CA Terminal: 06/15/15

Monday 15 June 2015

MP Govt. ordinance does away with requirement to pay amount by dealers for extension of stay order

VAT/MADHYA PRADESH/INDIAN ACTS & RULES : Madhya Pradesh Vat (Amendment) Ordinance, 2015 – Amendment in Sections 4A, 10, 14, 16A, 18 and 29 of Madhya Pradesh Value Added Tax Act, 2002

ITAT rejects comparables as they were inappropriate due to diverse activities, brand value and econo

IT/ILT : Where TPO made addition to assessee's ALP in respect of rendering software development services to its AE, since two comparables selected by TPO were inappropriate due to various factors such as brand value, economy of scales, goodwill, diversified activities, owning of intangibles etc., impugned addition was to be set aside

Sec. 10A relief denied on software development units on failure of assessee to prove that they were

IT : Where material on record was found to be insufficient to treat each of 31 units of assessee as separate undertakings, benefit under section 10A would be limited to eligible undertakings of assessee

No denial of DTAA benefit to owner of ship just because charterer of ship was liable to tax under bu

IT/ILT: Where assessee rendered services to foreign vessels under agency of a U.K. Company and charterer of ship was of Bahamas, freight beneficiary being a company of U.K., as per DTAA entered into between India and U.K., said income was not taxable in hands of assessee in India

CBDT's new instruction specifying revised limit for filing appeal is also applicable to pending case

IT : In view of CBDT Instruction No. 5 of 2014 dated 10-7-2014, where tax effect of appeal filed by revenue before Tribunal was less than Rs. 4 lakhs, appeal was to be dismissed

Prior period exp. is allowable if its liability is crystallized in current year

IT : Deductibility of prior period expenses is to be decided by considering details of such expenditure; if liability is crystallised in current year, amount has to be allowed as deduction but if expenditure relates to earlier year and simply payment is made in current year, deduction would not be allowed

Borrower can't be classified as wilful defaulter without adhering to procedure laid under RBI Circul

Banking Regulation Act: Where Grievance Redressal Committee of respondent bank had not followed procedure as envisaged under RBI Master Circular and not communicated its decision to petitioner forming an opinion that petitioner should be labelled as wilful defaulter, decision of Grievance Redressal Committee was to be set aside

High Court critical of ITAT for passing order on basis of docs and evidences not presented before AO

IT: Where Tribunal deleted disallowance on account of interest paid to partners, etc., based on documents and evidences which were not presented to Assessing Officer or Commissioner (Appeals), matter was to be remanded

Exp. incurred via credit card couldn't be held as unexplained if credit card bill was paid through b

IT: Where assessee made all her credit card expenses and investments out of her bank account by cheque and she explained all investments, addition made under section 69 was not justified

Growth In Exports Of Textile Products May Shrink

The Indian textile and clothing sector, which registered 41 billion dollars worth exports last financial year, might not see high growth in exports this year, according to industry sources.

The sources told The Hindu here recently that segments such as garments and home textiles had seen growth in exports. However, sectors such as cotton yarn had seen exports slowing down because of decline in demand from China.

The sources said that China was one of the major markets for cotton and yarn exports from India. Though textile mills were now exporting to countries such as Bangladesh, Vietnam and Cambodia, the demand from China was huge. This year, the industry expects export demand to be good for segments such as garments. However, the demand for yarn should increase in the overseas market. Hence, the export growth might be flat this year for the entire sector, the sources said.

Nearly 35 per cent of the country’s annual textile and clothing production is exported. In some countries, the average import duty on these products is high and hence, the industry needs support to upgrade technology, improve its efficiency and competitiveness.

Source:- thehindu.com

Good Demand For Indian Spices; Export Touch $2,432.85 Mn

Indian spices maintained their robust demand in the international market with their export touching a whopping Rs 14,899.68 crore in 2014-15 as compared to Rs 13,735.39 crore (USD 2,267.67 million) a year earlier.

Chilli, mint and mint products, cumin, spice oils and oleoresins, pepper, turmeric, coriander, small cardamom, curry powder/paste and fenugreek contributed substantially to the spice export basket as the demand for Indian spices scaled up phenomenally at the global level.

In 2014-15 fiscal, a total of 8,93,920 tonnes of spices and spice products valued at Rs 14,899.68 crore (USD 2,432.85 million) were exported, registering a 9 per cent increase in volume and 8 per cent in rupee terms and 7 per cent in dollar terms in value as compared to 8,17,250 tonnes valued at Rs 13,735.39 crore (USD 2,267.67 million) in financial year 2013-14.

The total export of spices during 2014-15 exceeded the target of 7,55,000 tonnes valued at Rs 12,304.90 crore (USD 2000 million) in terms of both volume and value for the financial year 2014-15.

Spices Board, the flagship organisation under the Union Ministry of Commerce and Industry, has been able to meet the export target by devising multifaceted activities for promotion of spices and sustaining their demand in the global market.

"The achievement is substantial - 118 per cent increase in terms of volume and 121 per cent in rupee and 122 per cent in dollar terms of value - and it was achieved in the face of tough competition. Increased demand for Indian spices in the international market is a testimony to their unmatched quality and escalating faith in their sustainability," said A Jayathilak, Chairman, Spices Board in a release here today.

Chilli continued to be India's largest exported spice, accounting for 347,000 tonnes in quantity and Rs 3,51,710 lakhs in value during FY 2014-15. The export grew by 11.04 per cent in quantity and 29.20 per cent in value as compared to FY 2013-14.

Source:- business-standard.com

Omission of creditors to participate in inquiry initiated by revenue wouldn't prove that they lacked

IT : Where omission on part of creditors to subject themselves to enquiry being initiated by revenue could not establish that creditors lacked identity, addition as undisclosed income was not justified

Haryana VAT: Deptt. can't make additions in turnover without corroborative evidence

CST & VAT : Haryana VAT - Where Assessing Authority rejected explanation of assessee that goods in question were never sold by it and made a certain addition in gross turnover, in absence of any material on record to show that any enquiry was made by revenue through vehicle owners or any material was confronted to assessee, impugned addition was not justified

Immediate Import Of Pulses Will Not Help Contain Inflation: Industry Experts

Immediate imports of pulses would not help in containing the domestic prices and the government should delay the inbound shipments of the commodity till August, industry experts said.

By August-September, arrival of the new crops from countries including Canada, the US, Australia and Myanmar start, Indian Grains and Pulses Association Chairman Pravin Dongre said.

These are the destinations from where India mainly import pulses.

"We advocate the delay in imports till August-September as that is the time for arrival of new crops in Canada, the US, Australia and Myanmar, the destinations from where we mostly import pulses.

"Now there is little point in importing as the prices internationally are firming up due to a dearth of supply and depleting stocks. It will be equally expensive for the domestic here," Dongre told PTI.

He said delay in imports for one or two months will not cause any major price rise so there is no need to panic so much.

Last week in the Cabinet meeting, the government had decided to import lentils in large quantities to boost supply and also asked states to take action against hoarders.

In a meeting chaired by Prime Minister Narendra Modi, the Cabinet expressed concerns over rising prices and decided to increase imports, among other measures.

According to ADMISI Commodities research analyst Sriram Iyer, the imports now might drive the prices higher in the international markets as farmers and other market participants who will be keenly watching the Indian situation could push up their prices in anticipation of the largest consumer, that is India coming to buy at the global markets.

"Even though, chana prices has fallen over the last month or so, we expect that with India entering the import market, there could be a possibility of a rally in prices," he added.

However, he added that prices rebounded from lows of the trading session to end above the important level of Rs 4,600 per quintal.

Pulse prices have risen by up to 64 per cent in the last one year as the domestic production fell by nearly two million tonnes in 2014-15, crop year due to unfavourable weather conditions.

Pulses production is estimated to have fallen to 17.38 million tonnes in 2014-15 crop year (July-June) from 19.25 million tonnes in the previous crop year due to deficient monsoon last year and unseasonal rains and hailstorms during March-April this year.

India imports about four million tonnes of pulses, largely through private trade, to meet domestic shortfall.

Source:- economictimes.indiatimes.com

Mideast Oil Powers Saudi Arabia, The Uae To Cut Petrol Imports

Middle Eastern oil producers Saudi Arabia and the UAE will sharply cut or even halt costly petrol imports next year after ramping up new refining capacities that put them a step closer to becoming exporters of the motor fuel.

The estimated loss of at least 60,000 barrels per day (bpd) in shipments to Saudi Arabia and the UAE is expected to be mitigated by strong global demand that will help replace revenue lost by sellers such as trader Gunvor, French major Total and India’s Reliance Industries.

And while the dwindling imports may point to a coming change in trade flows as other Middle East refining projects come online, the market currently looks strong enough to withstand the relatively small loss in daily seaborne purchases.

“Most of the counterbalancing will be done by lower exports from surplus countries, either because domestic consumption is growing [such as in India] or because the refining sector or yields are shrinking [such as in OECD markets]”, said David Wech, managing director of consultancy JBC Energy.

Organisation for Economic Cooperation and Development (OECD) countries Japan and Australia, for instance, are cutting refining capacities due to shrinking domestic consumption and more cost-effective imports.

Petrol exporter India is likely to reduce overseas sales to cater to growing local use of the fuel.

Total and Gunvor could also sell more into other Middle Eastern countries such as Egypt or nearby Pakistan, where petrol demand is strong, traders said.

ESAI Energy research agency expects global petrol demand growth to accelerate by 50,000 bpd to 420,000 bpd this year, the principal reason overall oil demand growth will be higher this year than in 2014, it said in a June note.

“The unusual strength in petrol had overturned some analysts’ reports in 2014 which said petrol would be bearish [this year] due to overcapacity,” said a Singapore-based oil products trader. “Overall, petrol’s crack this year should end at the same levels seen in 2014 if not higher.” Asian petrol cracks hit their highest in at least six years on June 11 at about $19 a barrel.

The drop in petrol imports from the two oil powers is a blip compared with the 24 million bpd the world will consume this year, and less than 20 per cent of the nearly 400,000 bpd taken by Asia’s top importer Indonesia.

Still, the UAE is adding another refinery at Fujairah and the Saudis another 400,000-bpd unit at Jazan before 2018, meaning the days of the region being an import destination could be numbered.

“The Middle East is moving towards self sufficiency.

Petrol crack values may be (put) under pressure but the impact would be countered by the slowdown in refining additions and strong demand growth within Asia,” said Ngai Si Min of consulting firm FGE.

State-owned Abu Dhabi National Oil Co has already more than doubled its refining capacity to around 830,000 bpd this year. And once it stabilises operations at a new residue fluid catalytic cracker (RFCC), it will choke off imports estimated at about 50,000 bpd.

Saudi Aramco’s petrol imports are already in decline after it started up two 400,000-bpd refineries over the last two years.

“This is a transition period where Saudi Arabia moves from being an importer to being roughly balanced from second-half of this year,” said Victor Shum of consulting firm IHS.

FGE expects Saudi Arabia to import some petrol this year, although with its net intake dropping by more than half to around 25,000 bpd from 80,000 bpd in 2014.

In 2016, Saudi Arabia’s net petrol imports could be down to as little as 12,000 bpd, said FGE’s Ngai.

Adnoc traders do not comment on operational issues and company officials were not available. A Saudi Aramco spokesman said he could not comment on trade flows.

Source:- gulfnews.com

Gold Seizures Up 62% In Fy15

Gold seizures by enforcement agencies shot up 62% last fiscal to 4.48 tonne, according to latest official data.

Official agencies seized 4,480 kg gold in 2014-15 compared with 2,760 kg a year before, said a senior government official. In value terms, the seizures were to the tune of Rs 1,120 crore last fiscal against Rs 690 crore in the previous year. The number of cases registered against such seizures has gone up to 4,400 in 2014-15 from 2,700 cases in the previous fiscal and 870 in 2012-13.

Despite the spurt, bullion industry executives say these seizures account for a very tiny part of the overall gold smuggling business. The World Gold Council last year predicted that gold smuggling in India would touch 200 tonne in calendar year 2014 compared with 150-200 tonnes a year before.

Gold seizures have jumped since January 2012, when the government started raising the import duty on the precious metal from a flat Rs 300 per 10 grams. Initially, it was raised to 4% in two phases in 2012 and in 2013 it was raised three times to 10%.

These apart, to control the current account deficit, the central bank in 2013 imposed an 80:20 rule, mandating at least a fifth of the imported gold to be kept aside for re-exports.

Source:- financialexpress.com

Indian Rupee Up Against Yen, Euro; Down Vs Us Dollar: Dbs

Backed by projected strong growth and inflow of investments, the Indian rupee has appreciated by 13.7 per cent against the Japanese yen and 12.8 per cent against the euro over the past 11 months, Singapore’s DBS banking group said today.

It has however declined 6.1 per cent in value against the US dollar from July 2014 to June this year, as the greenback has appreciated against Asia’s 10 currencies on its own economic strength.

Giving performances of Asian currencies, David Carbon, managing director for economic and currency research at DBS, said the rupee has appreciated by 6.6 per cent from July 2014 to this month against the Japanese yen, euro and USD combined.

The combined 10 Asian currencies have also appreciated by 6.6 per cent against the yen, euro and USD put together over the same period.

Currencies from China, Hong Kong, South Korea, Taiwan, Indonesia, Singapore, Malaysia, Philippines, Thailand and India had, combined together, appreciated by 13.7 per cent against the yen and 12.8 per cent against euro. However, they lost in value by 6.1 per cent against the American currency.

Individually, the gain/loss figures are the same for the Indian currency vis-a-vis others.

“Asian currencies are too strong,” Carbon told reporters during media briefing today, citing their performances against the yen, euro and USD.

He said the Asian currencies should soften or else there would be pressure on the region economies.

Asia’s combined economic growth is forecast at 6.25 per cent this year. Comparatively, US growth is forecast at 2.2 per cent, Japan 1.2 per cent and Europe 0.9 per cent during for the year.

Asia is driving the global growth and not the US, he pointed out. “For every dollar of growth the US puts on the global table, Asia now puts out USD 2.50,” said Carbon.

Reminding that “too strong Asian currencies” were not good, he said “Central banks (in the region) are shooting themselves in the foot.”

He also reminded Asian economies to invest at home from their surpluses. Except for India and Indonesia, Asian countries have been running surpluses since 1998. “Stop running surpluses, start running deficits. Stop investing in US Treasuries and start investing at home, where the income-lifting capital equipment and infrastructure is desperately needed,” said Carbon.

Current account surpluses are standing in the way of greater domestic investment in all Asian countries save for Indonesia and India, said Carbon, adding, “Asia’s investment growth has slowed to a crawl”.

After averaging 15 per cent per year for decades, the 10 Asian countries’ real investment growth has slowed from an 11-odd per cent pace in 2008 to four per cent in 2013 and three per cent last year.

If the Asian countries ran deficits of 2-3 per cent of the Gross Domestic Product (GDP), domestic investment could be 8-9 nine per cent of GDP higher than it currently is.

“That’s a boatload of investment dollars that could be improving Asia’s infrastructure, raising Asia’s growth rates and lifting Asian incomes,” he said.