IT : Recording of satisfaction by Assessing Officer is a pre-condition to initiate proceedings in terms of sections 153A and 153C
Sunday 16 August 2015
Cairn India Seeks Oil Swaps To Skirt Oil Export Ban, Get Higher Margins
Cairn India Ltd has proposed a swap deal to skirt an oil export ban, by selling its high-way Rajasthan crude oil to foreign firms at higher rates and in return supplying an equivalent quantity of oil.
The nation's biggest onshore crude oil producer wants the government to allow refiners like those based in Singapore and Japanese utilities interested in high-wax crude to pick up the Rajasthan crude and replenish the exported volume with no loss to any of the parties.
Sources close to the company said Cairn India has sought government approval for a tripartite agreement wherein Barmer crude oil will go to the international market where it will get better price than the ones realised locally.
The firm getting access to low-sulfur crude oil will supply equivalent quality of crude oil to Indian refiners.
Shipping the Rajasthan oil to customers who are best equipped to process the low-sulfur crude will help Cairn India get a premium versus a 10-12 per cent discount on Brent prices that local refiners, including Indian Oil Corp ( IOCBSE -0.80 %), Essar OilBSE -1.57 % and Reliance IndustriesBSE -1.52 %, currently pay.
Cairn India had previously sought approval to export the oil but the government had rejected it as the nation is 80 per cent import dependent to meet its oil needs.
Sources said the company now says it is not seeking a permission for exports but only a swap arrangement.
The three-way deal would essentially mean Cairn India will export Rajasthan oil but the deficit at its local customer will be made up by sourcing the commodity from an overseas supplier.
Sources said the company believes the pricing of Barmer crude oil at a discount to Brent has led to USD 1.94 billion loss to all stakeholders, including the government, on over 282 million barrels of oil produced since 2009.
Most Indian refineries are designed to process cheaper, high-sulfur crude, while that produced from the Rajasthan fields has low sulfur content.
The unique nature of the Barmer crude makes it difficult to optimise it in Indian refineries and so the crude is being sold at a discount.
The government had in September 2009 designated PSU refineries to buy the Rajasthan crude at a provisional pricing formula. A discount was provided as an initial incentive.
Since the PSU refineries were not able to leave the allocated quantity of crude oil allocated to them, the government allowed Cairn the freedom to sell remaining quantity to domestic private refineries.
At present, Essar and RIL buy bulk of 170,000 barrels per day of output from Rajasthan.
Source:- economictimes.indiatimes.com
Sugar Industry Looks For Festive Demand And Export Incentives
India’s total sugar production is estimated to be 28.3 million tonne in sugar year 2014-15 against annual demand of around 24 million tonne. With an estimated 10.2 million tonne of carryover stocks from current and previous years, the total availability in 2015-16 is forecast at a staggering 38.2 million tonne.
This is not the first time that sugar output has exceeded domestic demand in the last five years and the trend is expected to continue in this sugar marketing year (October-September) too. Many analysts think excessive domestic production and large carryover stocks have undermined the initiatives taken by the centre to help the sugar industry.
Attempts to export the commodity have come a cropper because of glut in the international market. India could manage to export barely 1.26 million tonne of the sweetener in the seven months to April. Global sugar production this year is estimated to exceed demand by 620,000 tonne, prolonging the problem of the industry.
India had exported 17.5 lakh tonne of sugar during 2013-14 (October 2013-March 2014) whereas between October 2014 and April 2015, exports stood at 1.26 mt. The export target for 2015-16 is 40 lakh tonne. While the Centre seems to be confident of meeting this target, industry analysts are skeptical.
Kamal Jain of Kamal Jain Trading Services said, "Achieving the target of 40 lakh tonne appears highly doubtful. Even with a bumper subsidy support of up to Rs 5,000 per tonne (if at all given), our rates will be much higher compared with that of Brazil and other countries due to heavy exchange rate fluctuations. There are indications that Brazil may cut prices for raw sugar to 8-9 cents/lb. This will bring down costs to below $300 per tonne. In the given situation, the export plan is likely to fail. It may succeed only if we can gain market access like Brazil. But this is doubtful, since our exporters have no links for selling raw sugar directly to refineries and leading overseas institutional buyers, like makers of beverages, confectioneries and other food products.”
Further the idea of bartering sugar for pulses may not prove effective. This idea was floated recently by Union commerce and industry minister Nirmala Sitharaman, who felt India may get pulses from African countries, Myanmar and Canada in exchange of sugar in a barter deal. Since these countries are not big sugar consumers, the scheme may not prove as effective as it sounds.
Jain said, “It is virtually impossible to structure barter or counter-trade deals in a commodity which is exposed to high price volatility and with countries that have no clue how the counter-trade works. Millers and users in Sudan, Somalia, Tanzania and Sri Lanka are in no mood to wait for their governments to understand the theory of barter. Neither does the Indian government have any readily available proposal from any country to barter sugar against specific commodities.”
The sugar industry of Brazil is also facing serious complications. More than 100 factories in the Latin American country have either been closed or are on the verge of bankruptcy. There is a growing fear that the sugar business in the busy October-March period may suffer a serious blow. This, in turn, may brighten up business opportunities for India during 2015-16. But one has to wait and watch till October.
Emkay Commotrade said sugar futures traded on a higher note amid talks of exports with the help of subsidies and hopes of a rise in demand ahead of festive season, like Ganesh Chaturthi and Raksha Bandhan. Sugar prices are likely to move up in the short term due to overall bullish sentiments on expectation of a rise in exports as well as domestic demand.
Kotak Commodities said the price rise could not sustain. "Overall, the long-term trend looks bearish for sugar,” it said.
Source:- mydigitalfc.com
Petitioner couldn't be prosecuted for defaulting in complying with buy-back norms if no public offer
CL: In absence of offer or public announcement of buy back of equity shares by petitioners, petitioners could not be prosecuted for offence punishable under section 77A(11)
Ban Palm Kernel Oil Import
Coconut growers in the region have demanded a ban on import of palm kernel oil to prevent adulteration of coconut oil.According to industry sources, price competition is the cause for adulteration. Unadulterated coconut oil cannot be sold for less than Rs. 170 per litre, whereas adulterated oil under brand names are being sold for Rs. 40 to Rs. 50 less, the sources said.
T.A. Krishnasamy, United Coconut Growers Association of South India, told The Hindu that in some brands, adulteration was up to 70 per cent. Adulteration using palm oil was easy because it was colourless and odourless, he explained.
Coconut growers, Mr. Krishnasamy said, were upset with the the Centre for not following what Atal Behari Vajpayee’s government had laid down — it had banned the import of palm kernel.
“The Congress-led government that came to power after the NDA government lifted the restriction and the present BJP government did not care to restore the ban,” said Mr. Krishnasamy.
Farmers are also sore with the State government for extending 25 per cent subsidy for palm kernel import made through the Chennai and Tuticorin ports, he said.
Kerala, where coconut oil consumption is highest in India, has been tough in dealing with adulteration.
Earlier this year, the Food Safety Department in Kerala banned nine brands of coconut oil from the market after detecting adulteration with palm kernel oil.
Due to availability of adulterated coconut oil at low prices, coconut is procured cheaply by the mills, Mr. Krishnasamy said.
Vested interests in tandem with the medical fraternity kept the demand for coconut oil low.
He said consumption of pure coconut oil was healthy for the body. He faulted the lobby of other edible oils for prevailing upon the medical fraternity in Tamil Nadu to create an impression that saturated fats in coconut oil raises cholesterol levels.
“The medical fraternity has, in fact, begun to accept the utility of pure coconut oil. If used for consumption without adulteration, coconut oil is indeed good for the body,” C.N. Raja, State Honorary Secretary, Indian Medical Association, Tamil Nadu Branch, said.
Source:- thehindu.com
Import-Export Laws Changed As Vn Adjusts To Int'l Rules
Pham Thanh Binh, a representative from USAID Governance for Inclusive Growth (USAID GIG) talks to Thoi Bao Kinh Te Viet Nam (Viet Nam Economic Times) about adjustments made to import and export laws.
Are amendments to export and import tax laws necessary?
After 10 years of implementation of the laws, amendments are truly essential if Vietnam is to meet requirements for development and international integration. Viet Nam has joined several free trade agreements (FTAs) in the past few years, which means the country will have to follow international rules in order to participate equally in the world market.
Besides, the amendment could support the Government's resolutions on business and environmental reform, and increase our nation's competitiveness.
Drafts of the two laws are up for public comment. Do you think the offered adjustments will work in reality?
The adjustments generally seem like they will lift obstacles that have burdened businesses for a long time. However, the specific content must be discussed further.
For example, the laws regulate that businesses have to pay taxes before customs clearance. We examined international rules and found that businesses do not pay fees and taxes right after completing customs procedures for goods clearance. They are given time to prepare the money. If we follow international rules, procedural issues and tax payment should be simpler and easier for businesses.
In terms of a monthly tax declaration, the revised laws give priority to specific businesses. But at present, the number of businesses which are given priority treatment is 38 out of a total 50,000 import-export businesses. The businesses benefiting from this is too few, and most of them are big companies. These priority policies will not create favourable conditions for small and medium enterprises, which are the majority.
If lawmakers keep the preferential tax option, they should expand the number of businesses eligible.
The law compiling committee also proposed that prioritised enterprises can pay taxes without interest within 10 days. However, the proposition is not concrete or developed so it can be applied in many different ways.
Collecting taxes from citizens in border areas should be reconsidered. At present, citizens do not have to pay taxes if they buy goods for personal use. In my opinion, the adjusted laws should clearly regulate just levying taxes on those who buy goods for re-selling inland and to goods distributors.
The concept of ‘tax payers' is currently understood in a variety of ways. How can the concept be unified?
This term should be made clear. I think the laws should simply declare that tax payers are exporters and importers, and those who do pay the tax can be anyone including mandated individual(s) or agent(s).
What should import-export businesses expect from the revised laws?
Import-export enterprises can expect that much of the revisions will create considerable changes in administrative procedures, especially their simplification.
Many items in the laws wish to create favourable conditions for enterprises. For example, importing raw materials for domestic production will be exempted from taxes.
Amendments to tax refund and declaration procedures are good additions. — VNS
Source:- vietnamnews.vn
Rupee Opens Lower At 65.16 Against Us Dollar
The Indian rupee on Monday weakened against the US dollar, tracking losses in Asian currencies and on India’s widening trade deficit. The home currency opened at 65.16, down 0.23% from its previous close of 65.01. The benchmark Sensex index rose 0.09% to 28,093.54 points.
Most of the Asian currencies were trading lower. Malaysian ringgit was down 0.74%, Taiwan dollar 0.53%, Indonesian rupiah 0.5%, Thai baht 0.35%, Philippines peso 0.23%, South Korean won 0.13%, Japanese yen 0.07%.
Data released by the commerce ministry on Friday showed both exports and imports contracted 10.3% in the month, leading to a trade deficit of $12.8 billion, an eight-month high.
The yield on India’s 10-year benchmark bond was trading at 7.747% compared with its Friday’s close of 7.744%. Bond yields and prices move in opposite directions.
Since the beginning of this year, the rupee has lost 3%, while foreign institutional investors have bought $6.92 billion from local equity and $6.29 billion from bond markets.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.679, up 0.17% from its previous close of 96.52.
US industrial output advanced at its strongest pace in eight months in July in another bullish sign for third-quarter economic growth that boosts the prospects of a rate hike next month. Industrial output increased 0.6% in July, far above the revised 0.1% gain in June, due to a strong gain in automobile manufacturing, Reuters reported.
Source:livemint.com
TP provisions not applicable on issue of shares to foreign AE; ITAT follows ratio of 'Vodafone' case
IT/ILT : In case of issue of shares by assessee-company to its AE located abroad, there is no provision in Chapter X mandating addition to assessee's ALP on account of less share premium received and also consequential interest on resultant deemed loan
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