Monday, 11 January 2016
Clearing of cheques by clearing houses is liable to ST under "Banking and other financial services"
Income initially disclosed before SetCom couldn't be said to be concealed if additions were made due
No TDS liability arises due to Retro-amendment in definition of 'FTS'
TDI Fun Republic Mall isn't dominant in Delhi/NCR; CAT rejects review petition filed by shop owners
SEBI amends definition of associate under securities norms for Stock Exchanges/Clearing Corporations
No denial of abatement if incorrect credit was reversed along with interest
Govt. removes 5 days grace period for PF contribution by employers
Income couldn't be estimated below 8% just because it was taxed at lower rate in earlier year
Mediclaim of employees is ineligible for input service credit
Steel Sector Seeks Govt Support On Lines Of Textiles, Sugar
NEW DELHI: India's steel industry, which is facing a crisis due to cheap imports and subdued prices, has sought a government support package on the lines of the ones extended to textiles and sugar sectors.
After lobbying for imposition of import duty, safeguard duty and anti-dumping duty on imports from China, South Korea and Japan, the over USD 100 billion industry has now approached the government for a comprehensive Steel Package.
The demand includes a year-long moratorium on payment of interest and principle amount as well as segregation of debt into two categories - Sustainable and Balance.
According to analysts, domestic steel companies are sitting on a debt burden of Rs 3 lakh crore and falling prices have led to steeply lower realisation making it difficult to service the debt burden.
Besides, cheap imports from China, South Korea and Japan among others have further exacerbated the situation leading to a decline in the share of the firms in the domestic market.
As per industry, the sector's share in gross non- performing assets as well as restructured standard advances of scheduled commercial banks is 10-11 per cent. Besides, an estimated 26 per cent of the total advances to the iron and steel sector are under stress.
In a presentation made to the Steel Ministry last week, companies said cheap imports and fall in prices of steel products are eating into their working capital funds and is impacting their debt servicing capacity.
That apart, investments to expand capacity has led to large borrowings and huge financial charges.
Appreciating the efforts taken by the government to help the sector, the firms in their presentation said that there is an "urgent need for a far more comprehensive relief (Steel Package) involving participation from all stakeholders, including the Banking sector".
The government has provided similar support to industries such as textiles and sugar, the presentation said.
Under the package, the one-year moratorium will be a short term measure to ensure continued operations, while various remedial measures are put into place.
Besides, segregating debt into Sustainable and Balance will help the industry in managing its financial burden.
While, Sustainable Debt will include long-term debt and working capital loans that are required to run the business as well as maintain cash flows to pay debt obligations.
The remaining -- termed as Balance Debt -- will be repaid over an extended period of time by converting it into Redeemable Preference Shares with a nominal rate of about 0.01 per cent.
"Considering the financial position of the companies due to various factors beyond their control, the industry would require a comprehensive package for its survival," the presentation explained.
Source :economictimes.indiatimes.com
Mines Ministry For Scrapping Export Duty On Iron Ore
NEW DELHI: The mines ministry has recommended scrapping of export duty on iron ore to bolster miners' revenues amid weakening prices and competition from overseas exporters. The recommendation to the finance ministry follows representations from the iron ore industry, which has been hit hard by slackening demand for ore and a fall in its price in the local and international markets.
Asenior official said the ministries of mines and steel have asked the finance ministry to withdraw the 10% export duty on iron ore. The industry has stated that high level of taxation along with factors like fierce competition from international companies, low global and international demand and declining commodity prices have hit iron ore industry in the state. Last week, trade associations in Goa urged Prime Minister Narendra Modi to withdraw export duty on low-grade iron ore , citing similar reasons. Goa mainly produces low-grade iron ore that is uneconomical for domestic steel mills.
"The industry has to contend with an extremely high percentage of taxes to the tune of over 40% for low-grade iron ore. Most of the taxes were levied or increased during the past years when commodity prices were booming. These taxes are no longer sustainable in the current situation of low prices, which do not support such level of taxation," said Goa Mineral Ore Exporters Association in its letter.
Iron ore producers in Goa are struggling to resume operations and exports of low-grade iron ore as commodity prices in general, and that of iron ore in particular, have crashed, according to the association. Prices of lowgrade iron ore have reduced to a fifth in the last four years.
Source :economictimes.indiatimes.com
Resale Price Method shouldn't be applied if exp. incurred by assessee didn't suggest that it was a d
Coal Exports From Australian State Of Queensland Up Despite Mining Backlash Sydney
Jan 11 Coal exports from Australia's Queensland state hit record levels for the second year in 2015, with shipments to India up sharply despite stalled attempts by Indian conglomerates to win approvals to dig new outback mines, data showed on Monday.
The state's exports rose 2 percent to 220 million tonnes in 2015 from the previous record of 216 million tonnes in 2014, and continue to grow, according to the Queensland Resources Council lobby group.
India's Adani Enterprises, which wants to ship millions of tonnes of coal a year to India, has been a target of environmental opposition since starting work on a new mine in the state's Galilee Basin six years ago.
GVK Hancock, along with more than a half-dozen other companies, is also seeking approvals to dig a mine in the basin, a 247,000-square kilometre (153,000-sq mile) expanse in north-eastern Australia.
Tim Buckley, an Australia-based director of the Institute of Energy Economics and Financial Analysis, said despite the increase, coal exporting countries such as Australia face a market in structural decline as India exploits more of its domestic coal reserves and switches to cleaner forms of energy.
"The supply is excessive, demand is weaker than expected, the last thing we need is more supply," Buckley said.
The International Energy Agency forecasts India would increase overall thermal coal imports to 204 million tonnes by 2020, a 73-percent rise over its 2014 estimate.
From one Australian port alone, Gladstone, exports to India were up by a fifth in the second half of last year, data showed.
Some 80 percent of the coal mined in Queensland is metallurgical grade used to make steel.
The state's biggest producer of metallurgical coal, a company jointly owned by BHP Billiton and Mitsubishi Corp, is expected to show a year-on-year rise in December quarter output when data is released on Jan. 20.
Source :.reuters.com
Thrust On Sezs To Revive Exports
SEZs have the potential to revive exports, which have contracted for the twelfth month running. Global demand is weak, though the recent devaluation of the yuan could benefit exporters.
"Incentivising manufacturing in SEZs would help in the Make in India initiative and also boost exports. We have taken up the issue with the finance ministry and are hopeful that the budget would address the concerns," a senior commerce ministry official said.
The commerce ministry has pitched for the exemption of the 20-per- cent minimum alternate tax (MAT) on SEZs to make merchandise globally competitive.
The Finance Act, 2011 broadened the scope of MAT by bringing SEZ developers and units under its ambit, significantly diluting the benefits offered by the economic enclaves.
Finance minister Arun Jaitley in his budget speech for 2014-15 said that manufacturing was of paramount importance for the growth of the economy. He said the government was committed to revive SEZs and make them effective instruments of industrial production, economic growth, export promotion and employment generation.
Exemption from MAT is offered to certain individuals whose adjusted total income does not exceed Rs 20 lakh. The limit of Rs 20 lakh is inadequate considering the huge amount of investments made in the export sector.
The commerce ministry is also working on streamlining the SEZ policy to bring more clarity and improve the competitiveness of exporters in the global market, which is mired by a currency war and falling orders.
During April-November this fiscal, exports declined 18.46 per cent to $174.3 billion. Imports stood at $261.8 billion and the trade deficit was $87.5 billion.
The SEZ revival package is likely to include incentives to investors to make use of the land and other facilities lying idle in the existing zones.
Other sops may include removal/lowering of MAT and dividend distribution tax as well as the permission to SEZ units to sell in the domestic market by paying the same duty applicable to imports from countries with which India has a free trade agreement (FTA).
SEZs, which are tax-free enclaves, have to pay duties for sales in the domestic market. This make the products costlier compared with imports from FTA partner countries that come in at zero or lower-than- regular duties.
As on March 2015, India had 202 operational SEZs across the country, which contributed close to a fourth of overall exports at $310 billion. Although fiscal concessions and tax sops are allowed to SEZs under the SEZs act, the Centre continued with MAT for years.
The finance ministry has justified MAT by saying that the government was forgoing considerable revenues, which were estimated at Rs 26,534 crore in 2014-15.
Source :.telegraphindia.com