ST : Section 66E(i) of The Finance Act, 1994 - Declared Services - Service Portion in Catering or Restaurant Transactions - Services Provided by A Non-Ac Restaurant, Where Food is Sourced From A Common Kitchen Supplying to Ac Restaurants as Well, Are Not Liable to Service Tax - Counter Sales Are Also Not Liable to Service Tax
Tuesday, 8 October 2013
ORDER NO 05/2013-Service Tax dated 04-10-2013
| S. No | Name of the assessee | File number of Show cause notice | Date of Show cause notice |
| (1) | (2) | (3) | (4) |
| 1 | DHL Express India Pvt Ltd | V/ST/HQ/AE/E/213/12 | 22.10.2012 |
| 2 | DHL Lemuir Logistics Pvt. Ltd. | ST/MUM/DIVIII/GII/DHL/10 | 13.09.2011 |
| 3 | DHL Lemuir Logistics Pvt. Ltd. | V/ST/HQ(Adj)/DHL-743/08 | 21.10.2008 |
| 4 | DHL Worldwide Express | MIV/ST/CERA/Gr.VI/04 | 02.04.2004 |
| 5 | DHL Worldwide Express (AFL Pvt.Ltd.) | M-IV/ST/CERA/Gr.VI/04 | 02.04.2004 |
| 6 | DHL Worldwide Express (I) P. Ltd. | MIV/ST/CERA/Gr.VI/04/3436 | 08.11.2004 |
| 7 | DHL Worldwide Express (COU) | V/ST/M-IV/DHL/R-11/03 dt 23/4/03 | 23.04.2003 |
| 8 | Idea Cellular Ltd | DGCEI/MZU/I&IS'C'/30-77/09/8834 | 20.10.2011 |
| 9 | Idea Cellular Ltd | ST/MUM/DN-III/GR-I/IDEA/133/2011 | 09.10.2012 |
| 10 | Idea Cellular Ltd | ST/HQ/EA-2000/(CAAP)Gr-03/Idea Cellular/10-11 | 06.09.2012 |
| 11 | Idea Cellular Ltd | ST/DIV-III/GR-I/SCN/IDEA/166/2012 | 01.10.2012 |
| 12 | Idea Cellular Ltd | ST/MUM/DN-III/GR-I/IDEA/133/2011 | 25.09.2012 |
| 13 | Idea Cellular Ltd. | ST/Div-III/Gr-I/SCN/Idea/CERA/37/2012 | 18.05.2012 |
| 14 | Idea Cellular Ltd. | ST/MUM/Dn-III/Gr-I/Idea/129/2011 | 01.10.2012 |
| 15 | Idea Cellular Ltd. | ST/MUM/Div-III/Gr-I/Idea/Lucknow/12/09 | 26.03.2013 |
| 16 | Idea Cellular Ltd. | ST/Div.III/Gr.I/SCN/Idea/(Spice)Dn/93/10 | 19.10.2010 |
| 17 | Idea Cellular Ltd. | ST/Dn-III/Gr-I/SCN/Idea/T& S/09 | 28.02.2013 |
| 18 | Idea Cellular Ltd. (Erstwhile Spice Communication Pvt. Ltd.) | C. No. V/(STC)15/CE/Adj/61/2008/ | 17.10.2008 |
| 19 | Idea Cellular Ltd. (Erstwhile Spice Communication Pvt. Ltd.) | C. No. V/(STC)15/CE/Adj/13/2009/ | 23.03.2009 |
| 20 | Idea Cellular Ltd. (Erstwhile Spice Communication Pvt. Ltd.) | C. No. V/(STC)15/CE/Adj/63/2009/4374-75 | 22.09.2009 |
| 21 | Idea Cellular Ltd. (Erstwhile Spice Communication Pvt. Ltd.) | C. No. V/(STC)15/CE/Adj/72/2009/ | 16.07.2009 |
| 22 | Mahyco Monsanto Biotech (India) Ltd. | ST/MUM/DNIII/GRI/SCN/MMBI/2009 | 20.09.2011 |
| 23 | Mahyco Monsanto Biotech (India) Ltd. | DGCEI/MZU/I&IS'C'/12(2)51/06 | 24.10.2008 |
| 24 | Mahyco Monsanto Biotech (India) Ltd. | ST/MUM/Dn.III/GR.I/SCN/MMBI/2009 | 14.10.2010 |
| 25 | Mahyco Monsanto Biotech (India) Ltd. | ST/MUM/DN-III/GR-I/SCN/MMBI/2009 | 22.04.2013 |
| 26 | Mahyco Monsanto Biotech (India) Ltd. | ST/MUM/Dn.III/GR.I/SCN/MMBI/2009 | 20.10.2009 |
| 27 | Mahyco Monsanto Biotech (India) Pvt. Ltd. | ST/MUM/Dn-III/Gr-I/SCN/MMBI/2009 | 12.04.2012 |
| 28 | Mahyco Monsanto Biotech (India) Ltd. | ST/MUM/Div-III/Gr-I/SCN (Interest)/MMBL/161/10 | 19.08.2011 |
| 29 | UPS Jetair Express Pvt. Ltd. | V/ST/HQ/AE/E/145/12 | 23.10.2012 |
| 30 | Vodafone Essar South Ltd. | ST/HQ/EA-2000/Gr-03/Vodafone-NLD/11-12 | 19.10.2012 |
| 31 | Vodafone Essar Ltd | V/ST/Dn-II/Gr IX/vodafone/inbounbd/2012 | 18.09.2012 |
| 32 | Vodafone Essar Ltd. | V/ST/Dn-II/GrIX/SCN/Vodafone/CG/2010 | 12.10.2012 |
| 33 | Vodafone Essar Ltd. | V/STC/Gr.IX/Tel/HMT/SCN/2004 | 25.09.2009 |
| 34 | Vodafone Essar Ltd. | V/ST/Div.II/Tech-II/Review/VEL/102/07 | 10.05.2011 |
| 35 | Vodafone Essar Ltd.(formerly known as Hutchison Max Telecom Pvt. Ltd. ) | V/STC/Gr.IX/Tel/HMT/SCN/2004 | 15.10.2008 |
| 36 | Vodafone Essar Ltd.(formerly known as Hutchison Max Telecom Pvt. Ltd. ) | V/STC/Gr.IX/Tel/HMT/SCN/2004 | 17.10.2008 |
| 37 | Vodafone Essar Ltd.(formerly known as Hutchison Max Telecom Pvt. Ltd. ) | V/STC/GR.VI/Tele/HMT/SIM/2005 | 20.03.2006 |
| 38 | Vodafone Essar Ltd.(formerly known as Hutchison Max Telecom Pvt. Ltd. ) | V/STC/Gr-IX/Tel/HMT/SIM/2006 | 11.10.2006 |
| 39 | Vodafone Essar Ltd.(formerly known as Hutchison Max Telecom Pvt. Ltd. ) | V/STC/GR.VI/Tele/HMT/SCN/221/2004 | 16.03.2005 |
| 40 | Vodafone Essar South Ltd. | ST/HQ/EA-2000/Gr-03/Vodafone-NLD/11-12 | 20.09.2012 |
| 41 | A B Corp Ltd | V-Adj/ST-II/abcorp/15-42/2012 | 12.04.2012 |
| 42 | A B Corp. Ltd. | ST/Div.IV/SCN/AA/774/05 dt.4.2.2005 | 04.02.2005 |
| 43 | Acculist Reseach Laboratories (I) P Ltd | ST/DnV/Gr.V/AR-Acculist/10-11/1931 | 11.10.2010 |
| 44 | Aditya Birla Minacr World Wide Ltd | ST/Div/Aditya Birla/courier/SCN-2/2010 | 20.10.2011 |
| 45 | Aditya Birla Minues World Wide Ltd | ST-Div-V/ABM/SCN-5/2010 | 16.04.2012 |
| 46 | Aditya Birla Minues World Wide Ltd | ST/Div.V/ABMWWL/SCN/2010/404 | 18.04.2013 |
| 47 | Advance Construction | ST/Div-V/ST-II/scrutiny/09-10/704 | 19.10.2011 |
| 48 | Advance Construction Co. Pvt. Ltd., | ST/Dn-V/ST-3/Scrutiny/09-10 | 17.10.2012 |
| 49 | Advance Construction Co. Pvt. Ltd., | ST/Div/V/ST-3/Scrutiny/09-10/1966 | 21.10.2010 |
| 50 | Advance Construction Co. Pvt. Ltd., | V-Adj/ST-II/ACC/15-198/2010 | 22.04.2010 |
| 51 | Almech Enterprises | V-Adj/ST-II/Almech/15-218/2010 | 10.05.2010 |
| 52 | Baker Hughes Asia Pacific Ltd | V-Adj/ST-II/BHA/15-211/2010 | 23.04.2010 |
| 53 | Baker Hughes Singapore Pte | V/Adj/ST-I/BHJ/15-44/2012 | 13.04.2012 |
| 54 | Balaji Telefilms Ltd. | Adj/ST-II/BTL/15-302/2010 DT. 15.10.10 | 15.10.2010 |
| 55 | BASF | V/STC/BASF/69/Bel/03 dt 23.06.03 | 23.06.2003 |
| 56 | BASF | V/STC/BASF/69/Bel/03 dt 19.04.04 | 19.04.2004 |
| 57 | BASF(I) Ltd | V/ST/Div-V(Bel)/SCN/BASF/2003 | 15.06.2006 |
| 58 | Bayer Material Science Pvt. Ltd. | ST/Div.VI/Gr.IV/Bayer/2011 | 07.10.2011 |
| 59 | Bharat Petroleum Corporation | ST/SC-V/CERA/BPCL/-06 dt. 29.08.2008 | 29.08.2008 |
| 60 | Bharat Petroleum Corporation | ST/SC-V/CERA/BPCL/06/3387 | 29.08.2008 |
| 61 | Bitcon India Infrastructure Development P. Ltd. | V/ST-I/HQ/AE/Gr.I/133/2008 | 19.10.2011 |
| 62 | Godrej Industries | ST/DN.V/GR.II/GIL-CRA/09-10/3947 | 05.10.2011 |
| 63 | Hydroair Tectonics (PC) Ltd | V/ST/HQ/AE/Enq/Gr.3/94/M-II/2011 | 11.04.2012 |
| 64 | Hydroair Tectonics (PCD) Ltd | V/ST/Dn-V/Bel/Gr.VI/HT Ltd/2012 | 20.12.2012 |
| 65 | Infrasoft Tech India Ltd. | V/ST/Div.VI/Gr.VI/ITIL/SCN/2010-11 | 03.10.2011 |
| 66 | Infrasoft Tech India Ltd. | V/ST/Div.VI/ITIL/SCN/2010-11 | 06.03.2012 |
| 67 | Ipca Laboratories Ltd. | DGCEI/MZU/I&IS'C'30-57/07 dtd.22.10.08 | 22.10.2008 |
| 68 | L & T Ltd | ST-II/HQRS Audit/Gr-4A/09/10/Part-I | 18.03.2013 |
| 69 | L&T Limited (HED) | ST/Div.V/Gr.II/L&T(HED)/SCN/2013 | 18.04.2013 |
| 70 | Larsen & Toubro Ltd. | ST-II/Dn-V/Gr.II/FAR/L&T(SSC)/2011 | 24.10.2011 |
| 71 | Larsen & Toubro Ltd. | ST/Div-V/Gr-II/L&T(Finance)/2010 | 09.10.2012 |
| 72 | Larsen & Toubro Ltd. | V/ST/Div-VI/Gr.II/L&T Grahak/17/2012 | 18.10.2012 |
| 73 | Larsen & Toubro Ltd. | ST-II/Div-V/Gr-II/L&T Finance/2009/Para4 | 09.10.2012 |
| 74 | Larson & Toubro | ST-II/Audit/EA2k/Gr.II/L&T/79/2010/1817 | 23.04.2013 |
| 75 | Mayfair Housing Pvt Ltd | V-Adj/ST-II/MHPL/15-74/2012 | 10.10.2011 |
| 76 | Mayfair Housing Pvt Ltd | V-Adj/ST-II/MH/15-73/2011 | 11.10.2011 |
| 77 | Meru Cab Company Pvt. Ltd | DGCEI/MZU/I&IS"B"/12(4)70/09 | 20.10.2010 |
| 78 | Meru Cab Company Pvt. Ltd | V-Adj/ST-II/Meru/15-65/2011 | 03.10.2011 |
| 79 | Meru Cab Company Pvt. Ltd | ST-II/DN.IV/GR.IV/MERU CAB/SCN/2011 | 20.10.2012 |
| 80 | Modern Cargo Services Pvt. Ltd | ST/Dn.V/Gr.III/19/09-10 | 07.09.2011 |
| 81 | Modern Cargo Services Pvt. Ltd | V-Adj/ST-II/Modern/15- /10 | 02.10.2012 |
| 82 | Modern Cargo Services Pvt. Ltd | ST-II/Div-V/Gr.III/19/09-10 | 01.10.2012 |
| 83 | Oglivy & Mather Pvt. Ltd. | V/ST/Div/IV/Gr/I/CERA-2000/OMPL/08 | 02.04.2009 |
| 84 | Pearl Logistics Services | V-Adj/ST-II/PLS/15-146/2010 | 22.04.2010 |
| 85 | Pearl Logistics Services | DGCEI/MZU/I&IS'D'/12(4)198/08 | 20.04.2009 |
| 86 | Petron Civil Engg. Pvt. Ltd. | ST/Dn.V/Gr.III/7/2010 | 18.10.2012 |
| 87 | Pfizer Ltd. | ST/MUM/IV/CERA/PFIZER/TTA/08 | 11.09.2008 |
| 88 | Ratiopharma India Pvt. Ltd. | V/ST/MUM/Div-VI/Gr-II/Ratiopharm-26/08-09 | 17.10.2008 |
| 89 | S P Fabricators Pvt. Ltd. | V/ST/Dn V/Bel/DAR/S.P.Fab/2010 | 24.10.2011 |
| 90 | S P Fabricators Pvt. Ltd. | V/ST-II/Div.V(Bel)/DAR/S P Fab/2010 | 14.01.2013 |
| 91 | Sai Star Distributors | ST/MUM/Dn.IV/SCN/CBL/08 dtd.22.10.08 | 22.10.2008 |
| 92 | Schlumberger Asia Services Ltd. | STC/MV/SCN/SAS/498/02 dt 10.06.02 | 10.06.2002 |
| 93 | Schlumberger Asia Services Ltd. | STC/MV/SCN/Schlumber/611/02 | 31.01.2003 |
| 94 | Schlumberger Asia Services Ltd. | STC/MV/SCN/SAS/487/02 dt 06.06.02 | 06.06.2002 |
| 95 | Schlumberger Asia Services Ltd. | STC/MV/SCN/SASL/456/04 dt 06.05.04 | 06.05.2004 |
| 96 | Schlumberger Asia Services Ltd. | STC/MV//SCN/Schlumber/48/03 | 18.08.2003 |
| 97 | Sitel India Ltd | ST-II/Dn.V/Gr.IV/SCN/Sitel/94/Pt.2/2011 | 21.10.2011 |
| 98 | Sitel India Ltd | ST-II/Dn.V/Gr.IV/SCN/STEL/94/11 | 19.10.2011 |
| 99 | Sitel India Ltd | ST-II/Dn.V/Gr.IV/Sitel/94/Pt.1/2011 | 19.10.2011 |
| 100 | Sitel India Ltd | ST-II/Dn.V/Gr.IV/Sitel/33/2012 | 12.10.2012 |
ORDER NO 06/2013-Service Tax dated 04-10-2013
Government of India
Ministry of Finance
Department of Revenue
Service Tax Wing
***
ORDER 6/2013- Service Tax
New Delhi dated the 4th October, 2013
In exercise of the powers conferred by section 83 A of the Finance Act 1994, as amended read with notification 30/2005-Service Tax dated 10th August 2005 , as amended and notification 16/2007-Service Tax dated 19th April, 2007 , the Central Board of Excise and Customs hereby assigns to the Commissioner of Central Excise Hyderabad II , the adjudication of the show cause notices at S. Nos 1 and 2 of the following Table, answerable to the Commissioner of Central Excise Guntur and Commissioner of Central Excise Hyderabad III respectively, issued to the assessee indicated in column(2) of the said Table and the details of which are indicated in columns ( 3) and (4) of the said Table
Table
| S.No | Name of the assessee | File number of Show cause notice | Date of Show cause notice |
| (1) | (2) | (3) | (4) |
| 1 | M.R.K.R Construction and Industries Private Ltd, 8-2-268/1/D/A, Plot no 7, Aurora Colony, Road No 3, Banjara Hills, Hyderabad | INV/DGCEI/CHZU/ST/61/2011 | 18-10-2011 |
| 2 | M.R.K.R Construction and Industries Private Ltd, 8-2-268/1/D/A, Plot no 7, Aurora Colony, Road No 3, Banjara Hills, Hyderabad | INV/DGCEI/CHZU/ST/60/2011 | 27-2-2012 |
-sd-
( Rajeev Yadav)
Director ( Service Tax)
Central Board of Excise and Customs
F. No 137/42/2013-Service Tax
To
Chief Commissioner of Central Excise Hyderabad/ Guntur
Commissioner of Central Excise Hyderabad-II/ Hyderabad-III/ Guntur
Additional Director General DGCEI, ( Headquarters), New Delhi
ORDER NO 07/2013-Service Tax dated 04-10-2013
Government of India
Ministry of Finance
Department of Revenue
Service Tax Wing
***
ORDER 7/2013- Service Tax
New Delhi dated the 4th October, 2013
In exercise of the powers conferred by section 83 A of the Finance Act 1994, as amended read with notification 30/2005-Service Tax dated 10th August 2005 , as amended and notification 16/2007-Service Tax dated 19th April, 2007 , the Central Board of Excise and Customs hereby assigns to Shri J. S Negi, Additional Commissioner in the office of the Commissioner of Service Tax , Ahmedabad, the adjudication of the show cause notices at S. Nos 1 to 3 of the following Table, answerable to the to the Additional Commissioner in the office of the Commissioner of Service Tax , Ahmedabad, Deputy Commissioner of Central Excise, Service Tax Division –I Surat and Deputy Commissioner of Central Excise, Service Tax Division Rajkot, respectively , issued to the assessee indicated in column(2) of the said Table and the details of which are indicated in columns ( 3) and (4) of the said Table
Table
| S.No | Name of the assessee | File number of Show cause notice | Date of Show cause notice |
| (1) | (2) | (3) | (4) |
| 1 | Divya Tourism Private Limited, 609, Gurukripa Tower, Near Moti Tanki Chowk, Opposite Tata Indicom, Subhash Road, Rajkot | DGCEI/AZU/36-20/2010-11 | 23-4-2010 |
| 2 | Divya Tourism Private Limited, 609, Gurukripa Tower, Near Moti Tanki Chowk, Opposite Tata Indicom, Subhash Road, Rajkot | DGCEI/AZU/36-21/2010-11 | 23-4-2010 |
| 3 | Divya Tourism Private Limited, 609, Gurukripa Tower, Near Moti Tanki Chowk, Opposite Tata Indicom, Subhash Road, Rajkot | DGCEI/AZU/36-22/2010-11 | 23-4-2010 |
-sd-
( Rajeev Yadav)
Director ( Service Tax)
Central Board of Excise and Customs
F. No 137/42/2013-Service Tax
To
Chief Commissioner of Central Excise, Ahmedabad
Chief Commissioner of Central Excise, Vadodara
Commissioner of Service Tax Ahmedabad
Additional Director General DGCEI, ( Headquarters), New Delhi
Shri J.S. Negi, Additional Commissioner , Office of Commissioner of Service Tax Ahmedabad
No financial impact as service tax is pass on: SREI Infra
The Central Board of Excise and Customs has said that tower companies cannot avail of central value added tax (CENVAT) credit on goods and services used in the construction of towers. This may in turn impact tower companies. However, Sunil Kanoria, Director of SREI Infrastructure says there is no impact per se because the service tax is a pass on. Also Read: Service tax dept slaps Rs 150 cr tax order on GTL Infra The tower owning companies used the taxes that they have paid as a set off against taxes they have to pay and hence got some bit of relief on taxes. But now with the department saying that such credit cannot be taken, notices have been sent to some of the tower companies. SREI Infrastructure owns 18 percent stake in Viom Networks although the Tatas hold the larger stake. Kanoria says the net off in the last two years has been negligible because new tower rollouts have been very few. He says the sector has clearly slowed down, besides his own approach has been fairly conservative for close to two years now. Therefore, he expects to see slow growth in AUM in this current financial year. Below is the verbatim transcript of Sunil Kanoria's interview on CNBC-TV18 Q: How much did you get net off in the last financial year? A: Hardly anything because in the last two years, new tower rollouts have been very negligible. Therefore, you do not have it is basically an issue which has been there from 2008-2009 - maybe when the tower growth was happening. So last two years it is virtually very negligible. Q: It is not as if you will see any prospective fall or a rise in taxes, could there be some deferred impact if at all, the tower companies were to lose this case? A: It will be in a deferred cash flow impact but ultimately the service tax is all VATable and pass on. |
Monday, 7 October 2013
Developer of housing project need not to own land as well to claim sec. 80-IB relief
IT : For claiming deduction under section 80-IB housing project developer need not be owner of land; limitation of commercial area applies only to projects initiated after 1-4-2005
ITAT slams revenue for invoking sec. 194C on an assessee who was receiving money rather than on paye
IT : Where assessee-corporation only licenced society to ply city buses for payment per kilometer, no tax was to be deducted as assessee was receiving and not paying anything towards terms of agreement
No reassessment on excess recovery of reimbursement if details were already given in original assess
IT: Where excess recovery of reimbursement of expenses was already shown as income by assessee and details of such recovery were also produced in original assessment, reassessment proceeding to tax said amount was invalid
GOVERNMENT PLANS TO SHIFT TAXATION FROM DIRECT TO INDIRECT
On 1 October, the Finance Ministry formally submitted to the European Commission an Economic Partnership Programme (EPP), together with a Report on Effective Action, which outline the Government’s plan to close 2013 with a general government deficit below 3%.
In its report, the government speaks of plans to continue shifting taxation from direct to indirect over the medium term.
The report says that further to the revisions in the income tax regime in recent years, the 2013 Budget provided for the widening of the income tax bands for single and joint tax computations, and for parents supporting minors who are not gainfully employed. However, this will be implemented gradually in a manner that will limit the expansionary impact on public finances which will amount to 0.17 per cent of GDP in 2014.
For the period 2013 to 2016, the gradual losses from the revision in the income tax regime affecting direct taxation will be offset by similar gradual revisions in indirect taxation planned in the context of the budgetary exercise for the upcoming year. Moreover, revisions to the VAT legislation are currently ongoing, the report says. These will empower the minister responsible for finance to revise as necessary the penalties and interest payable on taxation due in order to increase tax compliance and ease the recovery of amounts due.
The Economic Partnership Programme (EPP) is divided in two main chapters. The first chapter presents the Government’s key policy planks which represent the crux of the Government’s fiscal and economic strategy and which also correspond to the Country Specific Recommendations (CSRs).
Furthermore, the fiscal framework underpinning the overall strategy is laid forward. This fiscal framework will ensure that Malta moves towards fiscal consolidation and achieves fiscal sustainability. The second chapter lays forward the necessary measures and reforms taken by the Malta Government in all sectors of the economy to ensure that Malta will exit the excessive deficit procedure permanently.
The main economic and fiscal measures proposed include: the diversification of energy sources and the restructuring of the energy corporation (Enemalta); the restructuring of Air Malta; the Pension reform process including the proposed introduction of the third pillar pensions; reforms underway in the health sector; further investment in education; as well as measures to reduce the poverty trap and therefore encourage people to get into employment rather than stay dependent on social benefits.
Other important measures included under the EPP are measures to increase competitiveness through diversification, through incentives and programmes aimed at SMEs and other businesses and through various other reforms, including the holistic Justice reform.
The Report on Effective Action focuses on providing a quantitative analysis on how the Government will reduce the deficit-to-GDP ratio below the 3% threshold.
Filing tax returns: Will projecting it as a status symbol nudge people to pay more?
In what is just the latest bout of a decades-old carrot and stick approach, the tax department has launched a new campaign to get people to pay up taxes. This time, it's all about making people see the tax return as a status symbol.
To this end, minister of state for finance JD Seelam is planning to visit all the 35 cities that house zonal tax offices in a bid to bridge the gap between taxmen and big taxpayers.
Seelam has already visited cities such as Hyderabad, Ahmedabad, Bhopal and Jaipur. "We would like to create a non-adversarial tax environment. The trust deficit between taxmen and industry needs to be removed. Our target is to make people feel that paying tax is a status symbol. That should increase our collection," he says. But will this approach work?
Tax Returns are the New Black
As economic turbulence continues, finance ministry officials are not quite sure whether the tax authorities will meet the tax revenue target of Rs 12.35 lakh crore this year, as was estimated in the Budget. As far as direct taxes go, till September 17, for which data is available, net direct tax collection was up 12.7% to Rs 2.38 lakh crore, triggered mainly by a 21% increase in the personal tax component. But the concern is with corporate taxes, which is up a mere 8% from a year earlier.
A fifth of total tax revenues is from income taxes while corporate taxes make up 34%. The remainder is from indirect taxes such as excise and customs duties. However, the government raises the bulk of its tax revenues from a very small proportion of tax payers. This has always been the case. As of 2011-12, for instance (see Taxing Times), just 1.3% of tax payers, who earned Rs 20 lakh or more, accounted for around 63% of the income taxes collected.
Similarly, while a few lakh companies are registered in India, 1,746 companies with a gross profit of above Rs 50 crore accounted for over three of every four rupees of corporate tax collected in 2011-12.
In a now oft-quoted statement, finance minister P Chidambaram pointed out in his Budget speech earlier this year that there are only 42,800 individuals in the records of the tax department who have a declared income for tax purposes of over Rs 1 crore.
"The economic situation is not in my hands. But I am sure if we make tax administrators act more as facilitators than regulators, tax compliance will increase. Our effort will be to make tax payers feel proud when they pay tax," says Seelam.
In the past, the government has offered various incentives to get people to pay up. Businessmen and film actors have been felicitated for being highest taxpayers. Only two years ago, Cognizant Technology Solutions vice-chairman Lakshmi Narayanan was honoured as the top individual taxpayer in Tamil Nadu as a part of the I-T department's 150-year anniversary celebrations. In July this year, the Punjab government approved a new scheme to award top taxpayers both at state and district levels. The scheme initiated by the state excise and taxation department is aimed at increasing the collection of state tax, including value-added tax (VAT). But there is a minimum threshold of tax payment to qualify for such awards. For example, a rice sheller will qualify for the honour only if he pays at least Rs 2 crore as tax. Similarly, for mobile dealers, the minimum qualification is a tax payment of Rs 25 crore.
In the past, the government has also announced numerous tax amnesty schemes, with mixed success. For instance, the Voluntary Disclosure of Income Scheme was launched in the late '90s with much fanfare under P Chidambaram as finance minister.
"If the Centre is gearing up for a campaign to honour top tax payers, it's a welcome move. But the problem with any government department is that its left hand does not know what its right hand is doing. You shouldn't be surprised if one wing awards a taxpayer and the other raids him. There is a precedence to that," says Sudhir Chandra, former chairman of Central Board of Direct Taxes (CBDT).
Carrot, But also Stick
Another former CBDT chairman PK Misra says recognizing honest tax payers can only be a small component in the campaign to raise more tax. Coercion needs to continue as the core strategy alongside persuasion. "In Western countries 'I pay tax, I buy civilisation' has worked. It won't work in India. Here nobody wants to part with the money that reaches one's pocket," he says.
An income-tax officer posted in Gujarat, one of India's richer states, agrees. "We have to balance both tactics," he says. "Smaller taxpayers, for instance, are usually in a frame of mind where they will pay tax but don't want to face the procedural hassles. In their case, we should make all efforts to ensure that the process is simplified."
"But there is also a class of hardened tax payers who absolutely do not want to pay tax," he adds. "They use chartered accountants (CAs) and tax lawyers to hide money, and it is important to tackle such people through enforcement, searches etc."
Be aware of your rights as an investor: Study all offer documents carefully
To have a smooth financial journey as an investor , you have to fulfill certain duties and, under the laws that regulate the mutual fund industry, you also enjoy some rights.
An ideal investor is one who is aware of the rights, and disciplined and serious about his/her duties too.
Some of the important rights that you enjoy as an MF investor include the freedom to go through the offer document of the scheme that you intend to invest in, email/SMS alerts relating to your investments, receiving annual reports, periodic updates and other important communications from the fund house including any proposed change in a scheme's attributes.
You also enjoy the right to know how much commission the person who is advising you to invest is getting from the fund house. Also, you can get your complaints, if any, redressed through proper channels and to your complete satisfaction.
What you're entitled to:
Offer document:
An offer to invest in an MF scheme contains the scheme information document (SID) and a statement of additional information (SAI). In addition, you can also go through the key information memorandum (KIM), which gives important information about the scheme you intend to invest in as well as the fund house.
Colour coding:
This is a new tool aimed at helping investors choose between MF schemes which are least risky (Blue dot), moderately risky (yellow dot) and highly risky (brown dot). Here, each fund house labels every scheme with the appropriate code to make it easier for you to select the one best suited to your risk profile.
Email/SMS alerts:
Within five working days of your investing in a scheme — either for the first time or as a continuing investor — you should receive an email alert or an SMS about your investments.
Fund statements, periodic updates and annual reports:
As an investor in a scheme, you should receive periodic updates from the fund house about the scheme as well as the fund house, its annual report and updates as and when issued.
Consolidated statements:
Relatively a new initiative, all MF investors now get a consolidated monthly statement of all their fund-related transactions in each scheme where he/she has investments, across all types of schemes (equity, debt, liquid, gold ETF) and across all fund houses. However, if there is no transaction during a particular month(s), you will receive a half-yearly statement.
Assessee entitled to interest as delay in grant of Cenvat credit attributable to Department, says HC
ST: If department unjustly withholds rightfully earned Cenvat credit, assessee is entitled to interest and department cannot cite absence of any specific provision
Software license for one year doesn't confer any enduring benefit; licensing fee held as revenue exp
IT : Software license for one year does not confer any enduring benefit; licensing fee held as revenue expenditure
India’S Sham Fuel Pricing Regime Boosts Subsidies
The biggest component of India's import is crude oil; around 80% of our crude is imported. The high international crude price, around $110 per barrel, coupled with a weaker rupee, is amplifying India's current account deficit.
India spent a staggering $169.25 billion to import crude oil in 2012-13 and has already spent $47.13 billion on oil imports in first four months of this fiscal year.
Unfortunately, India's pricing mechanism of fuels is also faulty. India is a net importer of crude oil but a net exporter of petroleum products, thanks to excess refining capacity. The price of fuels in India is governed by trade parity pricing (TPP), comprising of 80% import-parity price (IPP) and 20% export-parity price (XPP) at the refinery gate.
So, though the products are produced in India, they are priced as if we are importing these products by benchmarking them with the price of the products prevailing in the Arabian Gulf. On top of that, some imaginary costs like trade premium and ocean freight charges are also levied in dollar terms.
IPP price is then achieved converting it to Indian currency. The non-existent price build-up does not stop here. Charges like customs duty and import charges are further added to the IPP price. In India, the retail price of petroleum products, other than petrol and aviation turbine fuel (ATF), is administered and is much lower than TPP.
The gap between the TPP of a petroproduct like diesel at the refinery gate and its administered price is termed as under-recoveries or losses. Government compensates three state-run oil marketing companies (OMCs) for their losses. Is under-recovery really a loss?
A closer look at the price build-up of diesel in Delhi — as reported on Indian Oil Corporation's website — reveals that the so-called underrecoveries of OMCs are notional and exaggerated due to the inclusion of non-existent costs like trade premium, ocean freight charges, customs duty and import charges in calculating TPP.
Adepreciating rupee further aggravates the loss figures because of unnecessary benchmarking of petroproduct price with foreign currencies. Current under-recovery on diesel reaches Rs 12.12 per litre from Rs 10.22 per litre on August 16, 2013.
The scheme of under-recovery also acts as a barrier to private players from entering the market because, unlike the state-owned OMCs, the government won't bear the compensation burden for them. Private players should be eligible for the same subsidies as public companies. This will encourage competition and break down the apparent cartelisation among OMCs.
The finance minister has said that the government would leave no stone unturned to contain the current account deficit at about $70 billion, or 3.8% of GDP, from a record high of 4.8% last year.
The government has imposed several restrictions on foreign exchange outflows and gold imports to arrest rupee depreciation but ignored a low hanging fruit: the rectification of faulty pricing mechanism of petroleum products. Because India is a net exporter of petroleum products, the appropriate cost price for the oil retailer at the refinery gate should be XPP, the price that oil companies would realise on export of a petroleum product.
By construct, XPP is lower than the TPP and, as on August 16, 2013, the divergence was Rs 1.86 per litre for diesel, which must have broadened by further depreciation. Redefining under-recovery with respect to XPP will isolate the price of regulated petroleum products from the exchange rate.
It will significantly reduce the country's subsidy burden and, according to a rough estimate by the finance ministry, a shift to XPP would have cut the subsidy on diesel by Rs 14,372 crore in 2012-13. Additionally, Rs 2,245 crore and Rs 1,001 crore would have been saved on LPG and kerosene respectively.
Private participation should further reduce XPP and, hence, under-recovery figures, as private players are better than their state-run counterparts in refining in terms of superior technologies, hedging strategies, high-sea deals in crude procurement and strategic coastal locations.
Source:- economictimes.indiatimes.com
Wsa Slashes India's Steel Demand Projection In 2013 To 3.4%
07-Oct-2013
World Steel Association (WSA) has slashed its projection for India's steel demand growth to 3.4 per cent for the current year from the earlier forecast of 5.9 per cent.
"In India, steel demand is expected to grow by 3.4 per cent to 74 million tonnes (MT) in 2013 following 2.6 per cent growth in 2012 as high inflation and structural problems are constraining steel using sectors' activities," the industry association said in its short-range outlook relased today.
WSA had in April projected India's steel demand growth at 5.9 per cent for 2013, pinning hopes on monetary easing and investment activities.
The demand growth projection for the next year has also been reduced to 5.6 per cent from seven per cent projected earlier.
"In 2014, steel demand is expected to grow by 5.6 per cent helped by accelerated attempts to implement structural reforms," it added.
However, it has increased the projected global steel use to 3.1 per cent to 1,475 MT for 2013. In 2014, it forecast that world steel demand growth rate to be even higher at 3.3 per cent to reach at 1,523 MT. Global steel use grew by two per cent in 2012.
The global demand growth would be fuelled by China, where demand for the country was forecast to grow by six per cent.
"Thus, despite steel demand growing by only 0.7 per cent in the rest of the world, total global steel demand will grow by 3.1 per cent," WSA said.
In a separate statement, WSA said it has appointed POSCO Chairman and CEO Joon-Yang Chung as its new Chairman for a year.
Source:- economictimes.indiatimes.com
Assocham Suggests 50% Hike In Msme Investment Limit
07-Oct-2013
The Associated Chambers of Commerce and Industry of India (Assocham) has recommended that the definition of micro, small and medium enterprises (MSMEs) under the MSMED Act 2006 should be revised. This is one of eight major recommendations by the chamber to help the MSME sector.
In a report titled Indian MSMEs: Current Scenario and the Way Forward, which Assocham recently submitted to Finance Minister P Chidambaram, the chamber said that keeping in view the definitions of MSMEs in other countries and inflation in India in the last few years, the capital investment limits on the basis of which MSMEs are defined are too low. They should therefore be increased by at least 50 per cent.
Moreover, the number of employees should also be incorporated in the definition, as in other countries, it said. For sustained growth, it is important for MSMEs across the country not only to deal with big corporates and government companies, but also to interact among themselves to identify new business opportunities, said Assocham.
The other major recommendations pertain to availability and cost of credit, marketing support, modification in labour laws, infrastructure, incentives and expanded tax benefits, constitution of a standing committee of secretaries to resolve policy and implementation-related issues, and greater and coordination at the ground level between Customs and DGFT offices.
Assocham feels that the current global economic scenario has thrown up both opportunities and challenges to the Indian MSME sector. On the one hand, opportunities have opened up enhance productivity and look at new national and international markets.
On the other, these opportunities compel MSMEs to upgrade the competencies that will be needed to withstand competition, since obsolescence is rapid, with new products being launched at an incredible pace and being available worldwide in a short time.
The chamber said that if its recommendations are implemented, the result will be a big boost for the MSME sector.
Source:- business-standard.com
End Port, Rail Coal Mismatch To Gain India Prize – Webber Wentzel
07-Oct-2013
The participants of South Africa’s coal value chain needed to put an end to the misalignment of port over capacity and rail under capacity, Webber Wentzel mining partner Manus Booysen said on Monday.
Booysen, just back from a major McCloskey coal conference in New Delhi, called for coal value chain participants to meet urgently at the highest level to take full advantage of the colossal opportunity that was rapidly building up for the export of additional coal to an energy-hungry India.
Booysen told Mining Weekly Online in a video interview that the reward for South Africa of such collaboration between the government, Transnet and the coal mining industry would be significant job creation, a boost for black economic empowerment (BEE) and an injection of additional foreign exchange into the country.
“We need collaboration, cooperation and realistic understanding of the coal industry and the marketing opportunities and we all need to work towards that common goal and to achieve that in the best possible way,” Booysen told Mining Weekly Online (see video attached).
He said India would soon be needing 950-million tons of coal a year to bring electricity to its vast population and it could only source 750-million tons of it locally.
The 200-million-ton shortfall gave South Africa an opportunity as it had become the preferred supplier of energy coal to the sub continent for geographical and coal quality reasons.
In addition, many Indian companies were considering investment or had already invested in coal mining in South Africa, with an eye on rising Indian demand.
The only kink in South Africa’s armour was rail capacity, which, as prospective Indian investors had earlier pointed out from public forums, should not be an impediment in a modern economy.
Transnet, which recently attained the equivalent of what would amount to 72-million tons of coal exportation on a yearly basis, had the great advantage of supplying a port – the Richards Bay Coal Terminal (RBCT) – that already had considerable spare capacity in being able to export at a rate of 91-million tons a year.
Just closing that gap of nearly 20-million extra tons of coal a year would be a vital source of additional economic activity for South Africa, without the need for capital outlay, and there was a long term opportunity to do much more, not only in South Africa, but also Southern Africa, taking in landlocked but coal-rich Botswana.
South Africa, Booysen believed, was in a better position to supply India than Indonesia, which had coal quality problems, and Australia, which was under production cost pressure.
But while South Africa had coal production capacity and port capacity, rail remained the limiting factor.
“We need to expand that,” Booysen urged, adding that it would give expression to the economic objective of the Mineral and Petroleum Resources Development Act to open up opportunities for historically disadvantaged South Africans to gain access to the exploitation of South Africa’s natural resources.
On the impediments in the way, Booysen told Mining Weekly Online that there was an unfortuante element of misalignment between the State-owned Transnet and the privately owned RBCT that needed to be eliminated.
“We understand that Transnet is now proposing to have a portion of the increased RBCT capacity as unallocated with the intention that the unallocated capacity will be made available to BEE players in the mining industry and emerging miners.
“We believe there could be greater cooperation between Transnet and RBCT and the various coal producers to achieve the economic opportunities and also promote BEE in the mining industry,” Booysen added to Mining Weekly Online.
Source:- miningweekly.com
India's Sept Soymeal Exports Down 5.5 Pct On Month
07-Oct-2013
India's soymeal exports in September fell 5.5 percent from a month earlier to 173,381 tonnes, a leading trade body said, but shipments could rise as new crop starts rolling in from October.
Fresh harvests from this month will raise supplies of soybeans, helping Asia's leading soymeal exporter boost supplies to buyers such as Iran, Japan and Taiwan.
Soybeans are crushed to produce edible oils and animal feed.
Traders expect improved new season crop would cut local soybean prices and push up overseas sales of soymeal.
The average export price for soymeal was $510 per tonne in September against $520 in August, free on board, data from the Solvent Extractors' Association (SEA) showed on Monday.
Soymeal exports for the first half of this fiscal year from April rose 6.2 percent from a year ago to 873,481 tonnes, the data showed. India's total oilmeal exports rose 1.2 percent to 1.65 million tonnes during the period.
"The half-yearly imports rose mainly due to the weak value of Indian currency," said B.V. Mehta, SEA's executive director.
Weakness in the rupee, which is down about 12 percent against the dollar so far this year, is expected to support exports of the animal feed.
India exported $1.8 billion of oilmeal in the fiscal year that ended in March 2013, when its annual exports of oilmeal fell 14.3 percent to 4.8 million tonnes.
Mehta said Indian soymeal exports lost ground this year in Vietnam where local supplies increased, but overseas sales of the animal feed surged in Iran and Europe.
Iran, the biggest buyer of Indian soymeal since February, imported 518,178 tonnes in the first half of the current fiscal year, a 25 percent jump from a year ago period.
Iran is set to emerge as the biggest buyer of soymeal from India for a second straight year.
Iran's purchases of food items are excluded from Western sanctions aimed at halting its disputed nuclear programme.
Tehran finds it hard to pay for imports due to the sanctions but India, its second biggest oil client after China, pays in rupees and these can be used by Iran to buy commodities such as rice and soymeal.
Europe's soymeal imports from India rose to 138,904 tonnes in April-September from 300 tonnes a year ago.
India's total oilmeal exports in September dropped around 6 percent to 294,830 tonnes from the previous month. (Editing by Nidhi Verma and Keiron Henderson)
Source:- in.reuters.com
Cotton Yarn Exports Likely To Drop By 20% In The Current Fiscal
07-Oct-2013
Cotton yarn exports from India, which has touched 120 million kg per month, is likely to drop by 20% in the current fiscal following the UPA government's sudden decision to remove the exports benefits under focus market scheme (FMS) on cotton yarn. FMS is aimed at developing new markets across the globe for Indian products.
Till date, Latin America and Africa were the focused markets for Indian cotton yarn exports. The move will also affect the spinning mills in Tamil Nadu, Andhra Pradesh, Kerala, Karnataka, Punjab and Haryana as this will create an excess capacity of yarn in the country and affect the trade in the second half of current fiscal. Talking to ET, T Rajkumar, chairman, Southern India Mills' Association (SIMA) said "We produce 330 million kg of yarn per month. Of this 200 million kg is used in the domestic market and rest is exported. China and Bangladesh accounts for 65% of the country's total yarn exports. But exports to new markets that we were developing for cotton yarn will take a beating due to the removal of FMS. Nearly 20% of the exported volume goes to these focused markets." Moreover, competitors of Indian yarns will take advantage of the current situation and will increase their exposure in these emerging markets.
SP Oswal, chairman, Vardhman Mills said "We will have to face stiff competition from Indonesia, Thailand and Turkey in the world market." "Last year, there was good demand of coarse cotton yarn from China which earned good revenues for the textile sector. This year we are not sure whether to get such demand from China," said Rajkumar. He also added that cotton yarn prices have not kept pace with cotton prices.
In the first week of October last year, price of a candy of cotton (Sankar 6 variety) was 32,900 and the price of a kg of cotton yarn was 228. But this year cotton prices have climbed to 48,500 a candy and the cotton yarn prices is hovering around 256 a kg.
Prem Malik, chairman, Confederation of Indian Textile Industry (CITI) said "The production of cotton yarn has gone up, but the domestic demand has not kept pace with the increasing production. There has been a decline in cotton yarn prices in the domestic market in recent weeks." India is the most competitive yarn producer in the world at present and therefore there is increasing export opportunities opening up for our cotton yarn, Malik said.
Referring to the urgent need to bridge the Capital Account Deficit (CAD), the CITI chairman said that textile products, including cotton yarn, have increasing demand in overseas markets and it will be logical to encourage export of cotton yarn from the point of view of bridging the CAD, in addition to creating additional employment.
Source:- articles.economictimes.indiatimes.com
Provisions of SICA prevail over IT Act; Scheme by BIFR to waive off tax liability of co. to be wound
SICA: Specific reference to Foreign Exchange Regulation Act and Urban Land Ceiling Act in section 32(1) and to section 72A of Income-tax Act, mean that those provisions will stand excluded from rigors of section 32 of SICA
To ease Foreign Portfolio investor norms SEBI suggests new investor class for FIIs, their sub-accoun
SEBI : SEBI Board Meeting - SEBI (Foreign Portfolio Investors) Regulations, 2013
Services provided by assessee for brand building of its foreign AE deemed as 'International Transact
IT/ILT: Where assessee performed greater servicer than a normal distributor, by performing functions of advertisement, it contributed to brand building of foreign AE, resulting in an international transaction
Telephones installed at the officers' residence get input service credit to the employer
ST : Where telephones installed at residences of officials were integrally connected with business of manufacture of final product of assessee, service tax paid thereon was eligible for input service credit
Receipts on transfer of building in SEZ to AEs eligible for sec. 80-IAB relief as it was an authoriz
IT: Where assessee had transferred a building constructed by it in Special Economic Zone on long-term lease to an associate concern, which was authorized activity, assessee was eligible for deduction under section 80-IAB in respect of profit derived from transfer of said building
Time-limit for project completion for sec. 80-IB(10) benefits reckoned from fresh approval taken by
IT: Time-limit for project completion for section 80-IB(10) benefits reckoned from fresh approval taken by successor of land
Service Tax Circular No.173/8/2013-ST dated 07-10-2013
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Tax Research Unit
Circular No.173/8/2013 – ST
North Block
New Delhi, 7th October, 2013
To
Chief Commissioners of Central Excise and Customs (All),
Director General (Service Tax), Director General (Central Excise Intelligence), Director General (Audit),
Commissioners of Service Tax (All)
Commissioners of Central Excise (All),
Commissioners of Central Excise and Customs (All).
Madam/Sir,
Subject: Restaurant Service- clarification -regarding
As part of the Budget exercise 2013, the exemption for services provided by specified restaurants extended vide serial number 19 of Notification 25/2012-ST was modified vide para 1 (iii) of Notification 3/2013-ST . This has become operational on the 1st of April, 2013.
- In this context, representations have been received. On the doubts and questions raised therein clarifications are as follows:
Doubts Clarifications 1. In a complex where air conditioned as well as non-air conditioned restaurants are operational but food is sourced from the common kitchen, will service tax arise in the non-air conditioned restaurant? Services provided in relation to serving of food or beverages by a restaurant, eating joint or mess, having the facility of air conditioning or central air heating in any part of the establishment, at any time during the year (hereinafter referred as ‘specified restaurant’) attracts service tax. In a complex, if there is more than one restaurant, which are clearly demarcated and separately named but food is sourced from a common kitchen, only the service provided in the specified restaurant is liable to service tax and service provided in a non air-conditioned or non centrally air- heated restaurant will not be liable to service tax. In such cases, service provided in the non air-conditioned / non-centrally air-heated restaurant will be treated as exempted service and credit entitlement will be as per the Cenvat Credit Rules. 2. In a hotel, if services are provided by a specified restaurant in other areas e.g. swimming pool or an open area attached to the restaurant, will service tax arise? Yes. Services provided by specified restaurant in other areas of the hotel are liable to service tax. 3. Whether service tax is leviable on goods sold on MRP basis across the counter as part of the Bill/invoice. If goods are sold on MRP basis (fixed under the Legal Metrology Act) they have to be excluded from total amount for the determination of value of service portion.
- Trade Notice/Public Notice may be issued to the field formations and taxpayers. Please acknowledge receipt of this Circular. Hindi version follows.
Yours sincerely,
(S. Jayaprahasam)
Technical Officer, TRU
Tel: 011-2309 2037
F.No.334/3/2013-TRU
India's retirement savings, income index improves: Report
NEW DELHI: India's retirement savings and income system index has improved over the last year and the performance is likely to improve significantly as pension coverage of the unorganised sector increases, says a report.
According to the Melbourne Mercer Global Pension Index, India's overall value increased from 42.4 in 2012 to 43.3 in 2013, out of 100. Of the 20 nations on the list, India is ranked at the 19th position.
However, India's score in the adequacy sub-index, which essentially measures how much income individuals are likely to have at retirement, improved from 37.4 in 2012 to 41.2 in 2013.
"It is heartening to see India's overall index improve in 2013," Mercer Retirement Business Leader Arvind Usretay said, adding that "the overall index value for India could significantly improve with increased pension coverage of the unorganised sector".
The passage of the Pension Bill is a landmark step for India towards ensuring this kind of coverage through the National Pension System (NPS). NPS remains the 'true' pension option available to individuals apart from employer provided retirement schemes, he added.
In the overall list of 20 nations, India was ranked last but one. It was topped by Denmark, followed by the Netherlands and Australia in the second and third place respectively.
According to David Knox, Senior Partner at Mercer and author of the research "as countries grapple with rising life expectancies, increased government debt, uncertain economic conditions and a global shift to defined contribution plans, there are still many lessons to be learnt and new solutions to be found, particularly for the post-retirement years."
An index value between 35-50 indicates a system that has some desirable features, but also has major weaknesses and/or omissions that need to be addressed. Without these improvements, the efficacy and sustainability are in doubt, the report said.
This year's Melbourne Mercer Global Pension Index covered 20 countries. The index measures the adequacy, sustainability and integrity of a country's pension system and is produced by Mercer and the Australian Centre for Financial Studies and is funded by the Victorian State Government.
As per the methodology adopted, each country is given a score between 0 and 100. The overall index value represents the weighted average of the three sub-indices - adequacy, sustainability and integrity.
FMV of a land not determinable on basis of guidelines meant for sub-registrar unless these are scien
IT : For computing capital gains under section 48, fair market value of property cannot be determined on basis of guideline value emanating from Sub-registrar's office unless it is scientifically arrived at
Creditors can apply for restoring name of co. within 20 years from date of publication in Official G
CL: Any creditor can make an appropriate application to company court before expiry of 20 years from publication in Official Gazette seeking restoration of name of company in register so that it can pursue its remedies which are available to it under law for recovery of amount from company whose name was struck off
Sum paid to prepone expiry of an agreement is related to business; allowable as revenue exp.
IT : Compensation paid by assessee for pre-closure of agreement to receive nitrogen gas would be allowable as revenue expenditure
Transactions with sole aim of getting tax benefits without any economic objective can't be held as '
ST/ECJ: Tax authorities cannot carry out inquiries to determine intention of taxable person in entering various transactions except in case of abusive practices; therefore, merely because a transaction was carried out with sole aim of obtaining a tax advantage, without any other economic objective, it cannot be regarded as sham
Extended period couldn't be invoked if issue was under litigation and department was aware of facts
ST: Where issue of levy of service tax was under litigation and even retrospective amendments had to be resorted to and matter was within knowledge of department, there was no fraud or suppression etc. on part of assessee with intent to evade taxes so as to warrant invocation of extended period of limitation
Sunday, 6 October 2013
All modes of transport aided by flight covered by expression 'Airplane'; eligible for 40% depreciati
IT: All types of crafts or modes of transport aided by flight, are entitled to 40 per cent depreciation
Asset purchased using exempt income of a trust would also be eligible for depreciation
IT: Depreciation is allowable on assets which came into existence by application of income, which is exempt under section 11
Loss making co. couldn't be excluded from comparables if it reported profits in immediately precedin
IT/ILT: A company cannot be rejected as a comparable as persistently loss making, if it reported operating profit in immediately preceding year
For sec. 54F relief locality and social status of assessee decides built-up area and land appurtenan
IT : For allowing deduction under section 54/54F, extent of land appurtenant to residential house has to be determined with regard to locality where residential house is situated, social status and profession of individual and other factors for proper and convenient enjoyment of residential house
GST will not subsume entry tax: Sumit Kumar Chakraborty
Two recent judgments on entry tax by the single and Division Bench of the Calcutta High Court have divided lawyers on the constitutional validity of the tax. In an interview with Namrata Acharya, president of West Bengal Taxation Tribunal Bar Association, Sumit Kumar Chakraborty, talks about the legal implications of the judgments and the constitutional provisions pertaining to entry tax. Edited excerpts:
What is your contention with the entry tax in West Bengal?
The West Bengal Entry of Goods into Local Areas Act, 2012 was challenged by various dealers before the Calcutta High Court on the ground that it violates the Constitution of India. The government can restrict the movement of goods from one state to another but for that there is a need for the President's assent. West Bengal did not take President's assent before imposing the entry tax.
Second, the government had said entry tax was introduced for some purposes or end use. They could not show any purpose of use for the money collected through entry tax. Thus, the single judge Bench had held the Act as ultra vires.
The matter went to the Division Bench of the Calcutta High Court, which directed the dealers not to seek refund on taxes already paid. At the same time, the government was allowed to continue with the assessment for entry tax.
Are the judgments of the single and division Bench in contradiction with each other?
No, they are not. The next hearing is in November. We are of the view the Act is still ultra vires, as the earlier judgment of the single Bench has not been stayed by the division Bench. Hence, the Act is still invalid. So, how can I pay tax?
The commercial tax department is asking how the court can ask for assessment when the Act is invalid.
What is assessment? It is the quantification of the liability to pay the tax. Realisation is a different thing. The court did not ask for realisation.
Assessment is determination of tax. In the case of entry tax disputes, some courts have held that the tax has to be paid. But our court has not said so, so the realisation of tax is invalid.
So, why are the dealers not filing a contempt of court case against the state?
The government is using coercive methods. It is issuing notices for assessment, not realisation. Only if they issue realisation notices does the question of contempt arise.
What are your views on the justification of entry tax?
Entry tax can be levied by state governments. Article 301 says a state can impose tax on the entry of goods into another state. However, for that restriction, you have to have the consent of the President. Several other states are also fighting cases pertaining to entry tax. In case President's assent is obtained, there are several other grounds under which the entry tax can be called unconstitutional.
For example, it is to be seen if the tax violates Article 14, 19, 304 of the Constitution. I've the fundamental right to bring any goods from any state to my state. Suppose, if a person is transferred from Chennai to Kolkata, he will be bringing his goods for use of consumption and use in West Bengal. So, is he liable to pay entry tax? The Act violates the law of equality as some states have imposed entry tax and some have not.
Recently, Punjab changed the name of entry tax as advanced tax on import of goods. Can the tax be retained by changing its name?
Advance tax is equated with self assessment of income tax. It is to be seen how they adjust the entry tax with self assessment.
IPL in FEMA violation; Special Director to form an opinion before calling BCCI President for persona
FEMA : Special Director was to be directed to first form his opinion whether to proceed against petitioner, President of BCCI, for remittances in violation of FEMA before calling petitioner for personal hearing as per rule 4 of Adjudication Rules
Jsw Plans Chennai Centre, To Expand Presence In Auto Steel
06-Oct-2013
Mumbai: JSW Steel Ltd is planning to set up a processing centre in Chennai, its third such unit in India, as it expands its presence in the competitive value-added steel segment.
“Chennai is in the blueprint. We are looking for land,” Jayant Acharya, director, commercial and marketing, at JSW Steel, said in an interview on Friday.
Processing centres are essentially service units that are closer to factories of clients and help steel companies customize products such as auto body parts, thereby ensuring speedier delivery and low freight costs.
JSW Steel has one of the largest steel capacities in India at 14.3 million tonnes (mt) and is pushing up production of value-added steel, including high grade automotive steel, serviced in a big way through imports.
Last week, JSW Steel said it would set up a processing centre in Pune in a joint venture with Japan’s Marubeni Itochu Steel Inc. in the automobile hub of Pune and invest Rs.204 crore, half and half through equity and debt.
The first phase of the project is expected to come on stream by fiscal 2015 with an installed capacity of 180,000 tonnes per annum that can be scaled up to 360,000 tonnes a year in the second phase, the firm said.
“Anyone who is in auto-grade steel has to have processing centres,” said Chirag Shah, director of research at Barclays Capital, an investment bank. “Obviously, Pune and Chennai are automobile hubs and processing centres will help them to service different geographies.”
Shah said Indian steel makers are seeking to compete with foreign steel makers who service the auto sector, and JSW Steel’s efforts are a step in this direction.
Auto steel is considered to be the most dynamic market where quick innovations are needed to keep pace with new automotive designs as well as the need to have lighter and stronger body parts.
“Other than challenging other domestic steel makers (in auto steel), there is also import substitution that is taking place and that is what JSW is aiming for,” Shah said.
Global rival Posco imports close to 2 mt of steel from its factory in South Korea and has five processing centres in India and a manufacturing unit. It is looking to open at least three more centres, according to company executives who spoke to Mint earlier this year.
India imported 7.9 mt of steel in the fiscal ended March, of which auto-grade steel was about 3 mt, industry data show. The country’s total production of steel was at 77.6 mt, up 2.5% from a year ago, according to the Joint Plant Committee, a research arm of the steel ministry.
In 2011, JSW announced its first Rs.122 crore processing centre in Haryana, also a 50:50 joint venture with Marubeni Itochu, to cater to north India.
Acharya of JSW said the northern India plant is to be set up near Faridabad and it and the Pune plant are likely to be operational next year.
In addition to automobile companies, these centres will be equipped to process flat steel products such as hot-rolled, cold-rolled and coated products for white goods, construction and other value-added segments. JSW Steel produced 8.5 mt of steel in fiscal 2013, of which 6.3 mt was flat products that mainly go into the making of automobiles and consumer durables.
On Friday, shares of JSW Steel rose 1.57% to Rs.774.05. The BSE metals index was up 0.63% to 8,729.94 points, while the benchmark Sensex rose 0.07% to 19,915.95. From October 2012 till date, JSW Steel’s share price have risen 4.19%, while the metals index has declined 17.89%.
Source:- livemint.com
Indian Tea Attracts Better Price On Demand From Us, Russia, Iran
06-Oct-2013
Recently the Tea Board of India and the Association of Tea and Coffee in Russia jointly organised a charity auction of Darjeeling tea in Moscow. First flush high quality Darjeeling tea from 20 estates - Badamtam, Margaret’s Hope, Thurbo, Castleton, Barnesberg, Okayti, Gopaldhara, Rohini, Tindaria, Glenburn, Sourenee, Arya, Puttabong, Risheehat, Sungama, Goomte, Thumsong Orange, Chamong Organic, Lingia Organic, and Jungpana were specialities of the auction.
Professional tea tasters were part of the auction that was featured by popular Russian television personalities. According to Tea Board officials, the auction evoked encouraging response from Russian consumers, with tea varieties fetching high prices of $ 1,384 per lot of 1.2 kg. While Darjeeling tea from the Castleton estate won the highest bid of $1,384, the second highest bid was offered for Chamong Organic ($1,076), the third highest bid was for Badamtan estate ($646). The other tea varieties were also well received, with prices ranging from $200 to $500 per lot of 1.2 kg.
So, if Russia comes forward, can the US be far behind?
According to tea industry officials, particularly exporters, Indian tea is finding increasing acceptability in the US markets. The demand for premium Indian tea, in fact, is reportedly going up by 6-7 per cent. Leading tea exporters like McLeod Russel, Goodricke Group and Rossell Tea are all upbeat. And that’s not without reason. Premium
Indian tea is fast coming up as a more preferred alternative to coffee in the US. The good thing is that discerning American buyers are ready to pay good prices for premium Indian tea varieties.
Consumer goods research firm Packaged Facts has predicted in its latest report that over the next two years, tea sales at restaurants, grocery stores and shops across the US is expected to expand to $18 billion. And there are already signs of this increase. Tea sales had already gone up 32 per cent between 2007 and 2012 and reached $15.7 billion. Indian tea companies are expected to latch on to the opportunity.
The US and Russia would be the two biggest markets for Indian tea. They would also be crucial for price expectations. According to industry estimates, while good varieties of Darjeeling tea fetch $20 per kg on an average, the premium high-quality varieties can fetch up to $60-70 per kg in the US.
The encouraging news from the US and Russia have come at a time when the Iranian tea importers are also exploring options of buying larger volumes of tea from India and negotiating terms for solving the payment problems. The Indian Tea Association expects to export 20-21 million kg of tea to Iran in the current year itself.
Things, therefore, look bright on the export front. On the domestic front too, production in north India stood at 414.62 million kg till July, vis-Ã -vis 375.02 million kg in 2012, according to the last figures from Indian Tea Association (ITA).
However, the scene in south India is completely different, which produced almost 6 million kg less at 132.2 million till July. The north accounts for around 75 per cent of total tea production.
Source:- mydigitalfc.com
India’S Technical Textile Industry To Reach $36 Billion By 2016-17
News that India's technical textile industry is set to be growing rapidly in the next few years comes as the Techtextil India trade fair welcomes more than 182 exhibitors from Austria, India, Turkey, Sweden, Switzerland, Czech Republic, UK, Netherlands, US, and other.
The industry is expected to grow at a rate of 20% annually to reach $ 36 billion by 2016-17. “Technical textile is an important part of the overall textile sector in India. Not only has it grown at an annual rate of 11% during 2006-11, but is also estimated to expand at a rate of 20% to reach $ 36 billion by 2016-17,” explained Raj Manek, Messe Frankfurt Trade Fairs India Managing Director.
The technical textile industry in India, whose current size is estimated at $ 17 billion, is seen as the next hub for both manufacturing and consumption, he said.
Indian market
India is seen as a key growth market for the sector, given the sheer size of its population. Cost-effectiveness, durability and versatility have made technical textile popular in the domestic market.
With the discovery of new applications every day, the growth of the industry is only expected to amplify, Manek commented.
He was speaking on the sidelines of Techtextil India 2013, an international trade fair for technical textiles and nonwovens that is taking place from 3-5 October 2013, Mumbai, India, exhibiting the newest products, services and technologies available in the sector.
Techtextil
Techtextil was launched in 1986 in Frankfurt am Main, Germany. Today, the Techtextil brand consists of six shows within a two-year cycle: Techtextil Frankfurt, Techtextil India, Techtextil Russia, Techtextil North America (Atlanta), Cinte Techtextil China, Techtextil North America (Las Vegas).
The show’s user-oriented trade fair concept include ten product groups reflecting the entire value-added chain of technical textiles, nonwovens and innovative apparel textiles. Techtextil has defined twelve application areas to address all industry target groups on the visitor side.
Techtextil India
Techtextil was launched in India in 2007 and its success led to the foundation of consecutive shows. The second edition in 2009 had a participation of 110 exhibitors and a footfall of 6339 business visitors (including Heimtextil India).
In 2011 the show gathered together 130 exhibitors and 3814 business visitors.
Source:- innovationintextiles.com
Race For Abu Dhabi Oil
06-Oct-2013
State-owned firms ONGC and OIL are planning to collaborate with private energy firms such as Reliance and Essar to bid for a prolific oil and gas block in Abu Dhabi.
A 75-year oil concession granted by Abu Dhabi to foreign partners in onshore areas is about to expire beginning of next year.
Adco, an affiliate of state operator Abu Dhabi National Oil Company, one of the oldest oil companies in the region, is currently working on the block with a consortium that includes BP, Total, ExxonMobil, Royal Dutch Shell and Portugal’s Partex.
The contract is set to expire, and the Abu Dhabi government has started the process of inviting fresh bids to partner Abu Dhabi Company for Onshore Oil Operation (Adco) in exploring the block. Bids will be received this month. A large number of international companies are interested in the block because of its high reserves.
The Indian firms are studying hydrocarbon data, possible consortium structure to compete with global players and the amount of stake to bid for.
“It is an immense opportunity for the exploration firms in the country to bid for blocks in such a proven hydrocarbon zone,” industry sources said.
Consortium partners
Sources said the process had just started and it was too early to finalise the Indian consortium partners, though a partnership among PSUs and private players was an option. However, the consortium is likely to bid for a minority stake only.
According to analysts, joint bidding by state-owned firms will provide the financial muscle. However, the consortium must also include global firms to induct new technology in exploration.
The oil and gas blocks on offer provide an immense opportunity for the Indian firms to buy stake in a region which is a major source of crude for the country.
Adco plans to increase its crude output to 1.8 million barrels per day (bpd) by 2017 from 1.6 million bpd. The largest oil producing company in the UAE controls 98 billion barrels of proven oil deposits.
The consortium is likely to face competition from existing global players, who are keen to bid for the renewal of the concession. New players from Asia are also likely to bid.
The exploration firms from the country will have to compete with China National Petroleum Corporation (CNPC), the Korea National Oil Corporation, Japan’s Inpex and Russia’s Rosneft.
The oil ministry is likely to encourage state-owned firms to bid aggressively as part of New Delhi’s energy security strategy.
Oil ministry sources indicated that the Abu Dhabi government could favourably look at the bids by the Indian consortium considering the friendly ties between the two countries.
Energy security
The Abu Dhabi asset can provide an impetus to Indian companies in their hunt for quality assets in regions close to the country. It is also likely to energise ONGC Videsh Ltd (OVL), which had failed to secure a stake in the prolific Kashgan oilfiield in Kazakhstan recently.
“One failure does not mean we stop operations in the country completely,” OVL managing director D.K. Sarraf recently told reporters here.
The government has eased the investment norms for state-owned firms to fast track overseas acquisitions.Maharatna firms such as ONGC can independently take decisions on investments up to Rs 5,000 crore, which will reduce the time period to make bids.
Source:- telegraphindia.com
No Replacement Yet For Coal India Independent Directors
06-Oct-2013
Coal India Ltd, the world’s largest coal miner, has not replaced the seven independent directors who finished their tenures in August after resisting some policy decisions that had been seen as harming the company’s interests.
The delay in replacing them points to the clogged decision-making at the state-owned company, in which the government plans to sell a 5% stake through the so-called offer for sale (OFS) route to raise as much as Rs.10,000 crore to narrow the fiscal deficit to the lowest in five years.
The seven directors were credited with highlighting the active role independent board members can play in influencing the functioning of firms rather than being passive supporters of management decisions.
“This is not a good precedent to not have any independent directors, especially at a time when the company is planning an offer for sale,” said Shriram Subramanian, founder and managing director of InGovern, a corporate governance research and advisory company. “This does not send the right signal to investors.”
In addition to the OFS, crucial decisions that await the new independent directors are Coal India’s plan to import coal to meet the domestic shortfall that goes beyond 100 million tonnes, and the acquisition of overseas companies to expand its resources base.
Of the seven directors, Samir Barua, a professor at Indian Institute of Management—Ahmedabad, was an academic. The rest were officers of the Indian Administrative Service with varying backgrounds.
The other independent directors were R.N. Trivedi, Sachi Chaudhari, Anis Ansari, Kamal Gupta, Sheela Bhide and A.K. Rath.
Subramanian said none of the seven directors had been reappointed possibly because their independent stance on key policy matters had discomfited the government.
The directors opposed the terms and conditions of the fuel-supply agreement (FSA) that Coal India signs with power plants guaranteeing supply of the fuel and softened the terms and the penalty levels in the final policy.
They also insisted that coal imported by Coal India to deliver to customers must be priced at the market value without being subsidized in any way by the company.
The directors also questioned the supply of coal to cement and metal firms at low prices, saying such customers sold their products at market prices and it wasn’t fair that Coal India should subsidize their fuel cost.
“Whatever we said, we said judiciously,” one of the former independent directors said on the condition of anonymity.
The directors wanted to bar power firms that sold all or part of their power at market rates from signing the FSAs and getting low priced and guaranteed coal supply.
An official at Coal India, not wanting to be named, said the process of the new appointments was on.
Landmark tenure
During the three-year tenure of the independent directors, the government had to issue two presidential directives ordering the companies to sign FSAs amid rising pressure from the power companies.
“It was perhaps for the first time presidential directives had to be issued by the government,” Subramanian said. “It was basically a matter of the dominant shareholder vis-a-vis the independent directors.”
The government issued the first presidential directive in April last year, ordering Coal India to supply as much as 80% of the coal requirements of power firms at a time when the company’s production was faltering.
In July this year, a second presidential directive was issued, asking Coal India to sign FSAs with power plants for a capacity of 78,000 megawatts (MW), according to media reports.
“The presidential directive helped the independent directors as they absolved them of any blame of taking decisions that were financially risky for the company,” one director said.
The Children’s Investment Fund Management (UK) Llp (TCI), a UK-based investor that has a lawsuit against Coal India, may have contributed in forcing the independent directors to take a bold stand against unfavourable policies, analysts said.
The lawsuit being heard in the Calcutta and Delhi high courts has named the directors in addition to the management of the company and the government, saying the firm’s policy of selling coal at low prices in India was bad for shareholders.
“There were no differences, no disputes. We made the firm take a call on the subsidy element,” said a second independent director who did not want to be named. “What we said was based on merit.”
Source:- livemint.com
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