Notification restoring ‘exemption’ which was withdrawn by mistake is clarificatory and retrospective

Excise & Customs : Where exemption to 'compounded rubber' was : (a) withdrawn from 1-3-1994 inadvertently vide an omnibus notification rescinding various notifications and (b) same was restored subsequently from 28-3-1994 vide another Notification, then, in view of consistent policy of Government to exempt 'compounded rubber', said restoration was clarificatory and retrospective from 1-3-1994

No revocation of trust’s registration as it didn’t prove that trustees had siphoned of undisclosed i

IT: Where there were no findings by revenue that assessee trust was indulging in any activity other than promoting education and there were no conclusive findings to prove that trustees had siphoned out undisclosed income of trust, Commissioner was not justified in withdrawing registration granted under section 12A(a) by invoking provisions of section 12AA(3)

Co. rendering high end KPO services isn’t comparable with a co. rendering low end BPO services

IT/ILT : Where TPO made addition to assessee's ALP in respect of rendering ITES services to its ALP, in view of fact that some of comparables selected were rendering high end KPO services and thus, there exited functional difference whereas some other comparables were improper on account of their huge turnover and brand value, impugned addition deserved to be set aside

Assessment in name of amalgamating co. was invalid as it ceased to exist after amalgamation

IT: Where assessee-company had amalgamated with transferee-company, notice under section 153C ought to have sent to latter, and since such notice had not been issued to transferee-company, assessment made in hands of assessee-company was a nullity

Subscription received by NASSCOM from its members isn’t liable to ST under Club or Association Servi

Service Tax : Subscription received by assessee, an apex body, from members being software companies, for promotion of common objectives is not liable to service tax under 'Club or Association Services

Assessment in name of amalgamating co. was invalid as it ceased to exit after amalgamation

IT: Where assessee-company had amalgamated with transferee-company, notice under section 153C ought to have sent to latter, and since such notice had not been issued to transferee-company, assessment made in hands of assessee-company was a nullity

SC: Prospective amendment couldn’t be given retro-effect so as to be made applicable for entire bloc

IT : Substantive amendment to section 40A(3) falling within block period could not be applied retrospectively for entire block period of ten years

Loss on sale of shares by assessee to JV partner at price lower than one offered in rights issue was

IT : Share sale transaction between JV partners post right share issue by JV company resulting in loss not a 'colourable device'; transaction could not be said to be a cover up for real transaction

Big Dip In Iron Ore Imports Affects Indian Ports

A drop of 75% in iron ore imports, followed by a 25% dip in fertilisers, has drastically impacted the total business of the 12 major Indian ports in April 2015, compared with the corresponding period last year. Petroleum, oil and lubricants (POL) imports also reported a 9.5% drop due to fluctuating prices in the global arena.

On the other hand, ports handled 58% more thermal and coking coal during April 2015, a showing that helped the dozen major ports record a net increase of 1.06% over the previous year, at 47.88m tonnes.

Kamarajar (formerly Ennore) port led the show with an increase of 26.5% in thermal coal and POL. Chennai, Jawaharlal Nehru port (JNPT) and Kandla also reported a marginal increase in imports of POL. Haldia Dock and V.O. Chidambaranar (formerly Tuticorin) port handled more coal and bulk cargoes.

“However, volumes are set to increase over the coming months,” said a Chennai port official. “More power projects will be going on stream, and the country will be requiring more coal and iron ore. Also, we are talking here only about the major ports. A lot of export-import business happens through private ports, as well, though it is not reported.”

Source:- splash247.com

Negative Growth In Key Export Sectors Worrying: Fieo

Sharp decline in Petroleum exports is the main reason but equally worrying is negative growth in some key export sectors, said S C Ralhan, President, Federation of Indian Export Organisations (FIEO).

Commenting on the merchandise trade data for April, 2015, Ralhan Saturday said that negative growth in exports is continuing since December, 2014 though the decline has come down from 21 percent in March, 2015 to 14 percent in April, 2015. The prime reason continues to be softening of crude, metal and commodity prices.

Petroleum exports is still showing a decline of 46.5 percent which itself is responsible for an overall decline of 9 percent, as the sector used to contribute to 20 percent of country’s exports.

Decline in exports of rice, marine products, meat, dairy & poultry products, leather & leather products are of equal consequences as these sectors have shown great promise in the past.

Equally worrying is negative growth in Gems & Jewellery, Electronics and Plastic goods as domestic capabilities are being augmented in these sectors.

However, increase in exports of Engineering, Handicrafts, Carpets, Pharmaceuticals, Organic & Inorganic chemicals is very positive development as most of these sectors were exhibiting a decline from Jan, 2015 onwards.

Ralhan said that while country-wise exports figure for April are not available, yet he feels that our exports to countries dependent on oil, metal and commodities exports may have taken a hit as they reduced their appetite for imports with tighter capital control.

President, FIEO said that while trade deficit has gone up marginally from USD 10.08 billion to USD 10.99 billion in April, 2015 as compared to the same month last year but a closer analysis of non-oil imports is required to see the constituent of imports as higher imports of raw-materials and capital goods may indicate little revival in manufacturing.

Ralhan said that the Interest Subvention Scheme may be re-introduced immediately and liquidity crunch of the exporters may be addressed with timely release of the exports benefits.

Source:- smetimes.in

India Seeks Duty Benefits On Exports Of 225 Items

India yesterday sought duty benefits from Bangladesh for 225 of its products under the South Asian Free Trade Area (Safta).

“Currently, India has been enjoying duty benefits on exports of 25 products to Bangladesh under the Safta. They demanded removal of 225 Indian products from the negative list so that they can enjoy duty benefits on those products as well,” said Manoj Kumar Roy, additional secretary to the Bangladesh commerce ministry.

The demand came at a commerce secretary-level meeting between the two countries at Sonargaon Hotel in Dhaka.

Since November 2012, India has been allowing duty-free benefit on exports of all Bangladeshi products, except for 25 alcoholic and drug items, under Safta.

During the meeting, India also demanded reduction of duty on exports of pomegranate and orange from India and permission to set up pasteurised milk factories in Bangladesh.   

“Regarding the dairy milk factory, we told them that we will give our decision during the next meeting in New Delhi, after consulting the sector people in Bangladesh,” Roy said.

He said Bangladesh and India would sign a trade agreement during Indian Prime Minister Narendra Modi's Dhaka visit, likely next month.

At yesterday's meeting, the Indian side agreed to accept Bangladesh Standards and Testing Institution's (BSTI) certification of 25 items for export to India, mainly dairy and food products.

India will also consider removal of 12.5 percent countervailing duty (CVD), a domestic tax to protect the local industry, on export of Bangladeshi garment items to India.

They also agreed to consider the removal of trade barriers on export and use of jute bags from Bangladesh, as exporters are facing problems on export of such goods to India.

India agreed that it would not stop exporting some essential commodities like cotton to Bangladesh without prior notice.

India often stops exporting essential items to Bangladesh without prior notice, for which Bangladesh businesses suffer a lot.

Exports to India declined 19 percent year-on-year to $456.63 million in fiscal 2013-14, mainly due to a slowdown in shipment of garment items that enjoy duty benefits in the neighbouring market.

In fiscal 2012-13, exports to India totaled $563.97 million, according to the Export Promotion Bureau.

Generally, India exports goods worth more than $5 billion a year to Bangladesh through formal channels. It is believed products worth another $5 billion enter Bangladesh through informal channels.

The total trade between the two countries increased from $3.15 billion in fiscal year 2009-10 to $6 billion in 2013-14, registering 90 percent growth, said Hedayetullah Al Mamoon, senior secretary to the commerce ministry who headed the Bangladesh side.

“However, this growth was mainly driven by substantial increase of import into Bangladesh from India, which further increased the trade deficit. We need to narrow the gap,” he added.

Indian Commerce Secretary Rajeev Kher led his side.

He later told reporters, “We discussed two important issues -- how to strengthen the relationship and how to increase trade between the two countries.”

Source:- thedailystar.net

Provisions of other Act as to liability for quality of goods is irrelevant to determine real manufac

Excise & Customs : In case of manufacture of medicines on job-worker basis, 'manufacturer' would be such 'job-workers' and not 'raw material supplier/licensee' as per whose instructions said goods are manufactured; provisions of Drugs and Cosmetics Act' making 'licensee' liable for quality, are irrelevant for excise law

Hire charges paid on KM basis without bearing running cost would attract sec. 194C TDS and not TDS u

IT: Where assessee-State Transport Corporation was making payment on kilometre running basis without any responsibility for running cost, maintenance cost, driver cost etc., said payment would fall within ambit of section 194C and not under defination of rent as defined in section 194-I

SLP admitted against HC’s order holding that registration of trust couldn’t be cancelled if its obje

IT : SLP granted against order of High Court where it was held that since revenue after satisfying about genuineness of object of assessee, a cricket association, had granted registration under section 12AA, later it could not cancel same on ground that activities of assessee were in nature of trade or commerce as objects remained as they were earlier at time of registration

Discuss Local Subsidies Before Import Tariffs, India Tells Wto

 India has conveyed to the World Trade Organization (WTO) director general that commitments to reduce trade-distorting farm subsidies must be discussed before pursuing new ideas for reducing import tariffs on agriculture and industrial products for concluding the Doha Development Agenda (DDA) trade negotiations by year-end.

Over the last 10 days, WTO director general Roberto Azevêdo has convened closed-door meetings with trade envoys from seven major industrialized and developing countries to discuss new ideas for market-access reduction commitments in agriculture and industrial goods to replace the 2008 revised draft modalities.

Trade envoys from the US, the European Union (EU), China, India, Brazil, Australia and Japan took part in the meetings held between 6 and 12 May.
Also present at the meetings were the WTO General Council chair Fernando de Mateo of Mexico and the heads of the negotiating groups for agriculture and industrial goods ambassadors John Adank and Remigi Winzap, respectively.

The meetings were aimed at drawing up the precise modalities based on a “recalibration” approach in the post-Bali programme for concluding the DDA negotiations by the end of this year at the upcoming 10th ministerial conference in Nairobi, Kenya.

A majority of developing and poorest countries, including India and China, repeatedly demanded that all the existing Doha negotiating mandates, such as the 2001 Doha ministerial declaration, the 2004 July framework agreement, the 2005 Hong Kong ministerial declaration, and the 2008 revised draft modalities in agriculture and industrial goods, must remain as the basis for concluding the stalled Doha trade negotiations.

But the US opposed the 2008 draft modalities on the grounds that they fail to address the changed realities in which major emerging economies such as China and India are being exempted from appropriate reduction commitments in agriculture subsidies and tariffs for farm and industrial products.

In the face of the continued standoff between the developing countries on one side and the industrialized countries led by the US on the other, director general Azevêdo has suggested a variation of average tariff cuts for agriculture and industrial goods with substantially truncated flexibilities, said people familiar with the discussions.

“An average low tariff cut will help industrialized countries to shelter their sensitive tariff products, while it might adversely affect a developing country like India to bring down its bound tariff for several products below the current applied rate,” said a trade analyst from an industrialized country.

Although Azevêdo did not specify any figures for an average cut for agriculture products or a cut on average for industrial products, the seven participants discussed several aspects such as the impact of average cuts on their respective bound and applied tariffs at this juncture.

Besides, the seven countries discussed whether such a framework would have a measurable impact for cutting down high agriculture tariffs in many industrialized countries as well as tariff escalation, which discourages the development of processing activity in the countries where raw materials originate.

More importantly, they discussed how the figures for average cuts for agricultural products deviated from the so-called tier formula of the 2008 revised draft modalities in which higher tariffs would bear higher cuts as compared to lower tariffs.

Clearly, the average cuts with reduced flexibilities are not beneficial for India and other developing countries, said a trade envoy, requesting anonymity.

As regards tariff reduction commitments for industrial goods, the 2008 revised draft modalities suggested the “Swiss formula” with accompanying flexibilities. The Swiss formula results in deeper cuts on higher tariffs based on coefficients (a higher coefficient means lower reduction in tariffs).

The trade envoys from the industrialized countries—the US, the EU, Australia and Japan—suggested that they are open to considering the so-called average cut framework with extremely reduced or no flexibilities in both agriculture and industrial goods.

The US has made it known that with the proposed “recalibration” to reduce the overall level of ambition in market access for agriculture and industrial goods, there should be no demands for any additional flexibilities.

China and India made it clear that they continue to adhere to the 2008 revised draft modalities to conclude the Doha trade negotiations. The two countries said that while they are willing to discuss new ideas, including the average reduction commitments, their governments will judge the outcomes in relation to the 2008 modalities.

More importantly, China and India maintained that they will not accept any framework that would undermine the flexibilities for special products and the special safeguard mechanism in agriculture and specific flexibilities in industrial goods as proposed in the 2008 modalities, the envoy said.

Azevêdo, however, did not discuss what ought to be the reduction commitments in the trade-distorting domestic subsidies, export subsidies and export credits that are provided by industrialized countries.

WTO’s highest court, the Appellate Body, had established that the domestic subsidies and export-financing schemes for cotton producers in the US had adversely affected the global cotton trade in a dispute launched by Brazil. Also, in another dispute against sugar subsidies, the Appellate Body had passed strictures against the EU.

But, for some inexplicable reason, the trade-distorting domestic subsidies and export subsidies and export credits for farm products were not covered during the meetings, said an African trade envoy familiar with the meetings.

Further, China, India, and Brazil asked the director general to decide the level of ambition for reducing commitments in subsidies in domestic support and export subsidies before the market access consultations to discuss the combination of average and cut on average formula.

A major industrialized country has maintained that there is nothing to discuss in the domestic support pillar, while another major industrialized country is reluctant to discuss the export competition pillar at this point.

The director general’s consultations failed to bring any convergence between the industrialized countries on the one side and developing countries on the other due to sharp differences over several issues concerning market access, particularly over the flexibilities that are accorded to developing countries on special products and the special safeguard mechanism in the 2008 revised draft modalities.

Source:- livemint.com

ALP of exp. reimbursed to AE for using services of its employees couldn’t be Nil as services were us

IT/ILT : Where assessee had claimed to have used services of personnel of its AE and had produced sufficient evidence that said services was an inevitable part of business activity of assessee, ALP of said expenditure could not be determined at Nil

No disallowance for TDS default on expenses which were ‘paid’ before year end; Merilyn’s case referr

IT : No disallowance under section 40(a)(ia) can be made if it is established that deductee has paid tax on amount received

Indian Rupee Opens With Marginal Gains At 63.45/Dollar

The weak US data overnight has led to dollar weakness overseas. The USD-INR pair should range between 63.30-63.60/dollar today, says Agam Gupta of Standard Chartered.

The Indian rupee opened with marginal gains of 6 paise at 63.45 per dollar on Monday versus 63.51 Friday. The dollar falls to a three-month low against the euro, as disappointing data on US domestic factory activity and consumer sentiment spurred doubts about the recovery in the US. The dollar index slips to the 93 levels.

Agam Gupta of Standard Chartered said, “The weak US data overnight has led to dollar weakness overseas. The USD-INR pair should range between 63.30-63.60/dollar today.”

“We expect to see demand from the local government banks below 63.40 levels and we see small exporter interest close to 63.60 levels,” he added.

Source:moneycontrol.com

Losses set-off against other income in earlier years couldn’t be again set-off while computing sec.

IT : Where assessee-company, engaged in wind mill power generation, claimed deduction under section 80-IA, since losses incurred by assessee had already been set off against other income of business enterprise, profit earned by it would be eligible for deduction

Customs duty paid under protest in case of Nil assessment order can be claimed through refund

Excise & Customs : Where assessment order is 'NIL' assessment and duty has been paid under protest despite NIL assessment, assessee need not challenge said NIL assessment as he cannot be said to be aggrieved thereby; therefore, assessee may apply for refund of duty paid under protest without having to challenge such NIL assessment

Losses already set-off against other income in earlier years couldn’t be again set-off while computi

IT : Where assessee-company, engaged in wind mill power generation, claimed deduction under section 80-IA, since losses incurred by assessee had already been set off against other income of business enterprise, profit earned by it would be eligible for deduction