IT : FINANCE BILL, 2015 – Clarification as to Applicability of Official Amendment Moved in Finance Bill, 2015 with Respect to Definition of Income – Provisions in Finance Bill, 2015 Will not Affect Lpg Subsidy and Other Welfare Subsidies Received by Individuals
Tuesday 5 May 2015
ITAT affirms claim of deprecation on leasehold land acquired from State Government
IT : Where assessee, engaged in mineral exploration, claimed deduction of provision for mine closure obligation, Commissioner (Appeals) rightly directed Assessing Officer to ascertain amount of year wise mining and allow mine closure obligation to extent mining was done corresponding to current year
No withholding taxes from debtor collection charges paid by co-venture and in-turn reimbursed by ass
IT/ILT-I: Where assessee, a joint venture between UPS WWF, USA, and 'J' Ltd., made reimbursement of debtor collection charges to US based company, in view of fact that had assessee made direct payment to payee, it would not have fallen within ambit of 'fee for technical services', assessee was not required to deduct tax at source while making payment in question
Assessee was to be penalized since he paid taxes collected from customers, belatedly
CST & VAT: Andhra Pradesh VAT - Where assessee paid admitted tax belatedly, i.e., beyond month in which it fell due and Assessing Authority imposed penalty upon it under section 15(4)(a), since assessee had charged its customers to tax, action of Assessing Authority in imposing penalty was justified
Interim order passed by SEBI can’t be challenged through writ; only SEBI can review such order
CL : An interim order passed by SEBI, is amenable for review by SEBI itself and no intervention is to be made through writ proceedings
Outstanding fee received by advocate from his client after elevated to post of High Court's Judge is
IT : Outstanding professional fees received by assessee for his discontinued legal profession as an advocate after elevation to post of Judge of High Court would not be taxable under section 4
Compensation paid to clear title of land was deductible as cost of improvement on its sale
IT : Expenses incurred to remove impediments or encumbrances in way of transfer of capital asset has to be allowed as deduction under head 'cost of improvement' while computing taxable amount of capital gain
HC upheld stay till disposal of appeal with a direction that appeal should be disposed within 6 mont
Excise & Customs : Where Tribunal had continued/granted stay 'until disposal of appeal/till further orders', High Court upheld said stay with a direction to Tribunal to dispose of appeals within 6 months with special emphasis on high value matters
No misconduct by a public servant if he had given proof of sum received and duly disclosed it in his
Prevention of Corruption Act : Where public servant had given testimony about amounts received by him and same had been duly intimated and reflected in IT returns, there was no violation of section 13
Lack Of Standard Norms, Complex Procedures Delay Imports: Cag
Lack of standard norms for clearance of inbound shipments at ports coupled with complex procedures lead to inordinate delay in imports, government auditor CAG said today.
"It was seen that the procedural complexities and consequent delays in import clearance are of a much higher order than in the case of export clearances.
"No standard benchmark or norms have been prescribed for ships waiting to get berth at ports and time taken during the various stages in the clearance of goods," CAG said.
The performance audit related to 'Import and Export Trade Facilitation through Customs Ports'. It found incomplete facilitation process mapping, weak target setting, inadequate monitoring of the implementation of the recommendations of the task forces and committees on transaction cost have compromised the achievement of envisaged benefits.
The audit observed that though there was a decrease in the dwell time during the period 2010-11 to 2013-14 for clearance of goods, this could be further improved by implementing the trade facilitation measures initiated by Central Board of Excise and Customs( CBEC) more effectively.
Dwell time indicates gap between the time cargo arrives in the port and leaves the premises after all permits and clearances have been obtained.
As much as 70 per cent of the dwell time was attributable to filing of Bills of Entry (BE) and payment process in case of imports while in exports filing of the Export General Manifest (EGM) constituted 90 per cent of the total time.
"These stages caused delay which needed to be addressed to reduce the dwell time and the consequential reduction in transaction cost," CAG said.
According to the Strategic Plan of Department of Commerce (2020), due to poor facilitation, the impact on the transaction cost has been estimated to the tune of Rs 42,000 crore.
CAG pointed out that the main reason for the delay in payment of customs duty by importers was the disagreement on the amount of duty computed by the department or lack of sufficient funds with the importer.
To reduce transaction cost and eliminate delays in clearance of goods at ports, CAG said: "The (Revenue) department may consider reaching out to importers to file error free Bills of Entry, to reduce time delay, allow online amendments to the minor errors in BE, adjustment of excess duty paid due to short landing."
Further, it said, the department may explore possibility of permitting minor amendments to EGM online and allow frequent monitoring of uploading of EGMs by service centres at Inland Container Depots.
It may also examine and address the reasons for non- utilisation of the facility of examination at the factory premises by the exporters, CAG recommended.
Source:economictimes.indiatimes.com
Dgft Weighs 'Systemic Interaction' With Customs Dept
The Directorate General of Foreign Trade (DGFT), an arm of the Union Commerce Ministry, is considering regular 'systemic interaction' with the Customs department to sort out operational issues.
"The attempt is to have such meetings once in two months to resolve operational issues between the two to promote foreign trade," additional DGFT Sanjeev Nandwani told reporters on the sidelines of an event organised by The Bengal Chamber here today.
DGFT is planning to hold a meeting on May 15, the first after the announcement of the Foreign Trade Policy 2015-20 in April, for the operational review.
According to insiders, the meeting is an attempt to clear a few misgivings about the clubbing of advance licence. Regular operational review meetings based on feedback will take place from time to time.
During 2014-15, India's exports touched the USD 310.5 billion mark in 2014-15 against USD 314.4 billion in the previous year. Imports stood at USD 447.5 billion against USD 450.2 billion in 2013-14.
Source:igovernment.in
Assocham Cautions Govt Against Signing Fta With China
Time is not yet ripe for India to go ahead and sign a Free Trade Agreement (FTA) with China even though such an arrangement with world's second largest economy is a key issue of economic cooperation in order to face Chinese competitiveness in the international markets, an Assocham study has noted.
While the potential of Sino-Indian economic cooperation is huge and the opportunity cost of non-cooperation is substantial, "at this juncture, a free-trade agreement with China would bring gains skewed in favour of China and will reinforce the existing trade asymmetries between the two countries", the Assocham Paper on 'Should India sign a Free Trade Agreement with China?', pointed out.
It said China's substantial edge in the manufacturing sector is in a large measure rooted in its better and extensive infrastructure (a non traded input), labour laws, productivity and an import tariff regime conducive for efficient manufacturing
"Given the different tariff rates and structural features of the economy between India and China, the benefit of FTA would not be equally shared. India will face some challenges in reducing and eliminating tariffs over a short time horizon. India China FTA cannot afford accelerated elimination of tariffs. It has to be gradual with reduction in tariffs in a phased manner covering commonly agreed, selected, and manufactures, services and agricultural products. Negotiations should take into account interests, sensitivities and specific differences between the two economies. The ultimate goal should be an FTA with a free flow of goods, services, investment, labour, and capital," it said.
Commenting on the findings, Assocham spokesman said, "In view of the comparative advantage China enjoys in manufacturing any form of trade agreement between the two has to tread cautiously. India's opening up of the trade sector has to be carefully calibrated to balance the interests of domestic manufacturing over the medium term."
The opening up of the India's trade sector will have to be complemented with greater openings for India's commercial services market so that overall bilateral trade and services balance with China is sustainable notwithstanding large trade deficit. This will also make trade negotiations smooth and easy and will not be viewed as a negative sum game where one partner loses and the other gains, he said.
Under an FTA or PTA gain or loss of the sector depends on its trade structure and initial import tariff rate. Commodities being exported to China facing tariffs will gain. On the contrary, those industries with more imports from China and protected by tariffs may face challenges. An FTA between the PRC and India certainly goes in favour of the PRC and is disadvantageous to India at least in the short run. This is because of the high tariff regime in India and the low tariff regime in the PRC. FTA negotiations pose serious challenges on import tariff issues.
The six main categories of goods receiving duty-free status are computers, telecommunications equipment, semiconductors, semiconductor manufacturing equipment, software, and scientific equipment. India's import tariff regime continues to be beset with a large number of anomalies with higher tariff rates for intermediates and lower for the final products leading to negative protection to the latter. This needs to be rectified as early as possible to strengthen India's negotiating stand in any FTA negotiations.
The restructuring of the manufacturing industry will take time and, therefore, in the short run the costs will be borne by Indian industry. Indian exports to China will need to expand beyond primary goods. Resource exports have weak linkages and neither benefit local communities if the process of resource extraction is low labor intensive. One should not overlook the fact that China is a huge market. To tap these markets Indian exporters should: (a) target China's demand for consumer goods which it cannot produce; and (b) plug into China’s supply chain networks, adds the Assocham study.
One needs to keep in view the disparity in size of the economy and production capacity between India and China. India needs to negotiate receiving similar (or higher) concessions that have been offered to other similarly placed partner countries which enjoy preferential treatment in accessing China.
The negotiations on preferential market access to China must enable Indian exports to be as competitive as those from China or its other FTA partners. Secondly, rather than agreeing on a general rules of origin criterion, the negotiations should focus on achievable product-specific rules of origin requirements, as the requirements differ from product to product. Thirdly, the vulnerabilities of domestic industries to imports from China also need attention when formulating and negotiating India's negative list.
Source:myiris.com
Infrastructure Issues Haunt Mango Exports
Not only mango lovers but exporters too are staring at a dull season this year. With production in the major mango producing states down by about 50%, prices in the domestic market are already high, and exports are also likely to be muted this season.
According to Abhijeet Bhasale, managing director of Pune-based import-export house Rainbow International that is also engaged in online retailing of mangoes through mangowale.com, “ Production in the major mango producing states of Maharashtra, Gujarat, Andhra Pradesh and Karnataka are down by almost 50%. This would impact the availability of mangoes in the domestic market, and also impact exports.”
Distributors and traders point out that regions like Andhra have been hit severely during the Hudhud cyclone in October last year, followed by the unseasonal rains at the onset of summer this year. The region is left with 25-30% of its normal production which is estimated to be around 200,000 tonne per year.
Similarly, in Gujarat, which exports the kesar variety of mangoes, exporters say that usually export inquiries start by mid-April, however, this year, only a handful of exporters have received queries.
“Gujarat has no Agricultural Processed Food Products Export Development Authority (Apeda) approved mango packaging facility. That is also a drawback for Gujarat”, said Harsukh Zarsaniya, secretary of Talala Agricultural Produce Market Committee (APMC).
Quality is also an issue for lower interest in mango exports this year, allege traders. This year, the weather conditions were not very favourable for the mango crop between January to April. Unseasonal rains in many mango growing areas across Gujarat have damaged the mango fruits badly.
“Quality is a major issue this time. Quality is not matching export criteria. However, we are waiting for regular arrivals in the market,” said Sanjay Vekaria, mango grower and trader from Gir area of Gujarat.
Talala APMC is the largest place in Gujarat for mango auction, especially for the kesar variety. Auction here is expected to start from May 19, late by almost 20 days compared to last year. Traders expect that prices of the kesar variety will be around Rs 450 per 10 kg box, higher by nearly Rs 150 a box from last year.
The Apeda, however, is not panicking. Sudhanshu, regional in-charge, western, Apeda said, “Exports to the European Union have started from March 24. It has been low at around 3 tonnes per day. However, we are awaiting a new hot water treatment facility at Goregaon, being set up by Apeda, that will be operational within a week. Exports to the EU would pick up after that.”
Hot water treatment is a post harvest requirement to export to the EU. Bhasale alleges that despite the EU writing to the Indian government sometime around December, it took time for the final guidelines for exports to come about. “The government issued the guidelines around March, and many exporters are not ready with the preparations,” he said.
For that matter, mango exports from India have been plunging in the last few years. It stood at 41,280 tonne in 2013-14 from 55,585 tonne in 2012-13 and 63,441 tonne in 2011-12. In value terms, the exports rose to $50.55 million in 2013-14 from $48.54 million and $43.73 million in 2012-13 and 2011-12, respectively. Production of mangoes last year stood at 18.43 million tonne.
Source:business-standard.com
HC couldn’t quash criminal complaint against cheque dishonouring by giving opinion on disputed quest
Negotiable Instruments Act : Where High Court quashed criminal complaint filed under section 138 by giving opinion on disputed questions of fact, High Court exceeded its jurisdiction in exercise of powers under section 482 of CrPC
No misconduct by a public servant if he had given proof of um received and duly disclosed it in his
Prevention of Corruption Act : Where public servant had given testimony about amounts received by him and same had been duly intimated and reflected in IT returns, there was no violation of section 13
Speculators Fuelling Soybean Prices: Sopa
The Soybean Processors Association of India (SOPA) has revised downwards the damage to soybean crop due to the recent rains. The body now expects the damage to be around 10 million tonne from 10.4 million tonne earlier.
SOPA blamed the futures market for underestimating the crop size, which it said has pushed up prices by 20% in a month. Soybean prices are trading around Rs 4,070 per quintal currently.
It said speculators in the futures market are quoting abnormally low figures, hurting the fortunes of processors and their margins.
The association also said that there is no change in crop estimates for MP, Rajasthan and other states except for Maharashtra where the crop size is revised to 26 lakh tonne.
"We are looking to protect the long term interest of processors, not just a few large ones. Heavy speculation and manipulation of prices in the futures market through NCDEX is hurting the entire trade. Futures influences market sentiments through unfounded rumours of lower crop size, bad weather and other unfavourable conditions resulting into unrealistic rise in prices which needs to be stopped," said Davish Jain, President, SOPA.
However, NCDEX clarified that, “Soybean futures contracts on the exchange platform have attracted wide and active participation from all segments of the value chain participants including manufacturers and exporters. The exchange is constantly monitoring the trading on its platform and shall take appropriate action in case any irregularities are noticed.”
The exchange further said, “The futures prices are based on underlying fundamental factors. Recent price movement in the futures prices for soya complex appear to be in response to recent developments in the demand-supply dynamics”.
SOPA said that heavy speculation, tax evasion by a few unscrupulous companies and very low prices of soybean oil in the world market and historically low landed price in India are hurting business of soybeen processors.
The body has suggested making physical delivery mandatory for a certain percentage of the futures contract, increasing the margin money and temporarily suspending soybean futures during the off-season when the speculation is at its peak.
Jain said that, SOPA will again approach the Central government to increase import duty on soybean oil from current 7.5% to 17.5% because there is a likelihood of carry over stock in the coming season”.
Source:business-standard.com
Liquid Milk Import In J&K Ticks Up, Poultry Down
Jammu and Kashmir has seen an increase in import of liquid milk up to February last fiscal while the corresponding figures for eggs, chicken, sheep and goats have turned lower.
As much as 95.38 thousand metric tonnes (TMT) of liquid milk have been imported through Lakhanpur inter-state border terminal, up to February in 2014-15, from 76.61 TMT in 2013-14 and 72.16 TMT in 2012-13, official data of the state government showed.
In contrast, 55.23 crore eggs came in under the said period in 2014-15, against 66.1 crore and 59.69 crore in 2013-14 and 2012-13. According to the figures, import of one-day chicks dropped to 5.26 crore in 2014-15, from 5.59 crore in 2013-14.
Source:business-standard.com
Government intimates recent amendments in indirect tax laws to revenue authorities
EXCISE LAWS/MISC. : Finance Bill, 2015 – Changes in Rates of Duty in Central Excise, Customs and Service Tax Introduced through Specified Notifications Pursuant to Finance Bill, 2015
Rupee Trading Weak At 63.51 On Dollar Demand
The rupee pared its initial losses, but was still down by 9 paise at 63.51 against the American currency in the afternoon session on dollar demand from banks and importers.
The rupee opened lower at 63.54 against the previous close of 63.42 at the Interbank Foreign Exchange market. It slid further to 63.59 before quoting at 63.51 at 12 noon.
The domestic unit hovered in the range of 63.60 and 63.45 during the morning deals. Overseas, In New York, the dollar was slightly firm against a basket of major currencies amid thin early trade as several key financial centres were shut for holidays. Meanwhile, BSE Sensex was trading higher by about 61.53 points or 0.22 per cent at 27,552.12.
Source:thehindubusinessline.com
Assam VAT : Clarification by AO from Commissioner not to be held as reference in absence of any prov
CST & VAT: Assam VAT - Under Assam General Sales Tax Act, there is no provision for reference, in absence of such provision for reference, internal letter of Assessing Officer to Commissioner seeking a clarification on exigibility of a good to taxation or on rate of tax could not be construed to be a reference in law
No denial of sec. 12AA registration to trust just because no charitable activity was carried out by
IT : Assessee's application seeking registration under section 12AA cannot be rejected on ground that no activity has been carried out by trust subsequent to its creation and even up to time of disposal of its application
JCIT gets flak from High Court for sanctioning reassessment notice by recording satisfaction in mech
IT : Where Joint Commissioner recorded satisfaction in mechanical manner and without application of mind to accord sanction for issuing notice under section 148, reopening of assessment was invalid
Rajasthan VAT: Dept. couldn’t establish terms of contract while claiming lease as sale transaction;
CST & VAT: Rajasthan VAT - Where Assessing Authority concluded that supply of goods by assessee to third parties was a sale transaction and not merely a lease and Tax Board upheld said order, since none of authorities had made any endeavour to ascertain intention of parties having regard to terms of contract, Assessing Authority was to be directed to re-examine matter
Discrepancies in book of accounts should cause addition to income of assessee and not its rejection
IT : Where in case of assessee engaged in business of readymade garments, liability towards creditors remained in existence for a long time and, moreover, assessee failed to establish genuineness of those liabilities by producing supporting evidence, addition made by authorities below under section 41(1) was to be confirmed
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