IT/ILT : Where certain addition was made to assessee's ALP in respect of rendering software development services to its AE on basis of difference in per hour rates charged by other provider of similar services, said finding being based on material on record, did not require any interference
Wednesday, 6 May 2015
Materials used in railway tracks meant for handing raw materials/finished goods inside plant are cap
Cenvat Credit : Railway track materials used in 'railway tracks' meant for transporting hot metal from blast furnace to pig casting machines for manufacturing pig iron and also used for handling raw materials and processed/finished goods, are eligible for credit as 'capital goods'
Non-payment of unpaid dividend by Co. is a continuous offence; limitation of bar can't be applied th
CL: Non-payment of unpaid dividend by a company is a continuous offence committed by company of which limitation cannot be bar
Date of original purchase contract and not date of revised one would be considered for sec. 32A allo
IT : Where assessee entered into contract for purchase of certain machinery on 2-5-1986, i.e., before 12-6-1986 being cut off date given in section 32A(8B) but due to escalation in price, revised contract was entered into on 18-8-1986, assets would be presumed to have been purchased before cut off date and would be eligible for investment allowance under section 32A
SEBI prescribes norms on pricing for debt-equity conversion under debt-restructuring scheme; amends
SEBI/INDIAN ACTS & RULES : SEBI (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2015 – Amendment in Regulation 70
ITAT affirms claim of depreciation 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
India Manmade Fibre Spun Yarns Export Decline Sharply In March
Spun yarns made of man-made fibres recorded sharp decline in export both in terms of volume and value. During March, a total of 6.85 million kg of man-made spun yarn were exported, comprising 3 million kg of polyester yarn, 2.1 million kg of viscose yarn and 1.7 million kg of acrylic yarn.
Polyester yarn exports were down 31 per cent in value while viscose yarn export was down 16 per cent during the month. Unit price realization was down US cents 10 for viscose and US cents 27 for polyester from a year ago. Acrylic yarn export jumped 12 per cent in volume while unit price realization fell US cents 19 to US$3.02 per kg.
Viscose yarn found buyers in 25 countries in March with exports valued at US$6.46 million or INR39 crore and volume at 2.13 million kg, implying average unit price realization of US$3.04 per kg. This was US cents 18 higher than realized in February and US cents 10 lesser than a year ago. Belgium continued to be the single largest importer of viscose yarn worth US$1.60 million followed by Egypt with imports worth US$0.91 million.
Algeria, Indonesia, Mexico, Japan and Thailand were the new markets for viscose yarns in March 2015, together importing yarn worth US$0.63 million with volumes at 178,000 kg. Meanwhile 12 other countries did not import any viscose yarns this March with majors ones being Syria, Costa Rica and Croatia. Belgium, Portugal, United Kingdom, Sri Lanka and Bangla-desh have cut their import of viscose yarns from India compared to last year.
Polyester spun yarns were exported to 49 countries in March aggregating US$7.08 million with a unit price realization averaging US$2.36 a kg. A total of 3 million kg was exported, of which, 34 per cent was only to Egypt and USA. Nigeria, Argentina, Saudi Arabia, Kenya and Tanzania were the new markets of polyester yarns in March.
Blended spun yarn exports aggregated US$38.6 million in March with volumes at 13.3 million kg. This includes 6.5 million kg of PC yarns worth US$17 million and 4.8 million kg of PV yarns valued at US$13.3 million. Egypt was the largest importer of PC yarn from India followed by Bangladesh, amongst the 49 countries that imported PC yarn from India in March. While Ecua-dor, Vietnam, Lebanon and Peru were the fastest growing markets for PC yarns, Sudan, United Arab Emirates, Djibouti, Honduras and Iran did not import any. Meanwhile, Pakistan, Mexico, Venezuela, Algeria and Israel significantly cut their imports of PC yarns from India. Among new markets Latvia was the major one in March 2015.
Turkey remained the largest importer of Indian PV yarns in March with volumes at 2.65 million kg worth at US$7.3 million, followed by Iran and Pakistan. Egypt and Tunisia were the new ma-jor markets for Indian PV yarn during the month while Tanzania, Spain, South Korea and Colombia did not import any PV yarns from India.
Source:ccfgroup.com
IRDA's approval must to register transfer of shares of Insurance-co. if it changes substantial holdi
INSURANCE/INDIAN ACTS & RULES : IRDAI (Transfer of Equity Shares of Insurance Companies) Regulations, 2015
Credit denied as assessee failed to establish existence of transporter who had supplied inputs to hi
Cenvat Credit : Where assessee claims that inputs were transported by a transporter, assessee must prove existence of said transporter and if such transporter is found to be bogus/non-existent, credit cannot be allowed
Presence of other builders offering Industrial plots in same area rules out dominance of opposite pa
Competition Act : Where land was allotted to various builders for establishment of industrial parks in various parts of Punjab and such builders were offering industrial plots, it could not be said that respondent builder who had cancelled allotment of industrial plot of appellant was in dominant position and had abused its dominance
CIT(A) couldn’t decide TP issue without discussing appropriate method and comparable instances to de
IT/ILT : Where Commissioner (Appeals) did not discuss about appropriate method to determine ALP of international transaction of import of A.C. unit and comparable instances had not been discussed to arrive at correct ALP, matter needed fresh adjudication
Tom Albanese Eyes Return To India Iron Ore Exports
Former Rio Tinto chief executive Tom Albanese says his new business, Indian mining giant Vedanta Resources, is gunning to restart iron ore production as soon as October, after India last week cut its duties on lower-grade exports of the commodity.
The possible return of one-time exporting giant India to the seaborne iron ore export market comes despite claims from Andrew Forrest that no new tonnes outside the major producers will come into production unless the price returns to above $US100 a tonne.
India's paring of its export duty from 30 per cent to 10 per cent, effective June, has made restarting production profitable for some miners in the state of Goa, even at current prices.
Mr Albanese, who was made chief executive of the London-listed Vedanta about a year ago, told Fairfax Media that he welcomed the export duty change, and the Indian mining group would now look to restart Goa production in October, at a run rate of 5.5 million tonnes a year.
"While Goan ores are lower grade than that desired by the Indian steel industry, they have had a long standing market in China," he said.
"Following some additional local and federal environmental permit related matters, we hope to resume production after the monsoon season in October. Obviously, at current low seaborne prices, we have a lot of work to do to ensure our costs are below our net realised prices. With the current mining cap in place, we would look to be mining at about 5.5 million tonnes a year."
India's domestic iron ore sector has been languishing since the Supreme Court ban on mining across three states was issued four years ago. The Supreme Court's ban in Goa was lifted about a year ago, with the condition that mining would be capped at 20 million tonnes a year. But the country's export duty had previously been too hefty to justify exporting.
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Before the ban was slapped on, Vedanta was planning to spend $US500 million ($638 million) to double its then production capacity in Goa to 36 million tonnes.
The industry expects the 20 million-tonne cap will be lifted or adjusted up if the resumption of exporting goes well. Goa was the country's largest exporter of iron ore before the ban.
For smaller, higher-cost players, the wait to return to production will hinge on whether higher prices can incentivise them back online.
Rio Tinto iron ore chief executive Andrew Harding told the Financial Review that "we shouldn't make the mistake of thinking that other countries don't want to grab our market share".
"If iron ore producers exit the market, other suppliers will fill the market void left behind," Mr Harding told the Financial Review.
"India could come online again at a moment's notice. They have previously had a large and viable iron ore export sector and there's nothing to suggest that they won't again."
Mr Forrest last week slammed Rio and BHP Billiton's argument that if they stop increasing production, others will simply fill the gap as a "fallacy".
"I would like to address the fallacy that multi-national companies (Rio and BHP) are protecting Australia's interests by expanding on the false premise that if we don't do it, someone else will," he said last week.
"We are talking about the highest barrier of entry resources industry in the world – you can't switch it on and off."
He also told ABC Business this week that "beneath $100 iron ore … if you look out there in iron ore expansion world, all the lights are off".
Industry modelling puts the break-even for the lower cost Goa producers at roughly $US53 a tonne, and even the slimmest of margins will encourage exporting to China. The reduced export duty rate applies to ore at a grade lower than 58 per cent.
India has swung from one of the world's biggest exporters of iron ore to a net importer in just four years, largely because of the Supreme Court ban on mining across three states. In 2011, India shipped about 100 million tonnes. In the current financial year it is tipped to import about 12 million tonnes of the commodity.
UBS commodities analyst Dan Morgan says India's iron ore industry is a "wild card that needs to be closely monitored". "It is probably too early to make a call, people have been disappointed in the past with India trying to come back from some of this disruption."
Source:afr.com
Banks acquiring equity shares pursuant to debt restructuring needn't comply with disclosure norms un
SEBI/INDIAN ACTS & RULES : SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2015 – Amendment in Regulation 10
Restricting Cheaper Rice Imports
Rice forms the very foundation of food security in Bangladesh as the Bangalees will continue to eat rice as a staple in the decades ahead as they did since time immemorial. Even in villages today, farmers, who toil day and night, like to take three meals of rice a day. Various kinds of cakes are still being made out of rice.
But then experts have warned, any distortion in rice prices in the country due to losses farmers incur will not only drive farmers from cultivating paddy to other lucrative vocations but also pose a serious threat to food security in the long run. Although the Food and Agriculture Organisation (FAO) has predicted good rice harvests in 2015 and 2016, it is still unpredictable as to whether such harvests could be sustained as paddy cultivation is highly dependent on vagaries of nature.
Huge imports of cheaper rice from neighbouring India by the private sector into the country have already made paddy cultivation uneconomic in terms of prices. It was found that imported rice cost 20-25 per cent less than that of local rice. For example, import cost of Swarna variety is Tk 22.5 to Tk 24.5 for a kilogram when it is Tk 27 to Tk 29 for the local variety.
And millers have done what they are bound to do in an open market operation. About 60 per cent of them stopped milling rice in the Aman season.
Official statistics show, private importers brought in 1.3 million tonnes of rice from India in July-April period of this financial year (FY'15) when overall import was 0.374 million tonnes in FY'14.
Realising the gravity of the situation, the ministry of food has already asked the National Board of Revenue (NBR) to impose duty on rice imports to protect the farmers from price debacle. But then the NBR is yet to rise to the occasion.
On the other hand, thanks to timely distribution of seed and fertilizer, favourable weather and uninterrupted supply of electricity, the production of paddy, particularly Aman and Aus, is set to increase in the current fiscal year. The rise is predicted despite a fall in harvesting area.
Aman production of financial year 2014-15 has been estimated around 14 million metric tons, an increase of 1.3 per cent compared with 13 million metric tons in the same period a year earlier, according to the Bangladesh Bureau of Statistics (BBS). During the period, Aus production has been estimated at 232.8 million metric tons, which is 0.08 per cent higher over the last year despite declining harvesting area by 0.6 per cent.
The NBR should take a quick decision on imposition of import duties on cheaper rice imports temporarily. This is because farmers do not know what the NBR is or what duties mean. They care about prices their produces fetch in local markets and accordingly take decisions on cropping.
Source:thefinancialexpress-bd.com
Hpcl Revises Down May Petrol Import Demand
Hindustan Petroleum Corp Ltd (HPCL) has revised down its petrol May imports to a total of 52,000 tonnes from an initial 57,000 tonnes, traders said on Wednesday.
It is now looking to buy a total of 30,000 tonnes of petrol for May 15-23 delivery to Mundra, down from its original target of a total of 35,000 tonnes for May 15-20 delivery.
Its import demand of a total of 22,000 tonnes petrol for May 16-20 delivery to Ennore was unchanged. HPCL does not usually import petrol and traders said these two import tenders, which are due to be awarded on May 8, were rare and the refiner could be looking to plug a supply shortfall caused by refinery maintenance.
HPCL said it would shut a crude unit and petrol-making unit at its Vizag refinery from June to July. A crude unit and a petrol-making unit at its Mumbai refinery were also scheduled for maintenance from April to May.
HPCL is not the only refiner seeking petrol imports. Indian Oil Corp (IOC) has been buying more than 200,000 tonnes of petrol recently for March to May delivery due also to refinery maintenance.
The unusual Indian demand for petrol has added to the strong market as the summer driving season in the U.S. and upcoming Muslim fasting month in June have tightened supplies.
Source:reuters.com
Moody's: Gail And Petronet To Benefit The Most From Surge In India's Lng Imports
Moody's Investors Service says that the expected surge in imports of liquefied natural gas (LNG) will benefit the country's leading LNG importer, Petronet LNG Limited (PLL, Baa3 stable) and dominant gas distributor, GAIL (India) Limited (Baa2 stable) the most, because of the increased usage of their gas infrastructure. India's (Baa3 positive) imports of liquefied natural gas (LNG) are set to more than double over the next five years.
"India's LNG imports should more than double to 24 million tonnes per annum by 2020 from 10.7 million tonnes in the financial year ended 31 March 2014, because of low and sustained LNG prices, rising industrial demand, and falling domestic gas production levels," says Abhishek Tyagi, a Moody's Vice President and Senior Analyst for the Public, Project and Infrastructure Finance Group.
"The stimulant effect on demand of lower LNG prices would be felt post 2017, because the fuel is mostly imported under long term contracts, which are generally linked to five-year average crude oil prices," says Vikas Halan a Moody's Vice President and Senior Credit Officer for the Corporate Finance Group.
Moody's analysis is contained in its just-released report titled "India Infrastructure: India's LNG Import Boom Is Credit Positive for GAIL, PLL," and is co-authored by Halan and Tyagi.
Moody's report says the demand for LNG in India would be even greater if it were more widely used by the power generation sector, which currently absorbs only 10% of bulk imports because of the fuel's persistently high price relative to coal and domestic gas.
As for GAIL in particular, Moody's report says that as the largest owner of gas pipelines in India, and given the company's capacity utilization rate of 45%, Moody's estimates that even a 5% increase in the company's capacity utilization rate will result in profits increasing by about 10%.
On PLL, Moody's report points out that the company's regasification capacity which accounts for around 76% of India's total installed capacity will continue to exhibit the largest market share for the foreseeable future, given the limited competition in the regasification sector.
Source:indiainfoline.com
CCI rejects allegation of anti-competitive practices against Flipkart, Amazon, and other e-commerce
Competition Act: Exclusive arrangement between manufacturers and e-commerce portals such as Flipkart, Amazon, Jasper and others to launch upcoming products on their websites wasn't anti-competitve and didn't have appreciable adverse effect on competition in relevant market. It seems very unlikely that an exclusive arrangement between a manufacturer and an e-portal will create any entry barrier as most of the products which are illustrated in the information to be sold through exclusive e-partner
India Gold Bullion Imports From Switzerland Rise Sharply During 2014-2015
Switzerland has turned out to be the preferred source of gold import among Indian gold bullion importers. The percentage share of Switzerland in overall gold imports by the country has recorded significant improvement over the past few years. Sources indicate that Switzerland is followed by the UAE, South Africa and Australia.
According to industry sources, Switzerland’s share in overall gold imports by Gujarat has grown considerably from 45% in 2011-’12 to as high as 80% in 2014-’15. Out of the total imports of 152.24 metric tonnes of gold imported through Gujarat during 2014-’15, nearly 122 metric tonnes were imported from Switzerland. Also, the overall gold imports by the state surged higher by 67% when matched with the net gold imports of 92 metric tonnes during 2013-’14.
The trend seems to be gaining further momentum in 2015. According to import data published for the month of March this year, out of 22 metric tonnes imported, 19 metric tonnes (ie., more than 86%) were sourced from Switzerland. The imports from other sources remained weak. The other key import sources were the UAE (1,450 kg), South Africa (740 kg), Australia (600 kg) and Turkey (350 kg).
Switzerland has the largest reserves of gold in the world. Banks and trading houses normally import gold directly from Switzerland, unless gold of a different quality is required or when it is required urgently. The easier procedures for gold shipment ensure fast movement of gold.
Switzerland has better systems and procedures in place when compared with other gold reserves such as South Africa and Australia. Moreover, there is rarely any chance for duplication or fake gold, if imported from Switzerland. All these factors have contributed to the sudden rise in gold imports from that country, traders say.
Source:metal.com
Rupee Weakens Against Dollar To 63.56
The Indian rupee on Wednesday weakened for the fourth consecutive session against the dollar after the local equity markets fell. The local unit opened at 63.33 per dollar and touched a high and a low of 63.31 and 63.66, respectively. At 2.04pm, the home currency was trading at 63.56, down 0.19% from its previous close of 63.44.
The Sensex fell 2.1%, or 574.43 points, to 26,864.12 points. Since 13 April, the local equity markets have fallen by over 2,170 points on the expectation of weak monsoon, muted earnings and threat of minimum alternate tax on foreign funds. The Foreign institutional investors (FIIs) have sold $1.73 billion in equity markets in the last eleven out of twelve sessions, except on 21 April when FIIs bought $2.6 billion.
Most of the Asian currencies were trading higher. Malaysian ringgit was up 1.16%, Singapore dollar was up 0.32%, Thai baht was up 0.31%, Philippines peso was up 0.28%, Taiwan dollar was up 0.25%, South Korean won was up 0.21%, Indonesian rupiah was up 0.13%, while China renminbi and China offshore were up 0.1% each.
Bond yield rose after international crude prices hit to a fresh 2015 highs. Brent crude was trading at 68.55, up 1.5% from previous close. The Brent crude has hit a low of 46.59 $/bbl in 13 January 2015 and since then it gained 47.48%.
The yield on India’s 10-year benchmark bond was trading at 7.91% compared with its Tuesday’s close of 7.85%. In intraday the bond yield touched a high of 7.92%—a last level seen on 6 January. Bond yields and prices move in opposite directions.
Since the beginning of this year, the rupee has lost 0.74%, while foreign institutional investors have bought $7.21 billion from local equity and $7.45 billion from bond markets.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.720, down 0.38% from its previous close of 95.076.
Source:livemint.com
In case of transit sales via dealer, consignee can take credit on basis of invoice issued by manufac
EXCISE LAWS/C : Additional Facility for Direct Transport of Goods from Manufacturer or Importer to Consignee Where Consignee Avails Cenvat Credit on Basis of Cenvatable Invoice Issued by Registered Dealer or Importer – Clarification on Cenvat Credit in Transit Sale through Dealer
Penalty was rightly levied on assessee as declaration form of import of goods was found blank
CST & VAT : Rajasthan VAT - Where goods of assessee were being carried by transporter in a vehicle from Delhi to Bharatpur and Assessing Officer intercepted said vehicle at destination of assessee, while goods had partly been unloaded, and having found that Form VAT-47 was totally blank levied penalty under section 76(6), levy of penalty was justified
ITAT directs admission of additional evidence by assessee to prove that its liaison office in India
IT/ILT : Where Assessing officer treated liaison office of assessee as PE, in view of fact that assessee had not been provided with reasonable and sufficient opportunity to represent its case, additional evidence filed by assessee was required to be admitted as per principles of natural justice
Short delay in filing appeal by revenue due to administrative reasons can be condoned
Service tax : 'Inordinate delay' and a 'delay of short duration' are different and only inordinate delay attracts 'Doctrine of Prejudice' and 'Strict Approach'; hence, delay of 29 days in filing appeal by revenue before Tribunal must be condoned liberally even if delay was administrative in nature
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