After Eu Ban On Mangoes, Iran Cuts Basmati Import

Close on the heels of a ban on mangoes from India by the European Union (EU), Iran has cut down its purchase of basmati rice by around half over the past three months. And yet, even farmers in Punjab and Haryana - the country's biggest producers of the aromatic crop - are planning to bring more area under basmati this kharif season.



About of 80% of basmati rice exported by India is bought by millers from Punjab and Haryana. Last year, Punjab had about 5.59 lakh hectares (ha) of area under basmati and had an output of 14.87 lakh tonnes while in Haryana the area under the crop was 7.21 lakh ha and production was 18.90 lakh tonnes.



Iran, which is the biggest importer of basmati rice from India, has cited stringent standards on chemical contamination, mainly arsenic, and dissatisfaction with the quality of commodity being delivered for lowered buying. While experts and officials fear this could hurt prices of the new crop as its transplantation begins in the first fortnight of July, exporters have allayed such fears.



Amit Marwaha, a leading rice exporter from Amritsar, said Iran had changed its food safety norms therefore it sent back some consignments of basmati rice from India. "I don't think this will impact rice exports to Iran and other countries since most of us have applied for hazard analysis and critical control points (HACCP) certification, which states that all food safety standards are met by the millers."



The Agricultural and Processed Food Products Export Development Authority (APEDA) data shows that India exported 35 lakh tonnes of basmati rice worth Rs 19,409 crore in the crop year 2012-13. Of this, Iran accounted for about 10.82 lakh tonnes valued at Rs 6,463 crore. From April 2013 to February 2014, basmati rice export stood at 34.38 lakh tonnes worth Rs 26,519 crore, riding mainly on strong demand from Iran, Saudi Arabia and Iraq.



Former president of the All India Rice Exporters Association (AIREA), Vijay Setia, said demand from overseas wouldn't suffer much in the coming season since most of the exporters had started maintaining the required international standards for metal residue in rice. "All concerns about quality of rice have been addressed so I see no negative impact on the export from India this year as well," said the Karnal-based exporter.

Source: - timesofindia.indiatimes.com

Rupee Down 8 Paise Against Dollar In Early Trade

The rupee weakened by eight paise to 59.33 against the US dollar in early trade on Friday at the Interbank Foreign Exchange market due to increased demand for the American currency from importers.



However, a higher opening in the domestic equity market and the US dollar's weakness against other currencies overseas, capped the rupee's fall.



Forex dealers said fresh demand for the dollar also put pressure on the rupee.



The rupee ended two paise higher at 59.25 in yesterday's session on range-bound movements.

Source:- thehindubusinessline.com

Mere plea of financial hardship wasn’t a valid ground to condone delay of more than 10 years in fili

Excise & Customs : Financial hardship is a ground for considering what should be appropriate condition for pre-deposit for entertaining appeal; however, merely on such financial hardships, writ petition after more than 10 years cannot be entertained

HC dismissed winding-up plea as dispute raised by respondent for the overdue sum required detailed i

CL : Where respondent was liable to pay a sum but had raised contentious issues which required detailed enquiry, winding up petition against respondent was not maintainable

Indian citizen taking employment abroad would be ‘non-resident’ in India if his stay in India is for

IT/ILT : Assessee should be treated as an NRI since he had left India for employment outside India and his stay in India in previous year was only 68 days

Alterations in AOA to be made as per 1956 Act on conversion of Public Co. into Private till new prov

COMPANIES ACT, 2013/COMPANIES ACT, 1956 : Clarification for Filing of Form No. INC-27 for Conversion of Company from Public to Private Under Provisions of Companies Act, 2013

MCA fixes time period for constitution of Audit Committee for Specified Public Cos earlier exempted

CL/INDIAN ACTS & RULES : Companies (Meetings and Its Powers ) Amendment Rules, 2014 – Amendment in Rule 6

Cos to accept old share transfer forms executed prior to April 1, 2014 for registration of transfer:

COMPANIES ACT, 2013 : Clarifications on Rules Prescribed under Companies Act, 2013 – Matters Relating to Share Capital and Debentures

MCA allows physical filing of Form MGT-10 for change in shareholding pattern until e-form is made av

COMPANIES ACT, 2013 : Clarification on Filling of MGT-10

Service-tax not collected from customer but paid to Treasury is an allowable business expenditure

IT: Where assessee had not collected and deposited service tax but on being pointed out, deposited same, amount being expended by assessee in course of business was allowable as business expenditure

HC set aside order of ITAT as it hadn’t examined the plea raised by assessee

Service Tax : Where issue raised by assessee as to calculation of interest had not been examined by Tribunal, order of Tribunal was set aside and matter was remanded back to Tribunal for a fresh decision

Sums collected by society for area development was for specific social purposes which couldn’t be he

IT: Where, assessee, a co-operative sugar factory, deducted certain amount from bills payable to members and non-members towards supply of sugarcane on account of 'Area Development Fund', in view of fact that said amount was impressed with an obligation to spend same for specified social purposes approved in AGM, it could not be brought to tax in assessee's hands as income

Receipts from sale of scrap generated after demolition of building is taxable as Cap gains and not r

IT-I : Proceeds of Malba (scrap), i.e., material left over after demolition of a structure, is taxable under head 'Capital gain', and not as 'Income from other sources'

Input is available for taxes paid on purchases used in execution of job work even if no tax is payab

CST & VAT : Where assessee claimed deduction under section 10 of Karnataka Value Added Tax Act, 2003 of input tax paid on local purchases of raw materials, consumables, etc., which were consumed in execution of job work undertaken on behalf of others, assessee was entitled to benefit of input tax rebate in respect of consumables used in relation to job work, even though no output tax was paid on turnover of job work

Shareholding of one partner and not cumulative holding of all partners should exceed 10% to invoke s

IT : Where shareholding of each partners of assessee-firm as well as of assessee-firm in closely held company is less than 10 per cent, even though their cumulative shareholding is more than 10 per cent, section 2(22)(e) cannot be resorted to for treating amount advanced by company as deemed dividend

Delay in filing appeal not condonable if assessee didn’t specify reason for delay and date of receip

Excise & Customs : Where assessee had failed to state date on which order passed by Tribunal was served on him and failed to furnish any reason for delay for a part of period (more than an year), condonation could not be granted

Govt. notifies ‘1024’ as Cost Inflation Index for Financial Year 2014-15

IT/ILT : Section 48, Explanation (v) of the Income-Tax Act, 1961 - Capital Gains - Computation of - Notified Cost Inflation Index for Financial Year 2014-15

HC raps ITAT for remanding case when all info was available to examine nature of sec. 14A disallowan

IT : Where in appellate proceedings before Tribunal, assessee raised a new plea that even suo motu disallowance in terms of section 14A made in return was not justified, in view of fact that entire material necessary to examine nature of disallowance to be made under section 14A was already on record, Tribunal was to be directed to give its conclusive opinion on issue in dispute on merits

AO couldn’t doubt sanctity of lease rentals paid by lessee if lessor had paid income-tax thereon

IT : If plant and machinery taken on lease is duly reflected in books of lessor, rent thereon could not be disallowed

Service-tax is not payable on sale of goods which have been subjected to VAT

Service Tax : Where under a contract of supply and installation of machinery, assessee had paid VAT on value of machinery, such sale was not liable to service tax and exempt under Notification No. 12/2003-ST

HC admits voluntary winding up plea filed by co. as its affairs weren’t prejudicial to interest of m

CL : Where on an overall comprehension of record, affairs of company cannot be said to have been conducted in a manner prejudicial to interest of its members or to interest of public, voluntarily, winding up petition filed by petitioner company was to be allowed

Assessee offering marketing and support services to AEs to be held as service provider and not distr

IT/ILT: Where assessee provided marketing and installation support services to its associated enterprises it was held to be a service provider and not a distributor

NR promoters not required to obtain PAN under I-T Act are exempted from filing its details on Co.'s

COMPANIES ACT, 2013 : Section 7 of The Companies Act, 2013 - Incorporation of Company - Applicability of PAN Requirement for Foreign Nationals

India-Liechtenstein Tax info exchange agreement notified with effect from April 1, 2013

IT/ILT : Section 90 of The Income-Tax Act, 1961 - Double Taxation Agreement - Agreement for Exchange of Information with Respect to Taxes With Foreign Countries - Principality of Liechtenstein

AO can make Rule 8D disallowances if claim isn’t satisfactory and cogent reasons are recorded

IT-I : Assessing Officer can make disallowance under rule 8D of 1962 Rules only when he is not satisfied with correctness of claim of expenditure made by assessee and such a satisfaction has to be an objective one based on cogent reasons

Payments for receipt of satellite signals fall within ambit of process royalty in view of FA, 2012 a

IT/ILT : Payment made by the assessee as "Pay Channel Charges" is "royalty" as defined in clause (i) of Explanation 2 to sec. 9(1) of the Act in view of Explanation 6 below clause (vi) of sub-section (1) of sec. 9 defining the word "process"

MCA mandates appointment of whole-time 'CS' in Cos having paid-up capital of Rs. 5 Crores or more

COMPANIES ACT, 2013/INDIAN ACTS & RULES : Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2014 - Insertion of Rule 8A

Full deduction under section 80-IA, 80-IB or 80HHC can be claimed as each provision is an independe

IT : Deduction under section 80-IA or 80-IB and deduction under section 80HHC are independent of each other and, therefore, full deduction under each section can be claimed

RBI issues final guidelines on Basel III liquidity framework; specifies 60% liquidity coverage ratio

BANKING : Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards

Issue already examined under revisional proceedings can’t be reassessed

IT : Once an issue has been dealt with by Commissioner under section 263, Assessing Officer cannot reopen that issue under section 147

Indian Citizen participating in golf tournament abroad deemed as NR as his stay in India was of less

IT/ILT : Where assessee being a professional golfer would be a self employed professional who carried his talent as a sportsperson by participating in golf tournaments abroad; his stay in India being less than 182 days during relevant previous year, he would not be a resident so as to tax his receipts from such self-employment abroad

Family pension received from UK based bank falls under residuary Article 23 of India-UK DTAA - taxab

IT/ILT : Where the assessee received family pension from the employer of the deceased wife i.e., from RBS, UK and the source country i.e. UK also deducted tax thereon at source , said income cannot be taxed for a second time in India

No reassessment to deny higher rate of depreciation if facts were fully disclosed during original as

IT : Where during assessment proceedings, assessee on a specific query with respect to depreciation clearly mentioned that commercial vehicles purchased during year were given on lease, Assessing Officer was not justified to reopen assessment on ground that vehicles were not used for hiring and, thus, assessee was entitled for depreciation at normal rate of 20 per cent and not at higher rate of 40 per cent

Assessment of escaped turnover set aside as it was beyond limitation period prescribed under Tamil N

CST & VAT : Where for assessment year 1997-98, Assessing Authority completed assessment of assessee on 11-3-2000 and subsequently he, on representation made by assessee, made rectifications in above order and passed revised order on 2-7-2002 and further he issued on assessee a pre revision notice dated 5-4-2004 and by order dated 23-8-2004 passed under section 16(1)(a) of Tamil Nadu General Sales Tax Act, 1959 revised assessment order, above order dated 23-8-2004 was beyond period of limitation

Assessment of a person other than searched one could be made either under sec. 148 or sec. 158BD

IT : Chapter XIV-B does not preclude Assessing Officer to proceed against an assessee by issuing notice under section 148 and, therefore, pursuant to search proceedings carried out in case of another person, it is open to Assessing Officer to either proceed under Chapter XIV-B or under section 148 against assessee

Coal India To Foray Into Fertiliser, Chemical Production.

State-owned Coal India (CIL) has decided to amend its memorandum of association (MoA) for foraying into the business of producing fertilisers and chemicals using coal gas.



The amendment will permit the maharantna firm to produce, process, store, distribute, sell import, export or otherwise deal in gas and other byproducts arising from coal gasification and use them to produce ammonium nitrate, fertilisers and associated products, a Coal India official said.



The official further said that the amendment will also allow the coal PSU to install and operate such plant in the country and overseas. The matter also came up for discussion during the board meeting held last month. The board accorded its approval to the proposal to amend of Memorandum of Association resolution, the official said.



CIL said Rashtriya Chemicals and Fertilizers Ltd (RCF) had signed a Memorandum of Understanding (MoU) with Gas Authority of India Ltd (GAIL) for jointly exploring the potential use of gas produced from surface coal gas project in the fertiliser industry.



GAIL had approached CIL for cooperating in various studies required for the process and project development for surface coal gasification in coal bearing states, including the area in and around Talcher in Odisha.



The Ministry of Chemicals and Fertilisers convened a meeting in 2009 for revival of Talcher unit of Fertilizer Corporation of India (FCIL).



In the meeting it was decided that GAIL, CIL and RCF would form a consortium by signing of MoU for setting up surface coal gasification plant for chemicals and fertilisers at Talcher.



In August last year, the Cabinet Committee on Economic Affairs awarded the revival of Talcher plant of FCIL to the consortium. In August, 2013 the government decided to form two joint ventures for operating the proposed project.



Source:- economictimes.indiatimes.com

Domestic Solar Cell Makers Claim Use Of Indigenous Products To Cost Low

Domestic manufacturers of solar cells have said that use of indigenous products can help keep cost of solar power low, countering the government's claim that it will escalate after imposition of dumping duty.



"The fact is that cost of power will remain exactly the same or lesser than what was discovered through an extremely transparent bidding process of Jawaharlal Nehru National Solar Mission (JNNSM) Phase 2 Batch 1," a senior executive of a large Indian solar cell manufacturing company said.



"From public interest perspective, it is the cost of overall energy mix which is important. Change in that will be negligible at less than 2 paisa per KwHr due to anti-dumping duty." According to domestic manufacturers, the cost of solar power could fall and remain at Rs 7.5 per unit by 2020 if indigenous solar cells are used, compared with the Rs 6.5-8 per unit at present.



The Ministry of New and Renewable Energy (MNRE) and power producers had expressed concern that the cost of solar power would double after the commerce department said it was considering imposing high dumping duty on imports of solar cells, the bulk of which comes from the US, China, Malaysia and Taiwan.



Officials also fear that a large number of projects will get stuck due to price escalation. More than 70% of the projects across the country are built on imported solar cells and around 4,000 Mw was tendered recently. This includes 375 Mw tendered out in the second phase of the National Solar Mission in January this year.



The Jawaharlal Nehru National Solar Mission (JNNSM), announced in 2009, targets 20 gigawatts of energy generation by 2022 in three phases.



In its finding, the commerce department had indicated that imposition of dumping duty could see foreign players setting up manufacturing facilities in the country in order to capture the growing sector.



"In fact, once it is provided a level playing field, India will have a thriving domestic manufacturing industry with its entire supply chain, bringing in FDI, saving Forex, driving employment, and above all, ensure India's energy security with a far superior energy mix," Moser Baer Solar's chief marketing officer Vivek Chaturvedi said, adding that this could push up India's solar cell manufacturing capacity to 4-5 gw in two-three years.



The government, however, is not relying completely on the domestic industry because of insufficient capacity. Against India's annual requirement of 3,000 Mw of solar cells, the country's installed capacity is 1,260 Mw, of which only 240 Mw is operational, according to the MNRE.



"In the last bidding for solar power projects under the second phase of the National Solar Mission, the price of domestic content based projects was double of the ones based on imported solar cells. This is the reason we offered a mix of both to optimise the cost of solar power," said a senior MNRE official.



The second phase of JNNSM was bifurcated into one based on domestically-manufactured solar cells and the other based on imported content.



The official said that in their previous presentations to the government, the domestic manufacturers have always cited the high cost of financing and solar power to gain subsidy benefits.



"But if they are able to provide cheaper solar cells, what is better than that. Our aim is to bring down the cost of solar power and also bolster the domestic manufacturing," the official added.



Source:- economictimes.indiatimes.com

Govt May Check Onion Export To Curb Price Rise

Export of politically-sensitive onions is expected to face the first set of checks as expectations of weak monsoon rains have prompted the government to begin work on keeping food inflation under control.



Sources said the government has identified onions, along with non-basmati rice, pulses, potatoes and milk as products that need intense monitoring given the possibility of a spike in prices in the coming months. Over the weekend, cabinet secretary Ajit Seth met officials from the food and consumer affairs, agriculture, finance and commerce and industry ministries to take stock of the price situation.



Since the government has comfortable stocks of grains, potato and onion at the moment, monitoring will be crucial so that supplies can be directed towards critical zones, officials said. Even then, onion exports will once again be subject to a minimum export price, which will be higher than the prevailing market price, to discourage outbound shipments of the key kitchen ingredient. Already, prices of onions used as seed have more than doubled over the past few weeks, market sources said.



Weak rains may hit western states such as Gujarat, Maharashtra and Rajasthan the most as northern states have an irrigation network to depend on. As a result, production of cotton and some oilseeds may be affected. The other fallout could be on onions as the new crop hits the market in October. Weak rains will delay, if not reduce, arrivals, resulting in a spike as was seen last year, although it was on account of heavy rains in parts of Maharashtra.



"Indian rainfall forecast worsens. Government should start counting onions lest it is hit by a surprise in Oct-Nov," tweeted agriculture economist Ashok Gulati.



The government is taking no chances, given the possible adverse fallout. The consumer affairs ministry has dashed off letters to state governments asking them to identify hoarders for effective crack down. The worry stems from onions as the wholesale price is around Rs 13 a kg, while the retail price is Rs 22-23 a kg.



The agriculture ministry has also informed the cabinet secretariat that area under cultivation for pulses has come down, resulting in the possibility of higher imports, especially of moong daal.



Milk is the other area of concern, where prices have increased by Rs 4 a litre over the past 12 months. Experts suggested that the government could respond by reducing the import duty on skimmed milk powder from the current level of 60% to signal lower prices.



In case of grains, the government has sufficient stock although there has been an increase in recent months despite stocks of 69.4 million with the Food Corporation of India. This included rice and paddy stocks of close to 28 million tones. Sources indicated the price issue will be addressed by releasing more stocks into the market. According to official data the average wholesale price of rice has increased to Rs 2877 per quintal, roughly Rs 29 a kg, compared to Rs 2,719 a year ago — an increase of a little under 6%.



"The government needs to think three-four months in advance for any political action to be effective. If domestic supplies of food products suffer (due to weak rains), the only way out is to import. Import duty can be slashed for certain products and can be increased, when the crisis gets over," Gulati said, when contacted over the phone.



Madan Sabhnavis, chief economist at ratings agency Care, too suggested that higher imports could help but warned against initiating measures too soon. "What if the monsoon is normal? You will be saddled with the stock," he said



But the government is on high alert, with the cabinet secretary scheduled to take stock of the situation every fortnight, compared to a monthly review of prices so far.

Source:- economictimes.indiatimes.com

Ban On Exports Is Wrong, Says Indian Pharmaceutical Dealer's Association

The Indian Pharmaceutical Dealer's Association (IPDA), the largest association of pharmaceutical dealers in e-commerce, has demanded immediate lifting of the ban by Maharashtra government on pharma exports. The association claimed here on Tuesday that the ban has caused a huge setback to the industry.



Pharma companies in state claim to be suffering losses of over Rs 4 crore everyday since February, when Maharashtra Food and Drug Administration (FDA) banned exports of pharma products through parcel posts. Navneet Verma, IPDA secretary from Mumbai, claimed that the association has over 50 pharma manufacturers and export members. He said, "State should immediately intervene to stop harassment on the pretext of curbing clandestine activities. There is an issue of illegal exports, but because of some black sheep all others are suffering losses."



Parcel post accounted for 30% of the total $2 billion (Rs 12,000 crore) global e-commerce market for pharma industry. This has completely crashed since February and caused huge revenue loss to the government as well. Maharashtra FDA has often cited violation of Drug & Cosmetics Act of 1940, to impose the ban. However, the Drugs and Cosmetics Act is not even applicable on exports, claims the association. It is meant to merely regulate manufacture, stocking or selling of drugs within the country.



Medicine export falls under the 'Foreign Trade Policy' and not under Drugs and Cosmetic Act. Hence FDA cannot take ban export, say IPDA members. The business is monitored by the Reserve Bank of India and undertaken with the approval of Assistant Drug Controller of India and the customs department. Also, the powers of state drug regulatory authorities of any Indian state are limited to the manufacture and sale of medicines in that state. While state authorities can order a company to stop manufacturing a medicine under certain circumstances, it cannot issue an order to specifically ban medicine exports.



Verma went on to level serious charges against the state FDA, saying that it is working at the behest of American pharma lobby, which has been spending millions of dollars annually to kill competition from small and medium-scale generic pharma companies in India. "Even Interpol has found no wrongdoing by any of the 50 members of IPDA over the last seven years in its global investigations against drug trafficking. We are meeting union commerce minister Nirmala Sitharaman on Wednesday as the new government is at least ready to listen to our grievances," he said.

Source:- timesofindia.indiatimes.com

India Should Lower Export Duty On Iron Ore: Cii's Nik Senapati

Arguing that India has more than sufficient iron ore resources, industry body CII today said there is a need to reduce export duty on the key steel-making raw material.



Asked whether the current 30 per cent export duty on iron ore should be brought down, pat came the reply from CII's National Committee on Mining Chairman Nik Senapati, "Yes."



"There is enough iron ore in the country to satisfy the need of all steel makers for the foreseeable future. There is enough for the growing steel industry," said Senapati, who also heads mining giant Rio Tinto's India operations.



India's installed steel manufacturing capacity currently stands at about 100 million tonnes and is projected to triple in another 10-15 years. It takes about 1.6 tonnes of iron ore to produce one tonne of steel.



"India is rich in resources. Iron ore resources are defined as what have been explored at the moment. It is by far not explored. One can't guarantee this, but it is most likely that there are more iron ore reserves...much more," he said.



However, the deficiency lies in exploration, he said. India, which was the third-largest iron ore exporter in the world in the not-so-distant past, has lost that status and market share allegedly due to the higher export duty. India's iron ore exports came down to 14.42 million tonnes in 2013-14 from 117.37 million tonnes in 2009-10.



Senapati said the country should prioritise restarting of closed mines in a transparent manner and in compliance with the Supreme Court's directive and it should ensure that the sector gets enough investment.



He also said the country should allow the transfer of a lease from one company to another to ensure profit.



"At the moment, you are not allowed to transfer for profit. If you can't sell for profit, the incentive to invest will be less. Those who are in exploration, they often do not do mining," Senapati said.

Source:- economictimes.indiatimes.com

Business receipts of a trust above prescribed limit would deny it sec. 11 relief; its registration w

IT: Where in case of assessee, a charitable trust, gross receipts having exceeded stipulated monetary limit provided in second proviso to section 2(15), assessee was not entitled to claim exemption of income in relevant year but said fact alone could not make trust non-genuine for purpose of invoking section 12AA(3)

Sub-Normal Monsoon: Govt May Have To Import Pulses To Rein In Inflation

Official prediction of a weak monsoon could make the government's job of taming food inflation - particularly in pulses, oilseed, coarse cereals and vegetables - more difficult. The rate of food inflation, as measured by the consumer price index, rose to 9.66 per cent in April from 9.10 per cent in March.



"The highest impact could be on oilseed, pulses and horticulture. The government has comfortable rice and wheat stocks. Also, much of Punjab and Haryana has irrigation," said Indira Gandhi Institute of Development Research Director S Mahendra Dev. He said it could be difficult in Madhya Pradesh, Maharashtra, Karnataka, Rajasthan and Gujarat, where farms are mostly rain-fed.



Production of coarse cereals like millet could fall. "Food inflation might rise due to the low harvest of pulses and oilseed. The government could increase import of pulses, as it did in 2009," Dev said. Even rice could be affected in areas like eastern Uttar Pradesh, depending on the distribution of rainfall. (FOOD PRICE CHALLENGE)



The government has sufficient grain stocks. Against a buffer norm of about 10 million tonnes of rice and 17 mt of wheat, the central pool has 20.64 mt and 41.59 mt of stocks, respectively. In the event of low monsoon rainfall, its distribution is key. Rainfall 10 per cent below normal may not have a debilitating impact if it is even.



"In the northern and western regions, much will depend on the distribution. If the monsoon is deficient in June and early July, paddy production might suffer in areas that do not have irrigation," said Prof Sudhir Panwar, president of the Kisan Jagriti Manch. In the west, where irrigation is poor, pulses, soybean and oilseed could be affected, as also maize and millet.



"The most worrisome impact could be on vegetables and horticulture crops," Panwar added.



However, some disagree. "Less rain could, in fact, be a blessing as farmers switch from water-intensive crops like rice and opt for pulses, oilseed and millets," said N P Singh, director of the Indian Institute of Pulses Research (IIPR). He said if rice planting did not start in full swing in the next 10-15 days, almost 10 per cent of the area under the crop could be available for pulses. The monsoon arrived in Kerala on June 6, five days late.



S Ganeshan of the Crop Care Federation of India (CCFI) said he would not press the panic button yet because of the grain stocks and the possibility of even rainfall.



The government is readying relief for farmers, including a subsidy on diesel and restructuring of loans in rainfall-deficient areas.



The India Meteorological Department in its second forecast for this year's monsoon on Monday estimated overall rainfall across the country at 93 per cent of the 50-year average from 1950 (known as long-period average, or LPA) two percentage points lower than its first prediction. The met office said except for the northearnern monsoon region (includes Bihar, Jharkhand and West Bengal), every other part of the country would receive less rain than normal.



Japanese brokerage firm Nomura, meanwhile, said in a report that a sub-normal monsoon was likely to drag down India's food output, with the country's agricultural GDP growth slumping to 0.8 per cent in the current financial from 4.7 per cent in 2013-14.



The monsoon is a lifeline not only for summer crops like rice, soybean, groundnut, maize, pulses, cotton, sugarcane and jute, but is vital for recharging groundwater for winter crops like wheat, barley and mustard.



Rainfall over Gujarat, Madhya Pradesh, Maharashtra and Odisha is likely to be 94 per cent of LPA. These states grow oilseeds, pulses, millets and other coarse cereals. Punjab, Haryana, Delhi, Uttar Pradesh and Uttarakhand are expected to get 85 per cent of the average rain this season. Rice, sugarcane and some pulses grow here and over 80 per cent of the farmland is irrigated. Andhra Pradesh, Karnataka, Tamil Nadu and Kerala are expected to receive 93 per cent of the average rainfall.

Source:- business-standard.com

Palm Imports By India Falling As Refiners Buy Soybean Oil

Palm oil imports by India, the world’s largest buyer, probably declined in May as refiners and traders bought more soybean and sunflower oils amid forecasts for record global supplies. Futures in Kuala Lumpur fell.



Shipments of the main crude and refined palm oils dropped 12 percent to 668,000 metric tons, the median of estimates from six processors and brokers compiled by Bloomberg show. Purchases of crude soybean oil more than tripled to 186,000 tons, while sunflower imports more than doubled to 150,000 tons, the survey showed. The Solvent Extractors’ Association of India typically publishes the data around mid-month.



Soybean oil’s premium over palm, the world’s most-used cooking oil, narrowed to average $91 a ton this year from $244 a ton in 2013, according to data compiled by Bloomberg. That’s spurred importers to stockpile soybean oil and cut purchases of palm, says Sunvin Group, a broker in Mumbai. World output of seven major oilseeds will be a record 487.5 million tons in the year to Sept. 30, according to Oil World in Hamburg.



“The soybean oil-palm oil gap was very narrow two months ago, encouraging commitments for soybean oil imports,” Sandeep Bajoria, chief executive officer of Sunvin, said by phone on June 9. “The gap has started increasing in the last two weeks and Indian importers have started looking at palm oil again.”



India imports more than 50 percent of its cooking oil demand, shipping palm from Indonesia and Malaysia, and soybean oil from the U.S., Brazil and Argentina.

Source:- bloomberg.com

Gold Import In May Estimated At 35 Tonnes

It is estimated gold import in May stood at 35 tonnes, in line with the trend seen in the past few months, when imports have been about 40 tonnes. A substantial amount of gold, however, has been coming into India through the unofficial route.



In May 2013, India had seen record gold import of 161 tonnes. This had led to sharp reactions from policymakers, with the Reserve Bank of India putting stringent restrictions on import.



Now, it is being hoped some restrictions on gold import will be removed. In 2013-14, India’s import of gold and silver was worth $28 billion. Many large brokerages estimate this to rise to $40 billion in 2014-15. Some unofficial inflows seen last year may return to the official route.

Source:- business-standard.com

Indian Rupee Opens Lower At 59.32 Per Dollar

The Indian rupee has opened lower at 59.32 per dollar on Wednesday as against previous day's closing value of 59.29 a dollar.

The dollar continued to see a bump up with the benchmark index slowly inching towards the 81 mark.

The Reserve Bank was a net purchaser of dollars in the first month of the current fiscal after it bought USD 5.87 billion from the spot market. During the month, the central bank purchased USD 7.85 billion from the market and it sold USD 1.98 billion, according to RBI data released today.

Source:- moneycontrol.com

Work contract composition scheme was inapplicable to ongoing projects if ST was paid on it before Ju

Service Tax : For ongoing projects as on 1-6-2007, if service tax is paid under 'commercial or industrial construction' or 'construction of complex' before said date qua such contract, works contract composition scheme will not be available

Immunity to co-accused from penalty in another order would result in acquittal of appellant as well

SEBI : Where Tribunal had set aside penalty imposed on person with whom appellant had allegedly acted in concert for undertaking manipulative trades, penalty imposed upon appellant was to be set aside

Selling expenses to be kept out of scope of AMP expenses to ascertain TP adjustment; ITAT follows LG

IT/ILT: Sales specific expenses such as commission and discount etc. not to be included within overall AMP expenses for processing them under section 92C

CLB to perform functions of Tribunal under Sec. 74(2) until date of transfer of pending proceedings

COMPANIES ACT, 2013/COMPANIES ACT, 1956/INDIAN ACTS & RULES : Companies (Removal of Difficulties) Fourth Order, 2014

Companies allowed to accept deposits without any deposit insurance till March 31, 2015

COMPANIES ACT, 2013/INDIAN ACTS & RULES : Companies (Acceptance of Deposits) Amendment Rules, 2014 - Amendment in Rule 5

MCA notifies provisions on repayment of deposits accepted before commencement of 2013 Act w.e.f. Jun

COMPANIES ACT, 2013/INDIAN ACTS & RULES : Section 1 of The Companies Act, 2013 - Act - Enforcement of - Notified Date From Which Provisions of Sub-Sections (2) & (3) of Section 74 of Said Act Shall Come Into Force

Conveyance allowance received by LIC employee to develop insurance business is exempt from tax

IT: Conveyance allowed paid by LIC to its Development Officer for performance of his duties and development of insurance business is to be allowed as exempt under section 10(14)

Appellate authorities to inform assessee to file request for condonation of delay alongwith belated

Service Tax: In absence of application seeking condonation of delay, before dismissing appeal as barred by limitation, Commissioner (Appeals) should inform assessee to file an application for condonation of delay

TRO can’t prohibit transfer of a property unless ‘NOC’ has been obtained from AO by fraud or misrepr

IT : Unless department was able to put forth a case of connivance or fraud or misrepresentation on part of assessee, NOC for selling property could not be ignored by TRO

Penal interest and pre-closure charges are eligible profits to work out sec. 36(1)(viii) deduction

IT : On prepayment of loans, income of financial corporation by way of penal interest and pre-closure charges on prepayment of loan are to be treated as eligible profit for purpose of deduction under section 36(1)(viii)

Payment of ‘Automobile cess’ on export of goods is eligible for rebate

Excise & Customs : Manner of levying, collecting and refund as applicable to excise duty are applicable to Automobile Excise Cess; accordingly, automobile cess paid on exports is prima facie eligible for rebate

Independent directors dealing at ALP or his remuneration as per the Act don't attract bar of pecunia

COMPANIES ACT, 2013 : Section 149 of The Companies Act, 2013 - Company to have Board of Directors – Clarifications on Rules Prescribed under The Companies Act, 2013 – Matters Relating to Appointment and Qualifications of Directors and Independent Directors

Sec. 80-IB: AO couldn’t assume that assessee had exceeded built-up area norm in absence of DVO’s rep

IT : In order to allow deduction under section 80-IB, it is not necessary that assessee developer must be owner of land on which residential project is developed

Trust working explicitly for benefit of ‘Agrawal’ community denied registration under Sec. 12AA

IT: Where dominant object underlying constitution of trust was for benefit of only Agrawal community, application for registration under section 12AA should be dismissed

India Becomes Second Largest Textile Exporter

Overtaking Germany and Italy last year, India has emerged as the world’s second largest textile exporter behind China.



According to new data from the Apparel Export Promotion Council (APEC), India’s textile exports were valued at over US$40 billion in 2013. China, the world’s number one textile exporter, valued its exports at close to US$274 billion – close to seven times that of India



India’s share of global textile trade increased by close to 18 percent in 2013 from the previous year according to the new data, enabling it to capture a significant portion of the global textile market, which is estimated to have grown by 6 percent last year.



India’s readymade garment industry in particular experienced the most significant growth, with a 23 percent increase in the export of shirts, trousers, skirts and other products last year. In readymade garments specifically, India ranked sixth globally last year with exports valued at US$16 billion – accounting for around 40 percent of the country’s total textile exports.



“This growth is phenomenal as the global textiles growth rate is only 4.7 percent compared to India as it has registered the growth rate of 23 percent, beating China and Bangladesh which have registered 11.4 percent and 15.4 percent [growth rates], respectively,” commented Virender Uppal, Chairman of APEC.



“Despite having slow recovery in U.S. and EU, our biggest traditional markets as well as [the] prevailing global slowdown coupled with sustained cost of inflationary inputs, we made the best possible efforts to reach here. The Government policy of diversification of market and product base has helped us and we ventured into the newer markets, which paid huge dividends. We also leveraged our raw material strengths and followed [and] sustained better compliance practices which attracted the buyers and international brands across [the] globe to source from India,” he added.



According to Uppal, the biggest problem currently facing Indian apparel exporters remains bottlenecks and rising interest rates.



“The availability of specialty fabric is a big bottleneck for which we have been aggressively demanding five percent duty scrip for the imports of fabrics. It must be considered favorably by the new government to boost apparel exports,” Uppal explained.



“Rising interest rates is another issue which hampers growth for which we have requested the government for a separate chapter for pre- and post- shipment export credit at a fixed rate of seven percent interest, and to treat readymade garment under priority sector lending,” he added.



In recent years, rising labor costs in traditional textile manufacturing hubs such as China have driven investors and businesses in the textile industry to explore opportunities in other markets such as India and Vietnam.



As the ardently pro-business BJP leader Narendra Modi sails through his first weeks as Prime Minister, many at APEC and in the wider textile industry are hopeful these outstanding issues will be resolved in the near future. Other surprises such as the normalization of trade relations with Pakistan and consolidation of outstanding economic ties with other key markets in the region would provide an additional boost to India’s increasingly-booming textile industry.



Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN.

Source:- india-briefing.com

Steelmakers Lobbying For Removal Of 2.5% Import Duty On Iron Ore.

Top domestic steelmakers have begun lobbying with the government for an effective raw material policy, including removal of 2.5% import duty on iron ore, in the face of an ongoing mining crisis.



The move comes even as the Federation of Indian Mineral Industries (FIMI), an apex body of 400 private mining firms, has urged the union commerce ministry to withdraw 30% export duty on iron ore.



With Modi government initiating deliberations with various industry bodies ahead of its first budget, key stakeholders in the steel industry seem to be presenting completely divergent demands.



"The industry is operating at 80% capacity utilisation due to constraints in mining. This is also leading to higher domestic prices of iron ore. We should take adequate steps to ensure availability of iron ore. In this context, we should restrict exports of iron ore. The latter only leads to creation more jobs in foreign countries, at the expense of jobs and our manufacturing sector. This is a call we need to take as a nation," Jayant Acharya, director (marketing) JSW Steel, India's leading private steelmaker said.



An official of another private steel major said: "In the present situation of iron ore shortage, government should mull the decision of abolishing the import duty on iron ore. Mining companies are taking undue advantage of scarce supply owing to temporary closure of mines in Odisha due to non-renewal of years-old leases. This has resulted in iron ore prices shooting up by Rs 500 per tonne. Even stateowned mining companies have increased the prices. It has a direct impact on steel making costs which has gone up Rs1,000 per tonne."



Source:- economictimes.indiatimes.com

Exporters Body Asks Finance Minister To Roll Back Mat From Sezs.

Export promotion body for special economic zones has asked the Finance Minister to roll back the minimum alternate tax (MAT) on SEZs saying that the move will boost overseas shipments as well as domestic manufacturing.



In its pre-Budget consultations with Finance Minister Arun Jaitley, the Export Promotion Council for EOUs & SEZs (EPCES) said: "MAT on SEZs should be exempted. If not feasible at least reduce it to 7.5 per cent, exemption may be provided from Dividend Distribution Tax to SEZ developers."



MAT and the dividend distribution tax on SEZs have dented the investor friendly image of these special zones.



In 2011, government had imposed 18.5 per cent MAT on the book profits of special economic zone developers and units. Although government last year announced an incentive package to revive these zones, several developers are surrendering their projects due to the imposition of taxes.



"In order to offer long term and stable economic policy and to attract investment, SEZ Act & Rules should not be altered by any other Act or Rule," EPCES said in a statement today.



EPCES also urged the Finance Minister at the meeting last week to extend the export benefits available to the domestic exporters such as focus product scheme to SEZ units.



For gems and Jewellery trading units situated within the zones, it asked to permit import for distribution to the users within the zone.



"Currently, trading of precious metals or articles is not allowed," it said, adding the government should also exempt SEZs from service tax.



SEZs, which are major export hubs, contribute about one- third to the country's total exports. They provide employment to about 15 lakhs people.



Of 566 formally approved SEZs, only 185 are in operation. Exports from these zones increased from Rs. 22,840 crore in 2005-06 to Rs. 4.94 lakh crore in 2013-14.



Source:- profit.ndtv.com

HC denied to hear an appeal as question of law wasn’t ascertainable in absence of a speaking order b

IT: Where in absence of specific discussion in Tribunal's order in respect of computation of taxable perquisite in hands of assessee, it was impossible to ascertain actual nature of controversy and questions of law sought to be raised were to be returned unanswered

Economic Slowdown In Ems Impact Global Export Demand

The economic slowdown in emerging markets following the tightening of monetary policies by them last year has impacted the global export growth and the recovery in advanced economies, a report has said.



According to the QNB Group report, the growth in emerging markets (EMs) - from Brazil to Indonesia, Russia and South Africa - is slowing down, partly reflecting the tightening of domestic policies by these countries last year to stabilise foreign exchange rates.



This slowdown is impacting global export demand and affecting recovery in advanced economies as well, it added.



Overall, the slowdown in EMs could jeopardise the global recovery, unless advanced economies pick up the pace, the report added.



Since the US Federal Reserve's announcement last year to taper its asset-buying programme Quantitative Easing (QE), global capital flew out of emerging economies, forcing their central banks to tighten monetary policies to stabilise exchange rates.



While the tightening has been relatively successful in reversing the capital outflow in some countries, there has been an impact on the growth of emerging markets.



The last few weeks have seen a series of disappointing data releases in EMs. Brazil's Q1 real GDP growth rate slowed to 0.7 percent (quarter-on-quarter annualised), compared with 2.3 percent for 2013 as a whole.



Indonesia's Q1 growth rate declined to 3.5 percent (5.8 percent in 2013). South Africa's s Q1 GDP contracted 0.6 percent, compared with growth of 1.9 percent in 2013.



The most dramatic fall was in Thailand with an annualised Q1 contraction of 8.2 percent, partly reflecting the current political instability. Against this trend, India saw a jump in Q1 GDP growth, partly due to a record USD 5 billion spending on elections, which added an estimated 2 percentage points to growth in the first quarter.



This generalised slowdown in EMs growth is impacting global trade flows. These economies account for approximately 40 percent of all global trade activities and have been among the largest contributors to the international export growth in recent years.



The slowdown in emerging markets is therefore having an impact on global export growth.



According to the World Trade Organisation, the USD value of global exports grew by a mere 1.7 per cent year-on-year in the first quarter of 2014, compared with 4.3 percent in Q4 2013.



Most of this slowdown can be attributed to lower export demand from EMs. In turn, lower global export demand has contributed to lower Q1 real GDP growth in both the US (-1.0 percent) and the Euro area (0.2 percent).



So far, the slowdown in emerging economies has not yet resulted in a contraction in global trade as witnessed during the Great Recession of 2008-09, the QNB Group Report said.



If advanced economies continue to recover and pick up some pace, the global economy should be able to maintain its growth momentum, it added.



According to the report, the performance of advanced economies critically depends on the normalisation of US monetary policy and the Fed seems to be set on completing QE tapering in late 2014.



If QE tapering results in weaker US growth, long-term US interest rates are likely to remain below 3 percent, thus pushing global capital out in search for higher returns in EMs, it said.



The result could be an uneven global recovery in favour of EMs, just like in the period 2010-13; on the other hand, if the US economy recovers as expected, long-term US interest rates are likely to go up, making EMs less attractive, and in turn, this would imply a further EM slowdown, while advanced economies recover, it added.

Source:- moneycontrol.com

Sugar Export Sop To Be Restored To 3,300/T

The Centre is all set to restore the incentive on raw sugar exports to 3,300 a tonne.



The incentive, technically supposed to defray expenditures on marketing and promotion incurred by mills, was slashed to 2,277 a tonne for shipments during April and May by the previous government.



There was also a move initiated under the then Food Minister KV Thomas to dispense with the incentive scheme totally after September 30, when the current 2013-14 sugar year ends. The Ministry had even prepared a draft note towards this for consideration by the Cabinet Committee on Economic Affairs, which had earlier approved the scheme on February 12.



The new Government has decided to retain the incentive in its original form, covering a total quantity of up to 40 lakh tonnes (lt) to be shipped between February 2014 and September 2015, i.e. until the end of the 2014-05 sugar year. Also the incentive is to be restored to 3,300 for June and July, informed sources told Business Line.



Minister parleys



This follows a meeting that Food Minister Ram Vilas Paswan had with his Cabinet colleagues from Uttar Pradesh (UP) and Maharashtra last Wednesday to look into the problem of cane payments to farmers by sugar mills.



The meeting was attended among others by the Union Agriculture Minister Radha Mohan Singh, Road Transport and Highways Minister Nitin Gadkari (who is also holding charge of Rural Development following Gopinath Munde’s demise), MSME Minister Kalraj Mishra, and Women & Child Development Minister Maneka Gandhi. The Ministers of State for Agriculture and Food, Sanjeev Kumar Balyan and Raosaheb Dadarao Danve, were also present.



There was a clear consensus to create conditions to ensure full discharge of cane arrears at the earliest. This would include promoting exports given the surplus sugar stocks in the country, the sources said.



The 2013-14 sugar season opened with stocks of 92.98 lt. With likely production of 214 lt and imports of one lt, the total availability for the season would work out to 334.98 lt, as against estimated consumption of 240 lt and exports of 20 lt.



The next season will have opening stocks of 75 lt, almost equivalent to four months’ domestic consumption. Without exports, sugar prices will remain depressed, making it difficult for mills to pay off farmers, the sources noted.



Cane politics



In UP, factories had, as on June 5, paid only 10,939.84 crore out of the 19,390.57 crore worth of cane procured from farmers at the State Advised Price of 280 a quintal for the 2013-14 season. That translates into outstanding arrears of over 8,450 crore.



Sugarcane farmers constitute a sizeable votebank in Maharashtra, where assembly elections are due later this year, and UP, where the Bharatiya Janata Party is seeking to build on the momentum from its best-ever performance in the recent Lok Sabha polls.



There are obvious political stakes in being seen to be doing things for cane farmers. The Ministers even favoured raising the import duty on sugar (both white and raws) from the existing 15 per cent to 40 per cent. But that is a call that the Finance Minister (Arun Jaitley) will have to take, the sources said.



The economics of export



Raw sugar of Brazilian origin is currently quoting at around 17 cents a pound or $ 375 a tonne, free on board (fob).



Indian raw sugar fetches a premium over this, both on account of higher polarity (an additional 4.05 per cent of fob value or $15/tonne) and freight advantage of being closer to the main West Asian markets (about $20/tonne).



The fob value of Indian raw sugar at Mumbai, thus, works out to about $410 a tonne or $415 after adding 1.5 per cent duty drawback benefit.



At current exchange rates, that would be roughly 24,500 a tonne. The ex-mill realisation on this in Maharashtra after deducting for transport, port handling and other charges (about 2,200) comes to 22,300 a tonne. “With the export incentive of 3,300, the ex-mill realisation would go up to 25,600 a tonne. Even with this, you cannot cover production costs that would be upwards of 26,000 a tonne even with the 11.5 per cent sugar recovery levels in Maharashtra,” claimed a miller.

Source:- thehindubusinessline.com

Thailand Emerging Threat To Car Exports From India

India, a hub for car exports to developed markets, is seeing serious competition from Thailand as production constraints and quality issues force manufacturers to consider production of critical models in the Southeast Asian nation.



Ford India is looking at shifting production of Fiesta, and Japanese manufacturer Suzuki is planning to move production of its newly launched Celerio from India to Thailand for exporting to developed markets, according to sources.



Ford's India unit is unlikely to export company's new compact sports utility vehicle EcoSport to North American markets, whose production will be moved to unit to the US automaker's Thai plant by 2016, according to recent reports.



Experts said EcoSport and Fiesta will mainly be exported to North American markets while Celerio will be exported to Europe.



Mayuree Chaiyuthanaporn, senior analyst, IHS Automotive Asean, who tracks Thailand automotive market, said, "Manufacturers are looking at Thai plants mainly because of India production constraint coupled with the better quality production in Thailand. Reportedly, Ford EcoSport produced in Thailand provide better noise, vibration, and harshness (NVH) levels. Meanwhile, export orders are likely to utilise Thailand's capacity to its maximum."



Thailand is a production base for pickups and small cars, with total capacity expected to reach three million units by 2019, highest in Southeast Asia. The production cost in Thailand can be reduced because of economies of scale. Completely built units (CBUs) export account for around 60% (2013) of total production output, according to IHS Automotive.



Atul Shahane, general manager, vehicle exports, Nissan Motor India, who has worked in Thailand said, "Manufacturing of pickups and small car segments get supported by the government in a big way. Thailand has better infrastructure and technology, while it also has some challenges in terms of political instability and natural calamities. However, quality of production is definitely better there compared with India."



The country also has the highest number of suppliers among Asean countries. The Thai Board Of Investment offers both fiscal and non-tax incentives for investments. Tax sops include exemption or reduction of import duties on machinery and raw materials, and corporate income tax exemptions and reductions.



Companies like Ford India and Suzuki have capacities in Thailand as well as in India. In fact, both automakers are also in the process of building additional capacities in Gujarat. Hence, production constraint is not an issue for factories in India, experts said. However, Thailand gives logistical and supply advantages as far as exports are concerned.



Maruti Suzuki did not respond to queries.



A Ford India spokesperson said, "We do not comment on speculations. However, it is important to clarify that our operations around the world do not 'compete' with one another. Under the global One Ford plan, our manufacturing strategy is determined by a number of variables like logistics, cost efficiencies, geographies, etc, and is implemented to deliver the success of a single global One Ford plan."



"Export strategy is fundamental to our growing operations in India and we are well on course to establish India as our export hub and a center of excellence for small cars and low displacement engines for both domestic and exports. As part of One Ford plan, Ford is investing significantly to deliver scale and flexibility to reciprocate the increasing demand from both domestic as well as export markets. With upcoming manufacturing facility at Sanand, Gujarat, Ford India will double its manufacturing capability and significantly increase export volumes to several global markets including mature markets."



Exports from India gained momentum with Ford Figo, and have today reached new heights with Ford EcoSport being exported to mature markets like Europe, it added.



V G Ramakrishnan, managing director, South Asia at Frost & Sullivan, said, "Exports form an important strategy for most manufacturers as it helps in keeping pricing competitive for them to sell vehicles in the Indian market. Hence, no company can really ignore exports from India."



Exports of passenger vehicles from India grew 6.09% last fiscal, as per data by Society of Indian Automobile Manufacturers.

Source:- dnaindia.com

Steelmakers Lobbying For Removal Of 2.5% Import Duty On Iron Ore

Top domestic steelmakers have begun lobbying with the government for an effective raw material policy, including removal of 2.5% import duty on iron ore, in the face of an ongoing mining crisis.



The move comes even as the Federation of Indian Mineral Industries (FIMI), an apex body of 400 private mining firms, has urged the union commerce ministry to withdraw 30% export duty on iron ore.



With Modi government initiating deliberations with various industry bodies ahead of its first budget, key stakeholders in the steel industry seem to be presenting completely divergent demands.



"The industry is operating at 80% capacity utilisation due to constraints in mining. This is also leading to higher domestic prices of iron ore. We should take adequate steps to ensure availability of iron ore. In this context, we should restrict exports of iron ore. The latter only leads to creation more jobs in foreign countries, at the expense of jobs and our manufacturing sector. This is a call we need to take as a nation," Jayant Acharya, director (marketing) JSW SteelBSE -0.78 %, India's leading private steelmaker said.



An official of another private steel major said: "In the present situation of iron ore shortage, government should mull the decision of abolishing the import duty on iron ore. Mining companies are taking undue advantage of scarce supply owing to temporary closure of mines in Odisha due to non-renewal of years-old leases. This has resulted in iron ore prices shooting up by Rs 500 per tonne. Even stateowned mining companies have increased the prices. It has a direct impact on steel making costs which has gone up Rs1,000 per tonne."

Source:- economictimes.indiatimes.com

Non-service of notice to caveators won't nullify an order if they fail to disclose any prejudice cau

CL: Where caveators had not disclosed any special damage or prejudice caused to them by order, failure to provide notice to him would not vitiate proceedings

An entity with diverse business model and higher profits is functionally different and can not be a

IT/ILT: A company having a different business model than that of assessee, and also making exceptionally high profit was rightly excluded as a comparable as by excluding it margin of profit declared would be at arm's length and consequentially, no adjustment would have to be made

Additions upheld as assessee told illusionary tale for receiving advance under an unsigned sales agr

IT: Where assessee allegedly received advance money for sale of property, in view of fact that sale agreement was neither signed nor registered and, moreover, summon issued to witn

Dept. can’t freeze bank a/c; sec. 87 only authorizes it to recover dues from bank after final adjudi

Service Tax : Section 87 provides for recovery of amount due and payable after adjudication is done and there is no power in section 87(b) to freeze bank accounts; at most, money can be claimed from bank itself after final adjudication

No reassessment on allegations of lower stock valuation if assessee substantiated its claim in asses

IT : Where assessee had made full disclosure of all material facts relating to valuation of stock at time of assessment itself, AO could not initiate reassessment proceedings after expiry of four years from end of relevant assessment year taking a view that value of stock declared by assessee was a lower amount as such valuation had to include 15 per cent profit as well

HC raps ITAT for demanding further sums to grant stay even when assessee had paid full taxes with 25

IT : Where assessee had already paid full tax amount and also approximately 25 per cent of penalty amount, Tribunal ought not to have required it to deposit a further sum as a condition for stay

‘Free’ rate of duty under Custom Tariff Act is also a rate of duty; Govt. is empowered to increase t

Excise & Customs : Entry 'free' occurring in column 'rate of duty' of Customs Tariff amounts to a rate of duty (equivalent to 'Nil' or 'Zero' rate) and if Central Government is satisfied such duty should be increased, it may do so by issuing notification under section 8A of Customs Tariff Act, 1975

Sacred Cow! No revocation of registration of trust working for welfare of cows if it made profit fro

IT : Where assessee-trust was established for purpose of cow breeding and protection of cows and oxen, incidental income earned by it from sale of milk could not be regarded as carrying on activity of trade or commerce within meaning of proviso to section 2(15)

Testing services to be deemed as ‘exports’ if samples tested in India were delivered to clients outs

Service Tax : Since delivery of sample test report to foreign client is an essential part of testing services, said service must be treated as consumed abroad and not liable to service tax, even if testing is done in India and report is prepared in India

No denial of sec. 10(23C) relief to educational units merely on inclusion of objects not related wit

IT: Unless it was shown that society was running any activity, other than educational activity, for mere existence of object not related to core activity, exemption could not be denied

No reassessment to tax gains on share dealing as business income if once taxed as capital gains afte

IT: Once income from sale purchase of shares was treated as capital gain after verification of all relevant details, reassessment could not be allowed to treat same as business income

Paradip Port Offers Hybrid Cargo Terminals To Investors

Paradip port proposes to permit private parties to set up hybrid cargo terminals — captive-cum-common user facility — as part of its expansion plans.

Paradip will be the first government port to offer this facility though some private ports have already started doing this.

SS Mishra, Chairman of Paradip Port Trust, said the hybrid terminals will be one of the many new ideas being worked out by the port to attract private investments.

“This will provide private investors the flexibility to ensure optimum unitisation of the port capacity,” Mishra said at a roadshow held by the port in Mumbai recently.

Investors can fix the ratio of captive and third party cargo at 60:40 or 70:30 but there should be a minimum guaranteed throughput, he explained to a gathering of potential investors and port users.

However, the Odisha-based port will have to get the Centre’s permission before offering its innovative concept to investors.

The hybrid concept does not exist in the current policy. It is a new concept which could give more flexibility to terminal operators. The Government will have to take the decision, said A Janardhana Rao, Managing Director, Indian Ports Association.

There is also the issue of tariff regulation. Tariffs at the government ports are regulated by the Tariff Authority for Major Ports and its guideline does not cover the proposed hybrid terminals.

There is separate policy for captive port policy under which port-based industries are given land/waterfront facilities to set up terminals for handling their own cargo.

Mishra is pinning his hope on the new regime at the Centre to get the nod for this new concept. “Let investors come out with their option, getting any approval is our responsibility, he said. Paradip port will soon be inviting bids for developing several bulk and liquid cargo terminals.

Source:- thehindubusinessline.com

Gail’S Cheaper Offer May Impact Gas Pricing Formula.

Gas utility Gail hopes to shake up the domestic market by offering some 2.5 million tonnes of liquid gas from the US at a dollar less than imports from Qatar.



Gail has tied up 3.5 million tonnes of liquid gas per year from US firm Cheniere's Sabine Pass facility in Louisiana. It intends to trade a million tonne of this gas through its Singapore arm and offer the remaining quantity to domestic buyers.



Gail's gas deal is linked to Henry Hub, the US benchmark, where prices have fallen to $4.7 per unit due to shale gas boom. After adding shipping and other charges, Gail expects to offer a price of $12-13 per unit.



Sabine Pass is one of the three US liquid gas projects with permission to export to non- FTA (free trade agreement) countries. Since India does not have an FTA with the US, it has been lobbying for a special waiver.



Till that waiver comes through, Gail's offering may be too little to kick off a shake-out in the Indian market. But it could impact the government's thinking on domestic gas pricing formula. Many had objected to the inclusion of costly JCC (Japan Customs Cleared) crude basket as one of the benchmarks along with Henry Hub.



Imports meet 40% of India's gas demand and are set to rise as demand outpaces domestic production. Most of the imports come from Qatar under long-term contracts and spot purchases at costs benchmarked to crude oil price. Gas import price now range between $13 per unit for long-term contracts up to $16 for spot buys.



Source:- timesofindia.indiatimes.com

Government Plans To Ship Vehicles From Chennai To Delhi Via Mundra To Save Fuel Cost.

In a bid to save on fuel cost and promote water transport, the Shipping Ministry is preparing a blue-print on the ambitious plan to ship vehicles made in Chennai to Gujarat via sea route and from there to Delhi via road.



"The Ministry has been asked to prepare a report on the feasibility of transport of vehicles manufactured in the South, from Chennai-based ports to Gujarat-based ports and automobiles built in Delhi and surrounding regions to South from Gujarat-based ports," a Shipping Ministry official said.



Last week, Road, Transport, Highways and Shipping Minister Nitin Gadkari had asked officials to come up with a report in this regard. "Officials have been asked to come up with a report for shipping vehicles manufactured in Chennai from Ports in Chennai to Mundra in Gujarat and from there to Delhi via road to minimise fuel cost," Gadkari had said.



The same route could be adopted for transfer of vehicles from manufactures like Maruti to South, he had said. The Minister had said that waterways were a fuel efficient mode of transport with a cost of barely 55 paise a km as against Rs 1.5 on transportation through road, besides it being environment-friendly.



It may be noted that Ennore Port has already seen exports of 4,49,720 automobile units till December, 2013 including by automobile manufacturers like Nissan, Ford and Ashok Leyland from Chennai, Toyota from Bangalore and Honda from Delhi. India has 12 major ports - Kandla, Mumbai, JNPT, Marmugao, New Mangalore, Cochin, Chennai, Ennore, V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia) which handle approximately 61 per cent of the country's total cargo traffic besides about 200 non-major ports in control of states.



It may also be noted that the possibility of a waterway of Gangotri-Kanpur-Allahabad-Kolkata for cargo and passenger movement is also being explored. Meanwhile, a screening committee has accorded approval for a World Bank study for making 1,620 km waterways from Kolkata to Allahabad.



Inland waterways comprising of rivers, lakes, canals, creeks, backwaters etc extend to about 14,500 km in the country. However, potential of this mode of transport has not been fully exploited so far. So far, India has five declared waterways besides the new 121-Km Barak in Assam but some of them are yet to be operationalised.



Source:- economictimes.indiatimes.com

Russia To Offer Investments To India For Projects, Jvs

Russia, keen to move shift funds from Europe after the Ukraine crisis, will offer investments to India for projects and Joint Ventures during the trip of its Deputy Prime Minister Dmitry Rogozin's visit to Delhi in third week of June in what will be first high profile engagement between the strategic allies since the anointment of the Modi government.



Rogozin will pick up from where he left during his last trip to India last February and pitch for hydrocarbon exports, stronger defence ties, expansion of nuclear power projects and investments in Indian projects, senior sources in the Russian government told ET. Rogozin, who is expected to meet the PM, External Affairs, Finance and Defence Ministers and National Security Advisor on June 18 will prepare for Modi's first meeting with President Vladimir Putin on the sidelines of the BRICS Summit in Brazil in July.



Sources indicated that Russia is keen to divert some of its funds from Europe following deterioration in ties between Moscow and European capital in the backdrop on Ukraine crisis. Moscow may route these funds to India that would contribute boosting Indian economy, sources said, adding, this would be major point of engagement with the Modi government that is keen to pursue a robust economic diplomacy. It has been learnt that Putin would propose investments for India during his meeting with Modi in Brazil. Putin will also travel to India later this year for annual summit. Very people are aware that Modi had visited Russia thrice as the Chief Minister.



Russia is also keen to work with India on changing the bilateral investment treaty to encourage and safeguard mutual investments, sources indicated. Besides, energy will be key pillar of partnership with Moscow planning additional nuclear power plants and oil exports to India. There is also a talk of oil pipeline to India from Russia to meet Delhi's growing energy demands. Russia is looking beyond Europe towards Asian markets for its energy export - the recent Western-Russian standoff is fueling this drive.



Last March Igor Sechin, a close ally of President Vladimir Putin and the head of Rosneft, Russia's largest oil company travelled to India to discuss energy deals. Rosneft offered Oil and Natural GasBSE -2.34 % Corp (ONGC), ten offshore oil and gas blocks. Nine of those blocks were located in the Barents Sea while the remaining one was located in the Black Sea. Rogozin will follow up on Sechin visit, sources said. ONGCBSE -2.34 % is also studying a previous offer from Rosneft to help explore the Magadan 2 and Magadan 3 blocks in the northern part of the Sea of Okhotsk.

Assocham Urged Commerce Minister To Restore The Policy For Sezs To Its Original Form.

Apex industry body ASSOCHAM has urged the new commerce minister, Ms Nirmala Sitharaman to restore the policy for special economic zones (SEZs) to its original form and immediately withdraw minimum alternate tax (MAT) and dividend distribution tax to regain trust of domestic and global investors.



SEZs were conceived as tax free enclaves with world class infrastructure for exporting only goods and services from units set up in them without carrying the incidence of various direct and indirect taxes, duties and levies to provide Indian exports a strong competitive edge in global markets.



However, imposition of MAT and DDT by the government a few years after the announcement of SEZ policy took investors by surprise followed by a fall in their interest thereby raising questions about government’s commitment to a stable policy regime.



“Creation of additional infrastructure in approved SEZs without exemptions, concessions and drawback is also imperative as additional benefits would flow through decongestion of overcrowded cities and creation of alternated urban satellite centres would provide new streams of revenue for governments and local bodies,” highlighted a paper on ‘Suggestions to Revive Special Economic Zones’ prepared by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).



“Both of these significant changes in the SEZ policy are imperative to provide Indian exporters a level-playing field and these should be included and be implemented as part of the new government’s immediate economic agenda,” said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the chamber’s paper.



“If immediate action is taken by implementing these corrective measures it would restore investor confidence and bring back SEZs to the forefront of economic and industrial development,” said Mr Rawat. “Restoring confidence of domestic manufacturing sector by providing a stable policy environment would promote competitiveness as SEZs can be the vehicle to boost manufacturing exports from India and catalyse revival of Indian economy.”



Besides, global markets are showing strong trends of revival after a prolonged spell of subdued and in some cases, negative growth, noted the ASSOCHAM paper. “India has the opportunity to reclaim its position as a world class, competitive global manufacturing power.”



Frequent policy changes have eroded the investors’ confidence in SEZs thereby severely affecting the overall potential of SEZs to provide significant boost to investments, exports and employment in India thereby virtually reducing it to a non-starter, noted the paper prepared by the ASSOCHAM Economic Research Bureau (AERB).



Source : orissadiary.com

Cotton Area In India Climbing For First Time In Three Years

Cotton seeding in India, the world’s second-largest grower, will probably expand for the first time since 2011 after global prices reached a two-year high in March.



The area may increase by 3.4 percent to 12 million hectares (29.65 million acres) in the planting season that started in May, according to the median of five estimates from growers, exporters and industry groups compiled by Bloomberg. The crop, which will be harvested from October, may be a record for a second year, the Confederation of Indian Textile Industry said, without giving an estimate.



A bigger crop in India, the largest exporter after the U.S., would increase global supplies as demand slows in China, the world’s top importer. Futures in New York tumbled 13 percent from the high in March as improving weather aided late seeding of cotton in Texas and on concern Chinese demand would weaken. Futures in Mumbai rallied to a seven-month high in May.



“Farmers have been happy with the prices they have got and they have very limited alternate crops available,” Nayan Mirani, vice president of the Mumbai-based Cotton Association of India, said by phone on June 5. “Planting is looking positive and should be the same or even more than last year.”



Futures on ICE Futures U.S. slumped 8.5 percent in May, the most since October, and were at 84.88 cents a pound today. Prices reached a two-year high of 97.35 cents on March 26. The contract for June delivery on the Multi Commodity Exchange of India Ltd. rose as much as 0.3 percent to 19,400 rupees ($329) per bale of 170 kilograms (375 pounds each) today.



Planting began last month in the northern Indian states of Punjab and Haryana, which are irrigated regions, while sowing in the biggest producing states of Gujarat and Maharashtra starts with the onset of monsoon rain this month. The monsoon, which provides more than 70 percent of annual rainfall, will be 95 percent of a 50-year average from June to September, the India Meteorological Department estimates.



“If the monsoon is below normal, the area under cotton will remain the same or even go up because among the competing crops cotton requires the least amount of water,” D.K. Nair, Secretary General of the Confederation of Indian Textile Industry, said by phone from New Delhi. “When there’s a water shortage, more people shift to cotton.”



An El Nino weather pattern may be established by August as Australia remains on alert for the event that brings drought to the Asia-Pacific region and heavier-than-usual rain to South America, the Bureau of Meteorology said on June 3. The event will reduce monsoon rain and crops from cotton to sugar and rice may be hurt, Newedge LLC said in a report dated June 5.



Even if El Nino develops toward the end of the monsoon season, output will not be hurt as cotton doesn’t require much moisture, A. Ramani, secretary of the Indian Cotton Federation, which represents 350 spinners, ginners and traders, said by phone from the southern Indian city of Coimbatore last month.



“There are indications that area might increase in Gujarat by 10 percent to 15 percent because the farmers have got good prices,” Shirish Shah, partner at Bhaidas Cursondas & Co., a Mumbai-based exporter, said by phone. Acreage will also climb in Rajasthan, Telangana and Seemandhra states, he said.



Output in the 12 months starting Aug. 1 may be 6.262 million tons, possibly making India the biggest producer ahead of China, Rebecca Pandolph, a statistician at the International Cotton Advisory Committee, said. China’s crop may drop 10 percent to 6 million tons in 2014-2015, the group said.



Exports to China may decline next year as India’s biggest buyer is reducing imports, Ramani said, without providing any estimates. Total imports by China tumbled 64 percent to 222,088 tons in the first three months of 2014, customs data show.



India probably exported 9.5 million bales in the year that began Oct. 1, according to Nair. Shipments totaled 9.8 million bales in 2012-2013, the Cotton Association of India estimates.

Source:- bloomberg.com

China’S Exports Rise 7% In May, Imports Fall

China’s exports gained steam in May thanks to firmer global demand, data showed on Sunday, but an unexpected fall in imports signalled weaker domestic demand that could continue to weigh on the world’s second-largest economy.



Exports rose 7 per cent in May from a year earlier, quickening from April’s 0.9 per cent rise, while imports fell 1.6 per cent, versus a rise of 0.8 per cent in April, the General Administration of Customs said.



China’s trade surplus widened sharply to $35.9 billion in May from April’s $18.5 billion, the customs office said.



That compared with market expectations in a Reuters poll of a 6.6 per cent rise in exports, a 6.1 per cent rise in imports and a monthly trade surplus of $22.6 billion.

“We do not think the May trade data will change the policy stance significantly,” Louis Kuijs, an RBS economist in Hong Kong, said in a note.



“While the export data is reasonably positive, the weakness of domestic demand implied by the import data may keep the pressure up for initiatives to support growth,” he said. China’s commerce ministry had predicted that the trade picture could brighten in May as base efforts fade and government support measures kick in.



Analysts have attributed the weak trade figures partly to an inflated comparison base with last year due to a rash of fake invoicing of exports to beat currency restrictions.



India’s trade deficit with China mounts to $9 bn in January-April



China’s trade with South Asian nations including India has touched a whopping $100 billion even as the deficit in trade between the two countries neared $9 billion in the first four months of this year.



Trade volume between China and South Asian nations jumped from $35 billion in 2006 to about $100 billion in 2013, but the fast growth features a rising trade imbalance with China exporting more, state-run Xinhua news agency reported. The India-China trade topped much of the $100 billion as the bilateral trade totalled $65.47 billion in 2013 with trade deficit mounting to $31.42 billion. Indian officials said the trade deficit averaged about $35 billion in the last three years.

Source:- indianexpress.com

Rupee Up 19 Paise To 58.98 Vs Dollar In Early Trade

The rupee strengthened by 19 paise to 58.98 against the US dollar in early trade on Monday on the Interbank Foreign Exchange market on selling of the American currency by banks and exporters amidst strong local equities.



Besides, dollar's weakness against other currencies overseas also supported the local unit, forex dealers said.



The rupee had appreciated by 16 paise to close at 59.17 per dollar on Friday on the back of a surge in local equities and heavy capital inflows.



Meanwhile, the benchmark BSE Sensex today rose by 183.26 points, or 0.72 percent, to hit new high of 25,579.72 in early trade.

Source:- zeenews.india.com

HC slaps Tribunal for deciding an appeal on merits instead of issues arising therefrom

CST & VAT : Where against order of assessment, assessee filed appeal and Appellate Commissioner insisted that assessee should deposit a sum of Rs. 23 lakhs by way of pre deposit and thereupon assessee filed appeal before Tribunal, scope of appeal before Tribunal was whether such condition imposed by Appellate Commissioner was correct in law or not and in process it could not have directly heard appeal on merits of order passed by Assessing Officer

HC rejected winding-up plea as bona fide dispute for debt existed between the parties

CL : Where a pre-existing bona fide dispute existed between petitioner and respondent, winding up petition against respondent for outstanding sum would not be maintainable

If insurance claim is capital receipt residual loss can’t be taken as revenue loss; excluded for ALP

IT/ILT: Where assessee imported certain computer equipments from its supplier located abroad which got damaged in transit, in view of fact that insurance claim received for same was treated as capital receipt, remaining portion of cost of equipment could not be allowed as a revenue loss and included in computation of ALP

Limitation period for filing appeal counted from date of serving of corrigendum order and not from o

Service Tax : Where, vide corrigendum order, liability of assessee is substantially changed, period of limitation for filing appeal must be counted from date of service of corrigendum order upon assessee

RBI allows non-residents to transfer assets to Indian entities on closure of their branch or LO in I

FEMA/ILT/INDIAN ACTS & RULES : FEM (Establishment in India of Branch or Office or Other Place of Business) (Amendment) Regulations, 2014 - Insertion of Regulation 8

NRs allowed to enter into currency futures or exchange traded currency options to hedge risk exposur

FEMA/ILT/INDIAN ACTS & RULES : FEM (Foreign Exchange Derivative Contracts) (Amendment) Regulations, 2014 - Insertion of Regulation 5B

HC directs Vodafone South to furnish bank guarantee for deficiency in payment of tax demanded by rev

IT : During pendency of appellate proceedings before Tribunal, assessee was directed to furnish a bank guarantee for difference of amount demanded and amount already paid towards tax demand

Commissioner (Appeals) is departmental officer and is bound by CBEC’s circular

Service Tax : Commissioner (Appeals) is a departmental officer and is bound by CBEC circular

Civil and flooring work exp. incurred on leasehold premises was capital in nature, says ITAT

IT : Capital expenditure incurred on premises taken on rent or lease etc. for carrying on business is not to be allowed as deduction in year of its incurring rather same will be capitalized entitling it to depreciation

Stock transfer on discontinuation of business is to be valued at market price and not at cost, rules

IT : Where a business is discontinued and stock transferred, valuation of closing stock would be at market value

Requisite Form to carry ‘Copper Scrap’ on a vehicle is Form VAT-505 and not Form VAT-515 under Karna

CST & VAT : Where assessee was carrying copper scrap for conversion into copper strips, rods and bars from Belgaum to Bhiwandi, Thane and Bhimpore through a goods vehicle and said goods were accompanied by form VAT-515, in view of notification dated 8-8-2008 issued under provisions of Karnataka Value Added Tax Act /Rules, appropriate form that was required to be accompanied with goods was form VAT-505 and, therefore, levy of penalty under section 53 upon assessee was justified

Temporary transfer of copyright in films doesn't amount to sales; levy of ST on it is constitutional

Service Tax : Variant modes of business transactions between producer and distributor, distributor and sub-distributor or area distributor or exhibitor (theatre owner) are not "sale or deemed sale of goods" and therefore, Levy of service tax on Temporary transfer of copyright in film under section 65(105)(zzzzt) is constitutionally valid

Benefit of sec. 73(3) wasn’t available if payment was made after receipt of summons and launch of in

Service Tax : Where tax and interest were paid by assessee after summons were issued to them and investigation was initiated against them, it could not be said that assessee had made payment on their own and, therefore, benefit of section 73(3) was inapplicable and penalty was leviable

Sales of commercial complexes after construction is commercial activity; resultant gains are busines

IT: Where assessee, a co-operative society, engaged in purchase and sale of agricultural implements, demolished its office and godown to construct shops with a view to reduce accumulated losses, profit on sale of shops was rightly treated as business income