Honda Cars India Eyes Breakeven And Profits Much Before March 2017

Japanese automobile maker Honda Cars India, which had sacrificed short-term profits as it built scale through new products and ramped up manufacturing capacities, now eyes breakeven and profits much before March 2017, indicated its president and chief executive Hironori Kanayama.

Currently, focusing predominantly on the domestic market and exporting less than 4% from two of its India facilities, the company will also explore the option of making India an export hub based on emerging opportunities in the African market.

Honda Cars, which had halved its losses to Rs 479 crore in 2013-14 with accumulated losses at Rs 1,848 crore, is upbeat on the prospects of the Indian market, especially after the encouraging response to its recent new launches. The automobile manufacturer has more than doubled its revenue by posting 83% growth in volumes at 1.3 lakh units during the fiscal to March 2014. It has now set a larger business goal of achieving sale of 3 lakh units a year by March 2017.

Kanayama told ET in Hyderabad on Thursday, that his company bucked the trend and posted over 80% growth in sales last fiscal when the Indian market actually declined. "We are confident that we can achieve growth much faster than the market.

Source:- economictimes.indiatimes.com

Cap on investment in FDs raised to Rs. 1,50,000 to keep it in sync with revised limits of Sec. 80C

IT : Bank Term Deposit (Amendment) Scheme, 2014 – Amendment in Para 3

Capital gain is taxable on completion of transfer of asset and not on receipt of consideration

IT : When transfer of capital asset is complete, sale consideration has to be taken into consideration for purpose of assessment even though payment of consideration deferred till other assessment year

Refund claims can't be denied without granting personal hearing to assessee

Excise & Customs : Refund claims cannot be rejected/denied or an adverse order in that matter cannot be passed without first giving a personal hearing to assessee; hence, order denying personal hearing on pretext of delay was quashed

India Says May Stop Thermal Coal Imports In 2-3 Yrs

India, the world’s third-largest buyer of overseas coal, may be able to stop imports of power-generating thermal coal in the next three years as state behemoth Coal India steps up production, the country’s power and coal minister said.

Prime Minister Narendra Modi’s government has asked Coal India, the world’s largest miner of the fuel, to more than double its output to 1 billion tonnes by 2019 to feed existing and upcoming power plants.

Modi has promised round-the-clock power to all Indians by 2022 and recently announced the nationalised coal industry would be opened up to allow private firms to compete with Coal India, which accounts for 80 percent of the country’s output.

Declining shipments to India would drag on global coal markets grappling with oversupply as top consumer and importer China tries to shift towards cleaner fuels.

“I’m very confident of achieving these targets and am very confident that India’s current account deficit will not be burdened with the amount of money we lose for imports of coal,” Power and Coal Minister Piyush Goyal told a conference on Wednesday.

“Possibly in the next two or three years we should be able to stop imports of thermal coal.”

Coal generates three-fifths of India’s power, but a shortage of the fuel means millions still go without electricity and power cuts are common.

Around 60 of India’s 103 power plants had enough coal for less than a week’s usage as of Nov. 2 due to lower supplies from Coal India.

Imports of coal have been surging as a result, equating to about 1 percent of India’s economy.

Shipments rose to 168.4 million tonnes last fiscal year, and the government estimated earlier this year that the domestic shortage would range between 185 and 265 million tonnes by 2016/17.

And some analysts were sceptical the country would be able to end imports soon.“India’s reliance on imports is not going away anytime soon,” said Prakash Duvvuri, head of research at consultancy OreTeam.

Source:- hellenicshippingnews.com

Skyrocketing Gold Imports In October Prompts Government And Rbi To Review Restrictions

India's gold imports rocketed in October, accelerating the trend in the third quarter of 2014 and prompting the government to consider restrictions on shipments as they have a bearing on the country's current account.

However, the World Gold Council said trade restrictions will encourage smuggling, which is already rising alarmingly. It estimates that about 200 tonnes of the yellow metal would be smuggled into the country this year, which is a huge amount for a country that bought 825 tonnes last year.

October gold imports are estimated to have jumped to 148 tonnes, rising six-fold from less than 25 tonnes in the same month last year. Imports in the September quarter were up 39%.

Top officials of the finance ministry and the Reserve Bank of India met on Thursday to consider tightening import controls on gold. They agreed to meet again in a few days to take a decision, official sources said. "We have not yet taken any decision and will meet in a day or two to continue the discussion," said a finance ministry official.

The government had clamped down on gold imports last year stipulating that nominated agencies could import gold on the condition that 20% of the consignment would be exported.

The scheme, commonly referred to as the 80:20 scheme, was relaxed in May this year when RBI allowed star and premier export houses to import the commodity. Banks and nominated agencies were also allowed to provide gold for domestic use as loans to jewellers and bullion traders. Last year, the government had increased the gold import duty to 10% to check widening current account deficit.

Net gold imports into India stood at 204 tonnes in the third quarter, up 124% from 91 tonnes in the same period a year ago. But last year's figure was artificially low because of government curbs.

Jewellery demand by India during the quarter stood at 182.9 tonnes, 16% higher than the demand from Greater China, including Hong Kong and Taiwan. Demand for bars and coins by the country during Q3 was higher at 42.2 tonnes compared with Greater China's 37.1 tonnes.

The World Gold Council, the global gold miners' lobby, says smuggling is an "unintended" consequence of the government's curbs on imports.

"The demand for gold in the country is not speculative and the restrictions have had unintended consequences, like encouraging smuggling," said Somasundaram PR, MD (India), World Gold Council.

"We estimate that over 200 tonnes of total gold imports this year would be unofficial." Last year, India imported 825 tonnes. In the year through September, imports amounted to 525 tonnes. Demand usually rises in the fourth quarter of the calendar, which coincides with the festive season.

Referring to the 80:20 scheme, Somasundaram said exports of handcrafted jewellery to countries in the Middle East and South-east Asia, which comprise a sizeable portion of the diaspora, were not "visibly" apparent. "If India exports 20%, you should typically see a lot of activity in places such as Dubai and South-east Asia, which does not seem very apparent."

In rupee terms, the average price of gold at Rs 25,452.4 per 10 gm during the quarter was 6% lower than a year ago.

Source:economictimes.indiatimes.com

Share application money couldn't be treated as loan/deposits to trigger provisions of deemed dividen

IT : Merely because shares were issued belatedly in subsequent year, share application money cannot be treated as loan or deposits or advance for invoking provisions of section 2(22)(e)

Department can't adjust unconfirmed demand against refund payable to assessee

Service Tax : While confirmed demand can be adjusted from amount of refund, there is no provision to adjust unconfirmed demand from amount of refund

Gains on renouncement of right of ESOP within 36 months of offer would give rise to short-term capit

IT : Where assessee acquired rights to purchase shares under ESOP which was a capital asset and he transferred said right within 36 months of offer, period of holding of right in question being less than 36 months, gain arising from transfer of said right was to be assessed as short-term capital gain

HC stayed recovery proceedings as appeal for condonation of delay was pending before Tribunal

Excise & Customs : Where assessee's applications seeking condonation of delay and stay of demand were still pending before appellate authorities viz. Tribunal as well as Commissioner (Appeals), High Court stayed recovery proceedings

A brief assessment order couldn’t be held as erroneous even if there was legal requirement to give d

IT : Writing an assessment order in detail may be a legal requirement but order not fulfilling this requirement cannot be said to be erroneous and prejudicial to interest of revenue

No penalty on claiming deduction of unpaid leave encashment exp. if full disclosure was made in retu

IT : Where assessee-society treated unpaid leave encashment and gratuity as liability and claimed deduction of same and full particulars of income given in return were not found to be incorrect, penalty was to be deleted

Distributors buying and selling lottery tickets on principle-to-principle basis aren't liable to ST

Service Tax : Sale and purchase (including 'on sale or return') of lottery tickets, which are actionable claims does not amount to service, if distributor was not acting as agent of Government and therefore, said activity was not liable to service tax

SEBI’s AO has to follow earlier order of other AOs unless facts/circumstances of impugned case are d

SEBI : Unless facts and circumstances set out in order passed by adjudicating officer are materially different from facts and circumstances of case in hand, it would be just and proper for adjudicating officer to follow earlier order so that there is uniformity in quasi-judicial orders passed by adjudicating officers of SEBI

CBEC reconstitutes committees for Appellate Tribunals in India

EXCISE & CUSTOMS LAWS/ST LAWS : Section 86 of The Finance Act, 1994 - Appeals to Appellate Tribunal - Constitution Of Review Committee of Chief Commissioners of Central Excise & Chief Commissioners of Service Tax - Corrigendum to Office Order No. 4/2014-St, Dated 15-10-2014

IRDA lays down guidelines for underwriters for pricing a risk on policies issued to commercial entit

INSURANCE : Further Guidelines on Pricing of Risk

Non-operating incomes and expenditures to be excluded while computing net operating profit under TNM

IT/ILT : Non-operating incomes and non-operating expenses would be excluded while computing net operating profit under TNMM to determine profit level indicator of comparable company.

No denial of sec. 10(23C) relief to educational institution on inclusion of incidental objects in it

IT : Assessee-society solely engaged in providing education through its nursing institute would be entitled to exemption under section 10(23C)(iiiad) irrespective of fact that its objects also included objects other than education

Sum paid by School for transportation of students to attract sec. 194C as buses were under the contr

IT : Where assessee-school hired buses from a transport contractor for point to point transportation of its students and staff, it was to be regarded as service contract governed by provisions of section 194C

Seller wasn't TCS defaulter if buyer had paid taxed after considering purchases made from seller

IT : Assessee company could not be treated as assessee in default for not collecting TCS from its buyers from whom assessee had received declaration as per section 206C(1A)

HC directs revenue to decide on merits as to whether cash seized during search could be treated as a

IT: Where assessee vide its letters on 6-12-2012 and again on 8-1-2013 requested department to treat cash seized during course of search as advance tax from date of seizure itself, application of assessee should be considered in accordance with provisions of Act

Provision of suspension of legal proceedings under SICA prevails over provisions of debt recovery un

SICA : Section 22 of SICA clearly covers and interdicts an application for recovery made under provisions of RDB Act

Tax paid on or after 1-3-2013 eligible for VCES benefit; circular taking contrary view was held inva

Service Tax : As per section 105(1)(e) of Finance Act, 2013 'tax dues' means service tax : (a) for period between 1.10.2007 to 31.12.2012 and (b) not paid before 1.3.2013; hence, tax paid on or after 1-3-2013 would be eligible for VCES even if paid before 10-5-2013; circular dated 8-8-2013 (point 8) taking contrary view was held invalid

Change in tender doc diluting entry barriers for other players couldn't be said to be anti-competiti

Competition Law : Where OP made changes in conditions of procurement in tender document which diluted entry barriers for other players, action of OP was not anti-competitive

TPO should apply same formula to compute operating profit of assessee and its comparables, rules HC

IT/ILT : Arm's Length Price would have to be computed by treating case of assessee and comparable instances on same footing by according same treatment to export incentives

Govt. hikes excise duty on diesel and petrol

EXCISE & CUSTOMS LAWS : Section 5A of The Central Excise Act, 1944 – Exemption from Duty of Excise - Amendment In Notification No 12/2012-CE, Dated 17/03/2012

No credit on towers/pre-fabricated buildings for mobile operators: CBEC's directive affirming Airtel

EXCISE & CUSTOMS LAWS/CENVAT CREDIT : Rule 2(A), read with Rule 2(K) of The Cenvat Credit Rules, 2004 – Capital Goods - Judgement of Bombay High Court in Case of Bharti Airtel Ltd V. The Commissioner of Central Excise, Pune III In C.E.Appeal No.73 OF 2012 and 119 OF 2012

CBEC directs officials to treat non-ferrous metal products as manufactured goods; excisable wef May

EXCISE & CUSTOMS LAWS : Section 2(D) of The Central Excise Act, 1944 – Excisable Goods – Judgement of Larger Bench on Excisability of Aluminium Dross and Skimming

Indian Cooking Oil Imports Hit Record In 2013/14, May Go Higher

India's cooking oil imports hit a record high in 2013/14 due to a surge in overseas purchases of soy and sunflower oils, a trade body said on Thursday, adding that low global prices could spur even higher imports in the current year.

Record imports by the world's top buyer could provide some support to global prices. Malaysian palm oil futures, the regional benchmark, have fallen nearly 17 percent in 2014 because of high unsold stocks in Southeast Asian countries, including Indonesia, the world's top producer.

India mainly buys palm oil from Indonesia and Malaysia, plus smaller quantities of soyoil from Brazil and Argentina. The South Asian country also buys small amounts of sunflower oil from Ukraine and Russia.

Imports of all cooking oils rose to 11.62 million tonnes in the year that ended in October from 10.38 million a year earlier, the Solvent Extractors' Association (SEA) said on Thursday.

That 12 percent increase was mainly due to a surge in imports of soy and sunflower oil at the expense of palm oil, imports of which fell for the first time in four years.

"India has imported the highest quantity of soybean and sunflower due to attractive prices," said B.V. Mehta, SEA executive director.

"We will have one more year of record imports if the current trend continues," Mehta said. "Low global prices with an increasing population promise record import levels."

Soyoil imports rose 79 percent to around 2 million tonnes in 2013/14, while sunflower oil imports rose by more than half to 1.5 million tonnes.

Imports of palm oil fell to 7.96 million tonnes, down 4 percent from the previous year.

The rise in imports has led to calls by local producers for an increase in import taxes to stem the tide.

India's food minister has favoured raising taxes on cooking oils to help refiners and oilseed growers.

On Thursday, imported palm oil was quoted at $690-$715 a tonne on India's west coast, while soyoil and sunflower was quoted at $830 and $905 a tonne respectively.

Imported palm oil was cheaper by $150-$200 a tonne than a year ago, while soyoil was down $165-$175 and sunflower oil $100 a tonne, traders said.

Source: in.reuters.com

No TDS liability of bank under sec. 194A on interest accrued on FD made by litigant on directions of

IT: Where litigant deposit FD with the bank on directions of Court, he ceased to have any control or proprietary right over those funds. Although FD was drawn in the name of the Registrar General, he was neither the recipient of the amount credited to that account nor the interest accruing thereon. There was no assessee to whom interest income from the FD could be ascribed, thus, bank was not liable to deduct tax under section 194A on interest accrued on such FD.

Provision of suspension of legal proceedings under SICA prevails over provisions of debt recovery un

SICA : Section 22 of SICA clearly covers and interdicts an application for recovery made under provisions of RDB Act

SC: Director's conduct of breaching an undertaking given to CLB to repay depositors was Contempt of

CL : Where pursuant to order of CLB respondent-director of finance company gave an undertaking to repay depositors but wilfully disobeyed order of CLB and breached undertaking given to CLB, respondent committed Contempt of Court subordinate to High Court and Division Bench of High Court erred in law in holding that he was not guilty of wilful disobedience of order of CLB

Sec. 35(2AB) provides deduction of in-house research exp. and not on acquisition of rights arising o

IT : In terms of exclusion clause contained in section 43(4)(ii), expenditure on scientific research should be on research actually carried out by assessee in-house and it should not be merely money spent in acquiring rights in or arising out of scientific research carried out by some other person

Palm Imports By India Tumble First Time In Four Years On Prices

Palm oil imports by India, the world’s biggest buyer, slumped for the first time in four years as record global cooking oil supplies narrowed its discount to soybean and sunflower oils.

Shipments declined 4.1 percent to 7.96 million metric tons in the year ended Oct. 31, the first drop since 2009-2010, the Solvent Extractors’ Association of India said in a statement today. Total vegetable oil imports, including industrial oils, jumped 12 percent to a record 11.8 million tons as purchases of soybean and sunflower oils climbed to the highest ever, it said.

Palm oil, used in everything from noodle to soaps, lost market share in India as its discount to soybean oil narrowed to an average $84 a ton this year from $244 in 2013, data compiled by Bloomberg show. Palm entered a bull market last week after Indonesia and Malaysia, the largest producers, scrapped export taxes to boost demand and cut reserves.

“The gap between soft oils such as soybean and palm oil was very narrow during the year and that eroded the competitiveness of palm,” said Sandeep Bajoria, chief executive officer of Mumbai-based broker Sunvin Group. “With Malaysia and Indonesia pushing their exports through zero duty, India’s purchases may rise by almost 1 million tons this year.”

Soybean oil imports surged 79 percent to 1.95 million tons, while sunflower oil imports jumped 55 percent to 1.51 million tons, the association said.

Source:bloomberg.com

HC directs AO to re-compute capital gains after referring the valuation of capital asset to Valuatio

IT: Where assessee made an objection with regard to adoption of market value under section 50C(1), Assessing Officer should have referred valuation of capital asset to valuation officer under section 50C(2)

SC admits appeal on issue of classification of shipment handling services within port Prior to 08-05

Service Tax : Supreme Court admits appeal against order of Tribunal holding that : (a) shipment handling services are not classifiable as 'port services' for period prior to 8-5-2010 and (b) amendment by Finance Act, 2010 mandating same is prospective from 8-5-2010

No addition merely on basis of statement recorded during survey if assessee retracted from said stat

IT : Where assessee retracted from surrender as same was obtained through intimidation and forged documents and no additional evidence was allowed to produce, addition would not be sustained

Indian Rupee Opens Flat At 61.48 Per Dollar

The Indian rupee opened flat at 61.48 per dollar versus 61.51 Wednesday.

Britain's pound fell to a 14-month low against the dollar on Wednesday as investors pushed back rate-increase expectations to late 2015 after the Bank of England forecast low inflation.

The dollar rose more modestly against other major currencies. Mohan Shenoi of Kotak Mahindra Bank said," Gradual dollar strength is continuing globally.

The USD-INR is expected to trade today in a range of Rs 61.20-61.50/dollar, says Mohan Shenoi of Kotak Mahindra Bank.Better than expected IIP and CPI data is positive for Indian stock markets which should keep rupee well supported. The USD-INR is expected to trade today in a range of Rs 61.20-61.50/dollar."

Source:ibnlive.in.com

Tribunal could rectify its order even if decision of HC was brought to its notice after disposal of

IT : Interest to be levied under section 234D has to be only with effect from 1-6-2003 even if assessment year referred to was prior to 1-6-2003

Sec. 29 of Punjab VAT isn't unconstitutional even if it doesn't allow opportunity to speak

CST & VAT: Provisions of section 29(7) of Punjab VAT Act cannot be termed to be unconstitutional, merely because in said section no opportunity of hearing has been provided to dealer before grant of approval by Commissioner to Assessing Authority to amend assessment order already passed

Export commission paid to foreign agent won't attract TDS if such agent didn't have PE in India

IT : Section 195 could not be invoked in respect of payment by assessee of commission on export sale made to a US company which had no permanent establishment in India

CBDT revises jurisdictions of CITs (LTU)

IT : Section 120(1) and (2) of The Income-Tax Act, 1961 - Income-Tax Authorities - Jurisdiction of – Amendment In Notification No. SO 1615(E), Dated 26-9-2006; Notification No.SO 2022(E), Dated 30-11-2007; Notification No.SO 739(E), Dated 27-3-2008; Notification No. SO 1217(E), Dated 26-5-2008 and Notification No. SO 3249(E), Dated 25-10-2013

Govt. exempts excise duty on bunker fuels used in certain Indian flag vessels up to May 10, 2015

EXCISE & CUSTOMS LAWS : Section 5A of The Central Excise Act, 1944 – Exemption from Duty of Excise - Exemption of Central Excise Duty Leviable on Bunker Fuels, Namely IFO 180 CST and IFO 380 CST Falling Under Chapter 27 of The Central Excise Tariff for Use in Indian Flag Vessels for Carrying Export-Import (Exim) Containers and Empties

Holding period of property begins on payment of full consideration if such condition was given for i

IT : Where as per MOU for acquiring property, property was to be transferred to assessee only when entire consideration was paid

Proprietorship firm is also a 'concern' for the purposes of service tax

Service Tax : Proprietary organisation is also a "concern" and if it is engaged in commercial activity of security services, it is a commercial concern liable to service tax.

Kurni Community is a backward class; trust established for its benefit couldn't be denied sec. 12AA

IT : Assessee-society, created for benifit of kurni community which was classified as a backward class, would come within exception provided under Explanation 2 to section 13 and, thus it could not be denied registration under section 12AA by invoking restriction imposed under section 13(1)(b)

Tribunal couldn't demand further pre-deposit from 'Deloitte' if it had paid full taxes alongwith 25%

IT : Where petitioner had already paid full tax amount and also 25 per cent of penalty, Tribunal ought not to have required petitioner to deposit a further sum for hearing appeal

Presence of price variation clause doesn't make assessment 'provisional'; no extended term for refun

Excise & Customs : Where assessee : (a) was clearing cylinders under price variation clause, (b) had not opted for provisional assessment and (c) was paying differential duty on supplementary invoices, said self-assessment by assessee was not provisional but final assessment; therefore, benefit of extension of time-limit for refund claim was not available

HC sets aside revocation of appellant's passport on non-compliance with summon under FEMA

FEMA : Revocation of passport on basis of complaint filed against appellant for non-compliance with summonses under FEMA was illegal

Processing of unfinished handicrafts goods amounts to manufacture eligible for sec. 10AA relief

IT: Where assessee after purchasing unfinished handicraft goods applied various processes like cutting, polishing, repairing, remaking, etc., and for that purpose, incurred substantial labour expenses, it could not be denied exemption under section 10AA on ground that it was not a manufacturing concern

AO couldn't make reassessment to disallow sec. 80-IA relief if such issue was considered during asse

IT: Where issue of deduction under section 80-IA was discussed and deliberated by Assessing officer during regular scrutiny proceedings and responded to by assessee, merely because issue was not discussed in assessment order would not lead to reopening of assessment

Sale of pickle with a brand name not registered under Trade Mark Act to be taxed at 4% under kerala

CST & VAT : Where pickle sold by assessee under a brand name 'Happy' had not been specifically registered under Trade Marks Act, same was taxable at four per cent falling under Entry No. 49 of Third Schedule to Kerala VAT Act

Investment in REC bonds out of advance money received in an agreement to sell would qualify for sec.

IT : Where assessee had invested part of advance money received on agreement to sell of property in specified bonds prior to actual sale, such investment would qualify for exemption under section 54EC

HC grants stay on recovery proceedings as appeal was pending for adjudication before CIT(A)

IT: Pending appeal against assessment, application for stay cannot be rejected on ground that recovery cannot be stayed

Income earned by NR from supply of hardware alongwith embedded software was business receipt and not

IT/ILT : Where assessee, a French Company, was engaged in business of manufacturing, trading and supplying of equipment and services for GSM cellular radio telephones system, revenue received by assessee on account of supply of software which was embedded in hardware was not in nature of royalty and therefore, it was to be taxed as business profits in accordance with article 7 of India-France DTAA

CLB can order rectification of register of members if it finds that shares are acquired in violation

CL : Mere imposition of penalty by SEBI for acquisition of shares in violation of 'Takeover Code' does not absolve a person from consequence as contemplated by section 111A and thus CLB is empowered to pass on order for rectification of register of members

Payment by exporter to NR consignee agent for office exp. couldn't be held post-sales exp. not perta

IT/ILT: Where assessee exporter paid "USA office expenses" viz., ocean freight, duties, warehousing expenses, road freight and selling and administrative expenses to US consignee agent, concurrent finding by appellate authorities allowing substantial part of expenditure on verification of documents, was to be upheld

SEBI asks depositors/AMCs to put in place a system for generation of single account statement for in

SEBI : Consolidated Account Statement (CAS) for All Securities Assets

Consent fee paid to SEBI without admitting alleged violation by broker couldn’t be held as penalty;

IT: When SEBI accepted consent application (settlement application) without admitting or denying guilt by assessee-stock-broker, resultant consent fee paid to SEBI could not be equated with a "penalty" - The fee was paid for purpose of business, to settle a dispute with SEBI and to be able to conduct business without interruption - Thus, consent fee was allowable as business expenditure under section 37.

MCA extends due date of e-filing of new form for notice of appointment of cost auditor to January 31

COMPANIES ACT, 2013 : Section 148 of The Companies Act, 2013 - Central Government to Specify Audit of Items of Cost in Respect of Certain Companies – Clarification on Matters Relating to Companies (Cost Records and Audit) Rules, 2014

Govt May Raise Steel Import Duty To Curb Shipments From China

The government is considering raising import duties on steel after domestic steel firms complained about surging shipments from China, and a decision may be taken in the next two to three days, Steel and Mines Minister Narendra Singh Tomar said.

Steel imports from China, the world's biggest producer of the alloy, doubled in April-September from 2013, prompting JSW Steel and other domestic steelmakers to ask for higher import tariffs.

"We have received several letters from Indian steel companies seeking help to compete with imports from China," Tomar said on Wednesday. He did not say by how much the duties would be raised. Currently the duties are in the range of 5 per cent to 7.5 per cent.

Struggling with overcapacity at home, China has boosted exports of steel qualifying for a generous tax exemption to countries like India and Japan, triggering accusations that mills there are taking advantage of the rebate to sell surplus steel cheaply.

A tonne of reinforcement steel produced in the domestic industry for use in buildings can cost up to Rs 15,000 ($244) more than that from China, according to AS Firoz, chief economist at a research unit of the steel ministry.

Meanwhile, home-grown companies are struggling with a shortage of iron ore and coking coal that has pushed their costs up.

Source:- businesstoday.intoday.in

Loss arising in derivative transaction to hedge exchange rate and interest rate exposure wasn’t spec

IT : Loss arising from derivative transactions which were entered into by assessee in order to hedge against exchange rate and interest risk exposure could not be treated as speculative loss, but as business loss

Sale of inputs while providing services amounts to 'removal of input as such'; Cenvat credit to be r

Service Tax : If, while providing services there is sale of raw materials/inputs, same will amount to clearing of inputs as such on which CENVAT Credit is required to be reversed at time of clearance as per CENVAT Credit Rules, 2004

Illusionary entry passed by assessee to impress bankers and stakeholder didn't represent real income

IT: Where illusory entry passed by assessee company to impress bankers and to please shareholders and same did not represent any real income/receipt, same would not be taxable

Make In India” To Rely Heavily On Chinese Steel Imports

Steel consumption in India is forecast to grow at record rates in accordance with Indian Government's “Make in India” campaign. Indian steel buyers have caused consumption to grow at its fastest pace in 5 years, and this trend is expected to continue with Indian raw-alloys growing scarce.

The Indian government, while a strong exporter of iron ore, has an insatiable appetite for steel. India’s steel imports from China alone doubled in April-September. The “Make in India” campaign seeks to transform India into an exporting hub and the inflow of steel from China will be used to revitalize its wavering manufacturing capacity.

With crude stainless steel production at 3 million tonnes, India ranks as the third largest producer of stainless steel. Low per-capita steel consumption of 2.1 kg compared to the world average of 5 kgs show that there is potential for long-term growth, but sluggish progress in infrastructure and a growing demand for steel across numerous sectors have proven to be major obstacles.

India’s steel industry is currently only running at 80 percent of capacity. Nevertheless, the World Steel Association (WSA) expects Narendra Modi’s pro-business plans to spur weakening Indian steel demand.

In fact, WSA predicts India will meet a demand of 76.2 million tons of steel by the end of this year. Additionally, there are expectations that the “Make in India” campaign will implement structural reforms designed to increase business confidence, which would result in a further six percent growth by 2015.

However, since a large majority of Indian steel imports stem from Chinese companies, Indian steelmakers such as JSW, Tata Steel, Jindal Steel and Power Ltd are likely to be priced out by their Chinese competitors. While formulating ways to remain competitive, a steel ministry spokesman said he had no immediate comment on whether authorities would consider raising tariffs.

A.S. Firoz, chief economist at a Steel Ministry unit, told Reuters: “The global market is such that the only thing that you can do is take some protective action to save the (Indian) industry. Otherwise you can’t decide what the global prices will be or at what price China will export steel.”

India’s steel operating capacity remains comparatively low. Despite heavy investment into the stainless steel industry (30,000 crore to build capacity of around 3.5 million tonnes), it is likely that Modi’s “Make in India” program will continue to rely on Chinese steel exports.

Source:india-briefing.com

India Gold Imports To Rise Into 2015 – Scotia-Mocatta

Gold imports into India have returned to more normal levels and could climb higher in 2015 amid tepid bullion prices and improved domestic economic conditions, Sunil Kashyap, Bank of Scotia-Mocatta managing director, said at the London Bullion Market Association (LBMA) conference held in Lima.

Last year began normally, demand was stable and imports were coming in at around 50-60 tonnes per month. Then the Indian government introduced a slew of measures, starting with custom duty increases from 2 to 10 percent of the value of gold.

In July 2013, the Reserve Bank of India implemented the controversial so-called 20:80 scheme in an attempt to control the escalating current account deficit and stabilise the rupee. Under the rule, every importer had to ensure that 20 percent of all th gold brought into the country would be made exclusively available for export.

“These measures led to a sharp decline in official imports – they fell to 5 tonnes in September. Once the market got its head around the new policy, imports resumed but only to about 15 tonnes in December,” Kashyap said.

But in 2014 the pace of official imports started to pick up steam. The real turning point came in May when the government increased the number of star trading houses/premier trading houses (PTH) that would be allowed to import gold.

Over the last three months, imports increased to an average of 60-70 tonnes per month. And even when accounting for the 20:80 rule, net imports into India are running at about 40-50 tonnes per month.

“We’re now now seeing regular imports of gold,” Kashyap said. “This has led to much more availability in the market – premiums have fallen from $50-$100 to $5-$10.”

Meanwhile, domestic Indian gold demand next year will hinge on two factors. The first will be price, which has been falling over the past several months.

Gold futures on the Comex division of the New York Mercantile Exchange closed Tuesday at $1,163.00 an ounce, which is about $225 below the February high.

“Most people see the price going lower, so the expectation is that demand will improve,” Kashyap said.

The second driver for demand growth will be the macroeconomic conditions inside India, which have improved significantly since Prime Minister Narendra Modi took office in May.

“The currency has been more stable, trading in a range of about 2 percent this year compared to a range of 10-15 percent last year. Inflation in September was at a five year low of 3 percent, while the stock market reached record highs this week,”

Souce:- www.bulliondesk.com

India May Be Able To Stop Thermal Coal Imports In 3 Years

India, the world's third-largest buyer of overseas coal, may be able to stop imports of power-generating thermal coal in the next three years as state behemoth Coal India steps up production, Power and Coal Minister Piyush Goyal said on Wednesday.

Prime Minister Narendra Modi's government has asked Coal India, the world's largest miner of the fuel, to more than double its output to 1 billion tonnes by 2019 to feed existing and upcoming power plants.

Modi has promised round-the-clock power to all Indians by 2022 and recently announced the nationalised coal industry would be opened up to allow private firms to compete with Coal India, which accounts for 80 percent of the country's output.

Declining shipments to India would drag on global coal markets grappling with oversupply as top consumer and importer China tries to shift towards cleaner fuels.

"I'm very confident of achieving these targets and am very confident that India's current account deficit will not be burdened with the amount of money we lose for imports of coal," Goyal told a conference.

"Possibly in the next two or three years we should be able to stop imports of thermal coal."Coal generates three-fifths of India's power, but a shortage of the fuel means millions still go without electricity and power cuts are common.

Around 60 of India's 103 power plants had enough coal for less than a week's usage as of Nov. 2 due to lower supplies from Coal India.

Imports of coal have been surging as a result, equating to about 1 percent of India's economy.Shipments rose to 168.4 million tonnes last fiscal year, and the government estimated earlier this year that the domestic shortage would range between 185 and 265 million tonnes by 2016/17.

And some analysts were sceptical the country would be able to end imports soon."India's reliance on imports is not going away anytime soon," said Prakash Duvvuri, head of research at consultancy OreTeam."Obviously coal demand will continue to mean imports are needed in.

Source:- firstbiz.firstpost.com

Indian Rupee Opens Flat At 61.52 Per Dollar

The Indian rupee opened flat on Wednesday at 61.52 per dollar versus 61.55 on Tuesday.The yen hovers around seven-year lows against the dollar early on reports that Prime Minister Shinzo Abe will call a general election in December.

Tata Capital NS Venkatesh of IDBI Bank said, "Both rupee & bond markets will closely watch the macro economic data release lined up later today. Rupee markets will also take cues from equity markets.

The yen hovers around seven-year lows against the dollar early on reports that Prime Minister Shinzo Abe will call a general election in December. "Softening of inflation will be positive for currency and the rupee is expected to marginally strengthen against the dollar on the back of trade flows as well as capital flows. We expect a narrow USD-INR range of Rs 61.45-61.60/dollar".

Source:ibnlive.in.com

Authority can't insist for any specific form of security for release of goods; bank guarantee is suf

CST & VAT : Adjudicating Authority had no jurisdiction to choose form of security for release of goods detained under section 47(2) of Kerala VAT Act and where assessee had furnished bank guarantee for release of goods detained, Adjudicating Authority could not have required assessee for production of cash security

Estimated addition upheld due to discrepancies found in books of assessee and non-maintenance of sto

IT: Where there was fall in GP rate, stock register were not maintained and other discrepancies were not properly explained, addition on account of estimation of GP rate was justified

No reassessment to curtail sec. 80-IC relief on basis of past order of AO if such claim was verified

IT : Where Assessing Officer on basis of earlier years order sought to re-open assessment though he had duly verified claim for deduction under section 80-IC in original assessment, reassessment was not valid

SC admits appeal on issue of chargeability of ST on coaching in mathematics based on ancient Japanes

Service Tax : Supreme Court admits appeal against Tribunal order holding that imparting coaching in mathematics based on ancient Japanese methods of mathematical calculation with help 'Abacus' amounts to 'recreational training institute' and is exempt from service tax under Notification No. 24/2004-S.T., dated 10-9-2004

Income arising to EOU on sale of scrap generated during manufacture was eligible for sec. 10B relief

IT: When assessee imports spare parts and exports them in same condition without involving those parts is any manufacturing activity, in such a case provisions of section 10B are not attracted

Sec. 54F relief denied as assessee had acquired another residential house within 1 year of transfer

IT: While computing capital gains arising on transfer of a capital asset acquired by assessee under a gift or will, indexed cost of acquisition has to be computed with reference to year in which previous owner first held asset and not year in which assessee became owner of asset

Demand under omitted provisions couldn't be held as invalid when it was validated by new provisions

Excise & Customs : Where demands made under omitted provisions of section 3A of Central Excise Act, 1944 and Rule 96ZP of Central Excise Rules, 1944 have been validated by validation provisions, same cannot be held invalid

Place of presentation of cheque wouldn't by itself confer jurisdiction upon local Court to take cogn

Negotiable Instruments Act: Where cheque was drawn at a bank in Karnataka, presentation of cheque to a bank in Kerala would not by itself confer jurisdiction upon Kerala Court

Lessor could claim depreciation on machinery leased out in course of its business

IT: Where machinery owned by assessee was leased out in course of carrying out of business, depreciation was to be allowed

No reassessment by AO to disallow sum paid to NR after holding that payment wasn't liable to TDS at

IT : Where Assessing Officer having considered material on record, concluded that assessee was not required to deduct tax at source while making payment to non-resident, he could not subsequently reopen assessment merely on basis of change of opinion that payment in question was to be made after deducting tax at source

Contractor not liable to pay compounded tax on labour work if he opted to pay compounded tax on comp

CST & VAT : Where a works contractor did only labour contract for one person and composite work for another person and had choosen to pay tax at compounded rate under section 8(a)(i) of Kerala VAT Act, there was no obligation to pay compounded tax for labour work, but in respect of composite work compounded tax had to be paid

Creche constructed in factory compound to increase efficiency of women employees was depreciable at

IT : Creche building constructed within compound of factory for purpose of increasing efficiency and productivity of women employees is part of factory building eligible for 10 per cent depreciation

No sec. 41(1) addition as assessee had acknowledged trading liability and settled it in subsequent y

IT : Where assessee had acknowledged liability for purchases and such liability in subsequent years was either settled by returning goods or by making payment by account payee cheques, liability had not ceased so as to make addition under section 41(1)

Principal CITs/CITs get power to grant Sec. 10(23C) approval; CITs get more time for deciding on Sec

IT : Income-Tax (Eleventh Amendment) Rules, 2014 – Amendment In Rules 2C, 2CA, 11AA, Form 10A, Form 56 and Form 56D

AO with equivalent designation can invoke Explanation 3 to sec. 43(1) without seeking previous appro

IT : Where Tribunal set aside order of Assessing Officer holding that he had not obtained approval of Deputy Commissioner before applying Explanation 3 to section 43(1), in view of fact that at relevant time previous approval of 'Inspecting Assistant Commissioner' was required to be obtained and since Assessing Officer himself was IAC, impugned order passed by Tribunal was to be set aside

SC admits appeal on issue of deduction of wharfage charges in computing value of Custom House Agent

Service Tax : Supreme Court admitted appeal against Tribunal order holding that wharfage charges are eligible for deduction from gross receipts, for determining value of Customs House Agent's Services

Amalgamated-Co. could file oppression plea even when its name wasn't appearing in register of transf

CL: Where shares were transferred to transferee company by virtue of amalgamation, it was entitled to institute oppression and mismanagement petition even though its name was not appearing in register of members of respondent-company

Proviso to sec. 113 levying surcharge in cases of block assessment is prospective; SC dismisses SLP

IT : Insertion of proviso to section 113 could not be said to be clarificatory in nature as prior to its insertion there was ambiguity with regard levy of surcharge in case of block assessment. Thus, proviso to section 113 levying surcharge in cases of block assessment was effective prospectively

I-T offices to remain open on Nov 15, 2014 for conducting admin work to implement restructuring of j

IT : Section 119 of The Income-Tax Act, 1961 - Income-Tax Authorities - Instructions to Subordinate Authorities – Income Tax Offices Throughout India to Remain Open on 15-11-2014 During Normal Office Hours for Conducting Administrative Work Related to Implementation of Restructuring of Jurisdiction Across the Country

CBDT reconstitutes DRP at Chennai and Ahmedabad

IT/ILT : Section 144C of The Income-Tax Act, 1961 - Dispute Resolution Panel (DRP) - Reference to - Reconstitution of DRP at Chennai

As China Demand Slows, Indian Iron Ore Imports Surge To Record

India's iron ore imports jumped to a record 5 million tonne in April-October, industry data showed, as a deepening shortage at home forced steelmakers to turn overseas for the raw material.

Gathering momentum in Indian imports should absorb some of the global surplus of iron ore and help stabilise prices that have been hammered by slowing demand from top buyer China.

But analysts warned that shipments to India, a country that holds vast reserves of iron ore and which was once the world's No. 3 supplier, would not wholly make up for the drop in Chinese appetite or fuel a sharp rebound in global prices from their lowest since 2009.

India imported 5.06 million tonne of iron ore in the first seven months of the fiscal year ending in October, according to data emailed to Reuters by industry consultancy SteelMint. The firm tracked shipments from 17 major ports.

Data collected separately by consultancy OreTeam puts April-October imports at 4.9 million tonne.Official government data only covers April-August, with imports totalling 2 million tonne.

Mining curbs due to court action against illegal mining have constricted iron ore supply in India.That, along with falling global prices, has stoked rising imports, which topped 2 million tonne in October alone, said SteelMint, predicting the total for the full year to March could reach up to 11 million tonne.

"We are expecting steel demand to pick up around January and that could trigger another round of strong imports of iron ore," said Prakash Duvvuri, head of research at OreTeam.

Nearly half the April-October imports were from South Africa, with just over 1 million tonne from Australia and Brazil, SteelMint data showed. JSW Steel Ltd, India's No. 3 maker of the alloy, led the list of importers with 3.7 million tonne purchased.

JSW said in September it was planning to import 10 million tonne or more this fiscal year if the domestic shortage continued and prices stayed low.

Other importers included Tata Steel, with more looking to follow."We may be forced to import anytime now. Depending on prices and all, we will buy 50,000-60,000 tonne. Based on how well we manage logistics and other things, we may then continue and increase," said R K Goyal, managing director of Kalyani Steels Ltd. The company has not imported iron ore before.

Global iron ore prices have fallen below $76 a tonne, losing 44% of their value this year amid a deep supply glut.Citigroup on Tuesday slashed its 2015 price forecast to $65 from $80

Source:- business-standard.com

Government May Reserve 20% Imported Gold For Small Players

The government is considering a proposal to reserve 20% of gold that importing bodies sell in the market for small jewellers, according to an official, a move seen creating a level playing field in the industry. The move follows a petition filed in the Delhi High Court by the Delhi Bullion and Jewellers Welfare Association (DBJW).

The petition argues that gold import rules framed by the UPA government favour large trading organisations, and that they are forced to pay huge premium to procure the yellow metal.

The court had directed the government to look into the matter. "Currently, banks give preference to old and loyal customers while state agencies follow some other criteria, so we are trying to evolve some common principle or guidelines that will provide a fair play to smaller players", said an official of the Directorate General of Foreign Trade (DGFT). "We have had stakeholder consultations and have invited comments, based on which we will evolve guidelines though consensus."

In its petition, the DBJWA said banks and nominated agencies were given access to the local market as long as they made a fifth of the gold they imported available for export.

A large section of gold traders allege that most of this gold is picked up by the big jewellers, leaving the small players with no option but to pay huge premium to procure the metal.

Another official said that under the formula being considered, banks and star trading houses that have the Reserve Bank's mandate to import gold will have to earmark 20% of the gold imported for domestic usage by the small and marginal players.

At present, gold is made available to traders in accordance with the 80:20 rule, which says that importers must re-export a fifth of the gold bullion shipment before taking delivery of the next.

To check the widening current account deficit, the UPA government had raised the import duty on gold to 10% from 2% in stages, and also said 20% of every consignment of imported gold had to be exported, with only select banks allowed to import the metal.

The import restrictions, however, led to the CAD falling to 1.7% of GDP in 2013-14, against 4.7% in the previous fiscal.

Talking to ET, DBJWA general secretary Prem Prakash Sharma said, "The court had directed the ministries of finance and commerce, the DGFT and others to file a reply with issues that prompted them to allow a handful of star trading houses to import gold into India. Following this directive, there had been a series of meetings with the finance ministry and the Reserve Bank of India. In the last meeting with the DGFT, a formula has been worked out to tide over the present situation."

Pankaj Parekh, vice-chairman of Gem & Jewellery Export Promotion Council, said, "If a country's gold consumption is 950 tonnes, and only 400 tonnes are being imported, there is bound to be a premium. So those who can afford to give a premium get it, and small and marginal players feel left out.

The DGFT has found out a way and it will soon be incorporated." The modalities of the new formula are being worked out by a committee headed by Parekh. The committee includes members of banks and star trading houses.

Source:- economictimes.indiatimes.com

Sum paid by an electricity Co. for transmission of electricity won’t attract sec. 194-I TDS

IT : Section 194-I could not be invoked in respect of payments made only for transmission of electricity rather than for the use of transmission lines per se.

CCI imposed penalty on jute manufactures for forming cartel and fixing sale price by issuing daily p

Competition law : Commission imposed penalty upon opposite parties i.e., jute manufacturers for their anti competitive practices of forming a cartel and fixing sale price of jute packaging material by issuing daily price bulletin

Certificate of incorporation/PAN didn't prove identity of shareholder-Cos if evidence showed them as

IT : Certificate of incorporation, PAN etc., are not sufficient for purpose of identification of shareholder when there is material to show that shareholder was a paper company and not a genuine investor

Consignment agent not engaged in clearing and forwarding work not liable to service tax prior to 10-

Service Tax : A consignment agent who has not been entrusted work of clearing and forwarding, cannot be classified under Clearing and Forwarding Agent and would not be liable to service tax prior to 10-9-2004, from when he would be liable to service tax as commission agent

Penalty upheld as assessee didn’t show reasonable cause for receiving cash deposit in contravention

IT: Where reasonable cause for receiving loan or deposit in cash was not established by assessee, levy of penalty under section 271D was to be upheld

RBI curtails limit of financial assets in factoring business and income of factoring business for NB

NBFCs : Review of The Non-Banking Financial Company – Factors (Reserve Bank) Directions, 2012

RBI lays stricter norms for NBFCs: raises limit of Net Owned Fund and capital adequacy requirement

NBFCs : Revised Regulatory Framework For NBFC

Definition of 'job work' in exemption notification couldn't be used if its definition wasn't given i

Excise & Customs : In absence of any definition of 'job-worker' in erstwhile Modvat Rules (Central Excise Rules, 1944), definition of job-worker under a particular exemption notification cannot be used for purposes of Modvat rules

AO couldn't make addition on estimated basis without rejecting books of account

IT : Without rejecting books of account addition on estimate basis was not justified

Recovery proceedings kept in abeyance as Joint Commissioner didn't proceed with revision petition of

CST & VAT: Where against order of assessment, assessee filed revision petition alongwith stay petition and Revisional Authority did not proceed with matter and in mean time Assessing Authority directed assessee to pay arrears of tax due, recovery proceeding were kept in abeyance and Revisional Authority was directed to dispose of stay petition on merits