IT : Deduction under section 10A is to be calculated before reducing unabsorbed loss and depreciation from profits of undertaking
Friday, 17 July 2015
Income arising from mobilization and demobilization of vessel outside India was taxable as 'FTS'
IT/ILT : Where assessee, a tax resident of Norway, was engaged in activities relating to acquisition of 3D seismic data under contracts with 'RIL' and 'ONGC', assessee was entitled to declare its income under provision of section 44BB
Act of IATA to fix 5% commission for cargo agents at insistence of Civil Aviation Ministry wasn't an
Competition Act : Where OP-IATA fixed commission for cargo agents at insistence of informant and Ministry of Civil Aviation, there was no contravention of section 3 on part of OP
Reassessment can't be sought in garb of rectification, as adjudicating authority doesn't have power
Excise & Customs : When order passed by authority at time of clearance of imported goods remains unchallenged, re-assessment/re-determination making extensive enquiry cannot be sought in garb of rectification, as there is no power of review with adjudicating authority
Sec. 69 additions rightly deleted as assessee had explained source of cash used to purchase property
IT: Where assessee had sufficiently explained source of cash used in purchase of immovable property, no addition could be made under section 69
MP Registration Act amended; exempts personal appearance of parties if docs are submitted in e-form
CL/INDIAN ACTS & RULES : Registration (Madhya Pradesh Amendment) Act, 2014
Interest paid to relative wasn't excessive as assessee had paid higher interest rate on loans from u
IT: Where expenditure incurred by assessee to cure deficiencies in new premises after its acquisition did not result in a new asset, or such enduring advantage so as to result in very character of expenditure being rendered capital, expenditure was allowable
Excise, Customs and service-tax summons can't be quashed under sec. 482 of Cr.PC
Excise & Customs : Summons issued for enquiry under Central Excise/Customs/Service Tax law cannot be quashed by resort to High Court's inherent powers under section 482 of Criminal Procedure Code; however, assessees may file a writ petition or avail any other legal remedy
Soyameal Exports Decline By 85% In 7 Yrs: Assocham
Farmers engaged in soy cultivation are highly distressed as India’s soyabean meal exports have dropped drastically by about 85% from record level of 4.24 million tonnes (MT) during fiscal year (FY) 2008-09 to a meagre 0.64 million ton in 2014-15, noted a just-concluded study by apex industry body ASSOCHAM.
Looking at near normal monsoon, the country is expected to reap rich harvest of over 12 million ton soybean meal putting further pressure on the domestic prices as India has become globally incompetitive and import of soy oil continues to increase.
“This significant slump in soybean meal exports from India is largely on account of speculation and an unrealistic approach in handling established export markets,” according to the study titled ‘Soybean: Time to regain lost ground,’ conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Madhya Pradesh is known as ‘Soybean bowl of India,’ accounting for lion’s share of 60% of total production followed by Maharashtra (30%), while Rajasthan, Andhra Pradesh, Karnataka, Chhattisgarh and Gujarat together account for remaining share of 10%.
“Soybean scenario in India is currently at crossroads due to erratic production, declining soybean meal exports and consequent idling of plants, poor soybean oil output while edible oil imports are growing and currently account for almost 60% of country’s total requirement,” said DS Rawat, national secretary general of ASSOCHAM while releasing the findings of the chamber’s study.
“Unless a targeted approach is initiated, India might permanently loose export market for soybean meal that has been so assiduously build over decades,” said Mr Rawat.
“Industry should adopt a pragmatic approach to revive lost markets on soybean meal export front,” he added. A constant rise in edible oil imports into the country is another alarming aspect highlighted by the study prepared by the Agri-business division of ASSOCHAM.
“Edible oil consumption in India is currently growing at a compounded annual growth rate (CAGR) of three% thereby placing enormous burden and dependence on imports to meet current deficit of 10 million ton due to near stagnant domestic production at about 8 million against a requirement of 18 million.”
Source:business-standard.com
CCI penalises public sector insurance cos. for rigging the bids in tendering process of Govt. of Ker
Competition Act : CCI orders cease and desist and also imposes penalties on public sector insurance companies for Cartelization in rigging the bids submitted in response to the tenders floated by the Government of Kerala for selecting insurance service provider for Rashtriya Swasthya Bima Yojna
India’S Soy Meal Exports Decline By 71.54% In Oct–June Period
Farmers engaged in soy cultivation are highly distressed as India’s soybean meal exports have dropped drastically by about 85% to a meagre 0.64 MT in 2014-15from a record level of 4.24 million tonnes (MT) during FY 2008-09, said a study by Associated Chambers of Commerce and Industry (ASSOCHAM).
The study titled ‘Soybean: Time to regain lost ground’ pointed out that significant slump in soybean meal exports from India is largely on account of speculation and an unrealistic approach in handling established export markets.
Source:thedollarbusiness.com
High Court directs winding up of a Co. as it had lost its substratum and it was unable to pay debts
CL: Where company was unable to pay its debt and had lost its substratum, it was liable to be wound up
No capital gain arose on slump sale as consideration for transfer was equivalent to net worth to tra
IT: Where assessee sold three proprietary concerns in slump sale, section 50B would apply; sale consideration received by assessee in cash being combined net worth of all three concerns and this net worth being also deemed as cost of acquisition and/or improvement under section 50B(2), no capital gain would stand to arise
New manual scrutiny norms for ST-Returns are effective from 1-8-2015
EXCISE : Revised Guidelines on Conducting Manual Scrutiny of Service Tax Returns to Come into Operation From 1-8-2015
3M May Invest More To Make India Its First Global Export Hub
Fortune 500 industrial conglomerate 3M is looking to scale up investments in India with an eye on making it the company's first designated export hub globally.
India's move towards the goods and services tax regime and improvements in the corporate tax system make it an attractive destination for setting up an export base, HC Shin, executive vice president in charge of 3M's international operations, told ET. This would mark a departure from the company's traditional approach of producing
locally across regions.
"3M can certainly bring in a lot more investment, as investment conditions continue to improve such as GST, corporate tax...We can also consider India as an export base in addition to our domestic presence. If you look at the cooperation coming through the ASEAN and other free trade initiatives of India, a lot of good things can happen," Shin said.
"We believe in regional selfsufficiency rather than using a single country as a hub. For us, exports are an exception rather than the norm. So if you ask me which is the designated strategic export country, there's none," Shin told ET at the end of a three-day visit to India during which he sensed a stark difference in the body language of people and the confidence in its economy compared to his previous visit in 2013.
Shin stressed that the reality he has seen 'coincides' with what he had read about India's recent resurgence on the global economic arena before his visit.
"We have been making in India for 28 years, with an India for India strategy. We learned it early and the hard way that bringing boxes from overseas and handing them to customers doesn't work," Shin said, adding that its domestic revenue is growing at over 20% in several segments, indicating 'strong performance in the current environment.'
3M has invested $100 million over the past 15 years into its 1,600 employee-India business, which includes setting up a fullblown research and development lab whose innovations have 'astonished' 3M's US researchers, according to Shin.
With the government's Make in India drive attracting new foreign players, 3M is also looking at helping its global industrial customers set up shop in India. "Because we have localised most of 3M's solutions, we can help them localise their product swiftly," said Shin.
Apart from manufacturing, 3M is keen to lend its expertise on Digital India and smart cities initiatives. It is betting big on ecommerce to improve its reach to medium and small enterprises and improve productivity of consumers by putting technical guides to some products online.
"We want to outgrow the market... If GDP is growing at 5 per cent, we can grow two to four times that and we are getting such accelerated growth from India now," Shin said, stressing that GST would be the biggest gamechanger for players like 3M.
Source:economictimes.indiatimes.com
India To Resolve Stainless Steel Import Dispute With Malaysia
Indian officials are scheduled to hold a meeting with their Malaysian counterparts to discuss ways of curbing misuse of Asean Free Trade Agreement (FTA) that has led to an alarming rise in stainless steel imports from that country in the last one year.
The meeting will also be attended by officials of the Indian Stainless Steel Development Association (ISSDA), an industry body which has been spearheading the issue.This follows a representation from ISSDA on the issue to the ministry of external affairs and the steel ministry. In particular, it has urged the government to review the Rules of Origin under the IndiaAsean trade in goods agreement at the earliest.
In order to qualify for preferential duty rates as per the India-Asean FTA, products have to meet a norm of 35% value addition. For this, all imports must be accompanied by a certificate of origin issued by the originating country.However, there has been instances of preferential tariff being availed without proper certificate or mis-declaration of value addition norms.
To counter this impact, ISSDA has suggested that a Product Specific Rule (PSR) as defined under the India Korea Comprehensive Economic Partnership Agreement (CEPA) or the India Japan Comprehensive Economic Co-operation Agreement (CECA) be adopted and followed in case of the India-Asean FTA.
"Malaysia has no hot rolling facilities for stainless steel. The input in this case, hot rolled coils required for cold rolling is imported from countries outside the Asean region like China, South Africa. Within the Asean countries, it would not be possible to deliver a 35% value addition in order to qualify for preferential duty ," NC Mathur, president of ISSDA, said.
However, it has been increasingly found that some companies mainly from Malaysia are furnishing preferential certificates of origin to convince Indian customs authorities that the material has originated in Malaysia.
Incidentally, according to latest data for June 2015, Malaysia accounted for 3,364 tonnes of stainless steel imports, second only to China at 19,962 tonnes. Stainless steel imports from China more than doubled to 2.31 lakh tonnes per annum (ltpa) in FY15 as against 1.11 ltpa in FY14. Imports from Malaysia jumped to 27,238 tonnes in FY15 from only 96 tonnes in FY14 in the wake of a 37% increase in total stainless steel imports to 4.59 ltpa in FY15.
While domestic stainless steel capacity is around 27 lakh ltpa, led by key players like, Steel Authority of India Limited (SAIL) and Jindal Stainless Ltd, a portion of it is idle due to imports.
There is also need to ensure reciprocal tariff reduction in all Asean countries for stainless steel products, the ISSDA official said. Though India has opened its market under free trade agreement, it has not achieved a reciprocal tariff reduction in all Asean countries for stainless steel flat products. Among the Asean countries, Thailand, Malaysia and Vietnam have most favoured nation (MFN) tariffs which are considerably higher.
Source:economictimes.indiatimes.com
Cenvat Credit On Goods Transported For Exports
We are a limited company engaged in the manufacture of the excisable goods which are later exported by us. For the purposes of export, we avail of the services of a goods transport agency for transporting goods from the factory to the port. Accordingly, we would like to know if we are eligible for the Cenvat credit on the same.
As per the provisions of the Cenvat Credit Rules, 2004 (the Credit Rules), the Cenvat credit is available to the manufacturer for the input services procured up to the ‘place of removal’. The term place of removal has been defined under the Credit Rules to mean a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory.
Further, as per the Circular No. 999/6/2015-CX dated 28 February 2015 (the Circular), it has been clarified that in the case of a manufacturer exporter, the transfer of property in goods takes place at the port where the goods are unconditionally apportioned to the shipping line and after the issue of the let export order (LEO), it is the sole responsibility of the shipping line to ship the goods to the foreign buyer with the exporter having no control over the goods. Thus, when the LEO is issued the property in goods gets transferred from the seller to the buyer.
In the instant case, we understand that the property in goods get transferred at the port after the issuance of the LEO by the customs officer. Hence, basis the Sale of Goods Act, 1930 and the Circular the goods can be said to have been sold at the port. Accordingly, the company shall be eligible to avail of the Cenvat credit in relation to the transportation services availed of for transportation of the manufactured goods to the port.
We are a private limited company providing works contract services. Recently, we have been awarded a government contract to take up rock fall protection and slope mitigation works across a dam area. Please suggest whether we are required to pay service tax on such services provided to the government?
In terms of extant service tax laws, service tax shall be charged on the value of all services provided in India except those specified in the Negative list or otherwise exempted. Notification No. 25/2012–Service Tax dated 20 June 2012 (exemption notification) grants exemption in relation to specified services provided to government, which include services pertaining to erection, installation, maintenance, repair, renovation, alteration etc. of canal, dam or other irrigation works. We understand that the services in the instant case would not qualify as erection, installation, repair, renovation, alteration of dam and accordingly shall not be exempt from service tax.
We are consulting engineering services exporters located in a domestic tariff area (DTA). We provide such services to various clients located in SEZs. Whether for providing such services to SEZ units, we would be eligible for benefits under the recently announced Service from Export India Scheme (SEIS) under the Foreign Trade Policy (FTP) 2015-2020?
A combined reading of para 3.08 (a) with para 9.51 (i) of the FTP 2015-2020 suggests that only ‘supply’ of a service to any other country is eligible for SEIS benefits. Since an SEZ is otherwise located within the Indian territory, supply of a service by units located in DTA to SEZs should not eligible for rewards under SEIS. It may be noted that a SEZ is deemed to be located outside India only for specified purposes under the SEZ Act, and the SEIS is not covered as part of list of such specified purposes.
This position has been also been clarified by directorate general of foreign trade (DGFT) vide its Policy Circular No. 1/2015-2020 dated June 11, 2015, wherein it has been stated that regardless of the amendment notified vide Notification No. 08/2015-2020 dated 04.06.2015 (through which export turnover/supplies relating to services to SEZ units has been deleted from the list of ineligible categories under SEIS, thereby making supply of a ‘service’ from SEZ to other countries eligible for SEIS benefits), supply of a ‘service’ by units located in DTA to SEZ units was and shall continue to remain ineligible for rewards under SEIS.
Accordingly, services provided by your company to units located in SEZs would not eligible for rewards under SEIS.
Source:financialexpress.com
Job-worker may forgo ST exemption and pay taxes; such taxes would be eligible as credit to principal
Central Excise : Process of chrome plating on piston rings does not amount to manufacture
Leasing out of captive power plant doesn't amount to removal of inputs used in manufacturing of such
Cenvat Credit : 'Leasing' of captive power plant for better operation and without any change in physical place, does not amount to 'removal' of cenvated inputs, capital goods and input services used therein; hence, no Cenvat reversal can be demanded under rule 3(5) of CENVAT Credit Rules, 2004
Tariff value notification comes into force only when official gazette containing it is offered for s
Customs : A notification comes into force only after : (a) it is duly published in official gazette, and (b) it is offered for sale on date of its issue by Directorate of Publicity and Public Relations of Board; hence, where tariff value notification was sent for publication on 3-8-2001 (Friday) but was offered for sale only on 6-8-2001 (Monday), it would come into effect only from 6-8-2001 (Monday)
Case of assessee couldn't transferred under sec. 127 just to facilitate effective and co-ordinated i
IT : Where reasons recorded by Assessing Officer do not satisfy criteria of section 127, impugned order of transferring jurisdiction of assessee's case was to be set aside
Electrical insulated press board isn't a paper; taxable at 12.5% and not at 5% under Karnataka VAT A
CST & VAT: Karnataka VAT - Electrical insulated press board commonly known as high density board was not paper and would not fall within Serial No. 69 of Third Schedule of VAT Act
Tobacco Board Eyeing Exports To Bail Out Growers
Allaying fears of tobacco growers in Prakasam district who were struggling to get a remunerative price for their produce, Tobacco Board Chairman K. Gopal on Thursday said the Board was going all out to find new markets and also consolidate India’s position in traditional markets to ensure a better price for their produce.
Mr. Gopal, who had visited Egypt and China, in this regard was planning to lead business delegations to Eastern Europe and Central Asian countries to boost exports.
While observing the e-auction proceedings at Ongole II auction platform, he prompted the traders to break the higher band for different varieties of tobacco.
“Though tobacco and tobacco product exports fell to Rs. 5,613.64 crore during 2014-15 as against Rs. 6,092.86 crore the previous year, the Board is confident of exporting products worth Rs. 7,000 crore this year,” he said and detailed the efforts being made by the Board to get export orders from countries such as China, Russia, Kazakhstan, Kyrgyzstan, Egypt, Tunisia and Iran.
The present crisis was a result of medium and low grade tobacco accounting for a maximum production unlike last year when bright grade accounted for bulk of the production fetching a higher price for Prakasam ryots.
The Chairman ruled out the possibility of the board intervening in the market, saying, “We have taken care to bring vibrancy into the market even during the lull period. We will leave it to the market forces to decide the price.”
He also turned down the growers’ plea to do away with penalty on excess crop in the present distress situation, saying penalty was the only deterrent available with the board to make farmers adhere to the crop size. “Farmers in the State had violated the crop size of 172 million kg fixed by the board for this year by producing 22 million kg more after producing 214 million kg as against the crop size of 172 million kg in the previous year,” he pointed out.
There was no proposal before the board for giving any compensation to the farmers willing to dismantle tobacco barns, he said.
Sourse:thehindu.com
Dgft Extends Meis Reward For Textile Exports
The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, has amended Table 1 (containing list of country groups) and Table 2 (containing ITC (HS) code wide list of products with reward rates) of Appendix 3B under the Merchandise Exports from India Scheme (MEIS) through public notice numbers 27 and 28.
In Table 1, Norway, Switzerland, Iceland and Liechtenstein have been shifted from country group C to country group A. Hence, exports of textile products to these countries will get MEIS reward of 2-5 per cent depending on specific HS code. Likewise, Hong Kong is shifted from country group C to country group B.
Post amendment in Table 2, exports of fabrics – both woven and knitted – covered under various HS codes to Bangladesh and Sri Lanka will also be eligible for 2 per cent MEIS reward which was earlier not available, with effect from July 14, 2015.
MEIS was introduced in the Foreign Trade Policy 2015-20 announced on April 1, 2015. The scheme allows duty credit scrips at the prescribed rates of 2 per cent, 3 per cent and 5 per cent on exports of notified products to notified countries classified under Group A, B and C.
Source:fibre2fashion.com
Rupee Opens Flat At 63.51 Per Dollar
The Indian rupee has opened flat at 63.51 per dollar on Friday against 63.51 Thursday.
Himanshu Arora of Religare said, "The USD-INR pair is expected to trade slightly higher today amid latest comments from Fed Chair, Janet Yellen, that they plan to hike rates this year on back of strengthening US economy."
"Forecast issued by the FOMC in June implied two 25 bps rate rises this year. We expect the USD-INR pair to trade in a range of 65.34-63.75/dollar today," he added.
The dollar index rallied to a seven-week high. An easing in jobless claims reinforced market expectations of a 2015 US interest rate hike.
Source:moneycontrol.com
FPIs can invest in security receipts of asset reconstruction cos. with less than 3 years of residual
FEMA/ILT : Foreign Investment in India by Foreign Portfolio Investors
Long-term capital gain from sale of house property by NRI isn't tax free and is liable to TDS under
IT/ILT : Resident-firm which buys house property from NRI cannot escape consequences of non-deduction of TDS u/s 195 from payments to NRI-vendor by claiming that long-term capital gains from sale of house property by NRI are tax-exempt under Chapter-XIIA contrary to the provisions of section 115E especially when NRI himself offered the amount as taxable in his income-tax return and paid tax thereon
Disclosure of stock of petty items which didn't have any nexus with production wasn't acceptable acc
IT : Rule of thumb applied by an assessee to disclose opening and closing stocks of petty items as same without any co-relation with production or turnover cannot be said to be accepted accounting procedure
RBI clarifies on reporting of deposits that are placed with NABARD/SIDBI/NHB owing to shortfall in p
BANKING : Deposits Placed with NABARD/SIDBI/NHB for Meeting Shortfall in Priority Sector Lending by Banks – Reporting in Balance Sheet
RBI permits factoring of export receivables on non-recourse basis to improve cash flows of exporters
FEMA/ILT : Export Factoring on Non-Recourse Basis
SEBI unveils policy for stock exchanges for annulled trades to improve transparency and uniformity i
SEBI : Policy for Annulment of Trades Undertaken on Stock Exchanges
Credit is allowable on capital goods even if they are used in manufacture of exempted goods and 'dut
Cenvat Credit : Where capital goods are used in making 'exempted domestic clearances' as well as 'export clearances on payment of duty', capital goods cannot be treated as used 'exclusively' in manufacture of exempted goods and therefore, credit of capital goods cannot be denied
Charges paid for evaluation of market price of shares would form part of cost of acquisition of shar
IT: Where assessee paid certain legal consultancy charges to a company for evaluation of market price of his shares, amount so paid was to be regarded as a part of cost of acquisition while computing capital gain on sale of shares
If SCN doesn't propose appropriation of credit, same can't be confirmed in adjudication order as wel
Excise & Customs : If there is no proposal in show-cause notice to confirm and appropriate already made payments (already reversed Cenvat credit), such confirmation and appropriation in adjudication order may not be in accordance with law
Addition on estimated basis wouldn't invite penalty if AO failed to show that books weren't maintain
IT : Where Assessing Officer failed to show that books of account were not maintained according to notified standard of accounting and there existed any factual inaccuracy in details submitted by assessee, impugned penalty order passed on basis of mere estimated addition was to be set aside
Union Cabinet approves of composite FDI caps for attracting foreign investments
FDI/FEMA/ILT : Introduction of Composite Caps for Simplification of FDI Policy to Attract Foreign Investments
Cos. issuing ESOPs to NR employees to furnish return to RBI in Form-ESOP within 30 days of their iss
FEMA/ILT : Issue of Shares under Employees Stock Options Scheme And/or Sweat Equity Shares to Persons Resident outside India
Credit is admissible on capital goods which are used to manufacture exempted goods and 'dutiable exp
Cenvat Credit : If an assessee is eligible for two exemptions, he may avail full exemption for domestic sales and pay concessional duty on exports; and if concessional duty is so paid, capital goods cannot be regarded as used 'exclusively' for exempted goods and credit thereof cannot be denied
No penalty if credit card dues are paid within 3 days from the due date: RBI
BANKING : Prudential Norms on Income Recognition, Asset Classification and Provisioning Pertaining to Advances – Credit Card Accounts
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