dropped to an eight-week low after a weak US consumer confidence report, with investors cautious about a Federal Reserve meeting.

Himanshu Arora of Religare said, "The USD-INR pair is expected to trade lower today on expectations that Greece will reach a bailout agreement soon. Improved risk appetite along with surging equities may dampen demand of dollar. Further, World Bank's statement that India is less vulnerable now than it was in 2013, may also support the rupee in the short term.”

“Outcome of ongoing FOMC meeting is expected to offer more cues to Indian Rupee going forward. The range for today is seen between 62.85-63.35/dollar,” he added.

Source:moneycontrol.com

Revenue to grant refund with interest if its stay application against refund order was dismissed by

Service Tax : Where refund has been ordered by Commissioner (Appeals) and stay against said judgment is declined by Tribunal, there is not reason for revenue to stop refund; hence, department must grant refund with interest

Appeal filed by revenue having tax effect of less than 4 lakhs isn't maintainable before ITAT

IT: Appeal filed by revenue is not maintainable where tax effect of appeal is less than Rs. 4 lakhs

ITAT upheld estimated addition made by CIT(A) as assessee failed to show that it was excessive or un

IT : Where assessee, engaged in trading of chemicals and drug intermediaries, failed to prove genuineness of purchases and sales, revenue authorities were justified in rejecting books of account and estimating income at one per cent of aggregate value of purchases and sales