Strike Hits Nhava Sheva Port Operations

Britain's drug regulator revoked the quality compliance certificate for a Wockhardt Ltd factory in India, the drugmaker said on Tuesday, the third of its plants to be hit by Shipping operations at Nhava Sheva port near Mumbai have been badly hit due to wage disagreements between workers and the management at Nhava Sheva International Container Terminal (NSICT), one of three independent ports in the area.



This comes at a time when the government is trying to push exports to address the problem of an expanding current account deficit. NSICT is an associate company of DP World of Dubai and has Jawaharlal Nehru Port Trust (JNPT) as a partner.



The disruptions in the entire port area, which also has the government-run JNPT and privately-owned GTI, started after labour troubles at NSICT on October 15. The port's labour union alleged that NSICT had declared a lockout which was illegal. This was denied by the company. On its part, NSICT alleged that trouble started after labourers adopted a 'go slow' strategy. The three ports together handle the largest volume of containers in India.



As a result, movement of traffic around the port area has been affected. Police said that because of the strike, multi-axle trailers which were unable to enter the ports were stranded along the road leading towards JNPT area.



A shipping agent told TOI that some foreign shipping companies have started calling off ships from coming to the ports at these facilities due to the slow movement of cargo. According to data from the Indian Ports Association, JNPT alone handled 64.5 million tonnes of traffic in 2012-13 which ranked it as the second biggest port in India.



According to C N Patil, union leader at NSICT, the company declared an illegal lockout at its facility at Nhava Sheva on October 15 and kept the labourers out of the area. NSICT got people from some other Indian ports to handle regular operations inside the port area, he further alleged.



The genesis of the trouble is the wage agreement between NSICT and the labour union. Patil said that in July 2011, the two sides signed an agreement under which NSICT agreed to a wage hike but later retracted on the same. They alleged that the labourers have not been given any hike for several years, but the company said that the wage is negotiated every four years. The last wage agreement, according to NSICT, was concluded in July 2013.



In an email to TOI, NSICT said that the workers "under instructions from their union leaders, commenced this go-slow in operations even though the matter regarding their request for wage increases is under conciliation at the office of the Assistant Labour Commissioner (Central)".



The company also said on Tuesday it received "an injunction from the Industrial Court Maharashtra to restrain the union and its officers from stopping any vehicle/container plying in and outside the terminal" and also from stopping "the ingress and egress of willing workers entering and leaving the terminal".



As a fallout of the troubles at NSICT and the decline in operational efficiencies at adjoining ports, shipping companies are diverting vehicles from NSICT, according to an email accessed by TOI from a shipping company to its shipping agents in Mumbai. Officials at shipping agencies said that the magnitude of the trouble is such that even if it is resolved amicably in a day or two, it would take about two weeks for normalization of operations.ort restrictions this year.



The UK Medicines and Healthcare Products Regulatory Agency will instead issue a restricted certificate, which means Wockhardt will be able to supply only "critical" products from the factory located in Kadaiya in western India, the company said in a statement.



Earlier this month, the UK regulator took away the generic drugmaker's good manufacturing practice (GMP) certificate for its key Chikalthana factory. Last week, the UK regulator issued a recall for drugs made at the plant.



The UK regulator's measures followed a ban by the U.S. Food and Drug Administration on drug shipments to the United States from a separate Wockhardt factory in Waluj, after hygiene and other compliance deficiencies were found. The UK agency later recalled products made at the Waluj plant.



Wockhardt, which has seven plants in India, said on Tuesday the impact of the MHRA's decision on existing business will only be known once it receives further communication.



The company's shares were down as much as 4 percent after it issued the statement before paring some losses to trade down 2 percent at 468.35 rupees. The main index was trading down 0.2 percent. Its shares have lost nearly 80 percent since their record-high in March.

Source:- timesofindia.indiatimes.com

Textile Exports Up By 10Pc To $3.576B In First Quarter

Pakistan’s textile exports have shown handsome growth of almost 10 per cent during first quarter (July-September) of the current fiscal year (2013-2014) over the corresponding period of previous year mainly due to substantial increase in export of raw cotton and rupee deprecation against dollar.



Export of textile and clothing surged to $3.576 billion in July-September period from $3.251 billion during the corresponding month of last year, showing growth of 9.99 per cent in one year. Meanwhile, According to the figures of Pakistan Bureau of Statistics (PBS), textile exports have enhanced by 15.34 percent in September 2013, as country exported textile commodities worth of $1.27 billion in last month against $1.1 billion of the corresponding period of last year.



Trade analysts said exports witnessed a growth because of increase in export to the European market owing to preferential market access on selected products. The European Union’s preferential package on import of 75 items was in operation since December 2012. Meanwhile, depreciation of Pakistani currency is also one of the pushing factors in export proceeds during the first three months. Country’s exports/imports surged due to rupee deprecation.



Analysts believed that country’s exports might suffer in next two to three months owing to the expected gas loadshedding for industries, which would shutdown the industrial units of the country.



A sector-wise analysis showed that export of raw cotton enhanced by 164.24 per cent during first quarter of the ongoing financial year. Meanwhile, exports of low value-added products, such as cotton yarn, was up by 8.25 per cent, cotton cloth 4.01 per cent, made-up articles 9.95 percent, yarn other than cotton yarn exports down by 0.77 percent and other textile material 10.84 percent in first three months of the current fiscal year over same month last year.

Export of bed-wear increased by 25.81 percent, tents exports went down by 16.20 per cent and readymade garments 13.46 percent in July-September 2013 this year over the same period last year.



Industry sources said that consistent supply of gas during the period under review to textile sector produced the desired results. The growth in yarn and fabric exports was mainly because of improved energy supply.



According to the latest figures released by Pakistan Bureau of Statistics (PBS), the overall country’s exports grew 9.23 per cent in July to September period to $6.712 billion as against $6.145 billion of the goods exported in the corresponding three months of the last fiscal year. Imports grew three percentages point to $11.177 billion in first quarter of the present financial year as compared to $10.853 billion of the corresponding period of previous year. The country’s trade imbalance narrowed to $4.465 billion during first quarter (July to September) of the ongoing fiscal year 2013-14 against $4.708 billion of the corresponding period of previous year, showing a decline of 5.15 percent in one year.



The figures revealed that the country’s food exports also registered an increase of 10.84 percent during July-September 2013. The country exported foodstuff worth of $1.007 billion in first three months of the ongoing financial year as against $909.197 million of the same month of preceding year 2012.

Source:- nation.com.pk

Third Wockhardt India Plant Hit By Export Restrictions

22-Oct-2013

Britain's drug regulator revoked the quality compliance certificate for a Wockhardt Ltd factory in India, the drugmaker said on Tuesday, the third of its plants to be hit by export restrictions this year.



The UK Medicines and Healthcare Products Regulatory Agency will instead issue a restricted certificate, which means Wockhardt will be able to supply only "critical" products from the factory located in Kadaiya in western India, the company said in a statement.



Earlier this month, the UK regulator took away the generic drugmaker's good manufacturing practice (GMP) certificate for its key Chikalthana factory. Last week, the UK regulator issued a recall for drugs made at the plant.



The UK regulator's measures followed a ban by the U.S. Food and Drug Administration on drug shipments to the United States from a separate Wockhardt factory in Waluj, after hygiene and other compliance deficiencies were found. The UK agency later recalled products made at the Waluj plant.



Wockhardt, which has seven plants in India, said on Tuesday the impact of the MHRA's decision on existing business will only be known once it receives further communication.



The company's shares were down as much as 4 percent after it issued the statement before paring some losses to trade down 2 percent at 468.35 rupees. The main index was trading down 0.2 percent. Its shares have lost nearly 80 percent since their record-high in March.

Source:- economictimes.indiatimes.com

India's Steel Production Grows 3% During Jan-Sept To 59.62 Mt

22-Oct-2013

India's steel production grew by 3 per cent to 59.62 million tonnes (MT) in the first nine months of the current year.



The country, the world's fourth largest steel maker, had produced 57.90 MT steel during the January-September period of the last year, according to World Steel Association (WSA) data.



Among major producers, India's rate of production growth was the second-best following China. China clocked 8 per cent growth during the January-September period to produce 587.38 MT steel.



Japan and the US produced more steel during the period than India at 82.43 MT and 65.24 MT respectively, but the pace of growth in these two countries was slower than India.



Japan clocked 1.4 per cent rate of growth in production while the US reported a negative growth of 4 per cent during the January-September period of the current year compared to a year ago output.



The global steel production rose by 2.7 per cent during the period at 1,186.21 MT compared to 1,154.79 MT during the same period last year, WSA said.



"The crude steel capacity utilisation ratio in September 2013 was 79.3 per cent and it is 2.1 percentage points higher compared to September 2012," WSA said.



Meanwhile, steel production growth in India fell short of the world average in September with the country clocking 4.7 percent growth compared to the world average of 6.1 percent.



India's steel output grew to 6.54 million tonnes (MT) in September from 6.24 MT during the same month last year.



Source:- economictimes.indiatimes.com

Sugar Exports Seen 2.6 Million Tonnes In 2013/14

22-Oct-2013

India, the world's second-biggest producer of sugar and a swing exporter that can impact global prices, will export 2.59 million tonnes of its excess sugar production in 2013/14, an official said on Tuesday.



Traders in the past days struck deals to export about 175,000 tonnes of raw sugar for December-January delivery, marking their first sale of the sweetener in the new season beginning in October, which took some of the wind out of the recent rally in sugar prices.



ICE March raw sugar prices rose 0.26 percent to 19.47 cents per lb on Tuesday.



Although some market projections are expecting potential exports from the world's largest consumer of sugar at as much as 3 million to 4 million tonnes this season, Vijay Singhal, sugar commissioner for India's main sugar producing state of Maharashtra, said that would be unlikely.



"The international price of sugar is too low for exports. It would take government incentives or subsidies at these prices for sugar," Singhal said on the sidelines of the 13th Datagro International Sugar and Ethanol Conference in Sao Paulo.



The area of sugar cane is due to fall slightly in India's main sugar producing states to 5.12 million hectares in 2013/14 from last season's 5.17 million hectares due to unfavorable rains, Singhal said. Sugar production would only fall slightly to 24.3 million tonnes from 25.8 million the year before, he said.



"We have an internal sugar surplus of 8.8 million tonnes and we expect to export a net 1 million tonnes of refined sugar and 1.5 million tonnes of raw sugar," Singhal said.



Singhal added that the surplus will fall to 7.9 million tonnes next year in line with a declining output of sugar and growing consumption. Consumption of sugar that was growing at 3 percent to 4 percent in the country was helping bring down the surplus. He projected consumption at 23.9 million tonnes.



Datagro's conference kicks off the annual Sugar Week and Sugar Dinner on Wednesday that brings traders, buyers, producers and analysts from around the world.



"Two factors will determine the final export numbers: the monsoons and the government," said Singhal, referring to the general elections next year, which means that the government typically maintains or extends favorable minimum prices for cane producers.



Analysts say government subsidies for cane producers were likely to stay favorable for production next year at the cost of mills which were increasingly at the risk of going bust because of the high costs of cane and low price of sugar.



Guilherme Nastari, the Indian sugar specialist at analysts Datagro, said India should produce 24.4 million tonnes of sugar in 2013/14, down slightly from the 24.8 million last season. Meanwhile, Nastari saw India's consumption up slightly at 23.3 million tonnes in India from 23.1 million last year.



Datagro also projected production growth in the world's No. 2 sugar exporter after Brazil, Thailand, to 11 million tonnes in 2013/14, up from 10.3 million tonnes last season due to favorable price subsidies from the government there.



Thailand is expected to export more than 8 million tonnes of sugar this season, a first for the big Asian exporter, according to Peter Baron, Executive Director of the International Sugar Organization.

Source:- economictimes.indiatimes.com

Govt May Import Onion As Prices Soar To Rs.90/Kg

New Delhi: Centre may import onion to stabilise prices that have soared to Rs.90 per kg in the national capital, Commerce and Industry Minister Anand Sharma said Tuesday.



Talking to reporters on the sidelines of an event here, Sharma blamed hoarders for the recent spike in prices.



“We will import onion if there are proposals and requirements so that we can stabilise the prices,” he said.



However, the minister emphasised that there was enough stock of onion in the country.



“We have enough onion stock in the country and the state governments must act firmly against the hoarders who are hoarding the onions which has led to the artificial scarcity and sharp escalation of prices,” Sharma said.



He also expressed hope that the prices would stabilise with the arrival of fresh domestic products by December-end.



Onion prices soared to Rs.90 per kg in the national capital and they are being sold at around Rs.80 per kg in other parts of the country. The prices have more than doubled in the past four months.

Source:- zeenews.india.com

Rupee Continues To Decline Vs Dollar, Falls 22 Paise

Indian rupee strengthened by 55 paise in early trade on Wednesday at 61.10 per dollar as compared to previous day's closing of 61.65. Pramit Brahmbhatt of Alpari India feels a weak dollar due to poor US jobs data may aid rupee gains seen this week.



Also healthy capital inflows by FIIs and dollar selling by exporters at around 62/dollar levels will add to gains, he adds. "However, strong month-end dollar demand from importers may cap gains.



The range for the day is seen between 61.05-62/dollar," Alpari said. Also Read - Industry sees 25 bps hike in policy rates on Oct 29: Survey The dollar wobbled after disappointing US jobs data cemented expectations that the Federal Reserve will keep its stimulus in place at least until early next year. And the euro rose intraday to as high as 1.379/dollar, its strongest level since mid-November 2011.

Source:- economictimes.indiatimes.com

Trustee for holders of debentures is deemed to be a creditor within meaning of sec. 439(1)(b)

CL: Trustee for holders of debentures is deemed to be a creditor within meaning of section 439(1)(b)

EPFO to launch special drive to clear pending grievances

NEW DELHI: Retirement fund body EPFO has directed its field offices to launch a special drive for the disposal of all subscribers grievances, particularly those pending for more than 30 days.

An office order said: "...launch the special drive for disposal of all grievances especially which are pending for more than 30 days. It should be ensured that there should not be any pending grievance for more than 180 days and 30 days as on October 24, 2013 and October 31, 2013 respectively."

The Employees' Provident Fund Organisation has decided to launch this special drive for disposing of the grievances after the Ministry of the Personnel, Public Grievances & Pensions (MPPGP) took up the issue with the Labour Ministry.

The Department of Administrative Reforms & Public Grievances under the MPPGP has called a review meeting to discuss the pending grievances under the Chairmanship of Joint Secretary (Public Grievances) on October 25.

The department has asked the Labour Ministry to dispose of all these grievances by October 31 this year.

According to a letter to Labour Ministry, the department said the status of grievance disposal was reviewed on October 1, and it was observed that 3,165 grievance were pending for over two months.

In response to the letter, the ministry asked the EPFO and Employees' State Insurance Corporation (ESIC) which comes under its purview to launch a special drive for disposing of pending grievances.

As per the guidelines on the subject, grievances are required to be acknowledged within three days of the receipt and should be redressed within a period of maximum two months of its receipt.

In case the time taken for redressal of grievance takes more than two month, an interim reply is required to be sent.

RBI/2013-14/333 A.P. (DIR Series) Circular No. 64 dated 22-10-2013

RBI/2013-14/333

A.P. (DIR Series) Circular No. 64

October 22, 2013

To

All Category - I Authorised Dealer Banks

Madam / Sir,

Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No.55 dated September 26, 2013 , wherein the Rupee value of the Special Currency Basket was indicated as Rs. 86.903352 effective from September 13, 2013.

2. AD Category-I banks are advised that a further revision has taken place on October 11, 2013 and accordingly, the Rupee value of the Special Currency Basket has been fixed at Rs. 83.819978 with effect from October 17, 2013.


3. AD Category-I banks may bring the contents of this circular to the notice of their constituents concerned.


4. 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

India's Steel Output Growth At 4.7% Lags World Average

21-Oct-2013

Steel production growth in India fell short of the world average in September with the country clocking 4.7 percent growth compared to the world average of 6.1 percent.



According to World Steel Association (WSA), India's steel output grew to 6.54 million tonnes (MT) in September from 6.24 MT during the same month last year. Growth in world's steel output, on the other hand, rose faster at 6.1 percent during the month to 132.54 MT compared to 124.93 MT a year earlier.



This was largely led by China which produced 65.42 MT steel in the reporting month clocking an 11 percent growth over the same month last year. China had produced 58.9 MT steel in September, 2012. In fact, India's growth in production was lower evn when compared with its Asian peers. Overall, Asia produced 88.31 MT steel during the month, up by 8.9 percent over 81.08 MT in the same month last year.



The US produced 7.2 MT steel in September 2013, up by 6.3 percent compared to September 2012. "The crude steel capacity utilisation ratio in September 2013 was 79.3 percent and it is 2.1 percentage points higher compared to September 2012," WSA said.

Source:- moneycontrol.com

Cotton Output In India Seen At Record As Rains Boost Crop Yields

21-Oct-2013

Cotton harvest in India, the world’s second-largest producer, is poised to reach a record this year as the best rains in six years boost yields.



Output may jump 6.7 percent to 38.1 million bales of 170 kilograms (375 pounds) each in the crop year that began on Oct. 1 from 37.5 million bales estimated in September and 35.7 million bales in 2012-2013, the Cotton Association of India said in an e-mailed statement today.



A record Indian crop may increase exportable surplus, adding to global supplies and capping a 11 percent gain in prices in New York this year. World reserves are estimated to expand to 20.3 million metric tons by July 31 from 19.22 million tons estimated a month before, the International Cotton Advisory Committee said on Oct. 10.



“The available moisture is likely to help increase the yields and result in a larger than estimated crop,” said Dhiren Sheth, president of the association.



The monsoon, which accounts for more than 70 percent of the country’s annual rainfall, was the highest since 2007 during the June-September period, according to the India Meteorological Department. The showers eased a drought that cut production the previous year.



“Exports may be similar to what we saw last year,” said Sheth. “We have already contracted to export 1.5 million bales of the new crop.”



Shipments totaled 9.8 million bales in 2012-2013, mainly to China, according to the association. Surplus is pegged at 13.75 million bales for this year, it said. Domestic consumption may climb to 26 million bales from 24.7 million bales last season, while imports are seen dropping to 1.2 million bales from 1.6 million bales, it said.



Cotton for December delivery was little changed at 83.20 cents a pound on ICE Futures U.S. in New York at 2:09 p.m in Mumbai. Futures tumbled 18 percent last year, extending a 37 drop in 2011. The contract for delivery in April on the National Commodity & Derivatives Exchange Ltd. in Mumbai was unchanged at 994.50 rupees ($16.2) per 20 kilograms.

Source:- bloomberg.com

Nmdc's Iron Ore Sales Up 8% In April-September 2013

21-Oct-2013

The quarterly result is the first to contain production from BHP's Jimblebar mine expansion project in Western Australia's Pilbara region.

Overall iron ore output was up 2 per cent on the previous quarter, and 23 per cent higher than during the same period last year.

BHP's iron ore production is ramping up as it pours billions of dollars into expanding its Australian mines.

The company has impressed the market by increasing its full year production target to 212 million tonnes from 207 million tonnes.

BHP Billion chief executive Andrew MacKenzie says increases will be reflected in the company's upcoming financial results.

"In this financial year completed transactions have already delivered proceeds of US$2.2 billion, further strengthening our solid balance sheet," he said in a statement to the share market.

"With strong production growth and our overriding commitment to substantially increase free cash flow, we are well positioned to grow returns to our shareholders.”

The result comes after iron ore miners Forescue Metals and Rio Tinto released strong production reports last week.

UBS analyst Glyn Lawcock believes the big iron ore miners will continue to hire new workers in Western Australia, but the pace of jobs growth will drop.

"If I look at WA, BHP, Rio, Fortescue, they're continuing to invest but they're also trying to do it with less people," said.

"So there will be more employment as they ramp up their volume - you can't grow your business without adding additional people ... but I think the pace of work has clearly slowed."

Source:- abc.net.au

Mr Lawcock says copper was the only division that underperformed in the quarter.

Its share price surged ahead after the announcement.

Electricity Import: Russia’S $500 Million Funding Offer Gets Cold Shoulder

The participating countries of Casa-1000 Megawatt (MW) power import project have given cold-shoulder to Russia’s offer of providing $500 million to implement the project, reportedly under pressure from Washington.

Russia had offered an investment of $500 million in establishing a transmission system for the Central Asia South Asia 1,000-megawatt (CASA-1,000) power import project, which stipulates bringing electricity from Kyrgyzstan and Tajikistan to Afghanistan and Pakistan.

Sources told The Express Tribune that Russia wanted contract of building power transmission lines against the investment of $500 million and Pakistan had welcomed this offer.

“However, other participating countries of the project – Afghanistan, Kyrgyzstan and Tajikistan – have not expressed interest in this offer and therefore no progress has been made so far in this regard,” the sources added.

Officials said that Russia was keen to contribute financing and getting contracts of gas import projects like Iran-Pakistan (IP) and power imports but due to the influence of US in the region, it is getting no welcoming response.

Officials said that Russia could join the power import project after Asian Development Bank (ADB) had pulled out but Islamic Development Bank (IDB) had signalled its willingness to become part of the consortium to contribute financing for the project. Therefore, officials said that it was unlikely that Russia could join this project.

Now, the World Bank and Islamic Development Bank (IDB) have agreed to provide $1 billion to implement the power import plan.

The Asian Development Bank (ADB) was to contribute 40 per cent financing for Casa-1000 MW power import project but it walked out for unknown reasons.

The CASA-1,000MW project is a strategic project for the US like the Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline project. The US had been trying to promote the CASA and Tapi projects which experts term unfeasible due to security concerns in Afghanistan.

CASA-1,000 is designed to transmit 1,300MW of surplus electricity from Tajikistan and Kyrgyz Republic through Afghanistan, which is going to consume 300MW, to Pakistan. The memorandum of understanding among the four governments was signed on November 16, 2007 in Kabul.

In the final feasibility study of CASA-1,000 project conducted in February, 2011, the surplus power capacity to export by Tajikistan and Kyrgyz Republic has been reassessed. About 3,700 gigawatt hours (GWh) is expected to flow by 2016.

However, the catch is that under “No Generation Expansion Scenario”, the amount of exported power will be decreasing each year in view of the rise in local demand in Tajikistan and Kyrgyz Republic. Moreover, the energy flow will not be available throughout the year and will be recurring during the April to September period of every year only.

The cost of transmission had been projected at 3.37 cents per unit which will go up to 7.26 cents by 2030. Whereas levelised cost of energy – the price at which electricity must be generated from a specific source to break even over the lifetime of the project – will be 5.38 cents per unit for 15 years and 4.94 cents for the 30-year period.

Projected sale price of energy by Tajikistan is 1.5 cents per unit and 2.5 cents per unit by Kyrgyz Republic.

Source:- tribune.com.pk

India's Rice Exports May Fall To 9.3 Million Tons In 2013-14: Usda

21-Oct-2013

NEW DELHI: Rice exports from India, the world's largest producer and exporter, are estimated to fall marginally to 9.3 million tonnes in 2013-14 marketing year that started this month, a latest report said.



India re-entered the rice exports market in September 2011 after a four-year ban on exports of non-basmati rice. It had emerged as the world's largest rice exporter in 2012 ahead of its Asian counterpart Thailand.



According to the US Department of Agriculture (USDA), rice exports are pegged at 9.3 million tonnes for the 2013-14 marketing year (October-September), slightly lower than 10 million tonnes in the same period last year.



The report did not give reasons for projecting a likely drop in rice shipments for this year.



However, the USDA noted that the Indian government is unlikely to impose any export restrictions in the near future with the forecast of near-record production and "more-than-sufficient" government-held rice stocks this year.



Stating that strong exports may affect domestic price movement, the report said the government has enough rice stocks to control any significant flare up in domestic prices due to the upcoming general elections in 2014.



Assuming normal weather conditions during the harvesting period, the USDA said that the country's total rice production is projected to remain near-record 105 million tonnes, as against 104.4 million tonnes last year. A record rice output of 105.3 million tonnes was achieved in 2011-12.



Earlier, the USDA had forecast rice output of a record 108 million tonnes this year. It has now lowered the rice output projections considering lower planting due to deficient rains in eastern states, the major rice growing region where most of the rice is not irrigated, the report said.



Continued dryness in October in eastern India and the 'normal' cyclones in October-November period across coastal India could damage the standing crop and further temper the prospects of summer-sown rice production, it added.



USDA has pegged overall India's consumption to rise marginally to 96.70 million tonnes during 2013-14, while estimating the total grain availability at 130.5 million tonnes for the same period.

Souce:- economictimes.indiatimes.com

Floods Mean Less Banana Export To Gulf Countries

21-Oct-2013

Fruit lovers in Gulf countries will not be able to get the taste of bananas from south Gujarat, especially Narmada and Bharuch this season. Due to recent heavy rains and floods, banana crops in over 2500 hectares in Narmada and Bharuch districts have been destroyed.



As per an estimate, around 20,000 tonnes of banana from Narmada, Jaghadia and other places in Bharuch and Surat districts, are exported to Gulf countries per annum. Desai Fruits and Vegetables (DFV), country's biggest banana exporter based in Navsari, alone is exporting more than 600 to 700 containers of bananas - around 14,000 metric tones - to the Gulf countries per annum. However, this time the banana exporters would not be able to meet the demand and the export is likely to remain on the lower side at below 30 per cent.



"The banana export season starts from October and lasts till May. This time around it is difficult to cater to demand from our buyers following the heavy damage to the banana crops in Narmada and Bharuch districts due to rains and floods," said Manoj Kumar, who is heading the export division to the Gulf at DFV.



According to Kumar, the market share of Indian bananas in Gulf countries is negligible at five to seven per cent and Philippines is leading with 80 per cent share. But, the bananas from south Gujarat are more popular in Gulf countries because of their sweet taste and cheap value. While the bananas from Philipines cost anywhere between $12 and $13 per 13 kilograms, the Indian bananas cost between $2.5 and $3 per 13 kilograms.



Ajit Kumar, general manager, DFV told TOI, "The major destruction of banana crops is reported from Jaghadia in Bharuch and Narmada districts. These are the two main regions from where we source our 90 per cent of the fruit" Smita Pillai, deputy director of horticulture in Narmada district told TOI, "The banana plantation in around 1360 hectares of farm land in Narmada district has been destroyed due to floods and heavy rains. This year, the plantation was done in a total of 5300 hectare of land."

Source:- freshplaza.com

India Strikes Lng Import Agreement With Russia

Indian Prime Minister Manmohan Singh failed Monday to strike a long-delayed nuclear power deal with Russia during talks with President Vladimir Putin that also focused on big arms and energy deals.

However, Indian foreign Secretary said that both the countries signed an agreement which enables New Delhi to import 2.5 million ton Liquefied Natural Gas (LNG) though pipelines each year.

Singh’s trip to Moscow was preceded by gruelling behind-the-scenes negotiations on the next phase of a Russian-built nuclear power plant on India's south coast -- one of the current government's signature projects.

Singh said India and Russia enjoyed a "privileged strategic partnership" that enabled the two giants to coordinate their foreign policy views

Yet he made no mention of an historic deal for the Kudankulam plant that was first signed in 1988 by then Indian prime minister Rajiv Gandhi and former Soviet leader Mikhail Gorbachev.

The collapse of the Soviet Union and Russia's subsequent years of economic mayhem meant that construction of the plant did not begin until 2002.

Work has been nearly completed on the first two units despite local protests that halted progress for six months in 2011-2012.

India now hopes to strike deals for an additional two reactors at the same location as it looks to meet surging electricity demand.

Negotiations about how the dispute can be skirted in time for Singh's meeting with Putin went down to the wire, and failed, despite optimism from India's outgoing government head.

The two sides instead issued a joint statement saying they had "agreed to speed up work on drafting a general framework agreement" on the third and fourth blocks at Kudankulam.

Putin and Singh also took a veiled swipe at Pakistan for its conflicted relations with the Taliban movement that is making its presence felt more prominently in Afghanistan amid the United States' ongoing drawdown of troops.

"Nations that aid terrorists by abetting and protecting them are guilty of committing the acts of terror to the same extent as the criminals who actually perpetrate these crimes," the two leaders' joint statement said.

Russia has been India's biggest weapons supplier for decades and arms talks are always a component of the annual round of meetings between the Indian prime minister and the Russian head of state.

Source:- thenews.com.pk

Gold Price Up 0.72 Per Cent In Futures Trade On Asian Cues

21-Oct-2013

Buoyed by a firm Asian trend, gold prices rose by 0.72 per cent to Rs 29,500 per 10 gram in futures trade on Monday as speculators enlarged their positions.



Besides, rising demand in the domestic spot markets for the ongoing festive and wedding season too supported the rise.



At the Multi Commodity Exchange, gold for delivery in far-month February 2014 contracts rose by Rs 210, or 0.72 per cent, to Rs 29,500 per 10 gram in business turnover of 10 lots.



Similarly, the yellow metal for delivery in December traded higher by Rs 205, or 0.70 per cent, to Rs 29,685 per 10 gram in 235 lots.



Analysts said a firming trend in the Asian trade on speculation that the US Fed would not start tapering until 2014 and rising demand in domestic spot markets mainly led to rise in gold prices in futures trade.



In the national capital, gold prices went up by Rs 150 to Rs 31,650 per 10 gram on Saturday.



Globally, gold rose by $1.60, or 0.12 per cent, to $1,319 an ounce in Singapore.

Source:- businesstoday.intoday.in

Rupee Ends Lower By Another 25 Paise Against Us Dollar

The Indian rupee ended lower by another 25 paise to 61.52 against the US dollar on persistent demand for the Greenback from importers and banks on the back of higher dollar in overseas market amidst volatility in equity markets.



The rupee resumed lower at 61.35 per dollar as against the last weekend's level of 61.27 at the Interbank Foreign Exchange (Forex) Market and dropped further to 61.58 before ending at 61.52 per dollar, showing a loss of 25 paise or 0.41 per cent.



The domestic unit hovered in a range of 61.33 and 61.58 per dollar during the day.



Meanwhile, the BSE Sensex moved up marginally by 11 points, or 0.05 per cent, to end at 20,893.89.



Oil prices edged higher by 10 cents to $100.91 a barrel in Asian trade on Monday as dealers await long-delayed US economic data for clues about the health of the world's largest crude consumer, analysts said.



The US stimulus programme has been credited with fuelling a global equities rally for most of the year. The US Central bank said in September that it would not wind down the programme if there was no broad improvement in the world's largest economy.

Source:- http://businesstoday.intoday.in

Reverse mortgage: Tax breaks for seniors on the house

NEW DELHI: If your parents are considering a reverse mortgage, here is a festival bonanza. The government has made the return from mortgaging their house to earn a monthly income more attractive. Now, the annuity income from a reverse-mortgage loan will become tax-free. The government has also scrapped the restriction of a 20-year annuity payment and said it would be applicable as long as the owner lives.

Several senior citizens have availed of the scheme, launched in 2009, to support them in their old age. Under a reverse mortgage loan, a senior citizen of 60 years taps the value of his residential house, while enjoying the security of using the same as his residence until either the mortgagee or his/her spouse survives.

The government has also allowed insurance companies to participate in the scheme. This is set to increase the annuity income three-fold from the present level on the same value of a reverse mortgage loan and usher in competition in this segment.

For example, a senior citizen has a house, the market value of which is Rs 1.25 crore. He or she can avail of a reverse mortgage loan of Rs 1 crore on the house. Only 80% of the value of the house is allowed as reverse mortgage loan. But, the entire amount is not handed out in one go. Of the total amount, a house owner can take 50% of the loan amount or Rs 15 lakh, whichever is lower, as a lump sum payout. The rest comes as annuity.

So, the owner who has availed of a Rs 1-crore reverse mortgage, is eligible for Rs 15 lakh as a one-time payment and the remaining Rs 85 lakh would be invested in annuity.

The amount of annuity depends from bank to bank and is calculated on the basis of the period for which the beneficiary wants to receive the annuity. For an average 10-year period, the annuity is Rs 420 per month for every Rs 1 lakh of reverse mortgage loan and for 20 years it is about Rs 100 per month for every Rs 1 lakh reverse mortgage value. There is no benchmark so far fixed for life-long annuity.

The Rs 85 lakh that the house owner has received would be invested in annuity and he will get an annuity of Rs 35,700 per month for 10 years and Rs 8,500 for 20 years. Now, after the National Housing Bank's (NHB) intervention, this amount would be trebled.

Until now, only banks were allowed to participate in the scheme. The entry of insurance companies, is expected to stir up the sector. NHB chairman R V Verma said the changes in the tax treatment for annuity will help large-ticket reverse mortgage loans for a shorter tenure.

It may be time for you to dump monthly income plans and bet on equity-debt combo

Monthly income plans (MIPs) of mutual funds have been poor performers in the past three years. They certainly didn't fulfill the promise of generating stable returns, marginally above debt funds. Conservative hybrid funds, as a category, including MIPs, have offered 5.73% and 6.37%, respectively, in the past one year and three years ended October 18.

The numbers call for a decision: Is it time to get out of these schemes? "It is the time you sell your investments," says Feroze Azeez, director-investment products, Anand Rathi Private Wealth Management. "If you want to invest in a mix of debt and equity, it is better to invest in dedicated equity funds and debt funds in a ratio that you prefer," he adds. In fact, many investment advisors have been advising their clients against investing in MIPs, as they believe MIP has failed as a concept.

NOT JUST PERFORMANCE

Poor performance is just one of the many factors that have gone against MIPs. And tax treatment of dividend is a big dampener. "Dividend distribution tax on these funds has been hiked to 25% from earlier 12.5%. This makes investing in dividend option of these schemes an unattractive proposition," points out Rupesh Bhansali, head-mutual funds, GEPL Capital. The effective rate of tax on the dividends works out to 28.33% for individuals and HUF investors in debt mutual funds. MIP is taxed as a debt fund. Many investors keen on regular income have invested in dividend option of MIP. And for them, the post-tax returns offered by these plans are not at all attractive, adds Rupesh Bhansali. He advises existing investors to get out of MIPs.

While many invested in growth plans of MIP to benefit from the best of both asset classes of debt and equity, the funds have not lived up to the expectations. "These funds have been delivering in intervals," says Abhinav Angirish, managing director, investonline.in, an online mutual fund distribution entity. He points out that both debt and equity funds have done well in the past six months, but MIPs failed to catch up. It is better to invest in a mix of equity and debt funds than being in an MIP, he says.

Investment experts also say that the investment strategy of MIPs is not working anymore. "The debt component of the MIP is not dynamically managed. Most fund managers employ static strategy which results in lower return on the debt component of MIP compared to the returns of the debt funds managed by the same fund managers," points out Feroze Azeez. Less money in these schemes compared to a debt fund is another factor that leads to lack of focused efforts by fund managers, he adds. The high expense ratio incurred by most MIPs further brings down the returns for investors.

TREAD CAUTIOUSLY

Though these schemes have been poor performers, do not jump and invest all your money in a fixed deposit or a debt fund. Experts advise sticking to your asset allocation. "If you want to invest in a combination of equity and debt, you should switch 80% of your money in a debt fund and 20% of your money in an equity fund," says Abhinav Angirish. You should consult your advisor to choose the right funds.

Banks should show real yield on fixed deposits

MUMBAI: Recently, the Reserve Bank of India has taken steps to increase the level of transparency in bank loans. For example, RBI has restricted banks from charging higher interest rates and at the same time projecting them as "zero interest loans". However, banks continue to follow less transparent practice with other products and most important among them is the interest paid on fixed deposits (FDs). For example, the FD pamphlets from most banks usually carry two columns - one for the interest rate and other for the "annualised yield". The explanation to the annualised yield column will also state that the "annualised yield is calculated on the basis of quarterly compounding for the entire tenure".

Why is giving annualised yield bad, you may ask. The problem is not in giving the annualised yield, but in giving the wrong yield (i.e, much higher figures) to grab the attention of FD investors. For example, a bank offering an interest of 8.75% per annum for its 10-year deposits usually projects that the annualised yield for the same is as 13.76%. Though the actual yield will be slightly higher due to quarterly compounding, the compound annual growth rate (CAGR) for a 10-year FD will only be 9.04% and not 13.76% as projected by the bank.

Now, let us take a closer look at how these banks arrive at this 13.76% figure for the 10-year FDs. To make the computation easier, let us assume that the amount invested in the 10-year FD is Rs 1 lakh. Since the FD is compounded quarterly, 2.19% (i.e, 1/4 of 8.75%) of Rs 1 lakh is added at the end of first quarter. So the value at the end of first quarter goes up to 102,190. Similarly, 2.19% of 102,190 is added at the end of second quarter and this process is continued till the end of 10 years. So the initial investment value of Rs 1 lakh grows to Rs 237, 635 at the end of 10 years. Since this is an absolute return of 137.64%, banks divide this value by 10 years to arrive at the 13.76% yield.

Since the above mentioned computation is correct, what is the problem, you may ask. The main problem lies in the fact that what they are projecting is the simple interest and not the compound annual growth rate. For example, the CAGR of an investment that has generated an absolute return of 300% in 10 years is just 14.87% and not 30% per annum. CAGR is the best way to compare return rates between two financial products and that explains why Sebi has made it mandatory for mutual funds to use CAGR while giving their historical returns.

RBI asks banks to consider revised interest rate on Special Deposit Scheme

IT : Special Deposit Scheme (SDS), 1975 - Revision of Rate of Interest

Customs Circular No 41/2013 dated 21-10-2013

Government of India

Ministry of Finance

Department of Revenue

Tax Research Unit

***

Circular No. 41/2013-Customs

R.No.146 I, North Block

New Delhi, dated the 21^st October, 2013

To

The Chief Commissioner of Customs (All)

The Chief Commissioner of Customs & Central Excise (All)

The Director General (All)

Sir/Madam,

Subject: Applicable CVD on Steam Coal imported from Indonesia under FTA notification No. 46/2011-Customs-reg.

I am directed to invite your attention to the above mentioned subject.

2. Under notification No. 12/2012-Customs, dated 17-03-2012 (S. No. 123 of the Table), Steam Coal falling under sub-heading 27011920 attracts basic customs duty (BCD) at 2% and countervailing duty (CVD) at 2%. Steam Coal imported from Indonesia enjoys preferential BCD @ 0% under S. No. 207 of notification No. 46/2011-Customs, dated 1^st June 2011 (India-ASEAN FTA). In this connection, a doubt has been raised whether an importer, while availing of the BCD exemption @ 0% under FTA (notification No. 46/2011-Customs), can simultaneously avail of the concessional CVD @ 2% as per notification No. 12/2012-Customs, or he has to pay the CVD at 6%, which is the rate of excise duty applicable on Steam Coal when Cenvat facility has not been availed of.


3. The matter has been examined by the Ministry. Under the Free Trade Agreement (FTA), the preference / concession is extended only in respect of BCD. All other duties, including CVD are charged as applicable to similar imports from other countries. The CVD on an imported article is levied at a rate equal to the excise duty leviable on a like article, if produced or manufactured in India. However, at times, under a notification issued under section 25(1) of the Customs Act, 1962, CVD is levied at a rate which is lower than the rate of excise duty leviable on the like domestic article.


4. In the present case, the excise duty applicable on Steam Coal is 6%, if CENVAT benefit is availed of and 1% if the CENVAT benefit is not availed of. Normally, Steam Coal will suffer 6% CVD, as the condition of non-availment of cenvat benefit cannot be satisfied in respect of imported goods. However, in the Budget 2013-14, as a conscious policy decision, it was decided to levy 2% CVD both on steam coal and bituminous coal. This is the general applied rate of CVD on all imports of steam coal and bituminous coal regardless of the excise duty leviable on like domestic coal. No such condition has been laid down that an importer cannot avail of this concessional CVD of 2% if he has availed of the concessional BCD on steam coal under another notification.


5. It is therefore clarified that an importer while availing of BCD exemption on steam coal under FTA notification No. 46/2011-Cus can simultaneously avail of concessional CVD at 2% under notification No. 12/2012-Cus.


6. Difficulties, if any, faced in the implementation of above instructions may be brought to the notice of the Ministry at an early date.

Yours faithfully,

(P. K. Mohanty)

Joint Secretary (TRU)

Tel: 2309 2687

Fax: 2309 2031

F.No.354/58/2013-TRU

RBI/2013-14/328 A.P. (DIR Series) Circular No.63 dated 18-10-2013

RBI/2013-14/328

A.P. (DIR Series) Circular No.63

October 18, 2013

To

All Authorised Dealer Category-I banks

Madam/ Dear Sir,

Memorandum of Procedure for channeling transactions through Asian Clearing Union (ACU)

Attention of Authorised Dealer Category-I banks is invited to Para 7 and Para 8 of Annex to the A.P.(DIR Series) Circular No. 35 dated February 17, 2010 .

2. The ACU Board of Directors in their meeting held on June 19, 2013 have decided to include only transactions involving export/import of goods and services among ACU countries as eligible for payment under the ACU Mechanism. Accordingly, Para 7 and sub-paragraph (b) of Para 8 of the Annex to the A.P.(DIR Series) Circular No. 35 dated February 17, 2010 have been updated and given in Annex. All other instructions contained in the A.P.(DIR Series) Circular No.35 dated February 17, 2010 shall remain unchanged.


3. AD Category-I banks may bring the contents of this circular to the notice of their constituents concerned.


4. The directions contained in this Circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions/approvals, if any, required under any other law.

Yours faithfully,

(Rudra Narayan Kar)

Chief General Manager-in-Charge

---

[Annex to the A.P.(DIR Series)

Circular No.63 of 18.10.2013]

Extant Para 7 and Para 8(b) to the Annex of A.P.(DIR Series) Circular No.35 dated February 17, 2010

Revised Para 7 and Para 8 (b) to the Annex of A.P.(DIR Series) Circular No.35 dated February 17, 2010

7. Eligible Payments Transactions that are eligible to be made through ACU are payments – (a) from a resident in the territory of one participant to a resident in the territory of another participant; (b) for current international transactions as defined by the Articles of Agreement of the International Monetary Fund; (c) permitted by the country in which the payer resides; (d) not declared ineligible under paragraph 8 of this Memorandum; and (e) for export/import transactions between ACU member countries on deferred payment terms. Note:- Trade transactions with Myanmar may be settled in any freely convertible currency, in addition to the ACU mechanism. 8. Ineligible Payments (b) payments which are not on account of current international transactions as defined by the International Monetary Fund, except to the extent mutually agreed upon between Reserve Bank and the other participants; and

7. Eligible Payments Transactions that are eligible to be made through ACU are payments – (a) for export/import transactions between ACU member countries including export and import on deferred payment terms; and (b) not declared ineligible under paragraph 8 of this Memorandum Note:- Trade transactions with Myanmar may be settled in any freely convertible currency, in addition to the ACU mechanism. 8. Ineligible Payments (b) payments that are not on account of export / import transactions between ACU members countries except to the extent mutually agreed upon between the Reserve Bank and the other participants; and

NR buyer not taxable for demurrage exp. reimbursed to it by Indian Co.; beneficiary shipping Co. is

IT/ILT: Where assessee-exporter reimbursed demurrage charges payable by foreign buyer to shipping company, it was in nature of sale expenditure, not taxable in hands of foreign buyer

Supply to SEZ units can’t be treated as ‘export’ for purpose of Rule 5 of Cenvat Credit Rules

ST : Supply to SEZ units cannot be treated as 'export' for purposes of rule 5 of CENVAT Credit Rules, 2004 and, therefore, assessee cannot claim refund of credit pertaining to those supplied under said rule 5

Supply to SEZ units can’t treated as ‘export’ for purpose of Rule 5 of Cenvat Credit Rules

ST : Supply to SEZ units cannot be treated as 'export' for purposes of rule 5 of CENVAT Credit Rules, 2004 and, therefore, assessee cannot claim refund of credit pertaining to those supplied under said rule 5

FBT comes to rescue employer; sec. 192 not applicable if any sum paid to employees was charged to FB

IT: Where assessee paid 'conveyance maintenance reimbursement expenditure allowance' and 'monetary subsidy under Holiday Home Scheme' to its employees and it paid FBT on said payments, provisions of section 192 were not attracted to instant case

HC condoned delay in filing sec. 12AA registration as assessee had bona fide belief of getting relie

IT: Krishi Utpadan Mandi Samiti was granted opportunity of registration as trust under section 12A with retrospective effect from 1-4-2003

Tips on transferring your Provident Fund when you shift jobs

One of the important things to be taken care of when you shift jobs is the transfer of your accumulated Provident Fund (PF) amount. It is seen that in most cases, inordinate delays take place while transferring the amount, and sometimes it just does not happen. Here are a few tips which can be followed while transferring your PF when you change your job:

Track the status on the Employee Provident Fund Organization (EPFO) website: You can visit the EPFO website and track the status of your request by selecting the state of the PF office, the regional PF office where the account is maintained, the establishment code and the account number. The extension code field is normally left blank.

E-Passbook to be generated for old and new accounts: The new initiative of the EPFO enabling generation of E-Passbook will help in giving you the exact status of the PF transfer. There may be a delay in you getting your passbook, but this will be intimated to you via SMS when it is ready for download. Remember that you will not be able to download the passbook for more than one account with the same organization.

Find out where the transfer is stuck: In a PF transfer, normally the new employer, the sending PF office and the receiving PF office are involved. In some cases the sending and receiving offices will be the same. When you wished to effect the transfer, you would have submitted Form 13 to your new employer. Ask for an acknowledgement of this form submission to the receiving PF office from your new employer. You can use this to follow up with the receiving PF office. You can also consider meeting the PF officials in person, although this may not always be possible. Sometimes, your PF may have been with the old company's PF Trust. In this case, you should follow up with your old employer for the same.

Document your grievance: The EPFO has an online tool for raising grievances called the Grievance Management System. If you are unsure about the status of your PF transfer, you must raise separate grievances with both the sending PF office as well as the receiving PF office. You will be provided with a grievance number, which you must carefully preserve.

HC allows provision for warranty as it isn’t a contingent liability and is to be discharged in futur

IT: Where liability to pay royalty had accrued and was not contingent and while making provision assessee had also made book entries in respect of tax deductible, provisions of section 40(a)(i) would not be attracted

Mere supply of gifts doesn’t prove under valuation of services

ST: Where assessee had supplied certain gift items to its clients and recovered part of cost thereof in name of 'advertisement expenses', then, in absence of any evidence that value was depressed through such process, charge of under-valuation cannot be sustained

INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES AHMEDABAD CONSTITUTION FOR THE WEEK FROM 21/10/2013 TO 31/10/2013

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INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCHES CHENNAI CONSTITUTION FOR THE WEEK FROM 21/10/2013 TO 24/10/2013

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ITAT devises formula for claiming lease equalization charges - gap of annual lease charges and dep.

IT: While allowing deduction on account of lease equalization charges, only difference between annual lease charge of leased assets and depreciation allowed on said leased asset under Income-tax Act should be taken into consideration

CCI not to provide hearing to person against whom reference is made to CCI before directing further

CL: Before directing further investigation under section 26(7), CCI was not required to issue any notice or hearing to person against whom information was provided or reference was made to CCI in terms of section 19

Garment-Makers For Duty-Free Inputs To Maximise Exports

Garment manufacturers claim the government’s restrictive import policies are blocking their access to new raw materials, which they require to diversify their product lines to take full advantage of the duty-free access under the EU’s Generalised Scheme of Preferences (GSP) Plus scheme.

According to the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), the country could utilise only three textile categories out of the total of 73 that it was given duty-free access to under the EU’s limited, unilateral trade concessions from November last year.

“This is because we do not have access to finer, synthetic fabrics used to make products like ladies’ garments, sportswear, etc., which involve high value addition to fetch higher prices. Our garment industry is still forced to produce low value added garments,” said Ijaz Khokhar, a leading exporter from Sialkot and former chairman of the PRGMEA.

“The government must relax the import policy to allow the value added textile industry to get the maximum benefit from the GSP Plus scheme, as the country has no raw material, except for cotton. Producing garments of generation III and IV is still a major challenge, as we are currently making just generation I or II garments, mainly because of the lack of raw material on account of high taxes on import,” he said.

“On the other hand, our rivals in Bangladesh are enjoying duty-free import of every raw material and, hence, have increased their value added textile exports to $26 billion, compared with Pakistan’s garment exports of $4.5 billion,” he argued.

Khokhar said he had interacted with many Chinese investors who were interested in relocating their manufacturing facilities to Pakistan because of rising labour and other costs in China. “Nonetheless, the Chinese investors too feel impeded by restrictive fabric import regime.”

Garment exporters say the local garment industry comprises small to medium-sized units. Such manufacturers are unable to import the raw material required to diversify their product lines because of their small scale. “We cannot afford to import raw materials even under the duty and tax remission for exporters (DTRE) scheme because of our size. The scheme, like many other such policies, has benefited only the big exporters,” said another garment exporter from Lahore.

He said the duty-free import of synthetic blends and cotton fabrics could double the country’s apparel and sportswear exports, as both raw materials are not manufactured domestically. Small trims, carrying no commercial value, should also be made duty-free to reduce delays, and the removal of import duties on raw materials would make our products competitive under the EU’s GSP Plus scheme, he added.

Khokhar was of the view that it was imperative for the government to give the value added textile industry across-the-board duty-free access to raw materials.

“The government should allow a free import mechanism for raw materials for the apparel sector. Even if a part of the imported duty-free raw materials winds up in the domestic market, as is feared by policymakers, it will not hurt any one. The government allows its duty-free fabric import under the DTRE scheme, but it is not feasible for SMEs to avail the scheme.”

He said the duty-free import of fabrics was also of crucial importance for value added exporters because of limited dyeing facilities in the country, and the energy, especially of gas, shortages for the industry.

Many garment exporters are also disappointed over the delay in the processing of their refunds. “Billions of rupees stuck in sales tax and other refunds have caused a cash flow problem for the industry,” said Pakistan Textile Exporters Association Chairman Sheikh Illyas. He added that few exporters could afford to bear the delay in the release of the refunds.

No exporter has received refunds for two per cent sales tax on purchases of raw material for export since February 2013, while claims from 2010 are still pending as well. Many say the Federal Board of Revenue (FBR) is delaying refunds to show higher tax collection.

Meanwhile, FBR officials say the board is releasing refunds pertaining to the current financial year. Claims from previous years will be cleared only when the government decides to do so, they say.

“There are a lot of discrepancies in the refund claims, which we are sorting out. But where genuine claims have been established, we are releasing the refunds,” said an FBR official in Lahore.

Khokhar was of the opinion that the bank guarantee system, which was in vogue before the introduction of DTRE, should be revived, at least for the small to medium scale exporters.

“This will ensure that exporters are able to import the required fabrics and that they do not face a cash crunch because of stuck up tax refund claims. If any one doesn’t convert duty-free imported fabric into garments for export, the FBR can get his bank guarantee encased.”

Source:- dawn.com

Mentha Oil Up 0.3% On Export, Domestic Demand

Mentha oil prices gained 0.39% to Rs 868.90 per kg in futures market today as speculators enlarged positions on the back of increased export as well as domestic demand in the spot market.



Tight supplies in the physical market due to less arrivals from Chandausi in Uttar Pradesh also supported the uptrend.



At the Multi Commodity Exchange, mentha oil for delivery in November month gained Rs 3.40, or 0.39%, to Rs 868.90 per kg in business turnover of 64 lots.



Similarly, the oil for delivery in October edged up by Rs 2.80, or 0.33%, to Rs 855.70 per kg in 153 lots.



Marketmen attributed the rise in mentha oil in futures trade to increased export and domestic demand at spot markets against tight supplies on restricted arrivals from Chandausi in Uttar Pradesh.



Source:- business-standard.com

Overall Import Rises Significantly In Sept

The country's overall import increased significantly in September over the previous month mainly due to higher import of food gains particularly rice and wheat, officials said Sunday.



"Import of different essential products including capital machinery and back-to-back imports for readymade garment (RMG) sector have also picked up during the period under review," a senior official of the Bangladesh Bank (BB) told the FE.



The settlement of letters of credit (LCs), generally known as actual imports, rose by nearly 20 per cent to around US$ 3.0 billion in September 2013 from $ 2.50 billion in August last, according to the central bank statistics.



On the other hand, opening of LCs against imports, generally known as import orders, increased by nearly 14 per cent to $ 3.12 billion in September last from $ 2.74 billion of the previous month.



The central banker said the overall import may decrease in the month of October following a series of holidays on the occasion of the Durga Puja and Eid-ul-Azha festivals.



"The importers may follow a 'go-slow' policy in the coming days mainly due to the political turmoil centring the next general election," he explained.



The actual import of rice increased by nearly 11 per cent to $ 23.75 million in September 2013 from $ 21.40 million in the previous month while wheat import jumped by 107.29 per cent to $ 173.38 million from $ 83.64 million.



The import of capital machinery rose to $ 147.02 million in the month of September from $ 102.54 million in the previous month.



The BB data shows that the back-to-back imports for RMG products including fabrics and accessories increased by nearly 16 per cent to $ 555.65 million in September last from $ 479.34 million of the previous month.



"The imports for apparel and clothing sector have increased mainly due to the rising trend of export of the woven garment and knitwear products," a senior official of a leading private commercial bank told the FE.



The country's RMG exports grew by more than 24 per cent in the first quarter (Q1) of the current fiscal year (FY 2013-14) despite of labour unrest, political turmoil and deadly industrial accidents.



RMG exports rose to $ 6.20 billion in the July-September period of the FY '14 from $ 4.99 billion in the corresponding period of the previous fiscal year.



The export of woven garments grew by 23.89 per cent to $ 3.04 billion during the period under review from $ 2.46 billion in the same period of the FY '13, while knitwear export grew by 24.43 per cent to $ 3.16 billion from $ 2.54 billion, according to statistics from the state-run Export Promotion Bureau (EPB).



The private banker also said the country's overall import may fall in the coming months if the political turmoil continues.

Source:- thefinancialexpress-bd.com

Coal India Trying To Stoke Appetite For $1.6 Billion Share Sale

Coal India Ltd chairman S. Narsing Rao will meet investors this week to stoke interest for a $1.6 billion share sale even as analysts slash their earnings estimates for the world’s biggest miner of the fuel.



A roadshow across Singapore, Hong Kong and the US will start on Monday as the government prepares to sell a 5% stake in the state-run company, Rao said. More than half of 50 brokerages including Jefferies Llc and Edelweiss Financial Services have cut their profit estimates for the year ending 31 March, according to data compiled by Bloomberg.



“Investors have many apprehensions,” Rao, who took charge of the state-owned miner in April last year, said in a telephone interview. “Concerns about our profitability are exaggerated.”

Coal India, whose initial share sale three years ago was oversubscribed 15 times, receded 32% from its May 2011 peak as rising labour and fuel costs eroded profit margins. A decade-low growth in India’s $1.8 trillion economy has damped demand for coal as factories run below capacity, threatening Prime Minister Manmohan Singh’s plan to raise Rs.40,000 crore from asset sales to narrow a budget gap and avert a ratings downgrade to junk.



“In the past three years, the market sentiment about emerging markets has become more pessimistic,” said Janne Rantanen, a fund manager at Helsinki-based FIM Asset Management, who oversees about $3 billion of assets. “That is hurting Coal India’s image as well.”

Shares gain



Coal India shares rose 0.8% to Rs.286.10 on 18 October. The stock has lost 19% this year, compared with a 7.5% gain for the benchmark BSE Sensex. The Kolkata-based company’s initial public offering (IPO) in October 2010, the nation’s biggest, raised Rs.15,200 crore, with the stock jumping 40% on debut.



The purpose of the roadshow is to mend investor sentiment hurt by frequent unrest among workers demanding wage increases and government directives to increase supplies to power plants, the lowest-paying customers, Rao said.

Shareholders are also looking at whether Coal India, which employs 358,000 workers, is able to find a better return on its $11 billion of cash in hand than interest that accounted for half of profit last year, he said.



“Coal India’s idle cash is weighing on its valuations,” said Ameerul Asyraf Bin Salman, an investment analyst at London- based Somerset Capital Management, which owns shares in the fuel producer. “The company has more workers than it requires. There’s scope for cost-cutting through automation.”



With Singh’s push for electricity generation, Coal India may have to divert sales to utilities, its lowest paying customers, after signing fuel-supply accords with power plants with 78,000 megawatts of capacity. Coal India, which sells about 10% of its output in electronic auctions to customers that do not have a contract, may sell more through auctions to improve profitability, Rao said.



“Nothing is cast in stone,” he said. “In case, we see a spurt in production costs, there is always scope to increase prices and bring them closer to the import price.”

Indonesian thermal coal bearing 6,322 kilo calories per kilogram was $76.61 a ton for October. Importers have to pay customs duty and freight over the benchmark price.

Spot sales of thermal coal fetched Coal India Rs.2,544 a tonne in the last fiscal year, almost double the amount paid by contract customers. Auctions, which made up 10% of volume sales, contributed about 40% to earnings before interest, tax, depreciation and amortization.



Waning coal demand at factories has pressured bid amounts at e-auctions, forcing the company to sell at lower prices in the last quarter. Auction prices dropped 16.4% to Rs.2,140 a tonne in the quarter ended 30 June.



“Things are certainly not as rosy as three years ago,” said Giriraj Daga, an analyst at Mumbai-based Nirmal Bang Equities Pvt., who has a hold rating on the stock. “With demand cooling, auction prices may surprise negatively.”



Power plants in the country had an average coal stock of 16 days as of 30 September, compared with an average of eight days a year ago, according to the power ministry. The number of plants with less than seven days of inventory, a critical level, came down to 18 from 35 a year ago.



Lower generation at power plants in the last six months has led to a rise in coal stockpiles, raising prospects of a decline in Coal India’s revenue. Sales at Coal India will grow 6% to Rs.72,360 crore in the year ending 31 March, the slowest pace in five years, according to the median estimate of 48 analysts in a Bloomberg survey.



Full-year profit may increase to Rs.17,460 crore, 52 analyst estimates show, from Rs.17,360 crore a year ago. The estimates ranged from a reduction of Rs.2,640 crore to an addition of Rs.2,780 crore. Profit in the three months ended 30 June fell 17% to Rs.3,730 crore, the first decline in at least five quarters.



India’s peak electricity deficit, which was more than 9% at the time of the IPO, has since reduced to 3.6%. Monthly power demand has contracted 2% to 82.9 billion kilowatt hours in the nine months to 30 September, compared with a 1.3% increase in the same period last year, according to the Central Electricity Authority.



The sale, which will reduce state ownership in Coal India to 85%, is half of an initial plan to sell a 10% stake. The government trimmed the offering after unions threatened to go on strike, saying stake sales are a step toward privatizing the company.



Coal India workers won a pay increase for five years starting July 2011 after threatening to go on a strike. They stopped work for a day in 2011, demanding a higher bonus. The company agreed to a 19% increase in bonus payout this year to win their support for the share sale.

Unions are pushing up employee costs and that needs to be compensated through higher prices, Rantanen said.



For Coal India, which fuels more than half of the nation’s power production, a price increase will probably be difficult to push through in the run up to the general elections due by May. An increase in prices of the fuel will lead to a rise in electricity bills for homes and factories.

“There would be room for worry if there was no leverage,” Rao said. “We have enough leverage to protect our profitability.”

Source:- livemint.com

‘Peak credit entries’ added to undisclosed income on assessee’s failure to substantiate his assertio

IT: Where assessee failed to bring on record nature of transactions in his bank account and purpose for which they had been entered into, peak amount of credit entries in bank account was added to income of assessee as income from undisclosed sources

Capital gain tax to be paid in the year itself in which joint development agreement is signed

IT: Where assessee, owner of plot, entered into a development agreement with developer in terms of which he was entitled to receive certain amount in cash and a furnished flat, assessee was liable to pay capital gain tax in year in which said joint development agreement was signed and not afterwards

Commencement of business when its critical project is in operable state; all exp. till that date to

IT: Date of setting up of business is date when a project is ready to be delivered or in an operable state; expenditure anterior to this date is to be capitalised

China Is World's Largest Consumer, 2Nd Largest Producer Of Iron Ore

Iron ore is the most important raw material for steel production. Its resources are found mainly in Australia, Brazil, China, India, Russia and the United States. Australia, China, Brazil and India alone, account for around 80 percent of the world total output.



According to statistics from the Metallurgical Mines’Association of China, global iron ore consumption in 2001 was over 1 billion tons. In 2010, it nearly doubled to more than 1.8 billion tons.



China contributed to 90 percent of the increase. The country has become the world’s largest iron ore consumer, and the world’s second-largest producer. But China’s iron ore resources are scattered, of low grade and with a high cost of extraction. It relies highly on imports from other countries.



Last year, it reported 440 million tonnes in output, 740 million tonnes in imports and 1.05 billion tonnes in consumption. Most of the imports are from Brazil’s Vale, Australia’s Rio Tinto, BHP and FMG.



Source:- english.cntv.cn

India Slaps $9/Kg Duty On Import Of European Union Bulk Drug

India has slapped anti-dumping duty of up to $9 per kg on import of a bulk drug from the European Union to protect the domestic industry.



The revenue department has imposed the duty — a levy to discourage cheap imports — on bulk drug Cefadroxil Monohydrate originating in or exported from the EU for five years.



It has been levied following recommendations by the Directorate General of Anti-dumping and Allied Duties (DGAD).



The duty "shall be levied for a period of five years (unless revoked, amended or superseded earlier)," a notification by the Central Board of Excise and Customs said.



Depending on different factors, the duty will be $7.88 and $9.03 per kilogramme on import of bulk drug. The DGAD had carried a probe in the imports and concluded the bulk drug entered the Indian market from EU below normal value resulting in dumping and thus causing "material injury" to the domestic industry.



The investigation was done after DGAD received an application from pharma major Lupin, Mumbai, on behalf of the domestic industry, alleging dumping of the bulk drug "originating in or exported from the European Union".



Hyderabad-based Aurbindo Pharma had supported the application.



Bulk drug Cefadroxil Monohydrate is an active pharmaceutical ingredient (a raw material) used for the manufacturing of pharmaceutical formulations.



Countries initiate anti-dumping probes to check if domestic industry has been hurt because of a surge in below- cost imports. As a counter-measure, they impose the duty, which is WTO compatible.

Soruce:- financialexpress.com

Gold Futures Rise To Rs 29,500 Per 10 Gm

Buoyed by a firm Asian trend, gold prices rose 0.72 per cent to Rs 29,500 per 10 gram at the futures trade today as speculators enlarged their positions.

Besides, rising demand at the domestic spot market for the ongoing festive and wedding season supported the rise.

On the Multi Commodity Exchange, gold for delivery in far-month February rose Rs 210 or 0.72 per cent to Rs 29,500 per 10 gram in a business turnover of 10 lots.

Similarly, the yellow metal for delivery in December traded higher by Rs 205 or 0.7 per cent to Rs 29,685 per 10 gram in 235 lots.

Analysts said a firming trend in the Asian trade on speculation that the US Fed would not start tapering until 2014 and rising demand in the domestic spot market mainly led to rise in gold prices at the futures trade.

In the national capital, gold prices went up by Rs 150 to Rs 31,650 per ten gram on Saturday.

Globally, gold rose $1.60 or 0.12 per cent to $1,319 an ounce in Singapore.

Source:- thehindubusinessline.com

Rupee Down 21 Paise Vs Dollar In Early Trade

The rupee on Monday fell by 21 paise to 61.48 in early trade on the Interbank Foreign Exchange market due to fresh dollar demand from banks and importers, amid strengthening of the US currency overseas.

Forex dealers said besides dollar gaining against other currencies in the global markets, increased demand for the American currency from importers also influenced the rupee.

They said, however, a higher opening in the domestic equity market capped the fall.

The rupee had lost 4 paise to close at 61.27 against the dollar on Friday.

The BSE benchmark Sensex rose 57.56 points, or 0.28%, to trade at 20,940.45 in early trade on Monday.

Source:- hindustantimes.com

Construction contracts are work contracts and liable to VAT; Larger bench of SC affirms Raheja’s cas

ST : Building/Construction contract is a 'works contract' and goods like cement, concrete, steel, bricks etc. are liable to VAT even if they lose their identity as goods

Reassessment sets-aside as revenue didn’t establish how project would be deemed as construction PE

IT/ILT: Reassessment abandoned where reasons recorded for reassessment did not indicate as to how and why income had escaped assessment and now in view of article 5 of DTAA with Korea, concerned project was a PE

Creation of an educational institute by a special statue of Parliament doesn't mean it is funded by

IT: It cannot be held that educational institution is only said to be substantially funded by Government, if it is either established or created by a special statute of Parliament

Co. could not deny to honour claim of creditor on mere reasonings that it failed to collect sum from

CL: Non-receipt of payment by company from party with whom it had entered into a sub-contract would not defeat claim of petitioning-creditor who had successfully and satisfactorily done its job

Family finances: Early start, high surplus will make the journey easy for Baraskars

Even when the markets were enjoying a bull run, several investors chose to stay away from equity. So, when the markets are churning out lackadaisical returns, it comes as no surprise that the portfolio of Baraskars, a Mumbai-based couple, is shorn of equity. Though they still have 27 years to retire, a little over half of their portfolio is invested in debt.

Gold comprises close to 36% of the total portfolio, while a meagre 9% is allocated to equities, and 4% is held as cash. "Equity is known to be volatile, and I felt that without proper investing guidance, it would be safer to opt for debt," says Yogesh Baraskar, a 33-year-old who works for an engineering firm.

Though their portfolio is currently skewed in favour of debt, the couple has little to worry since they have only three goals—their child's education and marriage, as well as their own retirement—all of which are more than 20 years away. With a little course correction, the couple should be able to achieve all their goals.

Yogesh lives with his 28-year-old wife, Trapti, in Mumbai, and the couple is expecting a baby in the next few months. Yogesh takes home a monthly salary of Rs 60,000, while Trapti is a homemaker. The couple spends about Rs 15,000 on household expenses, and another Rs 3,000 is used for miscellaneous items. In 2007, Yogesh had bought a house in Mumbai, in which he currently stays. He had taken a home loan for the Rs 12 lakh house and is paying an EMI of Rs 12,000 for it. After accouting for all these expenses, the couple is left with a monthly surplus of Rs 30,000.

Every financial plan must be covered for risk, which includes buying insurance as well as building an emergency corpus. Since the Baraskars have been extremely careless on the life and health insurance front, they need to address this issue immediately. Currently, Yogesh has a life cover of just Rs 8.75 lakh through three traditional plans. As he is the sole earning member and his responsibilities are going to increase when the child arrives, Shiv Kukreja of Ojas Capital suggests that Yogesh buy an online term plan of Rs 1 crore, which will cost him about Rs 800 every month.

Should you invest in tax-free bonds or prepay home loan?

By Narendra Nathan, ET Bureau | 21 Oct, 2013, 08.00AM IST

The market is flooded with taxfree bonds. Besides the three existing offerings (see table), the National Housing Bank is also expected to hit the market soon.

These are compelling investment options because the tax-free interest rates offered are very high and almost comparable with the pre-tax rates on bank fixed deposits.

The decision may not be that easy for those with a home loan to pay. The common refrain is that if there is any surplus money, shouldn't it be used to prepay the loan? Most borrowers may opt to prepay their loans than invest in tax-free bonds. If you are faced with the same dilemma, consider these factors before you decide.

Look at prepayment as an investment

Much of the confusion gets cleared if you see debt prepayment as just another investment. If you prepay Rs 1 lakh of a personal loan which was charging you an interest rate of 15%, you save Rs 15,000 in interest per annum.

And since money saved is money earned, your Rs 1 lakh will effectively earn you Rs 15,000 in a year. That's a good return and should be the first option for anybody with surplus cash. Evaluate your debts on the basis of the interest you are paying and start with repaying the costliest ones.

The credit card balance and personal loans should be the first in your cross-hairs. It doesn't make sense to keep money in a fixed deposit that fetches only 9% when you have a credit card outstanding with interest cost of around 42% and personal loans with interest cost of around 15%.

But you may also encounter situations where the loans are cheaper than what your investments can earn. That's when you should stop prepaying the loan and start investing. "Follow the simple rule that the return from the investments should be more than the interest on the loans," says Jaya Nagarmat from Investor Shoppe.

A small caveat here: You must also consider the risks involved in the investments when you make the comparison. You should only consider relatively safe investments such as bank fixed deposits and bonds.

Ensure your finances work as you ease into retirement years

Many people, who belong to the happy generation that worked in the post-1991 era, are financially well-placed but unsure about financial planning.

Several have built wealth over time, and navigated the world of investing to the best of their abilities, leaning on friends and relatives to learn the ropes. What should they know about personal finance at this stage of their careers?

First, it is important to recognise the peaking of one's income. A middle-aged professional should recognise that the return on the human asset is subject to risks, which can increase with age. Retirement is the most obvious risk, but economic cycles can create issues of job loss, retrenchment and lower increments.

Sportspersons, film stars, and media professionals may find that younger people encroach into their domains and render them less valuable. Poor assessment of future income has led many yesteryear filmstars to live in old-age penury.

While some professions may be based on reputation built over a lifetime, others may not be able to attract a consistent clientele with age. If you are 40, map your income realistically 50 years into the future, building in directorships and CEO positions you aspire for, with a good dose of realism. Not everyone finds an alternate profession easily.

Second, get real about the damage inflation can inflict over long periods of time. The key thing to remember is that the 'safe' bank deposit will provide a fixed and flat interest income, while expenses will compound over time at the rate of inflation.

If the calculations are too complex to comprehend, use a simple thumb rule: at an estimated inflation of 7-8%, your expenses will double every 9-10 years. This means your corpus should double every 10 years for you to stay above water. There are only two ways to deal with this problem.

First, save as much as you can in the years in which your income is higher than the expenses. Second, invest the savings in an investment that grows at least at the rate of inflation. At 50, when you already have a house and a car, and have reached the peak of your career, you should be saving 50% of your income. Put this to work for a later date when income falls and expenses move up.

Third, take a hard look at your assets and allocate them for future use. If you have a house that you live in, and a few deposits, shares and mutual funds, map these assets to your needs. The house will save you rental expense in the future.

The other assets should also have an identified use—your child's higher education and marriage, your international travel plans, your need for investment income when your regular income falls, and your need to leave behind assets for your children. Every asset should have an identified purpose and a possible time at which it will be liquidated or given away. Don't simply build assets and hope it will be fine.

If you leave your spouse with a large house and no income when you are gone, you may not have provided sensibly, even if that was your intention. Write down what you own and how you plan to use it. If the rent from your second house is supposed to fund your travels, put it down.

Fourth, divide your investments into three portions. The core portfolio is something you will need as long as you are alive, and its only purpose is to provide for your needs. You should lose sleep if this core is lost, erodes in value, or is inadequate.

No need to establish rendition of services in India to tax FTS as long as payer is a resident

IT/ILT : Rendering of service is not a pre-condition for attracting section 9(1)(vii) when Fees for Technical Services are payable by a person who is resident in India