Wednesday, 7 January 2015

Vegetable Prices Have Gone Down

Faced with criticism against rising vegetable prices in the city, Delhi government on Tuesday said that there had been a significant decline in prices of several vegetables including onion, potato, tomato and cabbage in December 2014, as compared to the prices in December 2013.


On Tuesday, TOI had reported that there was a sudden rise in price of vegetables, especially tomatoes, since production had been affected due to the weather and that export to Pakistan were continuing despite the shortage.


"As per price information collected from various markets of Delhi, there has been 31% decline in the price of cabbage, 20% decline in price of tomato and 10% decline in the price of onion in December 2014 as compared to the average retail price in December 2013.


Price of tomato has shown a declining trend. And prices of many vegetables also registered a declining trend in the last three months. As compared to the average retail price in October 2014, there is a decline of 40% in the price of potato, 14% in the price of cabbage and 6% in the price of onion was registered in December 2014, said SS Yadav, commissioner, food supply and consumer affairs.


Yadav said a close watch was being maintained on the arrival of vegetables and their wholesale and retail prices.


Source:timesofindia.indiatimes.com





Payment by foreign HO to foreign service provider for its business couldn't be taxed in hands of Ind

Service Tax : Payment made by foreign Head Office to foreign Service providers for services availed by Head Office for benefit of Head Office's business, cannot be taxed in hands of Indian Branch under reverse charge


HC denied stay as assessee failed to deposit the requisite amount of duty

CST & VAT : Kerala VAT - Where assessee had neither satisfied condition to deposit 30 per cent of disputed amount nor had produced proof thereof as required under rule 72A, benefit of stay would not be available to it


Club subscription paid by Co. on behalf of its managing director was personal exp; disallowable unde

IT : Expenditure incurred by assessee for creating manufacturing facility of elevator in India being in nature of capital expenditure, assessee's claim for deduction in respect of same under section 37 (1) could not be allowed


India's Coal Imports Jump 19 Pct In 2014 - Mjunction

Coal shipments to India, the world's third-largest importer, rose 19 percent to 210.6 million tonnes last year driven by an even bigger jump in purchases of the variety used in power generation, online trader mjunction said.


Imports have risen over the past four years as India adds capacity to supply round-the-clock power to its 1.2 billion people, a third of whom live without electricity. Lower-than-expected output from state giant Coal India (COAL.NS) is also boosting imports.


At 163 million tonnes, imports of thermal coal used by power companies jumped 22 percent in 2014. Coking coal, a steelmaking raw material, saw a 4 percent rise to 37 million tonnes, according to the provisional data from mjunction. Anthracite coal, met coke and pet coke made up the rest of the shipments.


Imports fell slightly in December to 15.30 million tonnes as good weather helped Coal India ramp up supply.


Coal India may not maintain the pace in January: workers at the world's top coal producer began a five-day strike on Tuesday in protest at Prime Minister Narendra Modi's move to allow private companies to mine and sell the fuel for the first time in 42 years.


The government does not regularly release coal import figures. Mjunction's data is based on port figures, monitoring of vessel positions and data from shipping firms.


Source:reuters.com





ITAT had to determine applicability of sec. 68 when AO had made additions under sec. 68

IT : Where Assessing Officer had invoked section 68 to make addition, Tribunal had to determine whether said section could be invoked


Issue as to determine an activity as 'service' or its classification would lie before Apex Court and

Service Tax : Issue whether a particular activity is 'service' or not; or whether, particular activity is classifiable under a particular heading of service or not, is question relating to 'rate of service tax or value of service' and cannot be raised before High Court; appeal would directly lie from order of Tribunal to Supreme Court


Issue whether service amounts to export is appealable to SC; Delhi HC applies new provision inserted

Service Tax : Issue 'whether assessee was engaged in export of services and whether service tax was payable' relates to levy of service tax and therefore, in view of section 35L(2) of Central Excise Act, 1944, same is appealable before Supreme Court, not High Court; issue of export rebate/refund is consequential


Kolkata Port Trust, West Bengal Govt To Sign Jv For New Port

Kolkata Port Trust, West Bengal govt to sign JV for new port Union government-owned Kolkata Port Trust will sign an agreement with the West Bengal government on Wednesday to set up a new port at Sagar Island in South 24 Parganas district through a joint venture (JV) between the two.


The Sagar Island port is estimated to cost Rs.11,900 crore and will be the first port to be built by the Union government in 14 years. The last major port— those owned by the Union government—to be constructed was the Kamarajar port at Ennore in Tamil Nadu in 2001 when the National Democratic Alliance government led by Atal Bihari Vajpayee was in power.


The new port will be developed through a special purpose vehicle (SPV) set up under the Companies Act, with 74% equity participation by the Kolkata Port Trust and 26% by the West Bengal government, a spokesperson for the shipping ministry said.


“Kolkata Port and West Bengal government will sign a joint venture agreement to set up the SPV, which will award concessions to private firms for setting up cargo handling facilities at the new port,” the spokesperson added.


This will enable Sagar Island to operate as a landlord port, a port development model where the land and waterfront infrastructure is owned by the government-controlled firm, which are given on lease to private firms who put up and maintain their own superstructure and install their own equipment to handle cargo.


Currently, 12 of the 13 major ports function as trusts under a law framed about four decades ago called the Major Port Trusts Act, 1963. Ennore port is the only exception. It was formed as a company under the Companies Act, 1956, when it was opened in 2001. The 13 ports together account for some 57% of India’s external trade shipped by sea.


Ports functioning as companies are free to set their own rates. In comparison, ports operating as trusts are subjected to rate regulation by the Tariff Authority for Major Ports.


The first phase of the new port, expected to start operations by 2019, will have the capacity to handle 54 million tonnes (mt) of cargo from nine berths. In the second phase, the capacity will be increased to 127.8 mt by adding 11 more berths to handle coal, iron ore, iron and steel products, fertilizer, container, petroleum, oil and lubricants.


India plans to almost triple cargo handling capacity at its ports to 3.13 billion tonnes by 2020 from the existing 1.16 billion tonnes to meet demand, according to a 10-year plan unveiled by the shipping ministry in 2011.


The Union government has decided to approach the Japan International Cooperation Agency for a soft loan of Rs.4,715 crore for the Sagar Island port—Rs.1,223 crore for dredging the approach channel and Rs.3,492 crore for building a 27km long rail road connectivity, including a bridge over the river Muriganga for evacuation of cargo, minister of state for shipping P. Radhakrishnan told Parliament on 11 December.


When operational, the new port with deep draft (depth) is expected to diminish the role of Kolkata port, India’s only riverine port, which has been hit by depth restrictions and higher logistics costs for exporters and importers.


As a result, Kolkata has been losing cargo to other neighbouring ports. From a peak of 57.329 mt in 2007-08, the port’s cargo volumes slumped to 41.386 mt in the year to March 2014.


Experts say there isn’t much cargo left for Kolkata to lose. “Whatever had to be lost, had been lost over the past five years. There is nothing more to lose,” said an executive at Steel Authority of India Ltd (SAIL)— Kolkata port’s biggest customer by volume.


SAIL, which ships about 5 mt of coking coal a year through the port’s Haldia dock, said it could consider shipping some of its coking coal imports through the Sagar Island port to save on logistics costs as bigger ships can be accommodated there, unlike in Haldia. The shipping ministry is also expected to seek viability gap funding from the Union government for the new port.


Viability gap funding refers to a one-time grant given by the central/state government for supporting public-private-partnership projects in infrastructure that are economically justified but fall short of financial viability. A project can secure as much as 20% of its capital costs in viability gap grants from the central government to boost its viability.


Source:livemint.com





CBDT asks officials to seek exchange of info. by 15-2-2015 in assessment cases getting time-barred o

IT/ILT : Section 143 of the Income-Tax Act, 1961 - Assessment - General - Request for Exchange of Information from Field Offices of Time Barring Assessment Cases


Slow Recovery Seen For Indian Steel Demand

Steel demand growth in India is unlikely to show rapid improvement in the short term, with any growth being gradual, India-focused ratings agency Icra said.


Steel consumption grew at 0.5pc on-year in the April-October period, Icra said, in line with the growth of 0.6pc in the 2013-14 fiscal year that ended 31 March.


Demand recovery in the capital goods and construction sector remains fragile, although automobile production is likely to make a smart recovery during 2014-15. Growth in steel output has also slowed to 2.2pc on-year in April-October, compared with a 4pc output growth in 2013-14, the agency said. India is likely to end 2014-15 as a net importer of steel because of the inflow of cheaper Chinese steel products.


But the top seven Indian steelmakers continue to have a healthy operating profit margin of 21.04pc, Icra said, largely because of cheaper prices of imported coking coal. India imports most of its coking coal needs, with the agency forecasting the average imported coking coal cost to Indian steelmakers to fall 15pc on-year in 2014-15.


But iron ore prices in India continue to remain firm, despite a nearly 50pc fall in global prices in 2014, as mining disruptions and restrictions in almost every major producing state has limited supply availability. While larger steel mills are meeting some of the shortfall through imports, smaller companies are unable to afford imports and are operating at lower capacities, Icra said.


Lower coking coal prices and a gradual demand recovery will offset firm iron ore prices and help Indian steelmakers stay profitable in 2014-15, it added.


Source:argusmedia.com





CBDT to crack whip on officials disclosing taxpayer's info to media; asks them to respect taxpayer's

IT : Section 138 of the Income-Tax Act, 1961 - Disclosure of Information Respecting Assessees to Specified Officer, Authority or Body Performing Functions under Any Other Law - Disclosure of Information about Taxpayers to Media


CBDT plans to celebrate 'Good Governance day' on every Wednesday by holding it as 'public meeting da

IT : Good Governance Day - Instructions on Observance of Wednesdays as a Public Hearing Day for Hearing Public Grievances


No denial of sec. 80-IB relief in current yr if activity taken by assessee was held as manufacturing

IT: Once it was confirmed for earlier years that activity undertaken by assessee qualified to be a manufacturing activity eligible for deduction under section 80-IB, same was to be allowed in current year als


Brought forward depreciation of eligible unit to be set off only against its income before allowing

IT : Unabsorbed depreciation pertaining to eligible unit carried forward from earlier years has to be set off first against income from eligible unit for computing deduction under section 80-IA


Revisional order of CIT set aside as AO had rightly granted sec. 80-IA relief after considering book

IT: Where assessing authority had already considered all details mentioned in computation statement which was taken from books of account maintained by assessee, revision was not justified


Issue of unjust enrichment can be decided on basis of docs and judicial precedents, says Madras High

Excise & Customs : Question 'whether incidence of duty has been passed onto buyer' has to be decided in light of documents submitted and precedent decision


Communication by Commissioner to deny refund was an order; appealable before Tribunal

Excise & Customs : Communication of Commissioner denying refund is nothing but an order passed by authorities under Act; hence, same is appealable before Tribunal


No denial of credit to buyer of goods even when supplier wasn't required to pay excise duty on such

Excise & Customs : Once recipient has received goods on payment of duty, CENVAT credit cannot be denied on ground that supplier of inputs was not required to pay excise duty on goods supplied without modifying assessment at end of supplier


Tuesday, 6 January 2015

CLB quashed defective oppression plea filed by ex-employee to take revenge of his removal from Co.

CL: Where petitioner was sacked as an employee of respondent-company and as a result of personal rivalry petitioner filed oppression and mismanagement petition, which suffered from many defects, it was to be dismissed


AO could disturb net profit for MAT purposes if assessee failed to prove adherence to accounting pri

IT : Where in course of reassessment, Assessing Officer finds that certain income other than item of escaped income for assessment of which, assessment originally completed was reopened, also have escaped from original assessment, he is bound to assess such item or items of income, as well


Issue of unjust enrichment can be decided on basis of does and judicial precedents, says Madras High

Excise & Customs : Question 'whether incidence of duty has been passed onto buyer' has to be decided in light of documents submitted and precedent decision


Full risk bearer service providers couldn't be chosen as comparable for restrictive ITES service pro

IT/ILT : Where assessee was only a restrictive service provider of IT enabled design engineering services to its parent company, TPO could not make addition to its ALP by selecting comparables who were full fledged risk bearers owning intellectual property rights both related to technology and brand name


No reassessment alleging TDS liability on sum paid to AE if AO had analyzed such issue at assessment

IT/ILT : Assessment order passed by Assessing Officer in case of assessee engaged in general insurance business after making detailed inquiries could not be revised on ground that assessee had made payment to its AE for providing reinsurance business without deducting tax at source


Interest subsidy received under 'technology upgradation scheme' is capital receipt

IT: Interest subsidy received under Technology Upgradation Fund Scheme is capital receipt


No sec. 69 addition as assessee had proved that source of deposit was proceed of land by filing copy

IT : Where assessee explained source of bank deposit as sale proceed of agricultural land and produced copies of sale/purchase agreements, no addition under section 69 without disproving said evidences


Non-compliance with summons issued under sec. 142 due to failure of CA won't lead to levy penalty on

IT : Where assessee handed over summons to Chartered Accountant who could not appear due to his personal illness, assessee could not be imposed penalty under section 271(1)(b)


Govt. permits 100% FDI via automatic in manufacturing of medical devices

FDI/FEMA/ILT : Consolidated FDI Policy Circular of 2014 – Review of the Policy on FDI in Pharmaceutical Sector – Carve out for Medical Devices


Even prior to 2013 India-UK protocol benefit of DTAA was allowed to fiscally transparent firm establ

IT/ILT: Where non-resident partnership was a firm under section 2(23)(i) and therefore it was a 'person' under section 2(31)(iv) and attracted operation of paragraph 2 of article 3 of Indo-UK treaty, revenue's view that said partnership was not covered by said convention failed


CCI rightly rejected application for appointment of law expert in absence of LLB degree and work exp

Competition Law: Where petitioner had failed to attach law degree and work experience alongwith application for appointment as a law expert, CCI was justified in rejecting said application


No seizure of goods lacking declaration if it was proved that goods weren't meant for sale where the

CST & VAT: U.P. VAT - Where assessee was transporting raw rubber from Tripura to Faridabad through State of U.P. and Assessing Authority having found that declaration form as required under section 52 was not available with driver seized raw rubber, since assessee had successfully rebutted presumption under section 52, there was no occasion to seize goods


Mandatory pre-deposit is payable even in case of duty drawback; CBEC clarifies

EXCISE & CUSTOMS LAWS : Clarification on mandatory pre-deposit of duty or penalty for filing appeal


[DGFT Public Notice] : Online IEC applications: Postponement of the date of operationalisation of Public Notice No. 76 dated the 27th of November, 2014

To be published in the Gazette of India Extraordinary Part-I, Section (I)


Government of India


Ministry of Commerce & Industry


Department of Commerce


Udyog Bhawan, New Delhi


Public Notice 80 / (RE-2013)/2009-2014


Dated the 06 January, 2015


Subject: Online IEC applications: Postponement of the date of operationalisation of Public Notice No. 76 dated the 27th of November, 2014


In exercise of powers conferred under paragraph 2.4 of the Foreign Trade Policy (2009-2014), the Director General of Foreign Trade hereby postpones the date of operationalisation of the Public Notice No. 76 (RE-2013) /2009-2014 dated 27th of November, 2014 vide which a mendments in ANF 2A of Handbook of Procedure Vol. I (Appendices and Aayat Niryat Forms), 2009-2014 were made.


2. Vide the Public Notice No. 76 (RE-2013), IEC applications were mandated to be submitted online with effect from 01.01.2015. However, due to some unforeseen technical problems it has not been possible to operationalise the new online IEC system. Therefore, till such time the new online system is operationalised and made effective, from a new date to be notified subsequently, applicants seeking to obtain IEC may fill the Application Form and submit requisite documents and fees (Rs.250/) to the concerned jurisdictional RAs as per the procedure, as existing prior to 01/01/2015.


3. Effect of this Public Notice: Operationalization of Public Notice No. 76 (RE-2013)/2009-2014 dated the 27th of November, 2014, vide which a mendments in ANF 2A of Handbook of Procedure Vol. I (Appendices and Aayat Niryat Forms), 2009-2014 were notified, has been postponed and the new date for the same will be notified at a later date. Till such time the new system is operationalised, applicants seeking IEC may submit their applications in the earlier format as per the earlier procedure (existing prior to 01/01/2015), along with requisite documents and fees to the concerned jurisdictional RA.


(Pravir Kumar)


Director General of Foreign Trade


E.Mail:dgft@nic.in


[F.No.01/93/180/20/AM-13/ PC-2(B)]





CBEC asks officials to use 'designation based NIC email-IDs' and to appoint nodal officers for repor

EXCISE & CUSTOMS LAWS : Building of a comprehensive MIS in CBEC


CBDT issues draft standard operating procedures for administering TDS

IT/ILT : Standard operating procedures (SOP) for administering TDS incorporating the re-engineered processes developed by the CPC-TDS


Monetary limits for filing appeal would apply to cases of recurring nature and to composite orders:

EXCISE & CUSTOMS LAWS : Section 35B, read with sections 35G & 35L of the central excise act, 1944 – appellate tribunal – appeals to - clarifications on monetary limit for filing appeal in tribunal/courts


Govt. releases chart indicating sector-specific FDI policy for industrial and other sectors

FDI/FEMA/ILT : Consolidated FDI policy Circular of 2014 – mapping of the sector specific FDI policy in terms of national industrial classification (NIC)-2008


Mango Treatment For Exports

Fruit flies were a major impediment for mango producing countries like Pakistan to market the ‘king of the fruits’ to developed countries. Mr A.Q. Khan Durrani, a researcher, is credited with saving and promoting Pakistan’s mango exports at a time when Indian mango exports to the European Union were banned.


Different countries have their own requirements for processing and treatment, but the most commonly used method in vogue is hot water treatment (HWT), radiation and vapour treatment.


Around 300 rejected mango consignments led to the imposition of a ban by the EU on the import of Indian mangoes at the start of the mango season on May 30, 2014 for two years.


But Pakistan — whose rejected consignments to the EU during 2013 stood at a lesser 234 — was warned that it will face a ban if five more of its shipments were rejected.


At this critical juncture, Mr Durrani — who has invested 27 invaluable years of his life on research for developing an indigenous HWT technology suited to Pakistani conditions— came to the exporters’ rescue, which helped the country earn $57m from mango exports in 2014.


Talking to this writer at his industry and research centre located opposite Baqai University on Super Highway, Mr Durrani said he has designed world’s three largest HWT plants, each with the capacity to process 12 tonnes of mangoes per hour.


Giving details about the technology, he said he had initiated the research work in 1983, but it took him 27 years to come up with a full solution to the fruit fly issue, in 2010.


According to international quarantine standards for HWT, the recommended temperature is 48 degrees Celsius, and the time for processing is 60 minutes. This results in producing pulp (mango) temperature at 46.6 degrees Celsius.


However, Mr Durrani said his research showed that under HWT, the temperature should be kept at 50 degrees, so that pulp’s temperature of 47.5 degree could be achieved. This is necessary to completely destroy or de-fertile fruit fly eggs.


Supporting his theory of keeping the temperature higher by two degrees over international standards, he said the mango produced in India and Pakistan has a very thin skin and the fruit fly thus easily manages to sting deeper into the fruit to lay eggs.


Yet, a number of issues crop up with the higher temperature, particularly the excessive opening up of mango pores and cells. In order to deal with this situation, a system has been developed where these pores and cells are semi-sealed by use of wax and shellac during the HWT process.


During a tour of these plants, Mr Durrani drew the writer’s attention toward a unit inside a small room and next to the HWT plant, which releases the wax and shellac, when needed.


After using ethylene process to fast ripen the fruit, another process is used to prolong the mango’s shelf life, he added. For this treatment, another plant developed by him rapidly cools the fruit to reverse the ageing process and also stops dehydration caused by HWT.


He explained that only the first step of HWT is needed for air shipments, whereas the two subsequent treatments (of sealing the pores and reversing the ageing and dehydration process) are done for sea shipments due to the time-taking journey.


Surprisingly, the world standard for the shelf life of fresh fruits and vegetables is not more than 7-8 days, but Pakistan has managed to develop an indigenous technology that has increased it to 35-40 days. Thus, they could still be labelled ‘fresh’ and not frozen, Mr Durrani claimed.


Meanwhile, radiation is Australia’s quarantine standard for treating mangoes. But when a team of experts carried out successive inspection and audits from 2010 to 2013, they approved HWT for mangoes.


Durrani added that Australia is also facing similar issues, and even after treating its mango shipments to China in 2012, they were rejected. However, Pakistani consignments were cleared even after it took them 23 days to reach there, against 12 days it took Australia’s shipments.


The approval and certification given by Australia to both Pakistan and India for HWT in 2013 benefited our exports because no Pakistani mango shipments were rejected by Australia, but India had to face a ban as all its three consignments were rejected.


However, when the mango export season started on June 5, Mr Durrani held video conference with EU officials for 26 days. During the discussions, the EU officials pointed out that they had initially rejected two Pakistani mango consignments, but there were no complaints after that.


Mr Durrani explained that the initial mango shipments were directly made from approved orchards, but were not processed under HWT. However, all the subsequent shipments were being treated under HWT. He regretted that even after having a technological edge, Pakistan exported only 4,700 tonnes of mangoes to the EU.


In fact, Pakistan’s mango export target of 9,000 tonnes per annum should have captured India’s share of around 7,000 tonnes exports to the EU.


A qualified mechanical engineer Mr Durrani focused on a single point agenda: that being an agricultural country, Pakistan could not progress without giving due importance to the farming sector.


He also came up with a solution for processing kinnow for the export market, and guided growers and exporters. Around 250 kinnow processing plants are operating on his technology today, and the country is earning around $124-147m from kinnow exports.


Source:dawn.com





Iran Ban, Iraq Duty Hike To Take A Toll On Rice Exporters

India's rice exporters may end the current fiscal on a damp note as Iraq has doubled the import duty to 40%, while Iran has clamped an outright ban at a time when price realisation has slipped 15-20% in overseas markets.


A senior official of All India Rice Exporters' Association (AIREA) told ET that traders are currently shipping only rice consignments with permits of last year to Iran. "We are hoping that Iran will lift the ban. We are planning to send a delegation to Iran in early February to sort out the issue," said the official, requesting not to be named.


The official added that the sudden increase in import duty by Iraq has come as a major blow and it is bound to impact exports to the country.


According to an estimate by exporters, basmati shipments are likely to come down to 35 lakh tonne from 37 lakh tonne in the previous year.


Iran has barred rice from other countries as its local crop is reported to be good this year and is set to arrive in the market there.The country imported over 12.5 lakh tonne of rice during April-July 2014, compared with 14.5 lakh tonnes in the year-ago period.


In the past two years, Iran has bought over 2.5 million tonne of basmati rice from India. The average price realisation has declined to $800-1,100 per tonne from $1,0001,300 per tonne last year.


Exports of basmati rice in the first seven months of the current fiscal declined over 8% to 19.36 lakh tonne from 21.13 lakh tonnes in the year-ago period. However, exports of non-basmati rice between April and October 2014 stayed almost the same as in the previous year, at about 4.2 lakh tonne.


The lacklustre export demand of basmati rice has pushed down prices in the domestic market as well, with farmers getting Rs 3,200 per quintal for Pusa 1121 crop, compared with Rs 4,100 last year.


Retail prices of basmati rice may fall further in the domestic market if exports slump, said Bal Krishna Mittal, managing director of Gurdaspur Overseas, which deals in basmati rice.


Output of basmati rice in the kharif, or summer, season in 2014 was robust at about 81 lakh tonnes, up from 66 lakh tonnes in the previous year.


Source:economictimes.indiatimes.com





India To Formulate ‘Long Term’ Gold Import Strategy To Benefit Exporters

The Indian government today announced its plans to devise a long term strategy for importing gold into the country in order to ensure smooth supply of the yellow metal to jewelry exporters. The government is working out on the new strategy which will also keep the current and trade account deficits under check.


The Union Commerce Secretary Rajeev Kher has scheduled a meeting on January 7th, which will be attended by representatives from country’s finance ministry, the Gems and Jewellery Export Promotion Council (GJEPC) and the Reserve Bank of India (RBI). According to reports, the government intends to extend the ‘Make in India’ campaign into gold sector.


According to traders, the supply of gold has eased considerably following the abolition of the 80:20 rule. Any rise in gold imports may unsettle the country’s trade balance data. To limit gold imports into the country, the government also plans to introduce quota system on gold imports.


Meantime GJEPC points out that a major portion of the exporters’ capital is being blocked to obtain bank guarantees for customs, since the duty on gold imports have sharply risen from 2% to 10% during the past two years. The Council Chairman Vipul Shah urged the government to allow exporters to provide legal undertaking to Customs in place of expensive bank guarantees. He also called upon the government to scale up the duty drawback rates to catch up with the prevailing high gold import rates.


The country’s trade deficit had climbed to 18-month high during November ’14, mainly on the back of surging gold imports. The imports of the yellow metal during the month had totaled 151.58 tonnes, rising sharply by 38% when compared with the previous month.


Source:metal.com





Mca Portal Clocks Over 5 Million Views In 8 Months

Indian steel mills set a new record by importing an all-time high of over 8 million tonne of key steel-making raw material in the 2014 calendar year.


Lack of stocks in the domestic market and falling prices in the overseas markets encouraged iron ore-starved steel mills to look out for imported material during the year. Major producers like Tata Steel and JSW Steel were the largest importers during the year. JSW Steel had announced its plans to import close to 10 million tonne during 2014-15.


Compared to the previous years, 2014 witnessed heavy imports. In 2013, import of iron ore stood at a mere 1.2 million tonne. CY 2012 had seen previous highest level of imports at 3.1 million tonne. CY 2011 on the other hand had witnessed just about 600,000 tonne, according to data compiled by Delhi-based Ore Team Research.


“Conditions have changed through the years and in the process of correcting the illegalities and regularising the mining industry the judiciary and state governments had to take hard decisions, which led to these circumstances today,” said Prakash Duvvuri, head of research at Ore Team Research.


As a result, India has turned out to be a net importer of iron ore as exports have dipped amidst the shrinking global prices. India exported barely 7.14 million tonne in CY 2014 against 8.12 million tonne of imports, he pointed out.


“We were the third largest exporter a few years ago. This year, India’s exports will come to zero level, unless the government takes some corrective steps and withdraws export duty. The government should at least withdraw duty on Goan ore, which is of low quality and there is no market for it within the country,” Basant Poddar, vice president, Federation of Indian Mineral Industries (FIMI) said.


Looking ahead at 2015, domestic production is likely to improve. Hence, India might see its dependency on imports come down slightly but not sharply.


Since the iron ore production would take time to come back on track and PSU mines would gradually increase their figures, the situation in the domestic market is set to improve in 2015 rather than turning further bullish, Duvvuri added.


However, imports will continue to be higher even in 2015 because the opening up of mines in Goa and Karnataka will take more time. “We can expect some more mines to open this year only by September,” Poddar said.


Source:business-standard.com





India Turns Net Importer Of Iron Ore In 2014

Indian steel mills set a new record by importing an all-time high of over 8 million tonne of key steel-making raw material in the 2014 calendar year.


Lack of stocks in the domestic market and falling prices in the overseas markets encouraged iron ore-starved steel mills to look out for imported material during the year. Major producers like Tata Steel and JSW Steel were the largest importers during the year. JSW Steel had announced its plans to import close to 10 million tonne during 2014-15.


Compared to the previous years, 2014 witnessed heavy imports. In 2013, import of iron ore stood at a mere 1.2 million tonne. CY 2012 had seen previous highest level of imports at 3.1 million tonne. CY 2011 on the other hand had witnessed just about 600,000 tonne, according to data compiled by Delhi-based Ore Team Research.


“Conditions have changed through the years and in the process of correcting the illegalities and regularising the mining industry the judiciary and state governments had to take hard decisions, which led to these circumstances today,” said Prakash Duvvuri, head of research at Ore Team Research.


As a result, India has turned out to be a net importer of iron ore as exports have dipped amidst the shrinking global prices. India exported barely 7.14 million tonne in CY 2014 against 8.12 million tonne of imports, he pointed out.


“We were the third largest exporter a few years ago. This year, India’s exports will come to zero level, unless the government takes some corrective steps and withdraws export duty. The government should at least withdraw duty on Goan ore, which is of low quality and there is no market for it within the country,” Basant Poddar, vice president, Federation of Indian Mineral Industries (FIMI) said.


Looking ahead at 2015, domestic production is likely to improve. Hence, India might see its dependency on imports come down slightly but not sharply.


Since the iron ore production would take time to come back on track and PSU mines would gradually increase their figures, the situation in the domestic market is set to improve in 2015 rather than turning further bullish, Duvvuri added.


However, imports will continue to be higher even in 2015 because the opening up of mines in Goa and Karnataka will take more time. “We can expect some more mines to open this year only by September,” Poddar said.


Source:business-standard.com





Transformer was an accessory to manufacture fertilizer; entitled for concessional rate of tax

CST & VAT: U.P. VAT - Where assessee was engaged in manufacture of fertilizer and Assessing Authority had issued a recognition certificate to it for purchase of raw material, accessories and component parts at concessional rate of tax and it had purchased transformer at concessional rate of tax, transformer was accessories to manufacutre of fertilizer entitled for concessional rate of tax


Department couldn't come to a new conclusion to deny exemption if facts/circumstances of case remain

Excise & Customs : When there are no changes in circumstances, either factual or legal, it would not be open to department to upset apple-cart and come to a new conclusion; therefore, department cannot be permitted to take different stands, unless there are good and cogent reasons for a change in future


Exporters Seek Including Tirupur In Smart City Programme

Tirupur Exporters' Association (TEA) has requested the Centre to include the knitwear hub of Tirupur city in Smart City Programme as part of its programme to set up 100 Smart cities.


In the pre-budget memorandum submitted to Finance Minister Arun Jaitley, TEA said the textile industry, which provides employment next to agriculture, contribute about 13.25 per cent of India's total export basket and realized export earnings worth USD 41.57 billion in 2013-14.


This IT-driven programme will be helpful to faster decision making in the business and efficient communication apart from leading a quality life in Tirupur, with a populaton of nine lakh, and has recorded Rs.18,000 crores in Exports and Rs.9,000 crores in Domestic market in 2013-14, it said. The exports are marching ahead, with a new target of doubling to Rs.36,000 crore in the next three years, it said.


Despite the availability of resources for manufacturing textile and garment products in the country itself, the garment sector has not grown up to its expectations due to various adverse factors, TEA president A Shaktivel said in the memorandum.


He requested the minister to include the deduction of 15 per cent of value of new machinery acquired and installed in the year under provision of Sec.32 Ac, available to Corporate assessees, to the non-corporate sector also, by scaling down the ceiling of investment to Rs one crore from Rs.25 crore.


Under the Export Performance Certificate Scheme, the garment sector utilized only Rs.727 crore against Rs.2,712 crore for 3 per cent of FOB value of garment exports at Rs. 90,402 crore in 2013-14, he pointed out.


As the duty free import percentage has been increased to 5 per cent from July 10, the non-utilization value could be still on higher side and therefore, to utilize the given facility out of 5 per cent, a maximum of 3 per cent of the licence may be allowed for import of fabrics without keeping restriction of 1,000 metre, he said. The government should also expedite the signing of Free Trade Agreement with European Union and Canada.


As the cost was on higher side and also to encourage more number of exporters enter the garment field, Technology Upgradation Fund scheme subsidy for exporting units should be increased and interest subsidy should be increased from 5 to 8 per cent and Capital subsidy from 10 to 15 per cent, the memorandum said.


Source:economictimes.indiatimes.com





Depreciation at 15% and not 30% allowed on lorries used for captive transportation and not in busine

IT: Lorries let out by assessee under an arrangement to clay contractors to supply clay to assessee, would be entitled to depreciation at 15 per cent as applicable to lorries not used in business of hiring


Rupee Strengthens To 63.34 After Crude Prices Drop To 5 1/2-Year Low

The Indian rupee on Tuesday strengthened against the dollar after international crude oil prices fell to a five-and-a-half-year low, raising hopes among investors that it will help the government to achieve its fiscal deficit target of 4.1% of gross domestic product (GDP). Auction proceeds from coal mines and spectrum is also likely to help the government meet its deficit target.


The Indian currency opened the session at 63.37 per dollar compared with its previous close of 63.42. At 2pm, the rupee was trading at 63.34 a dollar, up 0.13%.


Brent crude oil suffered a 1.8% drop on Monday to $55.42 per barrel, a fresh low going back to April 2009. Since a recent peak in June, the price of the international benchmark has now fallen by 51.8%, due to concerns of slowing demand coupled with a glut of global supply, Reuters reported.


Prime Minister Narendra Modi on Monday chose the ordinance route to allow the auction of iron ore and other minerals, the eighth time the seven-month-old government used executive powers to push through a key decision, ignoring criticism that it is bypassing Parliament.


The cabinet also cleared the Telecom Commission’s recommendations on spectrum auction that is expected to begin next month, the government said in a statement.


The fiscal deficit as a percentage of budget estimates from April to November has already reached 99% of the full-year target, the highest since the Lehman crisis, due to weak revenue collections.


India’s benchmark equity index, S&P BSE Sensex, was trading at 27,307.57 points, down 2%.


Most of the Asian currencies were trading higher against the dollar. The South Korean won was up 1%, Japanese yen 0.42%, Philippines peso up 0.21%, China offshore spot 0.19%, Singapore dollar 0.15%, Thai baht 0.15% and China renminbi 0.11%. However, the Malaysian ringgit was down 0.62%, Indonesian rupiah 0.22% and Taiwan dollar 0.04%.


The yield on India’s 10-year benchmark bond stood at 7.889% compared with its Monday’s close of 7.892%. Bond yields and prices move in opposite directions.


In 2014, the rupee weakened 2% against the dollar, while foreign institutional investors bought $16.12 billion from local equity markets and $26.36 billion from the debt market.


The dollar index, which measures the US currency’s strength against major currencies, was trading at 91.409, up 0.03% from its previous close of 91.378.


Source:livemint.com





Interest had to be deemed as unexplained if it had accrued on advances admitted as income during sea

IT : Addition could not be made at hands of assessee solely on single piece of evidence impounded during search as there was serious doubt regarding authenticity of evidence


Franchisee fee paid annually for using trademark 'Dominos' was allowable as revenue exp.

IT-I : Franchise fee paid annually at fixed percentage of sales turnover for using trademark belonging to payee company was to be allowed as revenue expenditure


Mere use of manpower to provide services doesn't make a service as ‘supply of manpower'

Service Tax : Mere use of manpower to provide services does, not render such service classifiable as 'supply of manpower


Monday, 5 January 2015

Assessee could ask for removal of wrong comparable before ITAT even after choosing it for its TP aud

IT/ILT : Companies engaged in software product development are functionally different and dis-similar to companies engaged in providing software development services


Assessee can choose most beneficial exemption if two unconditional exemptions are available to him

Excise & Customs : Where two exemption notifications are in force : one granting absolute unconditional exemption and other granting unconditional partial exemption, assessee may choose exemption most beneficial to it


ITAT dismissed appeal of assessee as neither any adjournment was sought by him nor anybody appeared

IT: Where none was present on behalf of assessee, neither any adjournment was sought, appeals filed by assessee was to be dismissed


No addition in block assessment on basis of material collected during post search period

IT : Addition cannot be made to value of property on basis of material collected during post search period and not during search itself


No rectification for re-computation of turnover as it didn’t confine to removing arithmetical errors

IT : Where assessee sought recomputation of turnover under section 154, but determination of same would not be confined to arithmetical or adding figures rather explanation and answers would be required, therefore said section could not be invoked


Allahabad HC upheld order for release of goods on payment of cash deposit of 20% of value of goods

CST & VAT: Uttar Pradesh VAT - Where Assistant Commissioner demanded cash security both under VAT Act and Entry tax Act for release of seized goods, cash security of 20 per cent of value of goods would be justified


No deduction of legal fee incurred by assessee to defend his criminal case on charges of custom duty

IT: Expenditure on legal fees to defend in custom duty evasion related criminal case, having no connection with carrying on of business of assessee should meet disallowance under section 37(1)


No MAT on income shown in current year when it had suffered tax in earlier assessment year

IT : Where once profit of assessee company had suffered tax, its inclusion in book profit was no basis to bring it under purview of tax once again under section 115J


TP addition to be deleted if AO had computed ALP without considering comparable data available at as

IT/ILT: Where Assessing Officer computed arm's length price using higher gross margin without considering updated data available at time of assessment proceedings, addition made was not justified


SC: Court can't admit complaint on dishonour of cheque before expiry of 15 days of service of notice

Negotiable Instrument Act : No offence can be said to have been committed unless and until period of 15 days, as prescribed under clause (c) of proviso to section 138, has in fact, elapsed and, therefore, a Court is barred in law from taking cognizance of such complaint


No denial of condonation plea due to non-filing of documentary evidence when department didn't objec

Service Tax : Merely because no documentary evidence is placed on record in support of reasons leading to delay, reason assigned cannot be brushed aside in totality in absence of their being any counter or objection raised by department; hence, if reasons appear to be bona fide, delay must be condoned


Father gets Sec. 54B relief for acquiring new land in son’s name even if original land was held join

IT : Where son of assessee was also joint owner of land which was sold and new land was purchased in name of son because of assessee's old age and other technical reason, assessee was entitled to deduction under section 54B


Oilmeal Exports Decline 45% In April-November

Faced with a steep 45% decline in exports between April-November, oilmeal exporters have urged the government to incentivise its shipment to abroad.


India’s oilmeal exports have been witnessing steady decline over the last three years. After a record 5.60 million tonnes of oilmeal exports in 2011-12, its shipment fell to 4.85 million tonnes in the following year and 4.33 million tonnes in 2013-14.


But, the year 2014-15 has been the slowest in many years with overall exports at 1.42 million tonnes between April – November period as against 2.6 million tonnes in the corresponding period last year.


Used as a bird feed and an animal feed, demand of oilmeals indicates global economic direction. With weak global economies, spends on bird feed and animal feed hit resulting into a slowdown in India’s oilmeal exports. Also, India’s perennial importers have diverted their orders to South American countries including Brazil and Argentina.


“Situation can only change with higher import duty imposed on edible oils which in turn can support the export of soybean meal. The government should also consider to give higher Vishesh Krishi Gram Upaj Yojana (VKYUG) on export of oil meals to provide some support to check the falling export,” said Pravin Lunkad, president of the Solvent Extractors’ Association (SEA).


While the government raised import duty by 5% all across, the industry termed the raise insufficient to make any significant change.


“It is practically impossible to recover the 45% decline of the first eight months in just remaining four months of the year. Even if we assume that a positive crushing parity to stimulate domestic oilmeal production and intermittent buying from China and Iran, Indian exporters may be able to recover not more than 15% of the fall. Still, oilmeal exports witness a decline of at least 30% this year,” said Anil Agrawal, managing Director of Sanwaria Agro Oils Ltd.


Sanction hit Iran has started purchasing oilmeals from Brazil and Argentina which works out to cheaper of upto $100 a tonne than import from India. Also, European countries have opted to purchase from these natural global suppliers.


While India’s oilmeal exports to Iran fell by a steep 70% at 242,291 tonnes between Apr – Nov 2014, that of European Union nosedived by a staggering 83% to a mere 65,304 tonnes in the first eight months of the current fiscal compared with 379,056 tonnes in the comparable period last year.


Exports to Taiwan and South Korea also fell by 29% and 19% to 54,584 tonnes and 568,275 tonnes respectively in the period under consideration.


“Owing to negative crushing parity, crushing mills have piled up seeds as they incur losses in oil which they try cover up through elevation in oilmeal prices. This makes Indian oilmeal costlier than other origins like Brazil and Argentina,” said Agrawal.Also, due to high price of soybean, India is totally out priced in the international market by $ 50-60 against other origins.


Source:- business-standard.com





Usda Sees Good Prospects For Almond Exports To India

The USDA has placed almonds on the top of the list in its recommendations for exporters in USA for entering the Indian market.


While saying that India remains a complex market to make inroads for food companies, USDA says that almond exports to India have been promising with an average growth of around 20% and a share of around 80% of India’s total almond imports in the last five years.


India is a small but growing market for exporters in USA thanks to globalisation of food and higher incomes in India. According to official estimates, India’s imports of consumer-oriented foods, led by tree nuts and fresh and dried fruits, have doubled to around $3.2 billion in the last five years, and USA is a top exporter of almonds to India.


According to India’s Ministry of Commerce, almonds imports from USA stood at around $380 million in FY2013-14. It was about 78% of total almond imports by India in the year and up around 140% from around $158 million worth almonds that India imported in FY2009-10.




Source – Ministry of Commerce, India

Higher income, an expanding retail industry, preference for healthy food, and changing tastes in India are reasons behind the growing demand for almonds in India.


Moreover, the boost to the food processing industry in India is expected to increase demand for food products such as almonds from USA in the coming years. Other export items with high potential include pistachios, fruits and fruit juices, sugar confectionery, sauces and beverages, says USDA.


However, there are challenges for USA exporters. “High tariffs (of around 30-40%) on the majority of food items along with effective bans on certain products continue to hinder the growth of food imports from the United States,” says USDA. It adds that it is preferable for US companies to partner with Indian importers to help address policy and regulatory obstacles. Exporters must also be prepared to meet the requirements of Indian importers such as mixed shipments and changes in product specifications to meet food laws in India, it adds.


Source:- thedollarbusiness.com





AO was directed to verify confirmation letters of creditors produced before ITAT for sec. 68 additio

IT : Where assessee could not produce confirmation letters from creditors in time before lower authorities but same was produced before Tribunal, matter was to be remanded back to verify genuineness of said letters


Penalty upheld as material issued against Form 18 was used to produce goods for sale to branches out

CST & VAT: Kerala VAT - Where assessee purchased carbon black and rubber chemicals against form 18 and utilized same for production of tyres, tubes and flaps transferred to other branch offices outside Kerala for sale, imposition of penalty under section 45A(g) was justified


Sum paid on testing of ultrasonic meter wasn't FTS as it didn't satisfy make available clause of Ind

IT/ILT : Payment made by assessee, engaged in business of manufacturing ultrasonic meters, to a US company towards calibration and testing of equipment, could not be treated as, fee for technical services' due to non-Compliance with make available cause


AO can’t make sec. 14A disallowance before discharging onus that exp. has been incurred on exempt in

IT : Where assessee had not claimed any expenditure in relation to exempt income, onus is on Assessing Officer to prove that out of expenditure incurred under various heads, some were related to earning of exempt income and not only this he has also to give basis of such calculation


Rupee Still Down By 8 Paise Vs Dollar

The rupee staged a mild recovery but was still trading lower by eight paise to 63.37 against the American currency in late morning trade on fresh dollar demand from banks and importers on the back of higher greenback in the overseas market.


The rupee resumed lower at 63.43 per dollar as against the last weekend's level of 63.29 at the Interbank Foreign Exchange and dropped further to 63.50 on initial dollar demand from banks and importers.


However, it recovered from its initial losses and was quoted at 63.37 per dollar at 1000 hours on selling of dollars by banks on hopes of more foreign capital inflows into equity market. It moved in a range of 63.36 to 63.50 per dollar during the morning trade.


In New York market, the US dollar ended higher against other currencies on last Friday on expectations that the Federal Reserve will raise interest rates while the European Central Bank and Bank of Japan continue to loosen monetary policy in the year ahead.


Meanwhile, the Indian benchmark Sensex was quoted higher by 103.83 points, or 0.37 per cent, to 27,991.73 at 1000 hours after crossing 28,000-mark in the early trade.


Source:dnaindia.com





'Gambier' isn't Kattha/Catechu, it is an unclassified item taxable at higher rate under UP VAT Act

CST & VAT : U.P. VAT - Where assessee was engaged in purchase and sale of Gambier and it claimed that said product was Kattha/Catechu falling under Entry No. 68 of Part A of Schedule II to U.P. VAT Act, product Gambier was an unclassified item


Income returned only in response to sec. 153A notice won't call for levy of concealment penalty

IT : Penalty under section 271(1)(c) could not be levied in respect of returned income which had been filed in response to notice under section 153A


No invocation of extended period when demand arose due to retro-amendments

Service Tax : No extended period, when demand arises due to retrospective amendments


Govt. notifies certain institutions and their eligible schemes for the purpose of deduction under Se

IT : Section 35AC, Read with Explanation (B) Thereto, of the Income-Tax Act, 1961 - Eligible Projects or Schemes, Expenditure on - Notified Eligible Projects or Schemes – SWA-Roopwardhinee, Maharashtra, Etc.


ITAT couldn't remand case to AO when it had enough material before it to decide issue of disallowanc

IT : Where there was enough material on record enabling Tribunal to decide issues raised in respect of allowance of service charges, matter was to be decided by Tribunal; it should not have remanded same to Assessing Officer


Dismissal of appeal by Tribunal without assigning any results would render its order as cryptic; to

Excise & Customs : Where Tribunal had not considered pleas raised by assessee and had brushed aside various grounds without any reasons, such Tribunal order, being cryptic, was liable to be set aside and remanded back for consideration afresh


Income declared in return couldn't be deemed as undisclosed if return was filed before the date of s

IT: Where income received by assessing was filed before search and same was on records of department before date of search, income could not be undisclosed in view of section 158BB


Sunday, 4 January 2015

ALP of interest-free loans given to foreign AE to be computed on basis of LIBOR and not at rate give

IT/ILT : Where no incriminating material was found by department during search indicating that assessee's working of TP was flawed or inconsistent in any manner, it would be wholly unjustified for TPO to review his own acceptance of assessee's TP report merely because a search was conducted in assessee's case


Exp. on verifying info of customers and their creditworthiness for issuance of credit cards is reven

IT : In credit card business credit investigation expenses would be revenue expenditure


[DGFT Notification] : Amendment in import policy conditions under ITC (HS) 4 digit code 3808.

To be published in the Gazette of India Extraordinary Part-II, Section -3, Sub Section (ii)


Government of India


Ministry of Commerce & Industry


Department of Commerce


Udyog Bhawan, New Delhi


Notification No. 106/(RE-2013)/2009-2014


Dated the 1 January, 2015


Subject: Amendment in import policy conditions under ITC (HS) 4 digit code 3808.


S.O. (E): In exercise of powers conferred by Section 3 of FT (D&R) Act, 1992, read with paragraph 1.3 and 2.1 of the Foreign Trade Policy, 2009-2014, the Central Government hereby inserts the following Policy condition as Policy Condition no. 3 under Chapter 38 of ITC (HS), 2012 – Schedule – 1 (Import Policy):


"3. Under Section [9] of the Insecticides Act, 1968 all chemicals intended to be used as insecticides, rodenticides, fungicides, herbicides etc. [referred to as ‘insecticides’ under the Act] require mandatory registration for import. In cases, where the ‘insecticide’ is imported for non-insecticidal purpose, an import permit is necessary from the Registration Committee under the Department of Agriculture and Cooperation. The Registration Committee while granting registration or a permit for import of an insecticide spells out the conditions for import which inter alia, may include reference to the source of import. No ‘insecticide’ can be imported from a source other than that specified on the certificate of registration or the permit, as the case may be. In addition, the Registration Committee may issue regulatory guidelines from time to time with respect to safety, efficacy, quality etc. which warrant full compliance from importers."


2. Effect of this Notification: The policy provisions under the Insecticides Act, 1968 for import of insecticides under EXIM code 3808 of Chapter 38 in ITC (HS), 2012 – Schedule – I (Import Policy) are being notified.


(Pravir Kumar)


Director General of Foreign Trade


E-mail: dgft@nic.in


(Issued from File No.01/53/162/Misc./AM-15/M-23/IC/PC-2-A)





[Indian Customs Tariff Notification] : Seeks to amend notification No.12/2012-Cus dated 17.3.2012 so as to extend zero customs duty on chickpeas(gram) upto 31st March, 2015

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


GOVERNMENT OF INDIA


MINISTRY OF FINANCE


(DEPARTMENT OF REVENUE)


Notification No. 39 /2014-Customs


New Delhi, the 31st December, 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 amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 12/2012-Customs, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 185(E), dated the 17th March, 2012, namely:-


In the said notification, after the Table, in the proviso, in clause (ab), for the figures, letters and words "1st day of January, 2015", the figures, letters and words "1st day of April, 2015" shall be substituted.


[F.No. 354/15/2010-TRU]


(Pramod Kumar)


Under Secretary to the Government of India


Note: The principal notification No. 12/2012-Customs, dated the 17 th March, 2012 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 185(E), dated the 17 th March, 2012 and last amended vide notification No. 34/2014-Customs, dated the 24 th December, 2014, published vide number G.S.R. 915 (E), dated the 24 th December, 2014.





Gold Imports Rise 8.5% To 849 Tonne In 2014

Despite stringent controls like the 80:20 scheme on gold imports for most parts of 2014, imports of the precious metal are projected to have increased 8.5% to 849 tonne in the year compared to 2013.


From June onwards, the average monthly imports stood at 90 tonne while in November, when the curbs were relaxed, imports stood at 151 tonne or $5.6 billion.


The 80:20 scheme was introduced in second half of 2013 to control gold imports and it succeeded to an extent. However, in the second half of 2014 imports rose due to demand for the precious metal. “Imports rose due to demand of consumers, which was suppressed for several months,” said an industry observer, who also tracks imports.


The last quarter of 2014 saw a spike in imports at 296 tonne, the highest after the quarter ended June 2013.

While the import bill for 2014 at $30.8 billion is less than $39 billion in 2013, the spike in the import bill is visible if one compares the data on a financial year basis. During April-December 2013-14, the bill was $23.36 billion, which has increased to $25.45 billion in three quarters of 2014-15.




Overall imports remained high despite the sharp fall in December imports, which is pegged at less than 30 tonne or around $1 billion, a fall of almots 80% compared to the previous month. The data will also be the lowest in the last 15 months and lower than December 2013 too (37 tonne). Traders say there was virtually no demand in December and the high inventories due to previous imports were still in the market.


Going forward too, the import scene may not see a big improvement. “Demand is quite dull and we don’t see any significant improvement in demand for a couple of months as now expectation is that in the budget, government may cut import duty on gold, which will bring down gold price in India to the extent of duty,” said Prithviraj Kothari of Riddhi Siddhi bullion.




Interestingly, gold was trading at a discount in December at a marginal $1-2 premium per ounce to its cost of import in the Mumbai market.In Mumbai’s Zaveri Bazar, standard gold is trading at Rs 26,900 per 10 gram while silver at Rs 36,300 per kg.


Source:- business-standard.com





Reassessment justified as assessee failed to disclose that it had commenced business with assets of

IT : Whether where material information that assessee company commenced its business using asset of an erstwhile company was not furnished with return and same was disclosed in subsequent year, reassessment was proper


Medical Group Insurance is also eligible for input service credit

Cenvat Credit : Services by way of : (i) Medical Group Insurance; (ii) Consultancy Services in relation to tax compliances; (iii) Outdoor Catering Services; and (iv) Subscription for International Taxation, are eligible for input service credit


ITAT allows sec. 54B relief to father on purchase of land in son's name even if sold land was held j

IT : Where son of assessee was also joint owner of land which was sold and new land was purchased in name of son because of assessee's old age and other technical reason, assessee was entitled to deduction under section 54B


IRDA lays down new guidelines in respect of group insurance policies for banks, NBFCs and Housing Fi

INSURANCE : Guidelines on Claim Processing for Group Life Insurance Policies under Lender Borrower Group Insurance Scheme


'IRDA' renamed as 'IRDA of India'

INSURANCE : Change of Name of IRDA to IRDA of India


High Local Ore Prices Prompt Steel Makers To Look Overseas

India will import nearly 15 million tonnes of iron ore in 2015 as higher domestic prices amid a supply shortage push top steel makers to import more, said industry executives.JSW Steel Ltd, with the largest domestic capacity for steel among private firms, will import maximum ore at nearly 9 million tonnes, while Tata Steel Ltd is expected to import roughly 2 million tonnes.


“By the end of the fiscal, JSW would have imported almost 9 million tonnes out of the total 15 million tonnes expected to be imported into the country, a marked shift from last year’s one million tonne total imports,” said Seshagiri Rao, joint managing director and group chief financial officer of JSW Group, adding a domestic supply shortage of almost 10 million tonnes has led to higher domestic prices.

“This is making imports of iron ore for coast-based steel plants much more viable although for plants in the interior of the country, it is still unviable to import. Still, companies are importing, as there is no uniform availability.”


Tata Steel did not respond to an email seeking clarity on its imports; but representatives of an industry association tracking such data said its imports would be close to 2 million tonnes.In a statement on 30 December, T.V. Narendran, managing director of Tata Steel, India & South East Asia, had confirmed that the company would be a net importer of iron ore.


Narendran said in an email that the company was impacted by issues related to mining lease renewals which led to intermittent stoppage of mining operations leading to disruption in the end-use operations.Goutam Chakraborty, analyst with brokerage Emkay Global Financial Services, said the current price of 62% Fe grade iron ore is about Rs.4,000 per tonne in India; the same grade is available internationally at around Rs.3,500 per tonne. He added that the cost of iron ore is even higher in India in case of lumps and is close to Rs.4,200-4,500 per tonne for a 62% Fe grade.


Rao from JSW Steel added that while international prices have fallen almost 40% since the beginning of the fiscal, in India, prices have actually risen.Bloomberg data says the price of 62% Fe grade iron ore fines imported into China has fallen from $110.1 per tonne as on 1 April 2014 to $66.4 per tonne as on 25 December 2014, a fall of almost 40% so far this fiscal.


In contrast, ore price at e-auctions in India has risen from Rs.2,700 per tonne in April to Rs.3,140 per tonne in November. State-owned miner NMDC Ltd cut prices in December for the first time in 2014, said Chakraborty of Emkay in a 2 January report. Data on the quantum of the price cut was not available.A senior NMDC executive said the price discovered via e-auction has not fallen, as there is demand at higher prices and buyers seem to have the capacity to absorb these prices. “Why should we fix a lower base price for iron ore when there is a demand even at a higher price?” asked the executive, who spoke on condition of anonymity.

He said NMDC’s pricing formula incorporates the international price benchmark, domestic demand and available domestic grades.


A mail sent to NMDC on Wednesday remained unanswered.Mining industry representatives, however, say that e-auctions are inflating prices way beyond international prices. They add that the quality and uniformity of iron ore are also not as per requirements.“This is leading to an added supply crunch, with several batches remaining unclaimed, while companies are resorting to imports,” said Basant Poddar, vice-president of Federation of Indian Mineral Industries (FIMI), India’s biggest trade body for minerals.

“There is no country in the world which runs its steel plant based on imported iron ore or iron ore available from e-auctions,” he added.


India is expected to produce up to 130 million tonnes per annum (mtpa) of iron ore as against a demand of 140 mtpa largely due to weaker output from Karnataka, Odisha and Jharkhand. Domestic output has fallen due to restrictions imposed by the Supreme Court to curb illegal mining.


Source:-livemint.com





Mere pleading of financial hardship without any documentary evidence won't lead to waiver of pre-dep

Service Tax : Pre-deposit cannot be waived on mere claim of financial hardship due to 'default by debtors and non-recovery' owing to global recession, sudden financial meltdown and financial crisis in US; assessee must file documentary evidence in support of its claim


Commerce Ministry Engages With Departments To Improve Ease Of Doing Business

The Commerce Ministry is intensely engaged with different departments, including revenue and shipping, to reduce paper work in a bid to cut transaction cost for exporters and improve ease of doing business.


The Directorate General of Foreign Trade (DGFT), under the Commerce Ministry has prepared a report suggesting various ways to improve India's ranking in the World Bank's report of ease of doing business, reduce transactions cost for exporters and boost outward shipments.


The ministry aims at reducing the number of mandatory documents from nine to three (bill of lading, invoice and shipping bill) for exports, and from ten to four for imports.


"DGFT is regularly meeting officials of different departments including revenue and shipping to achieve this goal. Reduction in paper work would improve ease of doing business, reducing transactions costs and time and also boost India's exports," an official said.


The report, Trade Across Borders, was circulated to all the departments concerned and they have expressed commitment to help achieving targets by March 31, the official said, adding Commerce Secretary Rajeev Kher has written to the departments to take actions on these recommendations.


According to exporters' body Federation of Indian Export Organisations (FIEO), these measures, if implemented, would push India's ranking within 100th from the current 126th position for doing trade across borders.


"As per our rough estimates, reduction in paper work and making all the ports EDI (Electronic Data Interchange) would help in reducing the transactions cost by about 3 per cent (about $20-25 billion) of the total $750 billion trade," FIEO Director General Ajay Sahai said.


Documents which could be dropped or merged for exports include statutory declaration form and terminal handling receipt while for imports product manual, inspection report and charter engineering certificate.


The government is aiming to improve India's overall ranking in ease of doing business index to 50th position in the next two years from the current 142nd.


The DGFT is also making several procedures online like taking Import-Export Code (IEC) and cargo release order.


Besides, other departments like the Department of Industrial Policy and Promotion (DIPP) too has taken series of steps to improve India's ranking.


During April-November, the country's imports were up 4.65 per cent to $316.37 billion, while exports were up 5.02 per cent to $215.75 billion. Trade deficit during this period stood at $100.61 billion as against $96.89 billion in the same period last fiscal.


Source:- economictimes.indiatimes.com





Defect of directing special audit without hearing assessee couldn't be cured by referring to unanswe

IT : In absence of an opportunity of being heard under section 142(2A), Assessing Officer cannot direct for special audit


Saturday, 3 January 2015

CBDT specifies class of assessees for Dispute Resolution Panels at Delhi, Mumbai and Bengaluru

IT/ILT : Section 144C of the Income-tax Act, 1961 - Dispute Resolution Panel (DRP) - Reference to – Reconstitution of DRPs at Delhi, Mumbai & Bengaluru – Supersession of earlier specified orders


AO couldn't pass rectification order to allow interest on refund for shorter period without intimati

IT : Assessing Officer having allowed interest on refund to assessee, could not pass a rectification order on ground that said interest was to be allowed for a short period of time without issuing notice to assessee


HC stays demand till disposal of appeal by CIT(A) as same issue was decided in assessee's favour in

IT : Where assessee filed an appeal against assessment order on a particular issue, in view of fact that identical issue had been decided in assessee's favour in earlier assessment year, demand raised for relevant year was to be stayed till disposal of appeal by Commissioner (Appeals)


Transactions emanating from common contract are closely linked; to be aggregated to compute ALP by T

IT/ILT : Where two or more transactions emanate from common source being an order or contract or an agreement or an arrangement, then such transactions could be said to be closely linked as nature, characteristic and terms of such transactions substantially flow from said common source; where number of transactions are closely linked transactions, then same can be aggregated and construed as a single transaction for purpose of determining ALP


No denial of registration to trust on non-commencement of charitable activities if its objects were

IT: Where assessee-trust was not engaged in any other activities apart from carrying out activities of distribution of free note books, registration of trust could not be denied on sole ground of non commencement of activity


No penalty due to estimated addition on understatement of sales if assessee had given complete detai

IT: Where addition in hands of assessee was made by estimating value of rice husk without any concrete evidence, levy of penalty on such addition was not sustainable


AO to consider dictum laid by SC in Shaduli Yusuff's case as he relied on vouchers recovered from th

CST & VAT : Where Assessing Officer reopened assessment relying on vouchers recovered from a third party and made addition to turnover, assessee was to be directed to produce account books and Assessing Officer should pass assessment order in accordance with dictum Supreme Court in State of Kerala v. K.T. Shaduli Yusuff [1977] 39 STC 478


No denial of depreciation when purchase bill wasn't in name of assessee if payment was made via cheq

IT : Assessee was held not required to deduct tax at source while paying commission to its Managing Director as part of its salary which was duly reflected in his taxable income


Advance on sale of land wasn't unexplained when sale agreement and bank certificate proved its genui

IT: Matter of claim for deduction under section 54 remanded where deduction was denied on ground of two other properties owned by assessee but there was no clear finding regarding ownership of said two properties


Betal Nut/Areca Nuts are importable against Duty Free Import Authorization; exempt from customs duty

Excise & Customs : Even if not listed in Entries 12(b)/12(c) of G-7 of SION, but in view of DGFT clarifications, Betel Nut/Areca Nuts is importable under DFIA and eligible for exemption under Notification No. 40/2006-Cus., dated 01.05.2006