CA Terminal: 09/15/15

Tuesday 15 September 2015

IRDA notifies registration norms for corporate agents; allows them to sell policies of upto 3 insure

INSURANCE/INDIAN ACTS & RULES : IRDAI (Registration Of Corporate Agents) Regulations, 2015

Accused held guilty of cheque dishonouring as complainant produced ledger books to show existence of

Negotiable Instruments Act : Where complainant produced ledger books to prove transaction by which liability of accused arose, complainant had discharged its initial burden to prove guilt of accused under section 138 on dishonour of cheque issued in discharge of that liability

'Facility Sharing Agreements' between Group Cos. at ALP won't be treated as 'real estate business' u

FDI/FEMA/ILT : Clarification On Fdi Policy On Facility Sharing Arrangements Between Group Companies

Now private companies can take loan from relatives of its directors

COMPANIES ACT, 2013/AAA/INDIAN ACTS & RULES : Companies (Acceptance Of Deposits) Second Amendment Rules, 2015 – Amendment In Rules 2 & 3

Excise Act doesn't contain any provision for proceeding against legal heir of deceased

Excise & Customs : In absence of any machinery provisions to assess and collect tax from a deceased person/dissolved firm, all proceedings against such deceased person/dissolved firm abate and therefore, proceedings cannot be continued against legal representatives

No reassessment to disallow additional depreciation without any failure of assessee to disclose mate

IT: Where claim of additional depreciation had been allowed during course of scrutiny assessment after verification of all details, in absence of any failure on part of petitioner, Assessing Officer could not have assumed valid jurisdiction to reopen assessment

Receipt of advance from Co. wasn't deemed dividend as money lending was substantial part of its busi

IT : Where assessee, holding 51 per cent shares in a company, obtained loan from its reserves and surplus, since out of total funds available with said company, more than 75 per cent were deployed in loans and advances, amount received by assessee could not be considered as deemed dividend because of exclusion by item (ii) to section 2(22)(e)

Payment under Voluntary Retirement Scheme is revenue exp.

IT: Where assessee, a manufacturer of paper, incurred expenditure on ucalyptus tree plantation, pre-plantation expenditure incurred by assessee was allowable as revenue expenditure

Goa VAT dealers who remained unassessed beyond limitation period can apply to Commissioner for refun

VAT/INDIAN ACTS & RULES : Goa Value Added Tax (Eighth Amendment) Act, 2015 – Amendment In Section 29

SEZ units asked to make payment to suppliers from Foreign Currency a/c; failure would invite liabili

SEZ : Closure of advance authorization license issued as per para 4.16(a) of ftp, pending for want of payment to be received from foreign currency account

Textile Ind Seeks Shield Against Chinese Dumping

On the heels of top guns of India Inc demanding protection for the textile industry from cheap Chinese imports, textile manufacturers and associations have warned that the domestic industry would be extinct if dumping is not countered.

The industry claims that as much as 60 per cent of dumping happens from China, and unofficial estimate peg the size of this trade varying between 20 and 40 per cent of the $105-billion domestic textile industry.

"If the present level of dumping continues unchecked, the domestic textile industry will be extinct over the next few years," Chairman for Policy, Apparel Export Promotion Council Premal Udani said.

He further said when China finds that shipments through one channel has reached the official limits, it starts exporting the same goods to other countries like Hong Kong, Vietnam, Bangladesh and Cambodia for onward shipping to India to avoid customs inspections.

The impact of increasing dumping by Chinese is also felt by the largest textile manufacturers like Birla Cellulose, Century, and other textile mills among others. Indonesian and Chinese viscose yarns are being imported at nearly 25 per cent cheaper rate than domestic prices.

While import price is around Rs 150 a kg CIF, domestic prices are around Rs 200 a kg. Also, nearly 80 per cent of the fabric being imported into the country is from China, CMO, Birla Cellulose Rajeev Gopal, which is the largest viscose staple fibre (VSF) producer in the world, said.

The government should provide a level-playing field to the textile industry across the value-chain by providing safe-guard measures against cheap imports. It should also sign FTAs with consuming markets like Europe, the US etc with preferential treatment to textile products to provide competitive advantage to Indian exports and be at par with countries like Pakistan, Bangladesh and Vietnam, Gopal said.

He also said many textile units have been shut in Bhinwandi area in Maharashtra and Surat in Gujarat, leading to huge loss of jobs. Clothing Manufacturers Association of India President Rahul Mehta said for the Rs 2-trillion ready-mades industry, the bigger issue is unofficial sale of second-hand garments through the northeastern borders as well as through SEZs like Kandla.

Source:thehansindia.com

Even job worker is entitled for sec. 80-IB benefit

IT : Where assessee carried on three kinds of activities, viz., manufacturing of plastic bags, trading and carrying out job work for manufacturing of plastic bags and polypropylene sheets for others, it was entitled for deduction under section 80-IB in respect of income derived from job work activity

Dumping Duty Only Short-Term Safeguard For Steel Firms

With the much-talked about 20 per cent safeguard duty on imported steel finally coming into force, it brings welcome relief for the steel sector, which has been struggling due to cheap imports from China and countries with which India has free trade agreements.

While the government has reacted with remarkable speed in response to an application from domestic steel producers in June, the safeguard duty on hot-rolled coils (HRC) will benefit the integrated steel producers (ISPs) only in the short term as it is likely to be applicable only for 200 days.

Earlier a government panel comprising commerce, steel and revenue secretaries had approved imposition of 20 per cent safeguard duty on imports of specific steel products from China, Japan and Korea for 200 days.Finance minister Arun Jaitley on Monday announced the government’s decision to impose a 20 per cent safeguard duty on steel imports with immediate effect. The duty on specific steel products will be valid for 200 days.

This is perhaps the first time in nearly two decades that the government is taking a series of moves to ‘protect’ the domestic steel industry since it was liberalised in the early 1990s.The safeguard duty is superior to the import duty since it is applicable to all nations unlike the import duty which excludes countries falling under free trade agreements. That said, the higher safeguard duty would benefit the ISPs, but negatively impact the companies involved in cold rolling and annealing of HR coils.

However, the players could circumvent this by importing HRC with some value addition. India’s import of iron and steel rose 58 per cent during April-June 2015, making it the country’s sixth-largest import during this period. The sector’s contribution to stressed advances stood at 10.2 per cent of the total advances at end-December 2014 and is among the top five sectors with stressed loans in the system. The Reserve Bank of India in its latest financial stability report highlighted that five out of the top 10 private steel producing companies are under severe stress.

These companies are struggling with delayed implementation of projects due to delays in land acquisition and environmental clearances among other factors.Steel imports have increased primarily from China, Korea and Japan. While the imposition of import duty of 12.5% applies to China, it does not apply to Korea and Japan, with which India has bilateral free trade pacts.

Source:livemint.com

Amended proviso to sec. 2(15) is prospective; town development activities are general public utility

IT : The proviso to Section 2(15) as substituted by the Finance Act, 2015 is applicable with prospective effect. Thus, even post insertion of such proviso but prior to April 1, 2016 activities of trade, commerce, business, etc, are not excluded from scope of charitable purpose which are in the course of actual carrying out of advancement of any other object of general public if aggregate receipts from such activity do not exceed 20% of total receipt of trust

Exemption available for works contract under repealed Sales Tax Act couldn't be carried under New VA

CST & VAT: Andhra Pradesh VAT - Where State Government of Andhra Pradesh had awarded a works contract to one 'K' for construction of a port and 'K' had entrusted work of construction to assessee, latter was rightly subjected to tax on turnover relating to works contract executed for 'K'

Amalgamation reserve couldn't be treated as benefit arising from business or profession under sec. 2

IT: Where four companies amalgamated with assessee-company, amalgamation reserve being difference in value of share capital of said companies prior and post amalgamation, coming into existence consequent to said merger could not be regarded as 'profit and gains from business profession' under section 28(iv)

Soyabean Oil Imports Touch All-Time High Of 4.06 Lt In Aug

India's soyabean oil imports have touched an all-time high of 4.06 lakh tonnes (LT) in August and the total inward shipment of vegetable oil in the same month has increased by 3 per cent to 13.74 LT.

"The import of soyabean oil is highest ever since it was permitted by the government in 1994. The inward shipments of soyabean oil have gone up mainly due to decline in its prices by USD 200 per tonne in last one year," Solvent Extractors Association (SEA) Executive Director B V Mehta told PTI.

Soyabean oil, which was costing USD 897 per tonne in August last year declined to USD 699 per tonne in the same month this year, he added.

The total import of vegetable oils during August 2015 is reported at 13.74 LT compared with 13.33 LT in the same month last year, Mumbai-based industry body said in a statement. Out of the total vegetable oil imported by the country in August, edible oil was 13.64 LT and non-edible oil was 9,477 tonnes.

The overall import of vegetable oils during November- August period rose by 23 per cent to 117.25 LT as against 95.25 LT in the same period last year.

Expressing concerns over the sharp rise in imports, SEA said: "India is being used as a dumping ground for excessive supply of edible oils in the world market."

"Excessive import has put tremendous pressure on the local prices, which are at a level where Indian oilseeds growing farmers are in distress and losing interest in oilseed crop," it added.

The country's dependence on imported oil has further increased to nearly 70 per cent, an alarming situation for the country's food security, it added.

India meets 60 per cent of its annual vegetable oil demand of 17-18 MT via imports. Palm oils make up over 70 per cent of the country's total vegetable oil imports.

Source:business-standard.com

FEMA provisions inserted by Finance Act, 2015 come into force wef. Sep 9, 2015

FEMA/ILT/INDIAN ACTS & RULES : section 138 of the finance act, 2015 – amendments in foreign exchange management act, 1999 – notified date on which provisions of clause (b) of said section, sections 140, 141, 142 and clause (ii) of section 143 of the foreign exchange management act, 1999 to come into force

Modifications In Electronic And Physical Iecs Will Now Be Done Online: Dgft

The modifications in the Electronics Importer Exporter Codes (IECs) as well as physical IECs can now be carried online by paying a fee of Rs 200 from September 21, Directorate General of Foreign Trade (DGFT) has said.

DGFT, on Monday, said in a public notice, “Modifications in Electronic IECs as well as physical IECs will now be carried out online. Applicants can seek modifications in their e-IEC’s/ IEC’s by paying a fee of Rs 200 online from the 21st of September, 2015.”

The new formats of online application form for issue/modification in IEC was notified vide Public Notice on November 27, 2014. Subsequently online application for IEC was operationalised with effect from February 1, 2015.

“Now, in exercise of powers conferred under paragraph 2.4 of the Foreign Trade Policy (2009-2014), the Director General of Foreign Trade hereby notifies operationalization of modification in e-IEC’s as well as the IEC’s issued in physical format from the 21st of September, 2015,” it said.

Applicants seeking modification in their IEC’s may log on to dgft.nic.in and click on Importer Exporter Code (IEC) under Quick Links and select “Modify your IEC” to amend their e-IEC’s and IEC’s in physical format. Henceforth all modifications in e-IEC’s/ IEC’s would be done online only, the notification added.

Source:knnindia.co.in

Rupee Opens Flat At 66.35 Per Dollar

The Indian rupee has opened marginally lower at 66.35 per dollar on Tuesday against previous day's close of 66.33.

Ashutosh Raina of HDFC Bank said, "The market is keenly awaiting the outcome of FOMC meeting later this week. Markets expect Fed to keep rates on hold in this meeting in the face of global growth concerns."

"The USD-INR pair continues to trade in the 66-66.50/dollar range and should continue to trade this range till some clarity on policy action from central banks," he added. The dollar remained close to a three-week low against a basket of major currencies ahead of this week's Federal Reserve meeting.

Source:moneycontrol.com

Sum received under JDA for identifying purchaser for land owner was taxable on due basis and not as

IT : Where assessee, a real estate company, received certain sum for identifying purchaser for third party and was following mercantile system of accounting, sum received by it would be taxable in current year and not when project would be complete

Salary and interest paid to partners are deductible even if income is estimated by AO on basis of Ne

IT : Where assessment was done under section 145, normal deductions were to be allowed; Assessing Officer could not deny deductions of salaries to partners and interest on financial, charges to assessee firm on ground that said exercise was akin to one under section 44AD under which separate deductions provided for in sections 30 to 38 are impermissible

Transaction occasioning movement of goods from one State to another is inter-State sale under CST Ac

CST & VAT : Central Sales Tax - Where assessee operated rice mill at Yanam in Union Territory of Pondicherry and it in accordance with a memo issued by Government of Andhra Pradesh purchased paddy within State of Andhra Pradesh, transported it to its rice mill at Yanam, milled paddy in its rice mill and supplied prescribed percentage of levy rice to FCI, Kakinada in Andhra Pradesh, sale of rice had taken place in course of inter-State trade and commerce

IRDA notifies norms for minimum limits of annuities & other benefits under life insurance policies

INSURANCE/INDIAN ACTS & RULES : IRDAI (Minimum Limits For Annuities And Other Benefits) Regulations, 2015

Sum received for maintenance services linked to supply of software isn't taxable as royalty

IT/ILT : Consideration received by assessee for supply of 'contact solutions' used for better management customer interaction, comprising of sale of hardware alongwith license of embedded software to end user is not royalty under article 12 of DTAA between India and USA

Book entry doesn't create income but recognizes it; income doesn't arise merely on reversal of wrong

IT : Where assessee credited her capital account with amount of sundry creditors written back but failed to furnish anything except name of parties and even reason for write back was not stated, impugned sum was assessed as income from other sources under section 56

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