Person whose income is subjected to withholding tax is entitled to claim its refund and not the dedu

IT : Where TDS was deposited by petitioner company on behalf of a foreign company, credit of refund could only be given to said foreign company

Beneficiary of discretionary trust won’t have right over its income; no tax if income wasn’t receive

IT: Discretionary trust is one which gives a beneficiary no right to any part of income of trust property, but vests in trustees a discretionary power to pay him, or apply for his benefit, such part of income as they think fit

Technical testing services received in abroad could not be liable to service-tax in India under reve

Service Tax : Where Technical Testing and Analysis Services was performed and received only outside India and there was no import of service, assessee could not be made liable to service tax under section 66A

Technical testing services received abroad could not be liable to service-tax in India under reverse

Service Tax : Where Technical Testing and Analysis Services was performed and received only outside India and there was no import of service, assessee could not be made liable to service tax under section 66A

Desist order issued against co. as it was organizing trade fairs by imposing unfair time-gap on thir

Competition Law : Commission directed ITPO to cease and desist from indulging in anti-competitive practice by removing discriminatory features that existed due to non-parity of time gap restrictions applicable to two third party events and that between an ITPO and third party events

Commission earned by NR agent for services rendered abroad couldn’t be taxed in India in absence of

IT/ILT : Where assessee paid commission to its foreign agents for rendering services abroad, in view of fact that those agents did not have PE in India and, moreover, services rendered were not in nature of technical service, income could not be said to accrue or arise in India and, thus, assessee was not liable to deduct tax at source while making payments to said agents

MCA tweaks norms relating to declaration and payment of dividends

CL/INDIAN ACTS & RULES : Companies (Declaration and Payment of Dividend) Amendment Rules, 2014 - Amendment in Rule 3

New Form MBP 2 shall be used for entering particulars of inter-corporate loans and deposits w.e.f. A

COMPANIES ACT, 2013/COMPANIES ACT, 1956 : Section 186 of The Companies Act, 2013, Read with Section 372A of The Companies Act, 1956 - Loan and Investment by Company - Clarification on Maintaining Register in New Format

Co-op. society can’t be denied sec. 80P relief for investment in public or private cos.

IT : Deduction under section 80P(2)(a)(i) could not be denied to assessee for investment made by it in private or public limited company

RBI empowers AD-1 banks to transfer assets on closure of Liaison Office or Branch Office in India

FEMA/ILT : Transfer of Assets of Liaison Office/Branch Office/Project Office of A Foreign Entity Either to its Wholly Owned Subsidiary/Joint Venture/Others in India - Delegation of Powers to Ad Banks

Co-op. society can’t be denied with denial of sec. 80P relief for investment in public or private co

IT : Deduction under section 80P(2)(a)(i) could not be denied to assessee for investment made by it in private or public limited company

Whether smuggling of goods would attract penalty on both firm and partners; case referred to larger

Excise & Customs : In view of apparent conflict between judgments in Commissioner of Customs (E.P) v. Jupiter Export [2007] 213 ELT 641 (Bom.) and Textoplast Industries v. Addl. Commissioner of customs 2011 (272) ELT 513 (Bom.), issue whether 'for same infraction, penalty can be levied on firm and partners both' was referred to larger bench

Reassessment can’t be based only on retro-amendments and interpretation of Apex Court on statutory p

IT : Subsequent amendments or subsequent interpretation of statute is not a ground to reopen concluded assessments

Frequent dealings in shares and absence of separate records trigger tax on resultant gains as busine

IT: Where there was short duration of holding of shares, and lack of clarity in account books, sale and purchase of shares would lead to business income and not short term capital gains

No VAT liability on 40% of restaurant bills which are liable to service tax, rules HC

CST & VAT : In case of restaurants, since element of service has been declared under Service tax laws and brought under Service Tax (i.e. 40% of bill amount to customers in restaurant), no Value Added Tax can be imposed on 40% of bill

HC deletes addition as variation in GP rates of current year and preceding years couldn’t justify ad

IT: Addition to profit could not be made on account of suppressed job charges that exceeded profit ratio compared to other years

Sum paid to unrelated party via banking route after deduction of tax at source couldn’t be treated a

IT: Where payment had been made through banking channels and tax was deducted at source and party was also not found to be related to assessee, Assessing Officer could not treat expense as bogus expense

Deputation of employees on cost sharing basis to affiliate cos. isn’t liable to ST under manpower su

Service Tax : Deputation of employees to subsidiary companies for limited period on cost-sharing basis does not make assessee a 'commercial concern' and does not establish 'agency-client' relationship and is, therefore, not covered under Manpower Recruitment or Supply Agency's Services

No reassessment on basis of report of DVO which merely casted doubt on valuation method opted by ass

IT : Assessing Officer could not refer matter to DVO without books of account being rejected; no reopening assessment based upon incomplete report of DVO raising doubts only about assessee's methodology

Block assessment under sec. 158BD set aside as reasons recorded by AO for assessment weren’t produce

IT : Mere recording of fact that in course of search of third party, some documents related to assessee were seized and, hence, jurisdiction of concerned Commissioner was assigned, is no proper reasoning as required for issuing notice to initiate block assessment

India. Government Restores Sugar Export Subsidy At Rs 3,300/Tonne.

The new government today reinstated the export subsidy at Rs 3,300 per tonne on raw sugar shipments to be undertaken during June-July, a move the industry said would boost exports.



To help the cash-starved industry to pay arrears to sugarcane farmers, the previous government had announced a subsidy for export of raw sugar up to 4 million tonnes during 2013-14 and 2014-15 marketing years (October-September).



It had fixed the subsidy at Rs 3,300 per tonne for February-March and decided to review it every two months. However for April-May, the subsidy was reduced to Rs 2,277 per tonne for raw sugar shipments.



Issuing a fresh notification, the Food ministry said: "The incentive towards marketing and promotion services for raw sugar production for the period beginning from June 1, 2014 and ending on July 31, 2014, shall be at the rate of Rs 3,300 per tonne."



Welcoming the decision, Indian Sugar Mills Association ( ISMA) said: "The mistake of reducing the export incentive for April-May even though the rupee had appreciated, is now rectified. Sugar exports, which could not take pace in last two months due to cut in incentive, will now resume."



"This positive step gives a lot of confidence to the sector that the new government will be fair in its decisions and positive towards farmers' interests," it said.



The country has exported about 5 lakh tonnes of raw sugar so far availing the benefit of the subsidy, it added. At present, sugarcane arrears are around Rs 11,000 crore, of this Rs 7,200 crore belongs to Uttar Pradesh.



Source:- blackseagrain.net

Growing Iran Oil Exports Challenge U.S. Nuclear Sanctions

Iran’s oil exports have risen this year, according to Bloomberg calculations, a trend that threatens to violate U.S. sanctions on the Islamic Republic’s main source of revenue.



Shipments of Iranian crude oil and condensate have increased about 28 percent on average this year, according to an analysis of customs data from importing nations and figures from the International Energy Agency in Paris. If crude sales are up by the end of July, that would break an international accord to hold Iran’s oil exports at the same level in the first half of this year that they were at in the previous six months.



Questioned in Congress yesterday about possible sanctions violations, an Obama administration official who monitors Iran’s oil exports said he’s confident Iranian crude shipments have remained within the limits set in a six-month agreement signed Jan. 20 that granted Iran limited sanctions relief in exchange for some nuclear concessions.



“Where we are today, we feel comfortable that the crude oil exports of Iran are remaining in the 1 million to 1.1 million barrels per day average,” Amos Hochstein, deputy assistant secretary of state for energy diplomacy, testified before the House Foreign Affairs Committee.



The U.S. Congress passed legislation in December 2011 to curtail Iran’s oil exports in an effort to deprive the Persian Gulf state of its leading foreign revenue earner, to pressure its leaders to accept constraints on a suspected nuclear weapons program. A month later, the European Union approved an embargo on Iranian oil purchases by its members.



Only six buyers are still allowed to take crude from Iran - - China, India, Japan, South Korea, Turkey and Taiwan -- down from 21 before the restrictions went into effect in mid-2012.



Among the reasons that exports in the first few months of this year look higher are seasonal variations in oil purchases and the fact that reporting lags shipments and customs data are sometimes revised, according to two U.S. officials who weren’t authorized to be quoted.



Another reason is that while India’s crude imports from Iran were up significantly in the first few months of this year, its refiners have signed contracts for lower purchases in the coming months, which should bring down Iran’s average exports by July, the officials said.



The Obama administration says Iran’s oil exports have been reduced by more than half from 2.5 million barrels a day before sanctions. The U.S. also says Iran is losing as much as $5 billion a month in oil revenue.



Customs and other publicly available data, though, show that Iran’s exports of crude and condensates rose to an average of 1.33 million barrels a day in the first four months of this year from 1.04 million barrels a day on average in 2013, according to Bloomberg calculations.



Iranian Oil Minister Bijan Zanganeh, asked by a reporter at an OPEC meeting in Vienna yesterday, gave a higher figure, saying the Persian Gulf producer is exporting 1.2 million barrels of crude oil and 300,000 barrels of condensate a day.



U.S. officials say Iran consistently inflates trade figures to create an illusion that sanctions are crumbling.



Using customs and ship-tracking data to assess Iran’s oil export quantities is complicated by the fact that crude and condensates can be transported by the same type of tanker or blended together and that some countries combine the two in their import data.



Condensate, a light petroleum liquid often found with oil or gas, is not restricted by U.S. sanctions as long as the buyer nation was granted a waiver from the sanctions by reducing the amount of crude oil it buys from Iran.



China has considerably increased its purchases of Iranian condensate this year, and that has inflated overall import figures, according to the two Obama administration officials who spoke on condition of anonymity. U.S. officials say Iran may be offering China and other customers significant discounts on condensate and crude in an attempt to keep sales flowing despite punishing sanctions.



Although Iran exports condensate in much smaller quantities than crude oil, the product fetches higher prices because it’s easier and less expensive to refine into gasoline or diesel fuel.

Source:- businessweek.com

Ford To Make India Its Export Hub: Ceo Alan Mulally

Terming India among the fastest growing markets, US-based carmaker Ford today said it has decided to make the country as its export hub.



"We have decided that India will be an export hub for Ford. We are exporting to over 50 countries from here and are increasing it overtime," Ford Motor President and chief executive officer Alan Mulally said.



Ford India has two manufacturing plants in the country - one in Gujarat and another at Maraimalai Nagar near here.



"It is because our (Ford India) operations are great, our quality is great and our efficiency is great. Its just that the location of India is great for us (to look for exports)," Mulally, who is set to retire from the company after eight years of service later this month, told reporters here.



Asked whether Ford India met his expectations, he said, "Remember Ford was in trouble in September eight years ago. We had the worst report in 2006. I remind you there was $17 billion loss to the company. If you are in business, you are going to have brackets around your numbers (net losses). We grew decisively. Not only we survived but are also prospering now.





"As soon as we attained profitability, we turned our attention to Asia Pacific. Our investments have been tremendous in India and China. These are the fastest growing markets in the world."



Asked on what would be his advice to chief operating officer Mark Fields who is tipped to replace him, Mulally said, "My advice (to him) will be to stay on the 'One Ford' plan. That transformation is one of the biggest transformation in the history (of Ford)."

On what difference he made in the company during his eight-year stint, he said the focus was on seven aspects, including making Ford serve all markets worldwide.



"Number two, we focused on the Ford brand. Third reason was our commitment to customers; fourth was on delivering better quality and fuel efficient vehicles; fifth to operate as one global company; sixth to always produce to the demand; seventh is financing plan... we have restructured our business and now have repaid all of USD 23.5 billion."



Earlier, Mulally met the 3,600 employees working at the Ford plant and the company's business service division here.

Source:- timesofindia.indiatimes.com

Solar Water Heater Makers Demand Rs 350 Crore Subsidy Arrears.

A grouping of solar water heater manufacturers today demanded that the government immediately pay them Rs 350 crore in arrears related to unpaid subsidies.



The pending subsidy includes Rs 50 crore for 2012-13 and around Rs 300 crore for the last fiscal, according to Solar Thermal Federation of India (STFI).



"The industry is on death bed. It is Rs 800-crore industry," STFI Secretary General Jaideep Malaviya said.



As of now, arrears have gone up to Rs 375 crore, he added.



To promote solar energy, the Ministry of New and Renewable Energy (MNRE) had launched a programme under which 30 per cent subsidy would be provided to solar water heater manufacturers for every unit sold.



The subsidy scheme comes under the Jawaharlal Nehru National Solar Mission (JNNSM).



Malaviya claimed that subsidies could touch Rs 500 crore in this financial year as the market for solar water heaters is expected to see a boom.



"The industry is on the verge of shutdown. Government immediately needs to set deadline of setting off the pending claims," Malaviya said.



The Federation has taken up the issue with the government.



"Our expectations from the government are that first all outstanding dues be paid and secondly there has to be anti-dumping duty on import of low quality systems...," STFI Chairman Mangal D Akole said.



He also stressed that subsidy should be given only to locally-made solar water heaters.



Source:- economictimes.indiatimes.com

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

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