Indian Cos allowed to issue share warrants to non-residents

FEMA/ILT : Fem (Transfer or Issue of Security by a Person Resident Outside India) (Ninth Amendment) Regulations, 2014 - Amendment in Regulations 2, 5, 6B, 9, 10 Schedules 1, 2, 2A & 4 and Insertion of Regulation 6C

RBI omits working group from definition of approving authority for purposes of project export

FEMA/ILT : Fem (Exports of Goods & Services) (Second Amendment) Regulations, 2014 - Amendment in Regulation 2 and Substitution of Regulation 18

IRDA allows proprietary trading membership of stock exchanges to insurers for trading in debt segmen

INSURANCE : Corporate Bond Market- Permission to Insurers For Membership in Sebi Approved Stock Exchanges for Proprietary Trading

RBI prescribes internationally accepted pricing methodology for valuation of Shares or debentures is

FEMA/ILT : Fem (Transfer or issue of Security by A Person Resident Outside India) (Seventh Amendment) Regulations, 2014 - Amendment in Regulation 9 and Schedules 1, 2 and 2A

Gold Prices Decline On Weak Global Cues

Snapping its four-day rising streak, gold prices fell by Rs 280 to Rs 28,450 per 10 grams in the national capital on Monday on slackened demand at prevailing higher levels amid weak global cues.

Silver also dropped by Rs 400 to Rs 45,600 per kg on reduced offtake by industrial units and coin makers.Traders said sentiments turned bearish as buying by jewellers declined at current levels amid gold retreating from a four-month high in overseas markets as a rebound in equities dampened demand for an alternative investment.

Gold in Singapore, which normally sets price trend on the domestic front, fell by 1.6 per cent to USD 1,317.12 an ounce, the lowest level since July 8 and silver by 1.6 per cent to USD 21.09 an ounce.

In Delhi, gold of 99.9 and 99.5 per cent purity plunged by Rs 280 each to Rs 28,450 and Rs 28,250 per 10 grams, respectively.It had gained Rs 670 in last four sessions. Sovereign, however, remained steady at Rs 24,900 per piece of eight grams in restricted buying.

Silver ready dropped by Rs 400 to Rs 45,600 per kg and weekly-based delivery by Rs 475 to Rs 45,590 per kg.Silver coins, however, continued to be asked at last level of Rs 80,000 for buying and Rs 81,000 for selling of 100 pieces.

Source:- timesofindia.indiatimes.com

Apparel Exporters Seeks Expeditious Finalisation Of India-Eu Fta

Apparel exporters today sought expeditious finalisation of the India-EU Free Trade Agreement to enable better market access for Indian exporters whose total outbound shipments stood at USD 15.7 billion last year.

"India's clothing exports to the FTA countries have increased significantly after signing of the FTA/PTA (Preferential Trade) agreements.

"These markets accounted for 12 % share of India's clothing exports and around 58 % (of USD 475 mn in 2013) share in the country's global clothing import", Apparel Exports Promotion Council (AEPC) Chairman Virender Uppal said.

"We recommend the government to expedite the process of India-EU FTA finalisation, as this will help exporters to have better market access, that is already enjoyed by India's competitors like Bangladesh, Vietnam and Cambodia," Uppal said in the presence of Textiles Minister Santosh Gangwar.

Gangwar, who was here to inaugurate the India International Garment Fair said the Modi-led government attaches great importance to the textile sector which is evident from the Budgetary announcements.

"This fair will provide the much-needed opportunity to source garments from India. The whole world is looking at us with hope. This sector, which yields rich dividend in terms of forex export earnings and huge employment potential, has received attention at the highest level," Gangwar said.

"The apparel sector, being the highest employment provider after agriculture, especially for women and the other weaker section of society, has a much bigger role and responsibility to play," he added.

India International Garment Fair is India's largest garment show in South Asia, covering Apparel and Fashion Accessories. The fair, being held at Pragati Maidan, has attracted 416 buyers from across the world.

Referring to the recent budget announcements related to the textile sector, the Minister said Prime Minister Narendra Modi attaches huge importance to the sector.

Gangwar further mentioned that textile sector has found importance in the budget and thanked the Prime Minister for the announcements.

India exported clothing worth USD 2 billion to the countries or blocks with which it has inked FTAs and PTAs, out of the country's total apparel exports of USD 15.7 bn in 2013.

India also imported around USD 275 mn worth of apparel with which it has FTAs and PTAs, out of total USD 475 mn imports in 2013,making them a growing trade partner of India.

Source:- business-standard.com

HC accepts withdrawal of writ petition; directed petitioner to seek appropriate remedy available und

Excise & Customs : Writ filed against pre-deposit order of Commissioner (Appeals) dismissed with liberty to take recourse to legal remedies available under law

No sec. 40A(2) disallowance if payment to director was authorized by CLB and taxed at maximum rate i

IT: No addition could be made on basis of gross profit rate where Assessing Officer had not brought any material on record to dispute correctness of books of account and further no evidence had been brought on record to substantiate allegation of unrecorded sales

Excisable value of goods sent back to principal for captive consumption would be cost of material pl

Excise & Customs : In case goods manufactured by job-worker are sent back by job-worker to his principal for captive consumption by principal, value in hands of job-worker would be 'cost of raw material including job-work charges

Onus is on assessee to prove reasonable allocation of common expenditure to unit eligible for sec. 8

IT: Onus is on assessee to produce sufficient material on record to show that there is no disproportionate allocation of expenses to arrive at more profits for 'eligible units' in order to claim more relief under section 80-IB

No TDS from sum paid for supply of mobile scratch cards if assessee hadn’t supplied any material for

IT : Where assessee placed order to print SIM scratch cards but had not supplied any material to manufacturer of card, transaction could not be treated as contract for carrying out work liable to TDS under section 194C

No denial of deduction of trade discount provided via credit note even if it wasn’t shown in sale in

CST & VAT : Where assessee, a retail dealer, allowed discount to purchaser of goods as per ordinary trade practice by way of credit note and claimed deduction of same from sale price and lower authorities disallowed claim on plea that discount was neither indicated in vouchers or bills issued to purchaser, assessee was entitled to deduction claimed for with regard to discount allowed even without showing same in sale invoice or bill

Only CCI and COMPAT had jurisdiction to decide competitional issues and imposition of penalty thereu

Competition Law: It is only CCI and COMPAT which have jurisdiction to decide issue of applicability of Competition Act, 2002 as well as issue of levy of penalty thereunder

Mere change in jurisdiction of assessee due to change in place of business won’t necessitate sec. 12

IT: An assessment order passed without making reference to Commissioner under section 124 is not a nullity for want of jurisdiction but it results in an irregularity which can be rectified by order of remit

Leather Exporters Brace For Eu Curbs On Chromium

India’s 35,748-crore leather exports industry is straitjacketed with a demand by the European Union to cut down on chromium content.

The 28-nation bloc has brought down to 3mg/kg the permissible limit of chromium VI, a form of chromium classified as cancer-causing. India should comply by May next year, a deadline that has forced leather exporters to rid goods ranging from footwear to dog leashes to car furniture of harmful chromium.

The move comes under the European Union’s Registration, Evaluation, Authorisation, and Restriction of Chemicals (REACH), a regulation adopted to protect human health and the environment.

The industry average is around 5-6 mg per kg.“We are trying out alternative tanning agents such as aluminium. Though any monetary estimate will be premature, we expect a slight cost increase,” said Aslam Basha, Executive Secretary at Indian Finished Leather Manufacturers and Exporters Association.

Hazardous chemicals

Over decades, leather manufacturers have been knocking off hazardous chemicals from their processes such as disinfectant Pentachlorophenol and Formaldehyde. “And this is just one more of them,” says Rafeeque Ahmed, President of Federation of Indian Export Organisations. European nations have been stressing on carcinogen-free leather for long. But now, the official mandate is a concern because chromium occurrence is commonplace in the manufacture of footwear, which constitutes 43 per cent of India’s leather exports, he said.

The carcinogen enters leather products chiefly during the tanning process in the form of Chromium III, which is innocuous but converts to the toxic form at higher temperatures. The Central Leather Research Institute, Chennai, is working on a new processing method to limit chromium presence, but it will take months to crystallise.

Ganesh Jeevan, Principal Technical Officer at CLRI, says 3 mg is the lowest detectible amount of chromium in any leather sample.

“No one adds chromium intentionally, and it cannot be completely done away with. This leaves little scope for alternative processing,” he said. Though there have attempts at replacing chromium with zirconium, the rare earth mineral is available at a large premium and the atomic energy industry is a priority buyer.

While small units make up a large portion of the industry, big players such as the Tata Group are also in the business. A spokesperson for Tata International Ltd which exports leather jackets and car upholstery, says a tannery sourcing “good quality” raw material need not fret over the EU mandate.

Source:- thehindubusinessline.com

HC denied to entertain writ against sec. 153C notice as statutory remedy was available with assessee

IT : Statutory remedy is available against notices issued under section 153C; hence, writ petition cannot be entertained

Cotton Extends Freefall Amid Prospects For Stocks Buildup

Free-falling cotton futures hit fresh two-year-plus lows last week amid expectations for a buildup in U.S. stocks and growing world inventories outside China.

Benchmark December lost 351 points for the week ended Thursday to close at 68.55 cents, a contract low finish just above its lifetime intraday low of 68.25 cents established in early June 2012.

December has closed lower eight sessions in a row and 11 of the last 12, including four new contract low settlements in a row. Fund and speculative selling blunted rally attempts at strategic technical levels.

Traders expected USDA’s supply-demand report Friday to show U.S. 2014-15 ending stocks rising from 4.3 million bales projected last month and stocks outside China growing from 41.95 million bales. The 2013-14 June estimates were 2.7 million and 38.69 million bales, respectively.

The market shrugged off constructive U.S. all-cotton export sales totaling a combined 271,500 running bales during the week ended July 3 for this season and next, up from 101,300 bales the previous week.

New-crop upland sales of 203,200 bales, up from 59,700 bales, were the second largest registered for the marketing year beginning Aug. 1, narrowly behind only 203,700 bales reported for the week ended Feb. 13.

Upland sales for shipment this season of 67,600 bales, up 16 percent from the prior four-week average, and small Pima sales brought 2013-14 commitments to 10.782 million bales, 106 percent of the June estimate.

All-cotton shipments slipped to 141,200 running bales from 175,100 bales the week before, with upland exports of 136,400 bales falling 9 percent from the prior four-week average. But shipments remained slightly above the pace needed to make the estimate.

On the U.S. crop scene, ratings improved and progress remained ahead of last year but behind the five-year average in the week ended July 6.

Cotton in good to excellent condition rose to 55 percent from 53 percent a week earlier, USDA said, with fair at 32 percent down from 34 percent and poor to very poor unchanged at 13 percent. A year ago, 44 percent was good to excellent and 24 percent was poor to very poor.

The DTN cotton condition index based on the USDA report increased to 138 from 135 a week earlier and 97 last year.

In Texas, good to excellent cotton rose a percentage point on the week to 41 percent, but fair fell three points to 37 percent and poor to very poor increased two points to 22 percent.

Squaring across the belt advanced 17 points for the week to 53 percent, four points ahead of last year but seven points behind average. Cotton setting bolls increased five points to 12 percent, up from 9 percent a year ago but behind the average of 16 percent.

U.S. upland growers had contracted about 6 percent of their expected acreage as of July 1, according to informal surveys conducted by the cotton division of USDA’s Agricultural Marketing Service.

The survey, based on the June plantings report, showed contracting was down from 11 percent a year ago and the smallest since 2009 when only 2 percent had been booked. The estimates don’t include cotton consigned to marketing organizations but do include cotton contracted with them.

By regions, bookings included 11 percent in the Southeast, against 32 percent a year ago; 9 percent in the Mid-South, down from 15 percent; 4 percent in the Southwest, up from 2 percent; and less than 0.5 percent in the West, compared with 3 percent last year.

On the international scene, traders monitored a deficit monsoon in key cotton areas of India, the world’s second-largest cotton producer. The monsoon is crucial to the production of various Indian crops.

India’s government, worried that poor monsoon rains will depress the country’s grain production, is planning to hold onto supplies for its domestic market instead of boosting exports — something that could push up prices for wheat and rice, Dow Jones Newswires reported.

India is the world’s No. 1 rice exporter and also has become a prominent supplier of wheat ever since the government lifted a ban on exports of the two grains in September 2011.

To avoid any shortfall, the government has dropped a plan to auction 5 million tons of rice from state stockpiles in the open market and to keep on hold a program under which wheat was being sold regularly through state-run trading companies to global bidders.

India’s 2014-15 cotton production was projected by USDA last month at 28.5 million bales, nearly 7 percent below the country’s 2013-14 output, despite an increase in the estimated area.

With demand for India’s textile product exports expected to remain strong, USDA projected its cotton consumption to rise 2 percent to a record 24.3 million bales.

But with world trade projected down 13 percent from 2013-14, mainly because of China’s reduction in raw cotton imports, India’s exports were forecast to decline 37 percent to 5.7 million bales.

Updated 2013-14 estimates by India’s Cotton Advisory Board earlier this month put exports at 11.4 million 170-kilogram bales, or 8.9 million 480-pound bales, close to USDA’s 9 million bales.

Meanwhile, trend-following funds sold 9,224 lots in cotton futures-options combined to chop their net long position by 38 percent to 5,618 lots during the week ended July 1, according to government data.

Those funds reduced their net longs to the smallest since they were net short Dec. 3. Index funds bought 171 lots to nudge their net longs up to 64,248 lots, while traders with non-reportable positions sold 2,847 lots to reverse to net short 2,342 lots from net long 505 lots.

Commercials bought 11,900 lots, covering 6,776 shorts and adding 5,124 longs to shave their net shorts to 67,526 lots. In futures only, non-commercials cut their net longs by 5.9 percentage points to 8.3 percent of the open interest, which rose by 788 lots to 146,236.

Source:- lubbockonline.com

Milk Prices May Rule Easy Despite Drought Fears

While a looming drought is causing worries over resurgent food inflation, there is one commodity – milk – that could offer some respite.Falling global prices rendering exports unviable, coupled with farmers tending to sell more to dairies in weak monsoon years, may see consumers not spending more on milk this time.

In 2013-14, India exported nearly 1.3 lakh tonnes (lt) of skimmed milk powder (SMP) worth over ?2,700 crore on the back of high international prices and a weak rupee.

Faltering exports

“This year, exports won’t cross 0.5 lt, as we are barely doing 3,000 tonnes a month,” said an industry source.

The country’s annual SMP production is 5-6 lt. Dairies bid up milk prices when export demand is high, as it was last year.

“Export realisations are currently ?215/kg, as against ?250 from domestic sales. Last week’s move scrapping the 5 per cent duty credit scrip incentive (on free-on-board value) will make shipments even less remunerative,” the source pointed out.

Domestic prices have also fallen from the ?285-290 levels until three months back. “Dairies are ready to supply even at ?230/kg for large orders. There is enough surplus powder in the system now,” he added.

Price correction

Diaries require about 12 litres of milk to produce a kg of SMP. A ?50/kg drop in SMP realisation will force them to offer ?4/litre less to farmers.

“The phase of huge procurement price increases we saw from around November is over. From now on, prices will rule flat or lower because there isn’t any export demand at current global realisations,” noted RG Chandramogan, CMD, Hatsun Agro Product Ltd.

Since December, SMP prices at the fortnightly auctions of New Zealand’s Fonterra Cooperative Group, the world’s No. 1 exporter, have tumbled from $4,868 to $3,810 a tonne (Indian powder fetches a $100-200 discount to international rates).

Two factors are driving this fall. The first is a production rebound in New Zealand after last year’s drought, the country’s worst since 1972-73.

The second has to do with the end of the European Union’s 30-year-old milk quota regime – which sets caps on how much each member-country can produce – from April 1, 2015. The dismantling is expected to boost output, especially from relatively low-cost producers such as Ireland and Poland.

Drought insurance

But lower export demand apart, there is another reason why domestic milk prices may rule easy. In years of low rainfall, farmers step up milk sales to make up for lost income from their main crop.

Gujarat Cooperative Milk Marketing Federation (GCMMF), for instance, reported a 9-10 per cent jump in procurement volumes in 2002 and 2009, both severe drought years.

“When the rains aren’t good, farmers go in for short-duration fodder crops that can be fed to animals, rather than raise cotton or groundnut. Dairying, thus, becomes their primary income source,” observed Rs. Sodhi, Managing Director, GCMMF.

There is a flip side, though.

In poor monsoon years, farmers accord priority in feeding to buffaloes and cows already in milk, while pregnant animals and calves tend to suffer fodder deprivation. This can, in turn, impact future milk production via a disruption of the reproduction-cum-lactation cycle of animals.

Source:- thehindubusinessline.com

Cairn Seeks Nod To Export Barmer Crude

The petroleum ministry is evaluating a proposal by Cairn India for exports of crude oil produced at its Barmer fields, which are the country’s largest inland oil producing fields.

A petroleum ministry official told HT that the government has sought a detailed note from Cairn India after the company’s promoter Anil Agarwal met petroleum minister Dharmendra Pradhan on July 3 and sought permission to allow export of Barmer crude.

“He (Agarwal) met the minister and sought approval to allow export of crude as it can substantially increase contribution to the exchequer while improving efficiency of refineries. Cairn has been asked to submit details,” a senior petroleum ministry official said.

Another meeting is scheduled this week between the petroleum minister and the Cairn-ONGC JV to go into details, he said.

“We have proposed a swap agreement wherein we will export this waxy crude and import a better quality and establish a better market price for the Rajasthan crude…any incremental revenue arising out of the higher price would be split between the government and the Rajasthan JV partners (Cairn and ONGC)…it would mean that on every one dollar incremental revenue, the government and its nominee gets 70-80 cents,”said a senior official of the Rajasthan JV of Cairn and ONGC.

Under current law, companies are not allowed to export crude oil. Oil producing companies are obliged to sell their entire produce only to the government or a nominee it appoints.

Keen to export crude to Japan and Singapore, Cairn is currently producing huge volumes of heavy crude in Rajasthan.

If Cairn’s proposal is accepted, it would be a significant step as India meets 80% of its crude oil requirements through imports. Cairn would become the first company to export crude oil from India.

Source:- hindustantimes.com

Merger of service provider with receiver from retro-effect doesn’t wipe out Credit availed of before

Cenvat Credit : Where services were provided during 2006-07, service recipient would be entitled to credit thereof even if, after provision of service, service provider is actually amalgamated into recipient from retrospective date since 1-4-2006

Winding-up of Co. admitted as it was pleading for defective goods even if default was due to scarcit

CL : Where dispute raised by company as regards quality of goods was only after filing of winding up petition for non-payment of dues, said dispute could not be held bona fide; real problem being non-availability of funds, winding up petition was to be accepted

Interest charged from AE held at ALP as Libor plus rate suggested by DRP wasn’t in sync with compara

IT/ILT: Where DRP had directed Assessing Officer to charge Libor + 2 per cent, Libor + 1 per cent charged by assessee could be considered as at arm's length, in absence of any other comparables where Libor + 2 per cent was charged

CBDT revises monetary limits for filing appeals; issues measures to reduce litigation

IT : Section 268A of the Income-Tax Act, 1961 - Appeals And Revision - Filing of Appeal or Application For Reference by Income-Tax Authority - Revision of Monetary Limits For Filing of Appeals by the Department Before Income Tax Appellate Tribunal, High Courts And Supreme Court - Measures for Reducing Litigation

MCA allows processing of MGT-14 via straight through process mode

COMPANIES ACT, 2013 : Section 448, read with Section 447 of the Companies Act, 2013 - Punishment for False Statement - Clarification on Form Mgt-14 Through Straight Through Process (Stp) Mode

Excise duty is chargeable on MRP of fertilizers without considering amount of subsidy; FinMin clarif

EXCISE & CUSTOMS LAWS : Clarification on Valuation of Fertilizers for the Purpose of Levy of Excise Duty - Inclusion of Subsidy Component in yhe Assessable Value

[Indian Customs Tariff Notification] : Seeks to amend notification No. 10/2008 Customs, dated the 15th January, 2008 so as to delete tariff item 3903 19 90 in respect of CECA.

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification

No. 17/2014-Customs

New Delhi, the 11th July, 2014

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 10/2008-Customs, dated the 15th January, 2008 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 33(E), dated the 15th January, 2008, namely:-

In the said notification, in the TABLE, serial number 169 and the entries relating thereto shall be omitted.

[F.No. 334/15/2014-TRU]

(Pramod Kumar)

Under Secretary to the Government of India

Note.- The principal notification No. 10/2008-Customs dated the 15th January, 2008 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 33(E), dated the 15th January, 2008 and last amended by notification No.50/2013-Customs, dated the 16th December, 2013 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (i) vide number G.S.R.779(E), dated the 16th December, 2013.

[Indian Customs Tariff Notification] : Seeks to amend notification No. 09/2012 Customs, dated the 09th March, 2012 so as to increase the variation levels in respect of re-import of cut and polished diamonds.

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification

No. 16/2014-Customs

New Delhi, the 11th July, 2014

G.S.R. (E). - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 9/2012-Customs, dated the 9th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide G.S.R. 129 (E), dated the 9th March, 2012, namely:-

In the said notification, in condition (v), for the proviso, the following proviso shall be substituted, namely:-

“Provided that a variance not exceeding +_ 0.05 mm in diameter for round shape diamonds and +_ 0.07 mm in length and breadth for diamonds of other shapes and variance not exceeding +_ 1 cent in weight shall be allowed.”.

[F.No.334/15/2014-TRU]

(Pramod Kumar) Under Secretary to the Government of India

Note. - The principal notification No. 9/2012-Customs, dated the 9th March, 2012 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.129 (E) dated the 9th March, 2012 and was last amended by notification No. 11/2013-Customs, dated the 1st March, 2013 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.134 (E), dated the 1st March, 2013.

Budget 2014-15 : Amendments proposed in Service Tax, Excise and Customs

Budget 2014-15 : Amendments proposed in Service Tax, Excise and Customs

[Indian Customs Non-Tariff Notification] : Seeks to specify class of persons for the purposes of section 28E of the Customs Act, 1962.

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification No. 51 /2014-Customs (N.T.)

New Delhi, the11th July, 2014

G.S.R. (E).- In exercise of the powers conferred by sub-clause (iii) of clause (c) of section 28E of the Customs Act, 1962 (52 of 1962), the Central Government hereby specifies "the resident private limited company" as class of persons for the purposes of the said clause.

Explanation.- For the purposes of this notification,-

(a) "private limited company" shall have the same meaning as is assigned to "private company" in clause (68) of section 2 of the Companies Act, 2013 (18 of 2013);

(b) "resident" shall have the same meaning as is assigned to it in clause (42) of section 2 read with sub-section (3) of section 6 of the Income-tax Act, 1961 (43 of 1961).

[F.No. 334/15/2014-TRU]

(Pramod Kumar)

Under Secretary to the Government of India

Budget 2014-15 : Highlights of amendments proposed in Service Tax

Union Budget, 2014-15: Changes in Service Tax - reg.

India’S Oilmeal Exports Down

India’s oilseed meal exports have declined by 31 per cent at 592,850 tonnes for the first quarter ended 30 June 2014 (April to June).During the same period last year, exports of oilmeal were recorded at 856,686 tonnes, Solvent Extractors’ Association of India (SEAI) said in a quarterly report.

In June 2014, export of soybean meal drastically reduced to just 2,637 tonnes, lowest in the history, however export of rapeseed meal and castor meal saved the situation and reported at 193,313 tonnes compared to 360,822 tonnes in June 2013, the statement adds.

SEAI said, export of soybean meal reduced due to poor availability of soybean coupled with high price lead to total disparity in international market.

South Korea, Iran and Thailand were the major importers of oilmeal during the first quarter.

Oilmeal import by South Korea during April-June was reported at 295,249 tonnes, against 304,745 tonnes, consisting 142,750 tonnes of rapeseed meal, 152,062 tonnes of castor meal and 617 tonnes of soybean meal.

Iran imported of 102,275 tonnes, as compared to 260,734 tonnes last year consisting of 35,500 tonnes of soybean meal and 66,775 tonnes of rapeseed meal, the statement adds.

Thailand imported of 44,192 tonnes, as compared to 55,810 tonnes, consisting 41,800 tonnes of rapeseed meal and 2,392 tonnes of soybean meal.

Viet Nam imported 29,664 tonnes, compared to 37,156 tonnes last year consisting of 16,091 tonnes of rapeseed meal, 3,462 tonnes of soybean meal and 10,111 tonnes of rice bran extraction.

Taiwan imported 20,866 tonnes, against compared to 27,521 tonnes of last year consisting of 13,995 tonnes of rapeseed meal and 6,833 tonnes of castor meal and small quantity of 38 tonnes of soybean meal.

Import from Europe drastically reduced to 36,017 tonnes during the first quarter compared to 109,062 tonnes imported during the same period last year, SEAI statement.

Source:- thepigsite.com

India May Cut Gold Import Duty

India is likely to cut its gold import duty to 6 per cent from a record 10pc in Thursday’s budget, leading to a rise in imports, a senior official at the country’s biggest gold trade group said on Wednesday.

Higher overseas purchases by the world’s No.2 buyer of the precious metal after China should underpin global gold prices that have risen almost 10pc this year, recovering from a 28pc plunge in 2013.

The drop to 6]pc in import duty “is practical and it may be reduced further. A reduction in import duty may encourage more demand from the consumers”, Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation, told the Reuters Gold Forum.

Bamalwa, whose federation represents more than 300,000 jewellers, met Finance Minister Arun Jaitley late last month, and said: “He (Jaitley) seemed very positive and we expect some good news about the industry.”

Jaitley’s maiden budget will be the first major policy event since Prime Minister Narendra Modi’s landslide general election win in May.

Finance ministry officials were not immediately available for comment outside business hours. Gold imports into India are likely to rise 200 tonnes in the second half to December, a 14pc increase compared with the first half, Bamalwa said.

Source:- dawn.com

Live Update Budget 2014: Personal Tax Exemption Limit raised by Rs. 50,000; No change in rate of sur

Live Update Budget 2014: Personal Tax Exemption Limit raised by Rs. 50,000; No change in rate of surcharge

Live Update Budget 2014: Maximum exemption limit raised to Rs. 2.5 lakhs for an individual

Live Update Budget 2014: Maximum exemption limit raised to Rs. 2.5 lakhs for an individual

Live Update Budget 2014: Import duty on steel increased from 5% to 7.5%

Live Update Budget 2014: Import duty on steel increased from 5% to 7.5%

Live Update Budget 2014: PPF annual ceiling enhanced to 1.5 lakhs

Live Update Budget 2014: PPF annual ceiling enhanced to 1.5 lakhs

Defense Ministry issues security manual for its licensed industries

FDI/FEMA/ILT : Security Manual for Licensed Defence Industries

IRDA issues new format of 'Financial Condition Report' for non-life insurance Cos; to be effective f

INSURANCE : Financial Condition Report For Non-Life Insurance Companies - Supersession of Circular No. Irda/Actl/Cir/Misc/081/05/2010, Dated 13-5-2010

Live Update Budget 2014: Committed to revive Special Economic Zones: Jaitley

Live Update Budget 2014: Committed to revive Special Economic Zones: Jaitley

Mango Exports Likely To Dip This Year

With the European Union (EU) banning import of Indian mangoes earlier this year, exporters have tried to focus on other markets, especially the US to compensate for the loss. However, industry insiders feel that the US is unlikely to make up for the volumes lost to EU, and overall mango exports from the country would be less by around 10-15 per cent this year.

Abhijeet Bhasale, managing director of Pune-based import-export house Rainbow International that is also engaged in online retailing ofmangoes through mangowale.com said, "We are the second largest exporter of mangoes to the USA, and had exported over 90 tonnes of mangoes to the US last year. However, this year we have not seen any rise in exports to the US." He outlined two main reasons behind this, one is that the irrradiation facility at Lasalgaon in Maharashtra that was undergoing a capacity expansion was not ready until end of April. Irradiation process certification is required to export mangoes to US.

On top of this, the US also employed stringent checks on Indian mangoes at airports following the ban from EU. India's total mango exports to the US last year was around 280 tonnes, and this year it can increase by 15-20 per cent. However, it is unlikely to compensate for the volumes lost in EU trade.

Traders say that the entire EU basket of exports is around 5,000 tonnes of mangoes, of which the UK is one of the biggest markets accounting for nearly 3,500 tonnes of export. The Agricultural Processed Food Products Export Development Authority (Apeda) figures show that India had exported nearly 3890 tonnes of mangoes to the EU in 2012-13. However, traders claim that original export figures are higher than the Apeda numbers, as all exporters are not registered with the Apeda.

Sudhanshu, regional in-charge, west zone, Apeda, however, says that exports to the US have been extended till mid-July. "We are expecting to touch 400 tonnes in total exports to the US this year, and have so far done around 300 tonnes. Among other markets, exports to New Zealand has increased to over 50 tonnes from a 30 tonnes last time," he said.

However, when it came to the traditional markets in West Asia (which accounts for around 50 per cent of mango exports from India), some of the South Gujarat-based traders pointed out that this year Pakistan has managed to raise its share of exports to these countries. "The kesar crop in Gujarat has been affected this year due to the unseasonal rains, and mango arrivals in Talala and also parts of Maharashtra have been less compared to last year," said Nanjibhai Patel, a Junagadh based trader.Total mango exports from India were around 55,000-56,000 tonnes in 2012-13.

Source:- business-standard.com

Economic Survey For Increasing Share In Merchandise Exports

India should more than double its share in world merchandise exports to at least 4 per cent in the next five years, a government document has said.

In 2013, India's exports share in world merchandise exports was 1.7 per cent, said the Economic Survey 2013-14, tabled in Parliament by Finance Minister Arun Jaitley on Wednesday.

"India should aim to increase its share in world merchandise exports from 1.7 per cent in 2013 to a respectable ballpark figure of at least 4 per cent in the next five years," it said, adding, "India's exports should grow consistently by around 30 per cent annually to reach" that figure.

It said the aim is "not impossible" as during 2003-04 to 2007-08, India's exports grew consistently by above 20 per cent annually.

However, it said that achieving this aim in the medium term is a big challenge and some basic steps need to be taken like product diversification, building export infrastructure, focusing on useful free trade agreements, addressing the inverted duty structure, rationalising export promotion schemes, and taking steps for trade facilitation.

India's merchandise exports share in world exports increased from 0.5 per cent in 1990 to only 1.7 per cent in 2013 whereas China's share increased from 1.8 per cent to 11.8 per cent during the same period.

"Thus there is a yawning gap between India and China in the share of world merchandise exports," it added. The country's exports grew by a double-digit pace for the first time in seven months in May, narrowing the trade deficit,” it noted.

"In 2014-15 first quarter, trade deficit declined by another 42.4 per cent.”

It said the pick-up in India's exports in April-May 2014, though a positive sign, is partly due to the low base.

According to the International Monetary Fund’s World Economic Outlook projection, world trade volume would grow to 4.3 per cent in 2014 and 5.3 per cent in 2015 from the 3.0 per cent in 2013 with a marked improvement in export and import growth of advanced countries.

However, it said there is also the downside risk of external shocks like the latest increase in oil prices owing to the Iraq crisis.

Talking about the services sector growth, it said services growth to a large extent depends on global growth and trade. The prospects for IT services, however, seem bright with Gartner projecting a 3.1 per cent increase in IT spending worldwide in 2014.

The robust growth in foreign tourist arrivals of 10.6 per cent coupled with the 11.4 per cent growth in foreign exchange earnings in the first two months of 2014-15 also augurs well for the Indian tourist sector."Thus the signals in India's service exports are mixed," it added.

Source:- profit.ndtv.com

Live Update Budget 2014: Five more IITs and IIMs to be set up

Live Update Budget 2014: Five more IITs and IIMs to be set up

Live Update Budget 2014: FM raises FDI in defense up from 26 to 49 % with Indian management and cont

Live Update Budget 2014: FM raises FDI in defense up from 26 to 49 % with Indian management and control.

India's Jsw Raises Iron Ore Imports

JSW Steel, led by billionaire Sajjan Jindal and India's third-largest maker of the alloy, will import 6 million metric tons of iron ore this fiscal year compared with no shipments a year earlier due to production cutbacks at home.

JSW's return to the sea-borne iron ore market after a gap of more than a year could further support prices that seem to be recovering after sliding to 21-month lows in mid-June.



India's Supreme Court in May ordered the temporary closure of some iron ore mines in top producing state Odisha pending renewal of their licences. This has cut output from the state that produced more than 70 million metric tons last fiscal year.



A previous court clampdown on illegal mining in Karnataka and Goa states have also stifled supplies.



The company last week took delivery of its first imported iron ore shipment in over a year in a capesize vessel carrying 170,000 metric tons of high-grade ore from South Africa, JSW's Joint Managing Director Seshagiri told Reuters on Wednesday.It imported about 1.6 million metric tons in 2012/13.



"Imports are coming all the way from Canada, South Africa and Australia," he said in a telephone interview. "Iron ore can be seen in Karnataka but it is not available to the industry."



India was once the world's third largest exporter of iron ore, shipping more than 117 million metric tons in the fiscal year through March 2010. It slipped to No. 10 last fiscal year, with exports estimated at less than 20 million metric tons.From about 218 million metric tons in 2009/10, India's iron ore production fell to 144 million last fiscal year ended March 31.



Rao said output is expected to drop to 100 million metric tons in the current fiscal year against demand of 140 million.The domestic shortage has also forced JSW to use low-grade iron ore ignored by local steel mills before the mining restrictions came into place in the past three years.



This has increased JSW's consumption of coke, a processed form of coal, by up to 25 percent as low-grade iron ore tends to consume more energy, Rao said.As a result, the company's coke imports will continue to rise from the 8 million metric tons it shipped in last fiscal year.

Source:- marinelink.com

Foie Gras Import Ban: Should The Government Decide What You Eat?

In a controversial move, the Government of India has banned the import of Foie Gras – a food product made from the liver of a duck or goose that has been specially fattened. Foie Gras has been a contentious issue because of the way it is produced.

Foie gras is a popular and well-known delicacy in French cuisine. Ducks are forced to endure the pain of force-feeding, which is done to enlarge their livers, and are ultimately killed to extract the liver which is described as rich, buttery, and delicate, unlike the liver of an ordinary duck.

Force-feeding of birds dates as far back as 2500 BC, when the ancient Egyptians used to deliberately fatten them for food. Today, France is the largest producer and consumer of foie gras, though it is produced and consumed worldwide, particularly in other European nations, the United States, and China.

Although the move to ban the import of foie gras has won India accolades from the animal rights groups across the world, it has raised many eyebrows at home as some people feel that the Government should leave it to consumers to decide what they want to eat.

One feels compelled to ask: What about lakhs of chickens and goats which are slaughtered daily in the country? Will the Government ban them too? Such a thing is not practically possible. People are capable of making the right moral and personal choices for themselves. The Government has no business prescribing food habits.

According to The Wall Street Journal, an official said that the ban is a result of complaint by an animal activist group. “Import policy of the item ‘foie gras’… is revised from ‘free’ to ‘prohibited’,” the Directorate General of Foreign Trade (DGFT) said in the notice on its website. “The decision takes immediate effect,” said SP Roy (Joint Director General of Foreign Trade at the Directorate).

Animal Equality, a London-based animal activist group, has been campaigning for a ban on foie gras across the world since 2012. A spokesperson of Animal Equality, Amruta Ubale, told the Wall Street Journal, “India is the only country to ban imports, whereas countries such as Israel, Germany and England have only banned the production of foie gras.”

While people can be made aware or educated, the Government taking decisions on their part — that too about something as personal as food habits — doesn’t make sense.

While a ban on import of narcotic drugs is logical, one wonders why the Government should ban an import when there is no national interest or economic interest at stake.

Any ban is executed by the bureaucracy. That’s the level where corruption seeps in with bureaucrats giving a free hand to few in exchange for bribes. In case of a ban on an import such as this, custom officials get several easy opportunities to facilitate smuggling of the banned products.

Every ban implies greater regulation and more government and hence goes against the grain of the mantra that this Government has adopted from day one: Minimum Government, Maximum Governance”.

Source:- niticentral.com

Adani Gas abused its dominance position as it imposed unfair conditions on buyers for supply of gas,

Competition Law : Where Gas Sales Agreement (GSA) entered into by opposite party (gas company) with its buyers provided for payment of interest by buyer on delayed payment and for termination of contract by opposite party on account of failure to off-take 50 per cent or more of cumulative Daily Contracted Quantity (DCQ) by buyer during a period of 45 consecutive days as against longer period available to opposite party from GAIL, GSA imposed unfair conditions in contravention of section 4 of Com

Data collection charges couldn’t be deemed as charges for professional services to attract TDS under

IT : Data collection charges paid by assessee are not covered by expression 'professional services' as mentioned in Explanation to section 194J

Reimbursement of demurrage charges to be excluded from shipping profits while applying sec. 44B

IT: Section 44B could not be invoked in case of demurrage charges reimbursed by assessee to non-resident for import of crude oil

Commissioner couldn’t dispense with requirement of furnishing ‘C’ Form even on destruction of Form b

CST & VAT : Where a fire broke out in business premises of assessee, which devastated all records including statutory forms obtained from purchasing dealers to whom assessee had made sales both under Delhi Sales Tax Act, 1975 and Central Sales Tax Act, 1956, and thereupon assessee filed an application before Commissioner under rule 7(3) of Delhi Sales Tax Rules, 1975 seeking an exemption from production of statutory declaration forms and Commissioner granted exemption from producing only ST-1

Assessee-developer need not own land to claim sec. 80-IB(10) benefit, rules HC

IT: Section 80-IB(10) deduction is admissible to assessee-developer though land was owned by a co-operative society

Rent from letting out a small portion of space is business income if assessee occupies other portion

IT: Where assessee owning a shopping mall, let out a small portion of said mall, in view of fact that after a short period let out portion of mall had been taken back and, moreover, in major portion of said premises assessee was already carrying out his own business, rental income derived from shopping mall was to be taxed as business income

Stay order was valid even when personal hearing wasn’t allowed provided it was a speaking order

Excise & Customs : An order on a stay application, cannot be regarded to be invalid merely on ground that a personal hearing was not afforded; however, it can be challenged on ground that requirements of law have not been objectively considered or that order is non-speaking one

Matters decided by SetCom were conclusive, which couldn’t be interfered with under reassessment, rul

IT: Once Settlement Commission has completed proceedings, its order is considered conclusive as regards matters 'stated therein' per section 245-I and reopening any proceeding in respect of matters covered in said order would be barred

Exp. incurred by assessee to increase airtime of TV programmes for better returns was revenue exp.

IT : Where expenditure related to expansion was incurred for carrying out existing business more efficiently and with a view to generate more revenue and it did not result in creation of any tangible asset and any advantage of enduring nature, said expenditure was allowable as revenue expenditure

No service-tax on laying of electrical lines and installation of transformers for power distribution

Service-tax : Contract engaged in laying electrical lines, construction of sub-stations and erection, installation and commissioning of electrical transformers, etc., for power distribution companies, prima facie, exempt under Notification No. 45/2010-ST

Trust constituted for admin and management of various port activities entitled to sec. 12A registrat

IT: Where assessee-trust was constituted under Major Ports Trusts Act, 1963 for administration, control and management of various port activities, said activities being in nature of general public utility within meaning of section 2(15), assessee's application seeking registration under section 12A was to be allowed

Application for condoning delay was to be rejected if it didn’t specify period of delay in filing ap

CENVAT : No condonation of delay in filing appeal in absence of proper ground; application for condonation of delay to be rejected if does not mention delayed period

No writ for compounding charges of illegal share allotment by a Co. without admitting share applican

FEMA : Where in petition for compounding of offences allegations were mainly against acquisition of shares and any order in petition would affect rights of applicant in respect of shares, applicant was to be impleaded as a party in that petition

Comparables accepted in subsequent year couldn’t be rejected by TPO in earlier year without any reas

IT/ILT-I: Where TPO made adjustment to assessee's ALP by rejecting a comparable picked up by assessee, in view of fact that while making impugned adjustment TPO did not consider assessee's plea that said comparable had been accepted in succeeding year and, moreover detailed reasons for rejecting it had not been assigned, impugned adjustment deserved to be set aside and matter was to be remanded back for disposal afresh

India To Keep Grain Supplies On Fears Of Poor Monsoon Rains

India's government, worried that poor monsoon rains will depress the country's grain production, is planning to hold on to supplies for its domestic market instead of boosting exports—something that could push up global prices for wheat and rice.

India is the world's No. 1 rice exporter and has also become a prominent supplier of wheat ever since the government lifted a ban on exports of the two grains in September 2011.

"We don't want to end up importing grains," a senior food ministry official who declined to be named said in an interview with The Wall Street Journal, explaining plans to scale back commodity sales. "We have sufficient grain stockpiles, but naturally there will be an impact because of the weather situation."

To avoid any shortfall, the government has dropped a plan to auction 5 million tons of rice from state stockpiles in the open market, the official said. Instead, the government plans to distribute the grain to the poor through government welfare programs.

More

Lackluster Monsoon Rains Trigger Crop Worries in India

Central government officials have also decided to keep on hold a program under which wheat was being sold regularly through state-run trading companies to global bidders, the official said.

India in September approved exports of up to 2 million tons of wheat by June 30. State-run agencies were able to sell 1.5 million tons to global bidders in that time. The government hasn't issued another order for wheat exports because of the uncertain weather, the official said.

"We have not received any orders for reviving wheat sales. We may or may not decide to go ahead [with the program] only after the monsoon season," the food ministry official said.

Since the arrival of monsoon rains over the country's mainland in the first week of June, rainfall has been 43% below average for this time of year, according to data from the India Meteorological Department. India gets 70% of its total annual rainfall during the June-September monsoon season.

About a third of India's grains production is bought by state agencies that maintain buffer stocks, while the rest is bought by private traders.

While government officials said they weren't planning to impose any curbs immediately on exports of rice and wheat by traders, they said the direction of policy will be shaped by the quantity of rainfall and its distribution through the season.

Weak rains have already delayed the planting of the summer rice crop in swaths of major producing states in eastern India, said Trilochan Mohapatra, a director in the state-run Central Rice Research Institute. "The rainfall situation appears to be serious," he said. "If it continues like this, it could affect our production. We are keeping our fingers crossed."

India's rice production could drop below 100 million tons from the 106 million metric tons harvested last year, he said, adding the impact may be less if rains pick up. However, production concerns have increased as the weather office has predicted an El Niño effect—a weather event associated with below normal rains—late in the monsoon season.

"The disappointing progress of the monsoon is a major worry," said Darren Cooper, senior economist with the London-based International Grains Council. "If monsoon rains don't improve substantially, then we are probably going to lower our forecast for India's rice exports."

The council had forecast that India would export 9.7 million tons of rice this year, while No. 2 exporter Thailand would ship out 9.2 million tons.

"If a problem with this year's kharif [summer] crop becomes increasingly apparent, then I would expect the pace of India's exports to slow quite considerably and the domestic market would then become the priority," Mr. Cooper said.

Indian 5% broken rice grades are currently quoting around $430 per ton, compared with $415 per ton for comparable Thai varieties.

The effect of a poor monsoon on wheat production won't become apparent until later, since winter is the main sowing period for the crop. Wheat is less dependent on rainfall than rice, as the main cultivation areas are in the northwestern region, which have an extensive network of canals and dams for irrigation.

Source:- online.wsj.com

Daimler India Starts Production Of Left-Hand Drive Trucks For Exports

Daimler India rolls out first Left-Hand Drive (LHD) FUSO trucks for export markets from Oragadam plant near here. The first heavy-duty truck - the FUSO FJ (equivalent to a 2528C), will be launched in markets like, Nigeria, Ethiopia and Egypt. The trucks will aslo be exported to other markets like Africa, Latin America, and the Middle East.

With this, Daimler Trucks Asia strengthens its portfolio of new FUSO trucks for the non-Asian markets as well blostering its export strategy. A variant of the new DICV-made FUSO LHD will be showcased at the upcoming IAA Hannover show in September 2014.

As part of the first wave of Export-markets DICV-made FUSO trucks are already exported to markets like Sri Lanka, Bangladesh, Indonesia, Kenya, Zambia, Zimbabwe, Tanzania and Brunei.

DICV will also start manufacturing medium-duty FUSO LHD vehicles subsequently later this year to address the wider market.

Daimler Trucks Asia expects to gain additional growth momentum in the future markets on top of the current existing markets from its new Asia Business Model introduced in 2013.

The new business model creates synergies by bundling the strengths of the Japan-based Mitsubishi Fuso Truck and Bus Corp. (MFTBC) and Daimler India Commercial Vehicles (DICV) under the Umbrella of Daimler Trucks Asia.

Source:- auto.economictimes.indiatimes.com

India's June Natural Rubber Imports Surge 41.5 Pct Y/Y-Board

India's natural rubber imports in June surged 41.5 percent from a year ago to 32,550 tonnes despite a rise in local output, the state-run Rubber Board said, as a drop in global prices prompted local tyre makers to increase overseas purchases.

The south Asian country's production during the month jumped nearly 66 percent from a year ago to 63,000 tonnes, the board said in a statement on Tuesday.

India's natural rubber consumption in June rose to 86,000 tonnes from 81,710 tonnes last year, it said.The south Asian country mainly imports natural rubber from Indonesia, Thailand, Vietnam and Malaysia.

Source:- in.reuters.com

Nearly Half Of India's Coal Power Plants Have One Week Of Stocks

Nearly half of India's coal-fired power stations only have enough stocks to last a week, the power minister said, as the country struggles to connect millions to the grid and wrestles with a growing coal import bill.

imports equate to about one percent of India's economy as state behemoth Coal India, the world's largest coal miner, has failed to raise output fast enough to meet demand.

This leads to frequent blackouts, something new Prime Minister Narendra Modi is keen to fix soon but which will raise coal shipments from countries such as Indonesia, Australia and South Africa. Coal fires more than half of India's electricity.

Power Minister Piyush Goyal said on Monday 26 out of 100 coal-based power plants in India had "super critical coal stock" - enough to meet requirements for less than four days.

A total of 44 plants, including the super critical ones, have "critical coal stocks" sufficient for less than a week, with the majority in the state of Maharashtra, the home of India's financial capital Mumbai.

"In order to ensure adequate availability of coal, Coal India Limited has been impressed upon to enhance production of domestic coal in the country and power utilities have also been advised to enhance imports of coal," Goyal told lawmakers.

India is already the world's third-largest coal importer despite sitting on the fifth largest reserves, mainly due to delays in securing environmental clearances to add new mines and to build facilities to transport coal from remote mines.

Coal-fired power plants are expected to see demand of 551.60 million tonnes this fiscal year ending March 31, but supply will be limited to 466.89 million, Goyal said.

In April-June, Coal India supplied 88.66 million tonnes to power companies against a target of 101.61 million. Coal shipments rose as a result.

India's imports of thermal coal, used in power generation, rose 11 percent to 14.77 million tonnes in June, according to a joint venture of Tata Steel and Steel Authority of India Ltd.Weaker-than-average monsoon rain this year could also encourage coal imports as hydro-electric production is expected to fall.

Source:- in.reuters.com

Profit on sale of commercial space gets sec. 80-IB relief as housing project was approved prior to 1

IT : Prior to 1-4-2005, local authority could approve a housing project without or with commercial use to extent permitted under Development Control Rules and, therefore, an assessee would be entitled to deduction under section 80-IB(10) in respect of profits derived from approved project including profits from sale of commercial space

Hospital is entitled to claim sec. 11 relief from income arising from pharmacy, an integral part of

IT : Where assessee, a charitable society registered under section 12A, was running a hospital, income earned by it from its pharmacy being integral to main object of running hospital, could not be excluded from computing income eligible for exemption under section 11

Indian Rupee Opens Higher At 59.94 Per Dollar

The Indian rupee gained marginally in the early trade on Tuesday. It has opened higher by 7 paise at 59.94 per dollar versus 60.01 Monday.

The dollar inched higher against the euro but pared some early gains, as investors continued to digest last week's strong US employment report and speculated about when the Federal Reserve is likely to begin raising rates.

Ashutosh Raina of HDFC Bank said that, “Better than expected US jobs data last week stoked the positive sentiment across global markets. Markets are now re-assessing as to when the Fed will start raising the interest rates.”

“The Indian markets are awaiting the first Budget from the new government. USD-INR pair has been trading in the 59.50-60.50/dollar range and should continue to trade in this range till the Budget,” he added.

Source:- moneycontrol.com

RBI increases credit period for import of diamonds from 90 days to 180 days

FEMA/ILT : Import of Rough, Cut and Polished Diamonds

Pre-deposit order passed by Commissioner (Appeals) under sec. 35F wasn’t appealable before Tribunal

Excise & Customs : Only orders passed by Commissioner (Appeals) under section 35A of Central Excise Act are appealable before Tribunal; pre-deposit order passed by Commissioner (Appeals) under section 35F ibid are not appealable before Tribunal

Leave encashment payments are deductible on basis of ‘actual’ payment under sec. 43B, says ITAT

IT : Depreciation on goodwill which is an asset as per section 32 is allowable as held by Tribunal in series of earlier years

HC upheld reassessment on sec. 69A additions as search initiated by AO had revealed bogus loan trans

IT : Where subsequent to completion of assessment, Assessing Officer, on basis of search carried out in case of another person, came to know that loan transactions of assessee with a finance company were bogus as said company was engaged in providing accommodation entries, it being a fresh information, he was justified in initiating reassessment proceeding in case of assessee

‘Harpic’ and ‘Lizol’ are pesticides covered by Entry 20 of Schedule IV and liable to Andhra Pradesh

VAT/CST : Harpic and Lizol are disinfectants capable of destroying germs and micro-organisms and they fall within category of pesticides covered by entry 20 of Schedule IV and liable to VAT at 4 per cent

Limitation period for assessment restarted once stay order was vacated even if it wasn’t communicate

IT : In terms of provisions of Explanation 1(ii) to section 153, period of limitation for assessment can be stayed only by an order or injunction of any Court and as soon as said order or injunction of Court is vacated, period of limitation shall re-start even though order vacating injunction is not communicated to department

HC rejected winding-up plea as it was pushed as a tactic to pressurize respondent-co. for payment of

CL : Winding up petition being pursued by petitioners as a pressure tactics for extracting disputed sums from respondent was to be rejected

No ST demand on bills raised amongst two departments of one Co. by treating them as separate persons

Service-tax : Two divisions of same company cannot be regarded as two persons for purposes of service tax; therefore, no service tax can be levied on inter-divisional bills raised by two divisions of same company

An AOP can file appeal through any of its HUF members and not through any member of such HUF in indi

IT : Where AOP consisted of a number of HUFs, appeal was to be filed by any of HUF as member of AOP or its Principal Officer, and not by any member of a HUF in his individual capacity

Rule 18 doesn’t contemplate rebate on both inputs and finished goods, it provides for rebate on eith

Excise & Customs : Owing to use of word 'or' in Rule 18 of the Central Excise Rules, 2002, rebate is not available on both inputs as well as finished goods, Rebate is available on either of two

Govt Hasn't Defined Hoarding, Traders Says

When does a 'regular stock' of vegetables turn into 'hoarding'? As the government cracks down on onion and potato 'hoarders', neither the Centre nor the Delhi government has fixed any limit on the quantity of these items that a trader can store without facing charges of hoarding.

The government is yet to define hoarding for any vegetable, including potatoes and onions, said Rajendra Sharma, former chairman of the Agriculture Produce Marketing Committee, Azadpur Mandi.

However, a senior government official said that now that onions and potatoes have been brought under the Essential Commodities Act, the government would fix limits on the size of stocks that vegetable traders can maintain.

Since these limits are yet to be declared, the purpose of the recent raids at more than 500 premises is not very clear. The government official said the raids were conducted to curb hoarding of items such as pulses. However, Rajendra Sharma alleged that the raids were conducted to mislead the public and show that the government was serious about controlling prices.

Sharma added that traders in the capital depend on daily supply of both the items. As these items cannot be stored for more than a week without keeping them in cold storage, hoarding is risky. If hoarding does take place, it is by traders close to areas where potato and onion is produced and by big farmers themselves who wait for an opportune time to sell the produce.

This was also proved in the recent raids when no hoarding of unreasonably large quantities of both items was found, Sharma added.

Traders at the Azadpur Mandi warned that imposition of ESMA on onions and potatoes could be counter productive. It might lead to further price rise, they said. If the limit on the amount that a trader is allowed to store is fixed low, traders would reduce the amount bought daily by them, in order to avoid ESMA will.

Traders argued that if the government wanted to control prices of potato and onion, it must prohibit exports of both items. India produced around 19 million tonnes (MT) of onions in 2013-14 as against 17 MT in 2012-13. Out of the 19 MT production, 1.5 MT were exported in 2013-14.

Source:- timesofindia.indiatimes.com

Investment to acquire controlling stake in a group co. and not to earn any income won’t attract sec.

IT : Where assessee made certain investment with an object of acquiring controlling stake in a group concern and not for earning any income out of investment, Assessing Officer was not justified in invoking provisions of section 14A, read with Rule 8D in order to disallow a part of incidental dividend income earned on said investment

India's Q1 Oilmeal Exports Fall By 31%

Oilmeal exports fell by 31% to 5.92 lakh tonnes during the April-June period of the current fiscal due to sharp decline in soyabean shipments to Iran, South Korea and other countries.

Export of oilmeal, used as animal feed, were 8.56 lakh tonnes in the same period of 2013-14.According to the Solvent Extractors Association (SEA), soyabean meal exports have declined sharply in the last two months due to poor supply of soybean coupled with high price led to total disparity in international market.

In June, soybean meal exports fell to 2,637 tonne, the lowest level, SEA said in a statement.As per SEA data, total soyabean exports fell to 1 lakh tonnes in the first quarter of 2014-15, as against 4.09 lakh tonnes in the year-ago period.

Similarly, castor seed meal shipments fell to 1.61 lakh tonnes from 1.89 lakh tonnes and ricebran extraction declined to 10,111 tonnes from 30,410 tonnes in the review period.

However, the export of rapeseed meal rose to 3.20 lakh tonnes during April-June of this fiscal from 2.26 lakh tonnes in the year-ago period, the data showed.

Oilmeal exports to Iran fell by 61% to 1.02 lakh tonnes in the first quarter of this fiscal, while shipments to South Korea declined marginally by 3.12% to 2.95 lakh tonnes in the same period.

The shipments to other countries such as Thailand, Vietnam, Taiwan, Indonesia and Europe remained remained below 50,000 tonnes, SEA added.

Source:- business-standard.com

India Coal Imports Up By 12Pct In June 2014

According to provisional data from market operator mjunction, indicating weak prices continue to attract buyers even as a local shortage lingers, India's import of coal and coke rose 12% to 18.5 million tonnes in June from a year earlier.

Asia's third-largest economy is the world's No. 3 buyer of coal from countries like Indonesia, Australia and South Africa as power plants that burn the fuel raise generation to try and meet the electricity needs of the country's 1.2 billion people.

Mr Viresh Oberoi, chief executive of mjunction, said that "We also feel that imports would continue to rise in the immediate short term because of prevailing attractive prices and possibility of further softness in international prices, mainly due to the China factor and comparatively low demand from European utilities."

China, the world's largest coal buyer, imported 24.01 million tonnes of coal in May, down 11.4% from April, figures from the General Administration of Customs of China showed.

Prices of thermal coal, used in power generation, have fallen about 40% in the last three years due to abundant supplies in Australia and Indonesia and slowing demand in Europe and China.

According to mjunction, India's imports of thermal coal, used in power generation, rose 11% to 14.77 million tonnes in June, a JV of TATA Steel and Steel Authority of India Limited.

According to mjunction's figures based on monitoring of vessels' positions and data from shipping companies, shipments of steelmaking coking coal rose 5% to 2.93 million.

India's government does not release import data regularly.Mjunction said that apart from thermal and coking coal, the total import figure includes anthracite, coke a processed form of coal and other such varieties. June shipments were the highest in 2014.

Source:- steelguru.com

India Eu Mango Import Ban Hits Dhl

A ban on import of Indian mangoes by the European Union has affected shipment volume of the ‘king of fruits’ sent via DHL Mango Express. In May, shipments from India were suspended after consignments were found infested with fruit flies.

Media reports said that annually the UK alone imports around £6.3 million worth Indian mangoes, roughly 10 per cent of the total UK mango market worth £68 million.

Due to the ban, the company delivered only around 400 shipments to global customers this year as against about 1,200 in the last couple of years, according to Rs. Subramanian, Senior Vice President and Managing Director, DHL Express.

Some companies gifted the 'king of fruit' to customers overseas, he said.DHL started the Mango Express service in 2004 as a hassle-free solution, including selecting the Devgadh Alphonso mangoes, getting phytosanitary certification, packaging, documentation, customs clearance and doorstep delivery.

Mangoes are chosen on the basis of transit and clearance time to ensure the fruits are ‘ripe-in-time’ when delivered. The mango gift packs are connected via the first available flight. DHL Express Easy shipments containing mangoes are sent with either one- or two-dozen mangoes.Charges vary from ?5,000 to ?7,500 a dozen. Mangoes came free to customers as part of Express Easy Mango service, he said.

Source:- freshplaza.com

Reserve Bank Of India Initiates Swap Of Old Gold With New One

The Reserve Bank of India (RBI) has undertaken an excercise to swap old gold in its reserves with a new one with a view to standardise the yellow metal stock.

The central bank has asked nominated banks to give quotes for swap with the objective to optimise the management of its reserves.

The nominated banks, including State Bank of India, would import gold on behalf of RBI and subsequently the metal would be swapped.

Under the scheme, RBI would exchange relatively impure gold, including some dating back pre-independence era from its Nagpur vault and get the equivalent worth of purer yellow metal.

According to sources, the operation would standardise the gold available with RBI to global standards and the gold acquired would be delivered to its overseas custodian, the Bank of England.

The entire exercise would take place through book entry and without any cash outgo, sources said.As of June 27, RBI had a gold reserve of worth $20.79 billion while total forex reserve $315.77 billion.

The central bank is likely to offload its old gold onto the local market through nominated banks, a bullion trader said, adding import of gold would come down to that extent.

At the time, this would help in increasing gold supply without putting pressure on current account deficit (CAD), which has come under stress due to rising crude oil prices due to conflict in Iraq.

In order to check rising CAD, the government had raised import duties and RBI imposed curbs on import of gold and also laid down various pre-conditions for inward shipments of the precious metal.

Gold imports declined 72 per cent to $2.19 billion in May due to restrictions imposed by the government on inbound shipments of the precious metal to narrow the CAD.

India's CAD, which is the excess of foreign exchange outflows over inflows, touched a historic high of 4.8 per cent of GDP in 2012-13, mainly due to rising imports of petroleum products and gold.A high CAD puts pressure on the rupee, which in turn makes imports expensive and fuels inflation.

Source:- businesstoday.intoday.in

Steel Industry Demands Easing Of Duty On Scrap Imports

With Transport Minister Nitin Gadkari proposing to garner Rs 100,000 crore for the development of highways in two years, steel mills are expecting a revival in demand. The scrap import is likely to pick up as the country is not producing enough ore to meet the demand.

The steel sector is demanding easing of duty on scrap import.

Import had fallen last year. Fears of ore prices shooting up due to rising steel demand may not hold true as sources said rising scrap import will help check ore prices. The latter have declined by 28 per cent this year to trade at $96.5 a tonne for delivery in China.

A slowdown in infrastructure investment in two-three years hit the sector hard. The steel demand in India grew 0.6 per cent in 2013-14 despite an average gross domestic product (GDP) growth of five per cent. The demand grows in 1.3 multiple of GDP. By that formula, the demand should have risen by 6.5 per cent.

In a recent statement, however, Gadkari and finance minister Arun Jaitley had hinted at measures to bring the manufacturing sector on the fast track.

Given ore mining continues to face hurdles, scrap is the only substitute, which India largely imports.

"In India, mills' excitement of owning raw material has come down. Rising import of scrap would keep ore prices under check," said T V Narendran, managing director, Tata Steel, in a recent interview with Business Standard.

India imported 4.6 million tonnes of scrap from China, Taiwan and Korea in 2013-14 compared to eight million tonnes the previous year. Despite a ban on ore mining, import of scrap plunged 42.5 per cent due to an overall slowdown in steel demand and, thereby, production in India. China has increased steel production capacity to 800 million tonnes adding 50-100 million tonnes annually for five-six years.

Data compiled by the Joint Plant Committee (JPC) showed India's finished steel consumption grew by 0.6 per cent to 74 million tonnes in 2013-14. India's iron ore production is estimated at 136.4 million tonnes in 2013-14 compared to 135.8 million tonnes in 2012-13.

"The slower-than-expected growth in steel demand can be attributed to lower demand from consumer sectors. But the future growth would depend on government measures in the coming Budget. With lots of free trade agreements signed with countries, scrap is imported at two per cent duty which needs to be increased at least to 10 per cent to bring the steel sector on track," said Neeraj Singhal, managing director, Bhushan Steel, one of the largest secondary steel manufacturers in India.

"Once investment in infrastructure projects starts coming, demand of raw material will also increase proportionately," said Amitabh Mudgal, president (marketing and corporate affairs), Monnet Ispat.Iron ore production in India is likely to grow 14 per cent to 155 million tonnes in 2014-15.

Source:- business-standard.com

Animal Rights Groups Say Production Is Cruel.

India has banned the import of foie gras, a government notice said, after animal rights activists complained that the method used to produce the duck liver delicacy was cruel.

“Import policy of the item ‘foie gras’... is revised from ‘free’ to ‘prohibited’,” the Directorate General of Foreign Trade (DGFT) said in the notice on its website.

An Indian government official could not immediately say on Friday (July 4) how much of the gourmet food the country imported.

But animal rights groups said the delicacy was being increasingly promoted by upscale restaurants in the country.

"Fancy restaurants across India are pushing sales of foie gras on their menus – that’s why we were seeking the ban,” Animal Equality India spokeswoman Amruta Ubale told AFP.

Animal rights campaigners object to foie gras because it involves the forced feeding of birds to engorge their liver, a process activists say is painful for the creatures.

A number of countries such as Denmark, Finland and Germany have banned the production of foie gras, the rights group said.

Source:- thestar.com.my

No input service credit on services of erection, commissioning and construction provided in Staff Co

Cenvat Credit : Erection, commissioning and installation, man-power recruitment and civil construction, used in employees staff colony, canteen and residence of Executive Director are not eligible for input service credit

CCI denies petition against abuse of dominance as issue of family feud was represented as a competit

Competition Law : Where opposite party was not in dominant position in relevant market of provision of school education services and dispute raised by informant was family feud arising from use of words 'Shri Ram' in brand name of respective schools, no competition issue arose and no case was made out against OP

Transactions amongst Indian residents are outside the realm of ‘International Transactions’ under se

IT/ILT : Where both assessee and its AEs with whom it had undertaken transactions were residents in terms of Indian taxation, any transaction between them would not constitute international transaction

VAT leviable on actual consideration of railway sleepers without considering free materials supplied

CST & VAT : Where assessee was engaged in manufacture of mono block prestressed concrete sleepers as per drawings and specifications issued by railways and it was supplied free of cost fastenings, malleable cast iron inserts and HTS wire to be incorporated in concrete sleepers, sale price of sleepers for purpose of levy of tax under provisions of Andhra Pradesh General Sales Tax Act, 1957 was actual consideration that was received/receivable by assessee and it alone could be basis for levy of sa

Payment of privilege fee by alcohol distributor to State Government wasn’t allowable as business exp

IT: Payment of privilege fee made by assessee, a wholsale distributor of alcoholic products, to State Government in terms of section 23A of Excise Act, 1968, was merely an application of income and, thus, it could not be allowed as business expenditure under section 37(1)

Belated appeal due to Advocate’s laxity couldn’t be condoned as I-T officers were supposed to take f

IT : Appeal filed by revenue pending for non-removal of office objection ought to be followed up not only by Advocate for revenue but also by revenue officials in-charge of initiating litigation and therefore merely because revenue's Advocate owned up mistake or lapse, delay would not be condoned automatically as departmental official must also give explanation for not being in touch with Advocate and following matter in question

Price charged for any activity not ancillary to manufacture couldn’t be deemed as price for manufact

Excise & Customs : Any income from activity not incidental/ancillary to manufacture (either in form of interest on deposits, notional or real earned on deposit etc.) would not be price for manufacture

Sum incurred for transfer of customer and HR database from predecessor to successor co. is an allowa

IT : Where in pursuance of an agreement entered into between assessee and TATA IBM, a part of business being handled by erstwhile TATA IBM was handed over to assessee company due to bifurcation of software and hardware business, expenditure incurred by assessee on processing domestic customer database and transfer of human skills in terms of said agreement, was to be allowed as business expenditure

Director won’t pay taxes of Co. if its building destroyed in earthquake and insurance claim is under

IT: Where company in which assessee was a director could not pay tax dues as its hotel building got damaged in earthquake, in view of fact that insurance claim had been raised but same was not passed by insurance company and civil disputes were still pending, it could not be regarded as a case where director i.e. assessee, failed to take measures for protecting property or interest of company and, therfore, impugned order passed against assessee in terms of section 179 deserved to be quashed

Rule 18 doesn’t contemplate rebated on both inputs and finished goods, it provides for rebate on eit

Excise & Customs : Owing to use of word 'or' in Rule 18 of the Central Excise Rules, 2002, rebate is not available on both inputs as well as finished goods, Rebate is available on either of two

No denial of sec. 10(23C) relief to educational institution if it included some general objects in i

IT: Trust carrying on educational activities, cannot be denied exemption under section 10(23C) merely because object clause also contains certain generalised objects

Winding-up plea admitted against respondent-co. as it failed to repay amount covered by dishonoured

CL : Where in terms of agreement, petitioner bank credited account of respondent company immediately by amount of cheques issued by third party after charging an agreed price, in view of fact that said cheques were subsequently dishonoured when being presented for encashment and respondent failed to make good sum covered by those cheques, a case for winding up was made out against respondent-company

HC remanded case to provide an opportunity to assessee to justify its claim of reduced rate of VAT o

CST & VAT: Where assessee claimed that during period 1-4-2005 to 30-3-2007 it had sold several used cars, which were purchased by it during this period, and relying upon Notification No. FD. 300. CSL.05, dated 24-10-2005 issued under section 4(3) of Karnataka Value Added Tax Act, 2003 admitted tax liability on sale of used cars at reduced rate of 4 per cent and lower authorities denied benefit of reduced rate of tax, matter was remanded to Assessing Authority to once again examination

Stevedores At Major Ports Face Fee Regulation

The Union Government is evaluating a policy option to regulate the rates being charged by stevedores and other cargo handling agencies at major ports.

The move follows the recent controversies over the alleged irregularities in appointing stevedores at Kolkata port.The Ministry of Shipping has reportedly sought an explanation from the port authorities on the allegations of high rates being charged by cargo handling agencies.

Stevedoring charges are fees paid for loading and unloading ships and there are firms that specialise in this service.The Ministry has now constituted a committee headed by Paul Antony, Chairman of Indian Ports Association, to study the issue in detail and to suggest whether the private cargo handling agencies at ports can be regulated.

One of the options is said to be to auction stevedoring services on the basis of a revenue sharing arrangement with the port. Like in the case of public private partnership projects in ports, the parties offering the highest revenue share will get the contract to offer cargo handling services.

The committee is required to submit its report in two weeks and, based on its recommendations, the government is expected to come out with a policy on engaging the service of private stevedores at all the major ports, said a government official.

Currently, the government ports appoint stevedores after accepting a licence fee approved by its board of trustees.

There is no limit on the number of stevedores a port can appoint. Stevedores and other cargo handling agencies are free to charge any rates for the service they render.

Following allegations of revenue loss to ports on account of private stevedoring, the UPA Government had appointed a committee headed by the Development Advisor on Ports to Shipping Ministry to study the issues.

That committee had recommended against the appointment of stevedores on the basis of revenue share as, it felt, such an arrangement will increase the transaction cost at ports.

The committee was also said to be against regulation of the rates charged by cargo handling agencies as there is enough competition among them and that forces market to determine the rates.

Though the Tariff Authority for Major Ports (TAMP) regulates port charges at government ports, stevedoring and cargo handling services on board ships were left unregulated.

Stevedores are hired by shippers and historically these services are not regulated by ports.The government is weighing the option of regulating stevedores at a time when there is a demand to abolish even TAMP and de-regulate port charges at the government ports, said an official with a stevedoring firm.

Source:- thehindubusinessline.com

Deductions allowable under one provision can’t be withdrawn unless other overriding provision is ove

IT : Once deduction is allowable under specific section, which is on an altogether different footing, same cannot be withdrawn by any other section unless conditions mentioned under any overriding section have been infringed

India Needs Export-Oriented Fdi

In his address to the joint session of Parliament, President emphasised three distinct but closely related economic policy thrusts — FDI, jobs and manufacturing.

The talk of encouraging investments, including by foreign investors and boosting labour-intensive manufacturing, is not new. Arvind Panagriya and others have attributed India’s poor show in manufacturing to the lack of suitable policy to make use of its abundant unskilled labour force.

Deploying the country’s labour force should not amount to subjecting them to exploitation or curtailing the democratic rights of workers; well-intentioned but archaic labour laws have, however, had a contrary effect.

The problem is one of means and ends. Current labour laws require firms to obtain government permission to sack employees, even if they are unproductive, and this law applies to all manufacturing firms of a decent scale.

Besides, firms find it difficult to exit in the face of financial loss, unprofitability or any other good reason to shut shop. These restrictive clauses discourage firms to invest in Indian manufacturing.

The way out is to reform labour laws and solicit export-oriented FDI (EFDI) in Indian manufacturing. For sufficient jobs to be created for the teeming mass of low-skilled workers, India needs to become a good place to manufacture and export. It has to become a hub for global export of manufactures, and not just domestic consumption.

EFDI has the potential to transport India to the industrial economy league: a stage which it allegedly jumped — wrongly, as we now realise — to become a post-industrial service-based economy.

In India, foreign affiliates accounted for only 5 per cent of total exports in 2001, when in China foreign invested enterprises made up 50 per cent of total exports. In fact, in China, export obligation is mandatory for foreign investors, whereas it is not so in India.

It is important that export obligation for FDI is introduced in India to enhance exports. EFDI also responds to quality physical infrastructure — and this is where we need to do some serious work. In infrastructure, massive state investments with help from private sector partners can rescue us from the present sorry state.

Given that uninterrupted power and seamless transport infrastructure are two crucial demands of the manufacturing sector, it is a good sign that energy and infrastructure form the core of the new cabinet’s economic policy focus.

Once infrastructure is in place, the trade and transactions costs will automatically reduce, giving a further boost to manufacturing and exports.

In terms of labour cost, India is not at a disadvantage relative to China or East Asia. India’s wage levels are more or less at par with these economies. India has among the best stock of raw material in the world, notably in coal and iron ore, and an abundance of workers. Hence, as far as factor endowments are concerned, India has everything that should form the bedrock of a thriving manufacturing sector.

The problems, however, have cropped up in the form of shoddy infrastructure and policymaking. The Government should focus on labour intensive manufacturing for the vast swathe of low to medium skilled populace, and simultaneously undertake a national skills mission, boost R&D spending and infuse greater quality into education at all levels.

The need of the hour is a synchronisation of India’s export and FDI policies. This can be achieved by increasing FDI in export oriented sectors such as gems and jewellery, light engineering goods, textiles and so on.

As of now FDI in India is concentrated in telecom, infrastructure and financial services. Eventually rising exports, on the back of growing EFDI, will help India address its troubling trade deficit, just as China has done.

Source:- thehindubusinessline.com