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Monday, 22 July 2013
INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI STATEMENT SHOWING THE LIST OF SPECIAL BENCH CASES PENDING AS ON 06.07.2013.
RBI/2013-14/147 A.P. (DIR Series) Circular No. 14 dated 22-07-2013
Reserve Bank Of India
A.P. (DIR Series) Circular No.14
July 22, 2013
To
All Category - I Authorised Dealer Banks
Madam / Sir,
Export of Goods and Software – Realisation and Repatriation of export proceeds – Liberalisation
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No. 52 dated November 20, 2012 extending the enhanced period for realization and repatriation to India, of the amount representing the full value of goods or software exported, from six months to twelve months from the date of export up to March 31, 2013. Further, in terms of A.P. (DIR Series) Circular No. 105 dated May 20, 2013 it was decided, in consultation with the Government of India to bring down the above stated realization period from twelve months to nine months from the date of export valid till September 30, 2013.
- In this connection, it is clarified that as the realization and repatriation period stipulation in terms of A.P. (DIR Series) Circular No. 52 dated November 20, 2012 was valid till March 31, 2013 only, the time period for realization and repatriation of export proceeds from April 01, 2013 onwards till September 30, 2013, shall be reckoned as nine months from the date of export.
- The provisions in regard to period of realization and repatriation to India of the full export value of goods or software exported by a unit situated in a Special Economic Zone (SEZ) as well as exports made to warehouses established outside India remain unchanged.s
- AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
- The directions contained in this circular have been issued under sections 10 (4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(C. D. Srinivasan)
Chief General Manager
RBI/2013-14/147
RBI/2013-14/148 A.P. (DIR Series) Circular No. 15 dated 22-07-2013
Reserve Bank Of India
A.P. (DIR Series) Circular No. 15
July 22, 2013
To
All Scheduled Commercial Banks which are Authorised Dealers (ADs) in
Foreign Exchange/ All Agencies nominated for import of gold
Madam / Sir,
Import of Gold by Nominated Banks /Agencies/Entities
Attention of Authorised Persons is drawn to the Reserve Bank’s A.P. (DIR Series) Circulars No. 103 , 107 and 122 dated May 13, June 04 and June 27, 2013 respectively on the captioned subject. ;As per these instructions, certain restrictions were imposed on the import of various forms of gold by nominated banks/nominated agencies/ premier or star trading houses/SEZ units/EoUs which have been permitted to import gold for use in the domestic sector. None of these restrictions was applicable to import of gold for the purpose of exports or to import of gold by units in SEZ exclusively for the purposes of exports.
- Based on a review of the above instructions and in consultation with Government of India, it has been decided to rationalize the import of gold in any form/purity including import of gold coins/dore into the country. Accordingly, the following instructions are issued:
- It shall be incumbent on all nominated banks/nominated agencies to ensure that at least one fifth of every lot of import of gold (in any form/purity including import of gold coins/dore) is exclusively made available for the purpose of export. Such imports shall be linked to financing of exporters by the nominated agencies (i.e. average of last three years or any one year whichever is higher). Further, they shall make available gold in any form for domestic use only to entities engaged in jewellery business/bullion dealers supplying gold to jewellers.
- They will be required to retain 20 per cent of the imported quantity in the customs bonded warehouses.
- They are permitted to undertake fresh imports of gold only after the exports have taken place to the extent of at least 75 per cent of gold remaining in the customs bonded warehouse.
- Any import of gold under any type of scheme, shall follow the 20/80 principle set out at (a) and (b) above. The extant instructions, as regards import of gold on consignment basis, LC restrictions etc. stand withdrawn.
- A working example of the operation the scheme envisaged in terms the present instructions is given in the Annex.
- Entities/units in the SEZ and EoUs, Premier and Star trading houses are permitted to import gold exclusively for the purpose of exports only.
- AD Category I Banks are advised to strictly ensure that foreign exchange transactions effected by / for their constituents are compliant with the above instructions. Head Offices of nominated agencies / International Banking Divisions of banks would be responsible for monitoring operations of the revised scheme taking into account transactions put through different centres.
- Government of India will be issuing separate instructions, if any, to the customs authorities/DGFT to operationalize and monitor these import restrictions.
- The above instructions will come into force with immediate effect. Authorised dealers may please bring the contents of this circular to the notice of their constituents and customers concerned.
- The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999), and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully
Rudra Narayan Kar
Chief General Manager-in-Charge
RBI/2013-14/148
Annex
An example of the working of the scheme:
- Nominated agency ABC imports say 100 kg of gold in any form/purity.
- Out of the above import of 100 kg, 20 kg gold held in the bonded warehouse can be got released in part or full to be sold to exporters of gold against undertaking to customs authorities as is the practice now.
- Any further import of gold by ABC shall be permitted by the customs authorities only to the extent of actual export out of 20 kg of gold held in bonded warehouse. This can happen only after at least 15 kg of gold out of 20 kg is actually exported from the previous lot.
- If ABC wants to place order for the second lot of import, only 75 kg of import (including 15 kg for exports) will be permitted which will again follow the procedure outlined above. At this stage, total gold with the bonded warehouse meant for the exporter will be (5 + 15) i.e. 20 kg. Out of this at least 15 kg (i.e. 75% of the above 20 kgs) will have to be actually exported to enable ABC to import again. This procedure will be followed for every lot of import.
- If for any reason, ABC is not able to channelize the gold held in bonded warehouse for exports, no further imports can be undertaken by ABC who will also arrange for re export of the gold in the bonded warehouse.
Materials used for making a premises dust-free and fire resistant is an eligible inputs
ST : Paints and other materials used on floor of factory/premises to make it dust free and fire retardant, which was essential for manufacture/provision of service, are inputs eligible for Cenvat Credit
Payments for launching and tracking of satellite aren't FTS as no technology is made available to as
IT/ILT : Where foreign companies did not make available or transfer any technology to assessee satellite manufacturer, with respect to launching and tracking of its satellite, payments could not be held as fees for technical services in view of article 13 of India - France DTAA and article 12 of India - USA DTAA
CISF wants ‘service tax, security deposit’ for guarding Haryana, Punjab Secretariat
The Central Industrial Security Force (CISF), which has been guarding the Punjab and Haryana Civil Secretariat in Chandigarh for over a decade now, has threatened to withdraw its services, if both the governments failed to clear outstanding dues worth Rs 45 crore by August 31.
The amount included service tax and advance security deposit of three months on the security being provided by it to the states.
The CISF, earlier this month, had sent a strong-worded notice to the governments of Haryana and Punjab in this regard. According to CISF, while Haryana is required to clear an outstanding of Rs 23 crore, Punjab owes it Rs 22 crore. However, in a letter to the director general (CISF) under Union Ministry of Home Affairs, Haryana's Additional Chief Secretary (Home) Samir Mathur has rebutted its claims and clarified the government's position.
It stated that CISF is a central armed police force and clearly differentiated from private security agencies.
"In this case, it is providing safety and protection to the functioning of democratically elected governments under the Constitution. The Punjab and Haryana Secretariat is the seat of governance of the states of Punjab and Haryana from where the constitutional functions are discharged. It is difficult to conceive that service tax has been sought to be levied for security... when the states are paying deployment charges," the letter added.
On CISF's claim that Haryana owes it arrears worth Rs 6.47 crore and a penal interest of Rs 9.82 crore, the government said: "During reorganisation of the erstwhile Punjab state, the assets were divided in the ratio of 60:40, including the space and manpower deployed in the Secretariat building between Punjab and Haryana. ...during the period of deployment of ITBP, the cost was shared in the ratio of 60:40 and this pattern is continuing again from October 2009 till date."
Interest allowable on advance deposit of MAT under sec. 115JA, as it bears character of advance tax
IT : MAT deposit made in advance under section 115JA on basis of book profit bears character of tax paid in advance and, therefore, interest under section 244A has to be granted in case of excess deposit of said amount
Why you should file tax returns before July 31 deadline
Q: July 31 is the last date for filing it returns. But a lot of people use the two year extended window to file their returns. Is this advisable? And what are the implications of missing the July 31 deadline?
A: One should file income tax return before the deadline rather than waiting for the deadline; file it as soon as possible.
If one files the income tax return late, that is after the deadline of July 31 then a penal interest is required to be paid. The penal interest is equal to 1 percent of the tax due whether one day or one month, 1 percent per month or part of the month, the penal interest would be payable. Therefore, I strongly recommend all taxpayers of India to file income tax return in time.
Those who have got loss etc, they cannot take the benefit of carry forward of the loss, especially if the tax return is filed beyond July 31.
If no tax is due and return is delayed then one can file the return after July 31. No penalty, no penal interest but only in a situation when no tax is due.
Q: Suppose there is any kind of unpaid tax pending because of variety of reasons like if one is changing employer or have any kind of other source of income etc then is there any penalty if one does not file returns within July 31?
A: Yes, if one does not file return before July 31 then some taxes are due. Reasons are not concerned, whether change of employer or some other income, tax on other income, interest income and property income. The fact remains that as on July 31 some tax is outstanding. On that tax the net tax payable amount penal interest will be the required to be calculated and to be paid. That means even if return is delayed for two days, for example if one files in the month of August even then penal interest will be charged for the whole month. Therefore, file the return in time, pay the taxes now and file the return before July 31.
Caller Q: I am holding unlisted company shares for last 20 years for which there is a buyback offer by an American multinational company. Can I pay long-term capital gain tax without indexation at the rate of 10 percent?
A: You will not be able to take advantage of 10 percent tax rate as that is applicable only for listed company. You have to calculate the cost based on cost, inflation index and then make payment of 20 percent tax and you can save tax also by making investment in real estate.
Caller Q: What is the right time to declare interest on the bank fixed deposits (FDs)?
A: On accrued basis declare your income from bank FDs etc. This means you would have a cumulative fixed deposit receipt and bank will give the details, certificate and details of accrued interest. Therefore, best is to declare accrued interest in the income tax return but still the choice lies with the taxpayer to take whichever path he would like to chose. One can go for cash system of accounting or mercantile system of accounting but follow one system consistently, for example you may declare accrued interest on year-to-year basis or you may declare the entire interest income at one go in the year in which you receive the actual amount of the interest. However, it's better to go in for declaring on accrued bases so it is easy for you to take advantage of the tax deducted at source also.
Staff crunch may burn Rs 15,000-cr hole in direct tax mop-up
Direct tax collection may fall short by Rs 15,000 crore due to manpower shortage, the Income-Tax Gazetted Officers Association apprehends.
Suggesting filling up nearly 1,350 additional posts of Group A officers by promoting Group B Income Tax Officers, A. Sitarama Rao, President of the Association, said, “With just 50 per cent of the sanctioned strength of these commissioners, how on earth will the Government narrow its gap between revenue and expenditure to 4.8 per cent in 2013-14 and three per cent by 2016-17?”
At a press conference here on Thursday, the Association said the problems were two-fold. First, the effective strength of the additional posts at certain levels will be much less than projected. Second, the direct recruitment process will take time.
Income Tax Gazetted Officers are basically promotees and account for nearly 15 per cent of total workforce in the department. After spending years as officers, they are promoted to the post of Assistant Commissioner of Income Tax and Deputy Commissioner of Income Tax.
The Association claims that these two ranks alone collect 80-85 per cent of total direct taxes.
According to its back-of-the-envelop calculation, the targeted working strength at the level of Deputy Commissioner of Income Tax and Assistant Commissioner of Income Tax will be reduced to 1,528 against the sanctioned strength of 2,914.
The Association’s statement comes after the Government has approved creating over 20,000 additional posts (Group A – 1,349, Group B – 2,064 and Group C – 17,338) in the Income Tax Department as part of cadre restructuring.
It was said that the move would generate additional revenue of over Rs 25,750 crore a year against additional expenditure of nearly Rs 450 crore annually.
However, the Association feels that even this additional revenue will not be possible, apart from shortfall in the Budget target of Rs 6.68 lakh crore.
The Income Tax Department plans to appoint 270 Group A officers a year for five years. Half of these will be through direct recruitment and half through promotion.
According to the Association, considering that the Union Public Service Commission (agency responsible for recruitment of Group A officers at Central Government level) cannot commence its recruitment process before February 2014, only 270 vacancies are likely to be filled by way of promotions. The corresponding 270 direct recruitment vacancies in 2013-14 and 2014-15 will actually be available only after two years.
Direct tax includes income, corporate, securities transaction and wealth tax. During April-June, gross direct tax collection rose to Rs 1.24 lakh crore against Rs 1.11 lakh crore during same period last fiscal.
Simplifying procedure for filing income-tax returns
The deadline for filing income tax returns, July 31, is just week away. Needless to say, many individuals dread the date with I-T department, as they find the entire process very confusing. However, according to experts, if an individual is clear about the basics, the entire procedure can be completed in an hour's time. "Tax payers earning over Rs5 lakh are now required to file their tax return electronically. This will reduce paperwork to a great extent," says Vineet Agarwal, director at KPMG. Choose the right form Tax consultants are divided over the applicability of forms ITR-1 (Sahaj) and ITR-2 for salaried individuals, drawing income from salary and interest. Going strictly by the new I-T rules, an individual cannot file returns using the simpler form ITR-1 (Sahaj) if the person has any taxexempt income above Rs5,000. Since the I-T department has not issued any clarification so far, there are numerous interpretations on the matter. Check your tax credit Take a look at Form 26AS, which shows the amount of tax deducted from your salary that your employer has actually deposited with the I-T department, on the e-filing portal. "It is critical to ascertain whether the tax deducted from your income (as per your Form 16) matches the figures in Form 26AS. The two versions must tally. If you go ahead with filing the return without seeking clarity on the nature of the discrepancy, you are bound to get a notice from the I-T department later," says Iyer. |
Business Group Wants Separate Ports For Exports, Imports
A business lobby group is demanding that the government designate separate seaports for exports and imports to overcome gridlock in the country’s biggest trade gateway, Tanjung Priok Port in North Jakarta.
Indonesian Employers Association (Apindo) chairman Sofjan Wanandi said on Monday that the lengthy dwelling time at the port resulted in high business costs that burdened business players and moreover, markedly disrupted international trade activities.
“We certainly cannot do business as usual, and certainly require a drastic change. Otherwise, both exports and imports will be impacted,” he told reporters after a meeting with Industry Minister MS Hidayat.
Exports and imports in Southeast Asia’s top economy have grown to record highs in recent years, with last year seeing exports reaching US$190.03 billion and imports settling at $191.69 billion.
In line with significant surges in overseas trade activities, the dwelling time at Tanjung Priok Port which shoulders more than 70 percent of incoming and outgoing goods, has further expanded in the past few years, peaking to eight days this year from 6.5 days last year.
Indonesia’s dwelling time ranked highest compared to its Southeast Asian neighbors, including Singapore (1.2 days) and Thailand (five days).
In the past few weeks, poor performance in Tanjung Priok Port has raised deep concerns among business players as it could process only 170 containers on a daily basis, far fewer than the 600 containers that it should tackle, according to an estimate by the Indonesian Chamber of Commerce and Industry (Kadin).
The slow handling activities at the port caused Rp 4.8 billion ($472,209) per day in losses for exporters and importers, Kadin’s recent statistics reveal.
A quick solution to accelerate exports would be to build a new seaport to mainly serve exports in Kawasan Berikat Nusantara (KBN) industrial bonded zone in North Jakarta, Sofjan said.
KBN, which covers Marunda, Cakung and Tanjung Priok, currently serves as an export-processing zone (EPZ) that hosts more than 100 factories.
On the other hand, to cope with big inflows of overseas goods, particularly raw materials and intermediary goods, the government should allow a special verification process, with importers and importer producers getting their purchased items checked at their own warehouses instead at the densely occupied Tanjung Priok Port, Sofjan added.
In response to the demand from local business players, the Industry Minister said breakthroughs were needed at the heavily congested port as the problems could further hurt both exporters and importers if they remained unsolved.
“We must [first] realize the plan to build a new container port in KBN. At least that can be a temporary alternative due to inefficiency at Tanjung Priok. If such inefficiency continues, our industry will suffer bigger losses and undermine the competitive edge of local businesses,” Hidayat said.
“The verification at warehouses of each importing firm would be feasible as an emergency solution to temporarily ease overloads at the port, but should be followed by stricter customs procedures,” he added.
Source:-www.thejakartapost.com
No unfair trade practice if complainant couldn’t prove that it was lured by false advertisement to a
MRTP : Where complainant could not prove that it acted on false and misleading advertisement issued by respondent-carrier before handing over its consignment to said carrier, no case of unfair trade practice was made against respondent
Curb Import Of Mobiles And Electronics To Support Rupee
Jul 22, 2013
MUMBAI: Experts have recommended curbs on imports of imports and pro-growth policies to encourage inflows from foreign institutional investors. Reserve Bank of India's moves to raise rates has been criticized as it hurts growth and encourages foreign debt which is seen as hot money.
"There is a need for RBI to cut rates aggressively to bring back the 'feel better' factor as a 'feel good' factor is something that will take longer. There is a need for this to encourage inflows from foreign institutional investors which is the only source through which capital can come in fast and in large quantities" said Pradip P Shah, Chairman, IndAsia Fund Advisors. He was speaking at a seminar on the falling rupee and its impact on the Indian economy.
He also said that foreign currency non-resident deposits ( FCNR) which has helped India raise foreign currency in the past can be encouraged through sops such as lower cash reserve ratio and statutory liquidity ratio requirement for these deposits. He said that central government must do its bit by discouraging imports of consumer electronics, micro electronics and consumer products if required through non-tariff barriers. "Right now these imports are not doing anything for the Indian economy they are only creating jobs in Thailand or some other country" he said.
Echohing his view Saugata Bhattacharya economist Axis Bank said that the government's top priority should be in reviving growth. "Growth coming down from 9% to 7% is not as bad as growth coming down from 6% to 5%" he said. According to Bhattacharya besides placing curbs on imports the government could provide a simultaneous sop to domestic production through tax cuts.
According to Prabodh Thakker, Vice President, IMC and chairman of Aon Global Insurance Brokers to support the rupee there was a need to provide a boost to domestic manufacturing, improve the policy environment and spur growth.
Source:-timesofindia.indiatimes.com
Fresh Curbs On Gold Imports
Mumbai, July 22: The Reserve Bank of India (RBI) today tightened gold imports further by ordering nominated banks and agencies to ensure the export of one-fifth of every lot of gold imported.
The central bank said banks must retain 20 per cent of the imported gold in customs bonded warehouses and will only be able to further import gold after exporting at least 75 per cent of the gold from those warehouses.
The RBI added that the banks and agencies could make available gold in any form for domestic use only to entities engaged in the jewellery business.
The latest measure came as part of what it called a move to “rationalise” the import of gold into the country.
Both the Union government and the central bank have been concentrating on bringing down gold imports over the past few months to tackle the ballooning current account deficit (CAD).
India’s CAD, which simply put is the difference between inflows and outflows of foreign currency, rose to 4.8 per cent of the gross domestic product in 2012-13 from 4.2 per cent in 2011-12. A high CAD has also been blamed for the recent depreciation in the value of the rupee.
As part of these efforts, while import duty of gold was raised to 8 per cent from 6 per cent, the RBI had in the recent past placed various restrictions on banks’ import of gold.
These steps seem to have met with success as imports in June are estimated to have fallen to around 31 tonnes from 162 tonnes in May and 141 tonnes in April.
India imported around 830 tonnes of the yellow metal in the previous fiscal.
In its notification today, the central bank said all nominated banks/nominated agencies must ensure that at least one fifth of every lot of imported gold is exclusively made available for the purpose of export.
Analysts said the quantitative restriction was a clever move by the RBI as it had to be seen in the context of the tight export market now prevailing.
This had resulted in gems and jewellery exports from India declining in 2012-13.
With imports of gold now linked to exports, the amount of the yellow metal coming into India could be hit if exports do not pick up.
The instructions will, however, not apply to import of gold by units in the special economic zones, export-oriented units or star trading houses, which import gold only for the purpose of exports, it added.
The RBI said on a review of earlier norms, it “has been decided to rationalise the import of gold in any form/purity, including import of gold coins” and the new guidelines will come into force with immediate effect.
The government will issue separate instructions, if any, to the customs authorities and the DGFT to operationalise and monitor these import restrictions, the RBI said.
The banks and other authorised agencies have been asked to strictly ensure that foreign exchange transactions are compliant with new instructions, the RBI said, adding that they will be responsible for monitoring operations.
It further said earlier instructions on the import of gold on a consignment basis and against letters of credit had been withdrawn.
Gems and Jewellery Export Promotion Council chairman Vipul Shah said, “This step will boost exports and foreign revenue. There will not be any shortage of gold for domestic use. There will be some impact on prices.”
Source:-www.telegraphindia.com
Adjustments made by TPO to be deleted as it provided no reasoning or data to justify exclusion of co
IT/ILT : Where TPO only provided unsupported reasoning and no data for excluding comparables adopted by assessee, adjustment was not sustainable
Income from short-term investment of sum acquired through convertible zero coupon debenture is taxab
IT: Where a company had introduced in assessee-company a sum of Rs. 900 crores in form of zero coupon convertible debenture to be converted into equity shares within a span of 36 months and out of which a sum of Rs. 500 crores was invested by assessee in short-term deposits with banks, interest earned on these deposits was an income chargeable under head 'income from other sources'
Sum paid under VRS on closure of a few of units as a part of restructuring process is an allowable r
IT: Where only two units of assessee-company were closed as part of restructuring process, expenditure on voluntary retirement scheme was allowable as revenue expenditure
Income from letting out of a commercial complex is ‘Income from house property’ and not a business i
IT : Income earned by assessee-firm from letting out a commercial complex was to be assessed as income from house property and not as business income
Adjudicating authority can’t go beyond the scope of show cause notice
ST : Demand cannot be confirmed on a ground not specified in show-cause notice
Interest earned by supplier of goods on deferred payment is exempt from ST
ST/ECJ : Supplier of goods/services who authorizes his customer to defer payment of price, in return for payment of interest, is, in principle, making a grant of loan and accordingly, interest earned thereon falls under negative list
HC denied to admit writ against a revision order as assessee had an alternate remedy to appeal befor
IT: Against revision order, assessee should approach Appellate Tribunal instead of filing writ petition before High Court
Sunday, 21 July 2013
Ownership of land with developer of a housing project isn’t a condition precedent for sec. 80-IB ded
IT : Ownership of land for development of a housing project is not a criterion for section 80-IB deduction
Payment of consultancy fees to carry on business more efficiently and profitably is a revenue exp.
IT : Expenditure incurred on consultancy charges to carry on business more efficiently, is to be treated as revenue expenditure, and not as capital expenditure
Ownership of property transferred during pendency of proceedings before BIFR or during winding up to
CL: Where transfer of properties were made either during pendency of reference before BIFR or during pendency of winding up proceedings, Official Liquidator was to be directed to take steps for restoration
‘Due date’ under sec. 36(1)(va) for payment of employee’s contribution to PF is same as contemplated
IT: Employee's contribution towards Provident Fund if paid before due date of filing return is allowable under section 36(1)(va) to employer assessee
Functionally different comparables to be excluded from list of comparables for TP study
IT/ILT : Where in course of transfer pricing proceedings, TPO made certain adjustment to ALP determined by assessee, in view of fact that two comparables selected by TPO were functionally different, assessee's plea that said comparables were to be excluded while determining ALP, was to be accepted
Finance Ministry Initiates Steps To Correct Trade Data Discrepancies
21 Jul, 2013
NEW DELHI: The Finance Ministry has asked Customs Department to ensure use of standard units on same items entering or leaving the country across ports in order to prevent discrepancies in trade data, which lead to embarrassment.
The Central Board of Excise and Customs (CBEC) has found that Standard Unit Quantity Codes (UQC), indicated in the Customs Act, are not being uniformly declared by importers and exporters for the same items across different ports.
"The issue of poor quality of trade data has been engaging the attention of the government," CBEC said in a communication to the Customs and other revenue officials.
An error of USD 9 billion was noticed in the country's exports for April-November period of 2011-12.
"The solution lies in improving the quality of data by using standard UQCs...Accordingly, it is directed by the Board that Customs field formations should ensure that only the correct and prescribed Standard UQC ... is mentioned in Bills of Entry/ Shipping Bills," the CBEC said.
It said an analysis of National Import Data Base (NIDB) reveals that there are at times "variations between the lowest and highest unit values of the same item", which might escape detection on account of the use of different unit codes.
Use non-uniform UQCs impacts data quality and makes comparisons and aggregations difficult, the CBEC said.
"The use of non-uniform UQCs for the same item also vitiates the quality of the NIDB data and reduces its utility to the assessing officers, who are unable to ascertain the contemporaneous values or assessment practice of a given item in different Customs locations," it said.
UQC have been specified in the Customs Tariff Act, 1975. The Board, which is responsible for collection of indirect taxes, asked the Chief Commissioners of Customs to ensure the instructions are "complied with scrupulously".
It, however, said the exercise should not result in delays in clearance of cargo.
Earlier, the Directorate General of Foreign Trade (DGFT) had streamlined flow of trade figures from different ports in the country.
This was done following the error in export figures of April-November period of 2011-12. The Prime Minister's Office had asked the commerce department to explain the errors.
Data reporting problems also created problems for officials during a recent visit of Commerce and Industry Minister Anand Sharma to Mauritius where bilateral trade figures were found not matching.
Source:-economictimes.indiatimes.com
Quarterly Apparel Sales Grow 10% On Stable Cotton Price, Removal Of Excise Duty
KOLKATA: Readymade apparel sales have bounced back after two years of flat growth with brands, retailers, manufacturers reporting more than 10% growth in last quarter. A stable cotton pricing coupled with removal of 10% excise duty has worked in favour of apparel industry bringing consumers back to the market at a time when inflationary pressure and rising product prices are pinching their pockets.
The rising domestic demand has prompted the country's textile industry to increase production of apparel and also look at Bangladesh to build up sufficient inventory for the festive season which is expected to drive sales further in the second half of the current fiscal.
"The domestic apparel industry is once again back in the growth mode after a lull of two years. In the first quarter there has been an overall growth of around 10% even though the economic parameters are not very bright. The growth has come because consumers are not willing to hold back their purchases any further," said Rahul Mehta, president of the Clothing Manufacturers Association of India.
Apparel makers and retail chains like Turtle, Madura Fashion, Future Group and Spencer's Retail say steady apparel prices this year has induced consumers to undertake purchases and the wedding season too has helped the industry. Apparel brand Turtle director Amit Ladsaria says the brand has grown by 31% in the first quarter (April-June) of this fiscal as compared to the same period last year. "The best part of this growth in sales is that it happened on full price, without any discounts or consumer offers," says Ladsaria.
Allen Solly brand head Sooraj Bhat adds that more serious shoppers are in the market. "The growth is coming from higher conversions and triggered by regular customers who account for almost 40% of the sales. Footfalls are yet to pick up completely," he says, adding the brand has grown sales of like-to-like stores by 26% in the last quarter over same period last year.
Prices have played a key role in bringing back customers to the market. Though the production cost has gone up but the apparel makers have not passed it to the customers bringing them much relief.
Spencer's Retail president & CEO Mohit Kampani says on an average apparel prices is slightly less expensive compared to last year on per unit basis. "The steady prices has made apparel more affordable when other consumer product prices have gone up.This has been a big catalyst," he says. Spencer's Retail has grown by 15% in apparel on a like-to-like basis over last year. Future Group's fashion business too is growing upwards of 20% at the Big Bazaar stores which the company wants to grow further by recasting the business soon, a senior official said.
The total size of the Indian apparel industry is Rs2.4 lakh crore. Of this,Rs1.62 lakh crore worth of garments is consumed in India and the rest is exported. India has also increased its imports from Bangladesh, one of the leading apparel making nations in the world.
Source:-economictimes.indiatimes.com
Mundra Overtakes Kandla To Emerge As India’S Largest Port
Ahmedabad: Mundra port, run by Adani Ports and Special Economic Zone Ltd (APSEZ), has emerged as the largest merchant port in India, overtaking the Union government-controlled Kandla Port by a whisker in terms of cargo handled in the first quarter of the current fiscal. It’s the first time that a private port has taken the top position.
Cargo handled by Adani port between April and June was close to 24 million tonnes (mt) as compared to about 23 mt handled by Kandla in the same period, said Rajeeva Sinha, whole-time director of APSEZ. “We are today the country’s largest port,” Sinha said. Both ports are located in the Kutch district of Gujarat.
An official at Kandla Port Trust confirmed the development. While Kandla was number one for the past five years, it appears that it is losing ground to Mundra because of the aggressive expansion and the risk-taking ability of the Adani group, said the official on condition of anonymity.
The Centre had set a target of 97 million tonnes per annum (mtpa) of cargo for Kandla port to handle this year while Mundra is likely to cross 100 mtpa mark, the official said.
Pipavav port in Gujarat in 1998 became the first private port in India to start operations, three years before Mundra. The two ports were part of the Gujarat government’s build, own, operate and transfer (BOOT) policy framed in 1995.
Most of Adani’s expansion and growth has come through in the past decade. The company invested about Rs.12,000 crore in this period for port development.
Mundra port’s cargo-handling capacity has been growing at 25% for the last five years on a year-on-year basis. Last year, Mundra became the country’s second-largest port by handling 82 mt, up from 64 mt in the previous year. In comparison, Kandla handled 93.6 mt of cargo, up from 82.5 mt.
Besides Kandla, which began operations in 1957, there are 12 other federal ports in the country, including the newly developed Port Blair in Andaman and Nicobar islands.
“While private ports have come into existence recently, major ports have been around for very long,” said Sajith Sreedharan, deputy managing director at BMT Consultants India that offers advisory services in the port and maritime sector. “Chennai port is 100 years old. There are a lot of bureaucratic hurdles for their expansion. Mundra’s success over Kandla shows the efficiency of a private port as compared to a government-run one.”
The turnaround time—a key yardstick of efficiency—is about two to three days at Kandla; it is less than one day at Mundra due to mechanization.
However, Kandla has one of the lowest tariffs in the world, which makes up for the time and money lost in berthing and unloading cargo, said the same Kandla Port Trust official quoted earlier.
Source:-www.livemint.com
Chemical Exports To Africa On The Rise
Africa is presenting a busy market for India's chemical exports as figures for Nigeria alone indicate considerable growth. Exports of chemical items from India to Nigeria alone have increased to about 5.6 percent from 2012 to 2013, according to the Chemical Export Promotion Council of India (ChemExcil).
In addition, total volume of exports to Nigeria this year amounted to $90.3 million as against $85.5 million last year, ChemExcil executive director Suhas Bhardi said at an exhibition that opened here with over 80 companies in attendance.
"The purpose of this Exhibition is to strengthen/expand existing business, promote india's chemical exports and to create a positive brand image of Indian products. This would also result in many more joint ventures and technology transfer," Bhardi said.
The Indian Chemical and Cosmetics Exhibition has been organised by ChemExcil in collaboration with the Pesticides Manufacturers and Formulators Association of India (PMFAI) and the Indian High Commission in Lagos.
The sector, which consists mainly of petrochemicals, accounts for over 70 percent of the total chemical market in Nigeria. "I am happy to note that the upstream petrochemical sector is well established as Nigeria is the highest oil-producer in Africa," Bhardi said.
PMFAI president Pradip Dave said the African region offered most potential for improvement in the productivity of crops and the African governments have therefore given priority to development of agriculture in the region.
Dave said that there was a good market for agrochemicals in Nigeria, adding that "it is estimated that the private sector agrochemical companies supply about 70 percent of the total CPP demand of approximately $120 million."
"Most of the African countries are now concentrating on development of irrigation projects and, with a modern irrigation system, by optimising and conserving water resources and also introducing drought resistance varieties. The drought resistance and high yielding varieties will definitely boost the agricultural production in the African region which will also help in boosting agricultural exports from Africa," he said.
ChemExcil's studies have shown that Nigerian companies consume in excess of $3.58 billion worth of chemicals per annum but produce just $380 million, an indication that the country is a potential market for the export of chemicals.
"The base chemical sectors, which consists mainly of petrochemicals, accounts for over 70 per cent of the total chemicals market in Nigeria. The upstream petrochemicals sector is well established as Nigeria is the highest oil producer in Africa," the council said on its website.
"Limited development of the downstream sector constrains growth of not only the base chemicals sector but also the total chemicals industry in Nigeria. In the speciality chemicals sector local manufacturing is focussed on paints, coatings and adhesives, using imported raw materials," it added.
For the remaining speciality chemical products, such as preservatives, water treatment and wood and textile treatment chemicals, local manufacture is limited. "The high operating costs as well as a lack of access to raw materials restrains the development of further manufacturing for a wider range of speciality chemicals," it said.
ChemExcil said, "Most regional and global speciality chemicals manufacturers supply raw materials and inputs to the local manufactures through distributors and also use the distributors to import fully manufactured speciality chemicals."
It has also identified a major market in essential oils flavours and fragrance/cosmetics/soaps and toiletries industry on the African continent.
"Africa's middle class has tripled in size in the last 30 years and is driving the continent's demand for cosmetics," it said.
"In Nigeria, cosmetics companies are racing for market share. While multinational brands dominate the market in Kenya and Uganda, and lack of capacity for local manufacturing remains an issue, local entrepreneurs are outsourcing manufacture and are using unique sales strategies."
After the Lagos exhibition, the ChemExil would move on to Addis-Ababa, Ethiopia, for a Buyer-Seller Meet and then to Dar es Salaam, Tanzania, July 23.
Source:-www.smetimes.in
How variation in interest rates alters the returns in debt funds
Every time there is a fall in the net asset value (NAV) of debt funds, there is renewed panic. The simple question in the investor's mind is: if there is no default and the fund is receiving its interest income, how and why should the NAV fall? A drop in the NAV of a debt fund can trigger alarm and lead to a precipitous closure for some, as happened in 2008. The market risks in mutual funds are not widely understood, leading to accusations that these should have been avoided somehow.
Investing in a debt fund is quite different from doing so in a bond or fixed deposit. In the case of a fixed deposit, the investor agrees to an unrealistic freeze in rupee return, in exchange for convenience and simplicity. The government no longer determines interest rates in our economy, nor are they dictated by powerful institutions. We have transitioned to a market for interest rates, and this market enables money to be lent and borrowed based on the needs and views of a large number of participants.
In such a market place, there are only prices and clearing. There is no right and wrong. If a borrower is willing to pay 8% for a year, and a lender agrees to it, the exchange of money is cleared at the agreed rate. The borrower needs the money; the lender has the money. The market just brings them together and enables the clearing. Alternatively, the borrower might be in the market today believing that the rates are set to rise and, therefore, wanting to borrow today; the lender might be in the market with a view that rates are set to fall and, therefore, eager to lend. We will never know the motivations, nor will we be able to identify why rates move up or down. At the end of the day, as long as everyone keeps their promise, we have a market where rates are determined efficiently and fairly.
When an investor chooses a bank deposit, he does not select the market. This is the reason he settles for a 4% rate on his savings bank account, while the bank itself would be lending its surplus balance for 8% in the call market. The bank is in the market for overnight funds, lending and borrowing as needed, while the saving bank depositor is standing out, content with a fixed rate. The market does not matter to this simple investor. He may get a lower or a higher rate. He is happy with a fixed rate and unwilling to look beyond.
What happens when such an investor chooses a debt fund? He simply steps into the market place for borrowing and lending. In this market, the rates change dynamically based on demand and supply and the views of various players. What is in the market is what he gets. This investor makes 9% on his liquid fund, when the money market rates are high; he makes 4% on his gilt funds, when the interest rates have risen; he makes 12% on his income fund, when credit spreads fall; and he makes 16% on his short-term fund, when rates correct sharply. Mutual funds are subject to market risk.
A debt fund also pools in money and creates a portfolio much like an equity fund, except that it buys debt securities issued by governments, banks and companies. If a five-year bond is issued at an interest of 10%, and the fund buys it, it earns this interest just like any other investor. However, since a debt fund is an open-ended product in which investors can come and go as they please, it accounts for the interest income on a daily basis. Therefore, the NAV of all debt funds will hold a component that represents this steady accrual income.
Misras have built a strong asset base, will achieve goals with ease
By Sakina Babwani, ET Bureau | 22 Jul, 2013, 08.00AM IST
Not all skewed portfolios need an immediate overhaul. When NitinMisra, a 40-year-old architect, contacted us for help, the financial planner did not alter the portfolio drastically even though it overtly favoured real estate. This is because Nitin has been a prudent planner, investing carefully to achieve his financial goals. While most advisers would be alarmed at a lopsided portfolio, SumeetVaid of Ffreedom Financial Planners did not recommend major changes as each of his investments is aligned to a goal. Besides, Nitin has built an extremely strong net worth of Rs 2.25 crore. With zero liabilities and a high income, the Misras have little to worry. Nitin lives in Delhi with his wife, Swati, 33, and six-year-old daughter, Nysa. A year after Nitin approached us, his finances are being reviewed by Vaid to check if the family is headed in the right direction.
Our suggestions
The original plan
On considering the Misras' finances, it was clear that they would have a smooth sailing, given his asset base, a high income of Rs 97,000 a month, and a saving rate of a little more than 50%. Nitin was, however, advised to start a few fresh SIPs to achieve his goals. "My investment in real estate will work in my favour as it will help me build a good corpus to meet my post-retirement expenses," says Nitin. A year ago, his portfolio had 88% invested in real estate, 8% in equity and 4% in gold.
The Misras' goals were relatively simple, including a corpus of Rs 22 lakh for Nysa's education in 12 years, and Rs 44 lakh for her marriage in 22 years. For their own retirement, they would need Rs 4 crore in 16 years.
Our suggestions
Nitin did not require life insurance as he had a strong net worth that would take care of his family's needs in case of an emergency. Nitin's family would need Rs 1.5 crore to meet their future expenses and his current net worth is Rs 2.25 crore, of which Rs 1.9 crore will be readily available to the family. This does not include their primary residence. However, Nitin was advised to buy individual health plans of Rs 3 lakh for himself and his family as he had been relying only on a family floater plan of Rs 3 lakh, which would not have been sufficient.
Saturday, 20 July 2013
Sec. 234B interest couldn't be levied if entire income of NR was subjected to withholding tax
IT/ILT : When revenue did not dispute fact that amount received by assessee, a non-resident, was subjected to 100 per cent tax deduction at source and that there was no liability on assessee to pay advance tax, question of levy of interest under section 234B did not arise
Delay in filing an appeal due to lapse of applicant can’t be condoned
ST : Delays in filing appeal which are deliberate or which occur on account of lapses on part of applicant, do not deserve any sympathies
M/S. LORD CHLORO ALKALIES LTD. Vs. DIRECTOR GENERAL OF INCOME TAX (ADMN) AND ANR.
|
No concealment penalty if search was initiated and concluded in the relevant previous year
IT: No penalty can be levied under section 271(1)(c) for concealment of income, where search was completed before end of relevant previous year
Anticipated loss in an outstanding repurchase transaction isn’t a notional loss; ITAT allows deducti
IT: Anticipated loss in outstanding repurchase transactions is actual and real and not a notional loss
Pre-deposit order must be communicated in writing
ST : Oral direction to make pre-deposit passed during course of personal hearing is not envisaged under section 37C of Central Excise Act and is invalid; any such direction must be passed in writing and communication as per section 37C ibid
A person performing back office services for an insurance co. can't be termed as an insurance agent
ST/ECJ : A person performing back office activities for insurance companies viz., handling applications, issuing policies, etc. cannot be regarded as an insurance agent and is not covered by reverse charge under rule 2(1)(d)(i)(A) of Service Tax Rules, 1994
Customs Notification No 77/2013 (NT) dated 19-07-2013
Government of India
Ministry of Finance
Department of Revenue
Notification no. 77 /2013-Customs (N.T.)
New Delhi, the 19th July, 2013
G.S.R. No. (E) – In exercise of the powers conferred by sub-rule (1) of Rule 3 of the Customs Tariff (Transitional Product Specific Safeguard Duty) Rules, 2002 and in supersession of notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 33/2013-Customs (N.T.) issued vide G.S.R. No. 199 (E) dated the 2nd April, 2013 , the Central Government hereby appoints Sh. Ram Tirath as the Director General (Specific Safeguard) for the purposes of the said Rules.
[F. No. 528/89/2012-STO (TU)]
(M.V. Vasudevan)
Under Secretary to the Government of India
Customs Notification No 78/2013 (NT) dated 19-07-2013
Government of India
Ministry of Finance
Department of Revenue
Notification no. 78 /2013-Customs (N.T.)
New Delhi, the 19th July, 2013
G.S.R. No. (E) – In exercise of the powers conferred by sub-rule (1) of Rule 3 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 and in supersession of notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 34/2013-Customs (N.T.) issued vide G.S.R. No. 200 (E) dated the 2nd April, 2013 , the Central Government hereby appoints Sh. Ram Tirath as the Director General (Safeguard) for the purposes of the said Rules.
[F. No. 528/89/2012-STO (TU)]
(M.V. Vasudevan)
Under Secretary to the Government of India
Customs Circular No 26/2013 dated 19-07-2013
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Excise and Customs)
Circular No. 26 /2013 -Customs
227- B, North Block, New Delhi
Dated 19.07.2013
To,
All Chief Commissioners of Customs/Customs (Preventive)
All Chief Commissioners of Customs and Central Excise
All Commissioners of Customs / Customs (Preventive)
All Commissioners of Central Excise and Customs
All Directors General under CBEC.
Sir / Madam,
Subject: Standard Unit Quantity Code (UQC) - regarding.
The issue of poor quality of trade data has been engaging the attention of the Government. Further, an analysis of National Import Data Base (NIDB) reveals that there are at times variations between the lowest and highest unit values of the same item, which might escape detection on account of the use of different unit codes.
- The matter has been carefully examined with the objective of improving data quality both from the view point of generating error free trade statistics as well as providing usable contemporary reference values to the assessing officers. The Board notes that Standard Unit Quantity Codes (UQC) indicated in the Customs Tariff Act, 1975 are not being uniformly declared by importers and exporters for the same items across different Customs locations. This impacts data quality and makes comparisons and aggregations difficult. The use of non-uniform UQCs for the same item also vitiates the quality of the NIDB data and reduces its utility to the assessing officers, who are unable to ascertain the contemporaneous values or assessment practice of a given item in different Customs locations. Therefore, the solution lies in improving the quality of data by using standard UQCs.
- In this regard, it is seen that the Customs Tariff Act, 1975 prescribes only a single Unit Quantity Code (UQC) against each Tariff Item, and it is the requirement of the law that the same is properly declared by importers/exporters/Customs Brokers in the Bills of Entry/Shipping Bills. It is the view that the correct declaration of the UQC, as indicated in the Customs Tariff Act, 1975 would resolve the aforementioned difficulties. Accordingly, it is directed by the Board that Customs field formations should ensure that only the correct and prescribed Standard UQC as per the Customs Tariff Act, 1975 is mentioned in Bills of Entry/ Shipping Bills.
- Board desires the Chief Commissioners of Customs to ensure that instructions as aforementioned are complied with scrupulously. There should, however, be an endeavour that the exercise does not result in delays in clearance of cargo. The Directorate of Valuation shall monitor the correct use of UQCs and DG (System) shall modify the software applications suitably to give effect to mandatory compliance of correct UQC.
- Difficulty faced, if any, in implementation of aforementioned instructions may be brought to the notice of the Board.
Yours faithfully
(R.P. Singh)
Director (Customs)
F. No. 450/180/2009- Cus. IV
AO can’t refer to CPWD rates to compute construction cost unless such rates are in conformity with s
IT: Unless there are similarities in rates of CPWD and State PWD, it is not proper to adopt CPWD rates for arriving at cost of construction
AAR can only determine tax liability of applicant and not any of its affiliate or AOP
IT : The Authority (AAR) can't give a ruling that the applicant is not liable to be taxed and somebody else is liable to be taxed. The proposed question framed by AAR for determination can only relate to applicant's tax liability. It would be impermissible for AAR to determine tax liability of person other than the applicant
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