MCA mandates IndAS from FY16-17 for companies having net worth above Rs 500 crore; notifies IndAS ru

COMPANIES ACT, 2013/INDIAN ACTS & RULES : Companies (Indian Accounting Standards) Rules, 2015

Rupee Strengthens To 62.25 Per Dollar In Afternoon Trade

The Indian rupee on Friday strengthened against the dollar on selling of the US currency by custodial banks, according to a banker.

At 2.01pm, the home currency was trading at 62.25, up 0.15% from Wednesday’s close of 62.34. The local unit opened at 62.22 per dollar. Rupee was shut on Thursday on account of a public holiday.

“There are some flows coming in from foreign investors and therefore custodial banks are selling dollars. The appreciation would have been higher but there is month end demand from oil companies which is offsetting the rise,” a banker at a public sector bank said on condition of anonymity. The benchmark Sensex fell 0.69% to 29,258.40 points.

Major Asian currencies were trading lower against the dollar. The Malaysian ringgit was down 0.71%, Taiwanese dollar 0.33%, South Korean won 0.33%, Indonesian rupiah 0.22%, Singaporean dollar 0.14%, Philippines Peso 0.12%.

The yield on India’s 10-year benchmark bond was trading at 7.688% compared with its Wednesday’s close of 7.710%. Bond yields and prices move in opposite directions.

Since the beginning of this year, the rupee has gained 1.13%, while foreign institutional investors have bought $2.49 billion from local equity and $4.68 billion from bond markets.

The dollar index, which measures the US currency’s strength against major currencies, trading at 94.559, up 0.17% from the previous close of 94.404.

Source:livemint.com

HC couldn't re-appreciate evidentiary material as it wasn't in scope of appeal

Excise & Customs : Where submission urged by assessee requires High Court to re-appreciate evidentiary material, same does not lie within scope of appeal, as appeal can be entertained only on a substantial question of law

Estimated addition curtailed by CIT(A) following ITAT's order of preceding year couldn't be interfer

IT : Where Commissioner (Appeals) had reduced net profit rate to 7.75 per cent from 12.5 per cent as applied by Assessing Officer, following Tribunal's order in immediately preceding year, no interference was required with Tribunal's order

No reversal of credit on loss of inputs due to moisture content after their delivery in factory

Cenvat Credit : Process of manufacture starts from stage of taking raw material from storage base to factory; hence, loss of inputs due to moisture after inputs were received in factory, is a loss during process of manufacture of finished products and there is no requirement of reversal of credit in relation to said inputs

Department couldn't lift corporate veil of Co. to recover tax dues from director during pendency of

CST & VAT : U.P. VAT - Where Assessing Authority passed assessment order on a company and raised tax demand upon it and appeal against impugned order was pending consideration, doctrine of lifting corporate veil was not applicable in instant case and director and authorised representative of company could not be made personally responsible for recovery of arrears of tax due from company

ITAT couldn't delete sec. 68 addition when mystery pertaining to creditworthiness remained unresolve

IT : Mystery pertaining to creditworthiness being unsolved, matter was remanded to Tribunal for fresh adjudication where it deleted addition made under section 68 in absence of departmental representatives

Sub-contractor not disentitled from availing the benefit of presumptive taxation under section 44BB

IT/ILT : The basic condition to be satisfied for applicability of section 44BB is that the plant or machinery(which term includes ship) supplied or rented on hire by the assessee-non-resident should be used in the prospecting for or extraction or production of minerals oils or where equipment has been supplied, such equipment should have been used for the purposes of prospecting for or extraction or production of mineral oils. There is nothing in the said provision so as to disentitle a sub-cont

In anti-competitive agreements, onus to rebut presumption of adverse effect on competition lies with

Competition Act : In case of agreements as listed in section 3(3), once it is established that such an agreement exists, it will be presumed that agreement has an appreciable adverse effect on competition; onus to rebut this presumption would lie upon opposite party

ITAT invoked sec. 40(a)(ia) disallowance as payment was made for labour contract work without deduct

IT : Where assessee had disclosed relevant particulars at time of original assessment, but they are found to be untrue on basis of material discovered by a later date by Assessing Officer, assessment would be validly re-opened section 147(a)

Inputs destroyed by fire at WIP stage were deemed to be used in manufacture; no reversal of credit

Cenvat Credit : Where inputs have been destroyed by fire while work was in progress, inputs must be regarded as 'used in manufacture'; hence, if there is no claim of remission by assessee, department cannot seek reversal of credit on inputs

No extended period if demand arose out of correct figures shown in ST-3 returns

Service Tax : Once correct calculations have been shown in ST-3 returns and demand arose solely out of correct figures shown in ST-3 returns, there cannot be any intention to evade service tax; hence, extended period cannot be invoked

No disallowance of depository charges paid by broker without deducting tax as Stock Exchange paid ta

IT : Where assessee made payment of depository charges on account of services provided with regard to transactions in securities through stock exchange without deducting tax at source, since taxes on said amount were already paid by recipient, impugned disallowance made by authorities below was not sustainable

Suspension of CHA licence couldn't be sustained if show cause notice wasn't issued in statutory time

Excise & Customs : Suspension of license of Customs House Agent cannot be sustained, when no show-cause notice was issued to said CHA under regulation 22 of Customs House Agents Licensing Regulations, 2004 within statutory time-limit

Prior to 1-4-2013, TDS disallowance was attracted in payer’s hand even when payee paid taxes thereon

IT : Position prior to 1-4-2013 - Where assessee-partners borrowed amounts from their respective partnership firms, assessee would be required to deduct TDS on interest payment made even firm paid taxes

Writ couldn't be filed to recover export benefit after expiry of 3 years of rejection of export bene

Excise & Customs : In case of rejection of deemed export benefits, writ petition thereagainst must be filed within 3 years from date of rejection; any writ petition filed beyond said period is barred by limitation

Appellant was to be held guilty of violating FEMA as he failed to prove that he was coerced while ma

FERA: Where appellant failed to disclose as to how he was pressurized, coerced, or tortured, and by whom, when he made earlier confessional statement, plea of appellant that he could not be held guilty founded upon his highly belatedly retraction of his confessional statement, had to be rejected

Income of Swiss shipping Co. is taxable only in Switzerland and not in India as per India-Switzerlan

IT/ILT : Where assessee, a Switzerland based company, was engaged in business of operation of ships in international water, in terms of article 22 of India-Switzerland DTAA, freight income earned by assessee was taxable in Switzerland and not in India

India Among Top 10 Asian Export Markets For Uk-Built Cars

Society of Motor Manufacturers and Traders (SMMT) reports car exports to China have increased five-fold since 2009. In 2014, 137,410 UK-built cars were exported to China, at 14.5 pct over 2013.

In 2014, Only UK bought more British-built cars than China. Exports to China is greater than combined UK exports to Brazil, India and Russia. China’s sales trend reflects substantial growth in the wider Asian market. UK-built cars exported to Asia has trebled in five years (220,682 in 2014 over 60,804 in 2009). Asia is UK automotive industry’s largest export market after Europe. 18.5 pct of all cars built in UK are used in the Asia region.

For 2014, UK automotive exports accounted for 11.2 pct of export generated revenue, valued at £26.2 billion. UK exported 1,195,190 cars to more than 100 countries at 54.7 pct increase over 2009, when 772,210 cars were exported.

Mike Hawes, SMMT Chief Executive says economic growth in Asia in these five years has resulted in increased demand for new cars. Demand for high-quality premium vehicles with a strong brand heritage puts UK in a prime position to cater to an emerging market owing to quality of globally competitive products. UK automotive sector is important to the UK economy leasing to highest share of UK exports in history.

Significant investment in British auto manufacturers (Aston Martin, Bentley, Jaguar Land Rover, Mini, McLaren and Rolls-Royce) means 60 pct of all UK-built cars on offer are from premium luxury brands. Average export value of UK-built cars has increased from £10,200 in 2004 to £21,900 in 2014 in the Asian market. Growth is ubiquitous in almost all Asian export markets since 2009. South Korea is now UK’s eighth largest export market outside of Europe up from 16th in 2009 at 13,337 vehicles over 2,315 units in 2009, equating to 476.1 pct growth.

Growth in India equates to 817.8 pct at 2,836 cars in 2014, over 309 cars exported in 2009. Jaguar Land Rover sold 226 cars in India in FY 2009-10. Export volumes remain modest in a number of Asian markets, owing to high import duty. The situation is similar in India and has resulted in driving local production. However, significant growth in cars exported to most Asian countries underlines a strong demand for UK-built. UK car exports to India places the country as one of UK’s Top 10 Asian export markets. Export of UK-built cars to India were higher than in Kuwait (2,548), Hong Kong (2,362), and Qatar (2,085) in 2014.

Source:rushlane.com

Hot Water Treatment For Indian Mangoes For Eu Market

India's prized Alphonso mangoes will be treated with "hot water" as part of procedures to remove any contaminants like fruit flies before being exported to Europe, especially Britain, where they have a large market, a top EU trade official said.

Maurizio Cellini, First Counsellor, Head of Trade and Economic Affairs team of the European Union to India, told IANS that among the procedures India has to abide by to export mangoes to the 28-member bloc is of treating fruit with hot water.

Cellini also said that while the mango has been allowed for export, the ban on four other Indian products - eggplant, bitter gourd (karela), taro plant (arbi) and snake gourd (chichinda) - has not been lifted.

The EU had last May slapped a ban on the Indian mango and the vegetables following concerns over contamination, mainly from non-European fruit flies. The European Commission voted to lift the ban on Indian mangoes in late January and the final decision was taken on Valentine's Day Feb 14.

Cellini said a number of controls have been put in place by India, including some conditions for the packaging.

"There has been a commitment by India to treat mangoes with hot water, which was an additional requirement which is apparently important in order to guarantee that the products are free of contaminants like mosquitoes, insects which may come with the fruit," Cellini told IANS.

"I know that Indian mangoes are very popular in Britain, so there will be strong export to Britain; other European countries import mangoes from Africa and Brazil," he added.

Regarding the other four vegetables, he said India has not been able to provide the necessary guarantees yet that the packaging and treatment would be done in a way to eliminate the insects.

"Our experts came to India and made an inspection a few months ago. The result of the inspection was that things were making progress for the mango but for the other products they were not there at the right point," he added.

On the dragging India-EU free trade agreement negotiations that have been going on since 2007 but are stuck on certain niggling issues, Cellini said that EU is fully committed to negotiations and if completed "it would be a boost to the European Union and to India alike.

"There are some difficult points still to discuss and we need to get back to the table and see whether India is willing to consider certain sensitive points of the negotiation which for the EU are important.

"If we see positive signals, I'm sure the negotiations can continue and we are hoping to reach a mutually satisfactory solution in a short time," he added.

The negotiations are stuck over the EU demand for duty cut on European automobiles, auto components and wines and spirits. India has been asking for greater access to the European markets, mainly the UK and Germany for its professionals.

Cellini also said the EU can contribute to the Narendra Modi government's initiatives like Make in India, Smart Cities, infrastructure and renewable energy.

"Europe is very advanced; We have the right technology and right solutions and we think cooperation in this area could be mutually beneficial," he said.

On the Modi government's Make in India initiative, Cellini said the initiative signals improvement in ease of doing business, in transparency and in predictability, reforms in taxation system, and improvement in the general business climate.

"If this is done then I am pretty sure the EU companies, multinationals and small and medium enterprises will be encouraged to come to India to do business. It is important that these reforms become a reality and are translated into real facts and realised and that life for entrepreneurs becomes easier in India. If that happens I'm sure that activity of EU business will increase in India," Cellini told IANS.

He said the government's initiatives signal good business sentiment. "Business sentiment is a good thing, but you still have to be convinced to make the investment and to take action; probably we are not there yet but the sentiment is certainly positive and has improved, compared to a few months ago.

"The outlook is good, let's wait another few months maybe in order to see all this becomes real; I think it takes some time, the government is not in place for a very long time.. Reforms are not done in a day," he added.

Source:business-standard.com

Myanmar An Option For Indian Textile Entrepreneurs

Favourable government policies, low wages, shorter sea route and growing garment exports make Myanmar an attractive option for Indian textile entrepreneurs, says Rajesh Kumar Shah

The garment sector in Myanmar has grown enormously since the lifting of economic sanctions by Western nations in 2012, after a gap of 15 years. Today, it employs over 250,000 people and accounts for 10 per cent of export revenues earned by the country.

In 2014, Myanmar’s garment exports were estimated at US$ 1.5 billion in terms of FOB value, which has doubled in the last three years alone. The National Export Strategy (of Myanmar) wants to increase the country’s garment exports to about $4 billion by 2020.

Like Vietnam, Myanmar too is not self-sufficient in raw materials and imports many of its garment sector requirements. Second, unlike Bangladesh which has strong knitwear and woven apparel segments, most of the apparel exported by Myanmar are non-knitwear.

On the other hand, India is rich in cotton, and manufactures various kinds of yarn and fabric in large quantities, which are both supplied to the domestic industry and exported. This presents an opportunity for India to export its textiles, and also to invest in the Southeast Asian country for setting up textile and garment manufacturing units.

India is the fourth largest trade partner of Myanmar (third largest export destination for Myanmar and fifth largest source of imports into Myanmar), according to data with the Embassy of India in Yangon. Trade between India and Myanmar also takes place via third country (Singapore) and across the 1,624 km land border, in addition to direct trade. However, textiles is certainly not among the top traded items between the two countries.

“Trade (between the two) has been small. Almost no garment exports go to India and not too many textiles are imported from India. The vast majority comes from China,” notes Jacob A Clere, project manager, Myanmar Garment Manufacturers Association (MGMA).

Source:fibre2fashion.com

No sec. 115E benefit on short-term cap gain from sale of foreign exchange asset as it isn't an inves

IT/ILT : Short-term capital gains arising on sale of assets is not income 'derived from' foreign exchange asset so as to qualify as 'investment income' within the meaning of section 115E of the Act so as to be entitled to concessional tax rate of 20%

Capital gain arose on sale of land as assessee didn’t bring evidence to prove that land was held as

IT : Where assessee failed to bring any evidence on record showing that land was purchased by him as stock-in-trade for business purpose, Assessing Officer was justified in treating it as investment and computing capital gain arising from sale of land on basis of guidance value determined by State Government for stamp duty purposes

"Router" is computer peripheral and not an external device; taxable at 4% under Tamil Nadu VAT Act

CST & VAT : Tamil Nadu VAT - Where assessee, a dealer in computers and spares, sold router, commodity in question was a computer peripheral falling under Serial No. 22 of Entry No. 68 of Part B of First Schedule to Tamil Nadu VAT Act

Four Surat Firms Fined Rs 100 Crore For Duty Evasion

Directorate General of Foreign Trade (DGFT) on Monday has imposed a Rs 100-crore penalty on four Surat-based textile companies for misusing Export Promotion of Capital Goods (EPCG) schemes to claim duty-free imports without fulfilling the conditions required.

The four companies – Nirmal Polyesters Pvt Ltd, Krishna Trading company, Pradeep Kumar Nirmal Kumar Ltd and Meenu Exim Pvt Ltd – have allegedly defaulted on their export obligations, which were mandatory under the EPGC schemes where imports of raw-materials were exempt from cess.

Additional DGFT of Mumbai and the Appellate Authority upheld the order passed by the joint director general of Surat and also imposed a penalty of Rs 25 crore each on the respective firms, for misuse of the Advance Authorization Schemes. Hence, the violation of foreign trade policy rules, said the DGFT order.

"EPCG authorisation holder has to fulfill export obligations against the scheme specified. The action taken by the authorities was to recover the import customs duty on defaulters through an institutional mechanism," a senior official of DGFT told dna.

In the said order, these four companies had obtained advance licence during 2001-05, from joint DGFT Surat for duty-free imports of polyester filament yarn with condition to supply 100% of the finished goods to export oriented units (EOUs). Fabrics made out of such imported yarn should have been towards discharge of export obligation, but this was not the case here, according to DGFT. Each of the firm had obtained advance license for import worth around Rs 70 crore.

As per the Foreign Trade Policy 2009, Under the zero per cent duty, EPCG Authorization holder is required to undertake export obligation equivalent to six times of the duty saved within a period of six years from the date of issue of authorization.

In 2006, the joint-DGFT, Surat, received a report from Directorate-General of Revenue Intelligence (DRI), Ahmedabad informing that all the above companies had misused the Advance Licensing Scheme by selling the duty free imported raw materials in the local market instead of exporting or supplying to EOUs.

On the basis of the said report, the joint DGFT, Surat conducted an investigation and adjudicated the cases by passing order in August 2013, thereby refusing issuance of further license.

Further, all of the four entities filled appeal before Additional DGFT, Mumbai, the Appellate Authority.

After hearing the companies arguments and analysing the reports received from the Central Excise authorities confirming that the firms had not effected any supply of manufactured goods to EOU units, as claimed. Hence the decision to penalise the firms.

Under advance authorisation scheme, any exporter can import raw-materials and related inputs under 100% duty exemption schemes but only after obtaining the license from DGFT, the licensing authority under this category.

The government fixes value addition as per the standard input-output norms. Once the export obligation will be fulfilled with the licensing authority, importers can sell the manufactured products in domestic market.

Source:dnaindia.com

India's Gold Imports To Rise As Rbi Eases Curbs Ahead Of Budget

Gold imports to top consumer India are set to jump in coming months after the central bank eased gold import curbs, ahead of an expected cut in import duty in next week's federal budget.

The Reserve Bank of India said on Wednesday banks would again be allowed to import gold on a "consignment basis", under which they act as intermediaries and don't pay for the stock until a buyer has been found, which is usually quickly. Trading houses will be allowed to bring in gold with no conditions attached.

Gold flows into the country have slowed despite the removal in November of the so-called 80-20 rule that required importing agencies to re-export a fifth of total imports, as importers and customs officials waited for more clarity.

"These clarifications were pending for a long time and should boost sentiment. Gold imports may increase to 75-90 tonnes in coming months as against about 40 tonnes in recent months," said Prithviraj Kothari, executive director of the India Bullion & Jewellers' Association.

Imports had dropped despite the reversal of the rule as the industry was taken aback by the sudden change in the central bank's position and banks remained wary, fearing customs officials would hold up incoming shipments.

"Some imports had been stuck at the airport, but not huge quantities, as customs officials were awaiting clarification from the RBI. They will be cleared now," said Sudheesh Nambiath, an analyst at precious metals consultancy GFMS, owned by Thomson Reuters.

Nambiath said imports could average 80 tonnes a month, boosted by the RBI move and expectations of a duty cut. The central bank acted just days ahead of the government budget, due on February 28.

Expectations are high that Narendra Modi's government will reduce the import duty on gold from a record 10 per cent, set in 2013 by the previous government as part of efforts to cut the current account deficit.

"We view the clarification by the RBI on the 80-20 rule relaxation as positive for the bullion market as it is a step in the right direction towards the possibility of a relaxation in gold import duty," HSBC analyst James Steel said in a note.

"Indian gold demand would undoubtedly benefit if the government decided to cut gold import tariffs in response to the big drop in its current account deficit," he said.

The deficit has narrowed recently due to the drop in gold imports plus a sharp slide in oil prices. Gold is a popular gift at weddings in India and is also bought for auspicious occasions.

Demand should therefore pick up from March for the wedding season, which continues until July, while Akshya Tritiya, a major festival associated with gold-buying, falls in April.

Source:thehindubusinessline.com

Rupee Ends Weaker At 62.34/Dollar

The rupee closed weaker at 62.34 against the dollar on Wednesday hurt by demand for the American currency from oil importers. The rupee had closed at 62.16 on Monday.

The currency markets were closed on Tuesday for a national holiday. The Indian unit’s movement during the day mirrored that of its Asian peers, which were seen trading weaker against the American currency.

Suresh Nair, Director, Admisi Forex, said, “The rupee depreciated to near a week’s low on Wednesday against the US dollar, tracking most of its Asian peers, on caution ahead of the Federal Reserve’s January policy meeting minutes.”

Source:thehindubusinessline.com

HC remands case to Tribunal as it failed to consider issue raised by revenue

Excise & Customs : Where Tribunal : (a) failed to consider an issue raised by revenue and therefore, did not render a finding thereon and (b) merely stated that it need not interfere, matter was remanded back to Tribunal

Exp. on domestic transaction with non-AE not to be held as an operating exp. for international trans

IT/ILT : Expenditure incurred on account of domestic transaction with non-AE cannot be considered as operating expenditure in relation to international transactions with AE while computing profit margin of assessee

No recalling of ITAT's order if it disallowed interest when borrowed sum wasn't used in business of

IT: Where Tribunal specifically found that borrowed money was not used in money lending business by assessee, and, hence giving any credit towards payment of interest on borrowed fund did not arise, recalling of Tribunal's order was not justified

Sale of shares couldn't be treated as unexplained when AO failed to prove that share transaction was

IT : Where DMAT account and contract note showed details of share transaction, and Assessing Officer had not proved said transaction as bogus, capital gain earned on said transaction could not be treated as unaccounted income under section 68

RBI lifts ban on import of gold coins/medallions and allows import of gold on consignment basis

FEMA/ILT : Guidelines on Import of Gold by Nominated Banks/agencies

Reimbursement of technical exp. to foreign head office without making available technical service wa

IT/ILT: Technical expenses allocated by head office to assessee-Indian division was in nature of reimbursement of technical expenses to head office and not on account of any specific technical services having been 'made available' and, therefore, such amount could not be brought to tax in hands of assessee under article 13 of Indo-French Tax Treaty

Reversal and lapsing of credit under Cenvat Rule 11(3) applies only when all final products are whol

Cenvat Credit : Rule 11(3) of CENVAT Credit Rules, 2004 is applicable only when all final products become fully exempt from duty; said rule would have no application if from common Cenvat credit availed inputs or input services more than one final product are manufactured and some of them have remained dutiable

Glass bottles and plastic crates are eligible for credit as their cost is included in value of aerat

Cenvat Credit : Glass bottles and plastic crates, whose cost has been included on pro rata basis in value of aerated beverages, are eligible for credit to manufacturer of said beverages

RBI lifts ban on import of gold coins and medallions; permits import of gold on consignment basis

FEMA/ILT : Guidelines on Import of Gold by Nominated Banks/agencies

SC: Sum paid to NR professional for preparation of scheme for raising finance and tie up for loans w

IT/ILT : Where assessee-company, intending to set up a power project, took services of non-resident company who prepared scheme for raising required finance as well as tie up for required loan from Indian and international financial institutions, and loans were availed by assessee, said services would come within ambit and sweep of term 'consultancy service'

Builder was entitled to sec. 54EC relief on sale of land being held as capital asset and not as stoc

IT : Where assessee builder sold property which was held for 30 years and same was shown as land asset not as land stock, asset was capital in nature and assessee was to be exempted under section 54 EC on investment of said capital gain

Issue related to selection or rejection of comparables has to be decided by passing a speaking order

IT/ILT : Issue of selection or rejection of a comparable should be decided by a speaking order

In development agreements capital gain is levied on transfer of possession of land irrespective of t

IT : Where assessee had transferred possession of land and all other rights except title at time of entering into an agreement with a builder, capital gain would not be levied in relevant assessment year in which title of land was transferred

Andhra Pradesh VAT Act doesn’t confer on Commissioner power to defer assessment proceedings

CST & VAT : Andhra Pradesh VAT - Andhra Pradesh VAT Act does not confer on Commissioner power to defer assessment proceedings initiated under section 21

Statement recorded without administering on oath has no evidentiary value, says Delhi CESTAT

Excise & Customs : Any statement made by a person recorded during survey operation has no evidentiary value, if it is not taken by administering oath; hence, any such statement cannot be used to allege clandestine removal

AO can invoke rule 8D when sec. 14A disallowance made by assessee is found unsatisfactory

IT: It is only when voluntary disallowance made by assessee under section 14A is found to be unsatisfactory on examination of accounts, that Assessing Officer is entitled and authorised to compute deduction under rule 8D

Segmental results couldn’t be rejected because it was unaudited and break up was done after closing

IT/ILT: Segmental results determined by assessee could not be rejected merely on ground that accounts segmental results were unaudited or segmental break up was done after accounts were closed

No interest payable for delay in debiting tax payment in CENVAT account if sufficient credit balance

Service Tax : Interest is not payable with respect to delay in payment of service tax payable by debit in CENVAT Account, provided sufficient balance was available in CENVAT Account

No unfair trade practice by insurer as complainant couldn't prove that ad of insurer lured it to pay

MRTP: Where complainant had not produced any evidence to prove false or misleading representation about nature and quality of services by respondent-insurance company or deception having been practiced upon it, luring it to seek insurance and pay high premium, complainant had failed to prove basic ingredients necessary for invoking section 36A

Non-resident co.’s service of preparing finance scheme and arranging national and international loan

IT/ILT : Where assessee-company, intending to set up a power project, took services of non-resident company who prepared scheme for raising required finance as well as tie up for required loan from Indian and international financial institutions, and loans were availed by assessee, said services would come within ambit and sweep of term 'consultancy service'

Govt. notifies new list of agricultural commodities which aren't "taxable commodities transactions"

IT : Commodities Transaction Tax (First Amendment) Rules, 2015 - Amendment in Rule 3

India Offers Wider Duty Cuts At Regional Comprehensive Economic Partnership

India, backed by South Korea and China, has made a two-tier proposal at the Regional Comprehensive Economic Partnership (RCEP), offering wider duty eliminations to the 10 Asean countries in the trade bloc and a lower market access to the five non-Asean members.

In negotiations that concluded late last week in Thailand, New Delhi made an initial offer to give duty free access to 70% of product categories from the Asean countries versus just 40% from the rest, which includes China, Japan, Korea, Australia and New Zealand. Its previous offer was to eliminate duty on 40% items from all 15 countries. "We are comfortable in giving 70% to Asean with whom we already have a free trade pact, but at present it will not be possible to open up so much in the initial offer for the rest," said a government official.

"While we do have an FTA (free trade agreement) with Japan and Korea as well, making a further distinction will only complicate matters. Korea and China are on the same page as us on the matter."

The exact categories that will be given duty-free status will be decided in further deliberations in April, with an end-2015 deadline to conclude negotiations. RCEP is a proposed comprehensive free trade pact among the 10 Asean members of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam and their six partners, Australia, China, India, Japan, Korea and New Zealand, with whom they have FTAs. The plan is to include goods, services, investments, competition and intellectual property under the pact.

India is moving with extreme caution in the regional trade deal, as it faces huge import risk from China, with which it already has a trade deficit of $36 billion even without having any FTAs. India will keep the items which pose a risk to the domestic market out of the pact. In the initial offer, at least New Delhi will not oblige to duty concessions in dairy, textiles, automobiles, machinery, rubber, spices and steel. Lower India access to manufacturing powerhouses of Asia will help protect domestic industry as the government goes about implementing the 'Make in India' programme.

Asean has proposed a formula of three layers of duty elimination for Asean, the FTA partners and non-FTA countries. India has already opened up 79% product lines for Asean under the free trade pact. Its concerns are more about some other members.

"We will not be comfortable giving more than 40% to China, Australia and New Zealand. The real test will be battling the high ambition of Australia and New Zealand.

India also argued that with the tier approach, RCEP will no longer be a common consensus agreement," the official added. India has so far signed FTAs with Asean, Korea, Japan, Singapore and Malaysia, and it is negotiating for similar agreements with New Zealand and Australia.

"The problem is that we are talking about differential tariffs for different countries with different rules of origin. We do not know how that will take off," said Arpita Mukherjee, professor at the Indian Council for Research on International Economic Relations. "The ambition is so low. Who opens 40% in a free trade agreement.

Source:- economictimes.indiatimes.com

Pakistan Imports Items Worth Rs 2.12B From India Via Wagha Border, Rs241.7M Tax Collected

Pakistan has imported items worth Rs 2.12 billion during the first half of February 2015 from India via Wagha Border, while total tax of almost Rs 241.7 million was collected during the said period.

As per detail, Pakistan imported tomatoes, garlic, polyethylene, ginger, cotton yarn, machinery etc from India during first half of February 2015. Pakistan imported 6290394 kg tomatoes worth Rs 291 million, while Rs 17.2 million was generated by getting Income Tax on tomatoes import. On the other hand, garlic 84198 kg, worth Rs 8.6 million was imported and income tax on garlic remained Rs 0.5 million.

Documents show that Pakistan imported 25358 kg fruits (H.S Code 709-6000) from India worth Rs 1.9 million, while the Rs 0.1 million as duty tax and income tax Rs 0.12 million was collected. Ginger worth Rs 100 million was imported; however duty tax Rs 14.9 million and Income Tax Rs 6.8 million was collected.

Pakistan imported vegetable of H.S Code 709-9900 worth Rs 8.8 million and Rs 0.4 million was collected as duty tax and Rs 0.15 million as income taxes. Besides, vegetables like cucumbers, beans, carrots, radishes and other vegetables were also imported.

Pakistan also imported soya bean worth Rs 994 million during first half of February, while duty tax Rs 49 million, sales tax Rs 52 million, additional sales tax Rs 1.3 million and income tax Rs 23 million were collected by Pakistan Customs.

As per detail, Pakistan has imported polyethylene of Rs 174.5 million, while the customs collected Rs 8.6 million as duty tax, Rs 31 million as sales tax and Rs 4 million as income tax. Similarly, polypropylene worth Rs 59 million was imported; while total tax almost Rs 15 million was collected on polypropylene import.

Besides that, Pakistan also imported cotton yarn worth Rs 40.9 million; cotton not combed Worth Rs 431 million and non-woven worth Rs 1 million from India via Wagha border and machinery worth Rs 4.5 million

As a whole, Pakistan import stands at Rs 2.12 billion from India via Wagha Border and total collected tax remained Rs 241.7 million.

Source:- customstoday.com.pk

Govt Taking Right Steps To Boost Domestic Coal Industry

One of the most common assumptions among coal watchers is that India's rising demand will translate into increasing imports, thus providing one of the few bright spots for a beleaguered industry.

While there is little doubt about the bullish demand outlook for India, the belief that imports will have to rise is predicated on the view that domestic coal output will continue to disappoint.

If history is a guide, then this is a safe bet, with state-controlled behemoth Coal India consistently failing to meet output targets and battling to supply enough fuel for the South Asian nation's electricity generators.

India's coal imports have steadily risen and gained 19 per cent last year to 210.6 million tonnes, making the country the world's second-biggest importer after China and ahead of Japan.

But it may pay to heed a warning that accompanies financial products that past performance isn't necessarily a guide to future outcomes.

There are signs that India is taking the right steps to boost its domestic coal industry, and while these won't necessarily bear immediate fruit, it's always worth watching the trend.

Once trends start, it becomes difficult to stop them. Just ask any coal miner who exports to China, which has gone from being the industry's greatest hope for long-term growth to the bleak prospect of a declining market.

The new government of Prime Minister Narendra Modi has shown some determination to reform India's vast coal sector, starting with making Coal India more efficient.

The government raised about $3.6 billion by selling a 10 per cent stake in Coal India last month, part of its plan to raise $10 billion by selling assets.

But more important, from a coal market perspective, than the cash raised was the level of interest shown by investors, with the share offer oversubscribed.

This is not only a vote of confidence that the government is prepared to tackle the bureaucratic issues holding Coal India back, but also will act to improve the company's rather dismal operational record.

Having more private investors on board will help drive change within Coal India, given fund managers are likely to push for improved returns and ask uncomfortable questions of management should they fail to deliver.

India is also pushing ahead with plans to open up the coal mining sector to private and international investors, Piyush Goyal, the coal and power minister, said on January 8.

This comes despite union opposition to the move, however a planned five-day strike in January was called off after two days when the government assured a committee would be formed to address worker concerns over the process.

So far global miners have been cool on the prospect of investing in India, most likely because of complex bureaucratic procedures and a playing field titled in favour of Coal India.

The coal divisions of the large miners are also hamstrung by the current low price environment, meaning limited cash available for new investments and management focus on trying to run existing operations as efficiently as possible.

It's more likely that private Indian companies will seek to get into domestic coal mining, with several expected to bid for blocks.

These private companies, which could include GVK and Adani Group have experience in mining, as well access to newer technologies and expertise.

If they do enter the market, they will no doubt be more efficient that Coal India, once again putting pressure on the state giant to lift its game.

India aims to double annual coal output to 1.5 billion tonnes by 2020, an ambitious target that if achieved would probably eliminate much of the need for imported fuel, especially thermal coal for power generation.

It's still very early days in getting anywhere close to that target, and it will be worth watching to see if Coal India does make efficiency and output gains, if the government can manage to cut red and green tape and how much private companies are willing to invest to get a foothold in the industry.

The main point is that the risks to India's domestic coal output are no longer to the downside. If anything, the risk is now that production will surprise on the upside, maybe not immediately but certainly over the next few years.

This represents a further blow to export-orientated coal miners in Australia, Indonesia and South Africa, as the last thing they want to see is an early peak in Indian imports.

Source:- businesstoday.intoday.in

India May Consider Sugar Export Subsidy On Thursday - Govt Source

India, the world's second biggest sugar producer, could consider subsidy for raw sugar exports at a cabinet meeting on Thursday, a top government source said on Wednesday.

Food Minister Ram Vilas Paswan said last week the government could give export incentives for 1.4 million tonnes of raw sugar as mills start distress sale to pay cane farmers.

The source also said the government had no immediate plans to export wheat from overflowing warehouses but could sell locally.

Source:- in.reuters.com

ITAT denies to condone delay on basis of vague affidavit of CA; raises questions on his work ethics

IT: It is unbelievable that an assessee, who is assessed for 2 years at a high income resulting in a huge tax and interest demand, has not visited the CA office almost for a period of about one year to know about the filing of the appeals. There is no deposition in the affidavit of CA filed by assessee that prior to TRO notice, no other notice by way of telephone or writing was received either by assessee or the CA. Thus, the depositions in affidavit remain vague, unsubstantiated and do not amou

Pre-deposit has to be waived off if assessee’s case is prima facie covered by a binding precedent

Service Tax : Pre-deposit must be waived in case of a good or strong prima facie case and, for that purpose, appellant need not satisfy appellate authority that his case is foolproof and is bound to succeed; it means that case is arguable one and fit for trial, or prima facie covered by a binding precedent

Even remand order of Tribunal isn’t appealable to High Court if issue is related to classification o

EXCISE & CUSTOMS : Where issue involved is classification of goods for determining rate of duty, even Tribunal order remanding case back to adjudicating authority for consideration of classification issue afresh, is not appealable to High Court

Using credit of subsequent month to pay duty of previous month would invite penalty

Cenvat Credit : In case of default in monthly payment, use of CENVAT credit during next month for payment of duty relating to previous month cannot be faulted with; at best, it can be said to be procedural violation for which penalty may be levied

Allottee couldn't accuse developer of unfair trade practice when he himself didn't comply with terms

Competition Law : Where complainants had failed to abide by general conditions and terms and conditions of allotment, they had disentitled themselves from contending that respondent corporation was guilty of restrictive/unfair trade practice

Sum paid by power generating Co. to erect transmission lines for sake of its customer was revenue ex

IT : Borrowed fund being utilised for earning assessable income, no interest was to be disallowed

Assessee couldn't be said to have suppressed facts if action was taken against him in past on same s

Excise & Customs : Where earlier proceedings on same subject matter have already been decided against a party, there is no question of suppression of facts, wilful mistake, fraud, etc., warranting invocation of extended period for subsequent period

Penalty wasn't justified as assessee had produced relevant docs on very next day of notice

CST & VAT : Rajasthan VAT - Where Assessing Authority imposed penalty upon assessee under section 76(6) on plea that it did not produce declaration form at time of checking of goods under transit, since assessee had furnished declaration form on very next day of giving of notice and there was no finding that such declaration form or bills or bilties already found with transit were false, forged or unreliable, imposition of penalty was not justified

HC directs department to complete adjudication and refund ST paid under protest if demand would be d

Service Tax : Where department had raised notice and assessee had paid service tax under protest along with challenging notice in writ, High Court directed department to complete adjudication and refund service tax, if demand is dropped

Retainership charges paid to NR agents to promote business in foreign country would be outside the a

IT/ILT: Retainership charges paid by assessee to overseas non-resident agents to promote its business in foreign countries would not fall within meaning of 'Fee for technical services' under section 9(1)(vii)

Derivate trading via stock exchange couldn't be held as speculative due to delay in recognition of s

IT : Derivate trading via stock exchange couldn't be held as speculative due to delay in recognition of such exchange

No addition under sec. 41(1) of balance sales tax on prepayment of total sales tax liability

IT : Where assessee made premature payment of deferred sales tax at Net Present Value against total liability and credited balance amount to its capital reserve account, same could not be remission or cessation of a trading liability under section 41(1)

HC unhappy with shortage of benches at CESTAT but refrains itself from giving direction to establish

Excise & Customs : Where Department/Assessees submitted that there were only two division benches and one single member bench at CESTAT, New Delhi to deal with matters from eight States and requested direction to Central Government to establish more benches citing huge pendency of matters, High Court refrained from passing any such direction

Issue of levying of Education Cess on DTA clearance by 100% EOU isn't appealable before High Court

Excise & Customs : Question 'whether manufacturers being 100 per cent EOU are required to pay education cess on computation of customs duty/excise duty on their DTA clearances' relates to 'rate of duty'; hence, not appealable before High Court

Writing off bad debt and reducing it from debtor’s account is enough to claim deduction: HC

IT: Once amount of bad debt is debited to profit and loss account and simultaneously reduced from asset side, same is to be allowed; it was not necessary for assessee to close individual account of each of its debtors in its books

No demand of CST from assessee as he had merely purchased goods on behalf of his principal

CST & VAT: CST- Where assessee purchased paddy for and on behalf of Ex. U.P. Principal, namely, 'A', Punjab, and dispatched same to him, who manufactured rice from paddy and then exported rice, movement of paddy from State of U.P. to State of Punjab was deemed inter-State sale falling under section 6A of Central Act

Assessee developing Industrial infrastructure with profit motive wasn't entitled to sec. 11 relief

IT: Where assessee, engaged in development of industrial infrastructure in State of Kerala, carried on its activity with profit motive and in same manner in which a private builder of large township would conduct his business, assessee's case would fall in proviso to section 2(15)

Sum paid to hire vehicles for exclusive usage would attract TDS under sec. 194C and not under sec. 1

IT: Where buses/vehicles were hired by assessee for fixed tenure and for its exclusive usage, section 194C and not section 194-I would be attracted

HC quashes CLB's order of replacing board with an administrator as there was no merit in oppression

CL: Where even though CLB had passed impugned order appointing administrator to oversee affairs of company to protect interest of both parties, in order to achieve said object, order replacing Board of Directors was too harsh as even though allegations of non-convening meetings were made, material on record showed that meetings were convened and appellant/respondent had already made a substantial investment in company

Survey and map-making services provided by engineer weren't classifiable as 'consulting engineer's s

Service Tax : 'Survey and Map-making, etc.' of various projects of M/s. GAIL and ONGC does not amount to 'consulting engineer's services', as there is no advice/consultancy/technical assistance involved; it is classifiable as 'survey and map-making services' and taxable only from 16-6-2005

ITAT allows credit for tax accrued but not yet paid in Brazil under Article 23 of India - Brazil DTA

IT/ILT : Where assessee gave loan to its AE outside India, while computing ALP of interest income, domestic prime lending rate would have no applicability and international rate fixed being LlBOR plus basis point would come into play

Value of intermediate goods used to manufacture exempted goods is includible in computing SSI limit

Excise & Customs : Goods wholly exempt under other notifications cannot be considered as 'specified goods'; hence, intermediate goods used therein cannot be considered as 'used in manufacturing specified goods' and are, therefore, includible in computing SSI-exemption limit

No penalty proceedings of FEMA against petitioner if there was stay against payment of penalty

FERA: Where there was a clear stay order against payment of penalty amount, no proceedings could have been initiated against petitioners under section 57 of FERA

IRDA introduces transitional provisions for investments made by insurers

INSURANCE : Transitory Investment Provisions Insurance Laws (Amendment) Ordinance, 2014 - Clarification on Approved Investments

CBEC launches a system of monitoring Court cases to ensure timely filing of reply affidavits by Govt

ST LAWS/EXCISE & CUSTOMS LAWS : Monitoring of Cat/Court Cases – Need for Development of An Effective System of Monitoring of Court Cases to Avoid Imposition of Penalty by Courts on Account of Delay in Filing or Non-Filing of Reply Affidavits in Respect of OAS/CWPS Filed in Cats/Courts

Handicraft Exporters Join E-Commerce Boom

Eyeing a pie of growing e-commerce sector in the country, handicraft exporters are joining hands with big portals to tap the domestic market.

"There is a huge demand of handicraft products in India and e-commerce portals are the best medium to tap those consumers. Several of the handicraft players are joining hands with e-commerce companies," Export Promotion Council for Handicrafts (EPCH) Vice-Chairman Rajesh Kumar Jain told PTI here.

He said at a time when the global economic situation is not in a healthy state, domestic market offers huge opportunities for exporters.

"Flipkart and Snapdeal are good platforms where we can sell our goods in India," he said. India's handicraft exports declined by about 10% year-on-year in January to $120 million.

Today, India is one of the fastest-growing e-commerce markets in Asia-Pacific along with China. With increase in internet penetration, adoption of smartphones and lower data rates are completely changing the way India shops.

Furthermore, favoured demographics and growing internet user base helped in aiding the growth. As per estimates, the sector's market size in the country is around $5 billion annually.

Jain added that as handicraft is a labour intensive sector, these platforms would also help in further creation of job opportunities.

The major product categories which can be sold on these platforms include house-ware, home textiles, furniture, glassware, bamboo goods, fashion jewellery and lamp & lighting, he said.

Analysts say online shopping space in India is expanding at a massive scale and the journey is not yet over.

Further talking about the councils' expectations from the forthcoming Budget, Jain said the government will have to take several steps in order to boost the sector's growth domestically and in the global markets also.

"We are aiming to double our share in the global market from the current three per cent and for that we need help in skill development, enhancing quality and standards of our products and help in exploring new markets," he said.

Jain added that the sector is facing challenges in terms of skilled manpower.

"We are trying our best to impart best of the skills. But we need an institution like we have FDDI for the footwear sector. We are expecting some major steps to be announced in the Budget for our sector," he said.

The country's annual handicraft exports ranges between $3 billion to $4 billion. The sector employs about 70 lakh people directly and indirectly.

Source:timesofindia.indiatimes.com

Indian Mangoes Officially Back On The Menu For Eu Consumers

The European Union has officially lifted the import ban on Indian mangoes just in time for the 2015 season, but one importer worries sales might initially be slow due to consumers’ perceptions of the risks.

The regulation was published in the European Commission’s Official Journal at the weekend (Feb. 14), stating Indian mangoes would once again be allowed into member states, subject to the correct phytosanitary certification.

“In light of shortcomings identified by audits carried out by the Commission in India in 2010 and 2013, and the high number of interceptions of harmful organisms on certain plants and plant products of Indian origin at that time, the import of five commodities, which were most frequently intercepted because of the presence of harmful organisms, including plants other than seeds of Mangifera L.,” the regulation says.

“The audit carried out by the Commission in India from 2 to 12 September 2014 showed significant improvements in the phytosanitary export certification system of that country.

“Furthermore, India has provided assurance that appropriate technical measures are available to ensure that the export of plants of Mangifera L. other than seeds originating in India is free from harmful organisms.”

The official easing of restrictions comes a few weeks after a vote during a Standard Committee meeting in Brussels held on Jan. 20 to lift the ban.

Import restrictions remain in place on four other commodities; the taro plant, eggplant and two types of gourd.

Meanwhile, British suppliers are gearing up to receive the first batches of India’s ‘king of fruits’, especially in towns and cities with large Anglo-Indian populations.

Mango importer and distributor Fruity Fresh has historically imported around 20% of the Indian mangoes coming into the U.K., and company representative Monica Bhandari has been heavily involved with the campaign to end the ban since it was first put in place in May 2014.

She is now preparing to receive Indian mangoes once again, but warns that sales could be affected this year as some consumers may have misunderstood why the ban was initially ordered.

“Therefore, we will have to do some damage control in that respect. However, we do know many customers are very excited to be getting their beloved mangoes back and we look forward to a busy season.”

Source:freshfruitportal.com

Tribunal couldn't reduce penalty once charges of suppression were upheld to invoke extended limitati

Excise & Customs : Once charge of suppression is upheld for invoking extended period, evasion penalty is automatic and same must be levied equal to amount specified in section 11AC and Tribunal cannot reduce it on grounds such as 'assessee did not gain anything from evasion'

Notice issued to assessee to show cause why proceedings be not initiated against him wasn't illegal

CST & VAT: West Bengal VAT - Where Assessing Authority issued on assessee a notice to show cause why legal action according to provisions of section 93 should not be taken for wilfully attempting to evade tax on unaccounted sales and assessee prayed for quashing said notice, there was no illegality or infirmity in impugned notice

No time limit is prescribed to recover duty-drawback refund erroneously, rules Gujarat High Court

Excise & Customs : Provisions regarding drawback are self-contained and Drawback Rules nowhere provide for any limitation for recovering any amount of drawback erroneously paid; hence, drawback may be recovered without any time-limit

Gm India Takes Exports Route In Quest Of Profits

General Motors Co.’s (GM) India unit, which has failed to report a profit since it started operations in the country in 1997, on Monday unveiled a radical new plan to turn around the local unit by increasing its focus on selling cars in overseas markets.

The company, which exported at least 1,000 vehicles in 2014, aims to sell as many as 19,000 units in the current year and 40,000 in following 12 months, according to Arvind Saxena, president and managing director of General Motors India Pvt. Ltd. In comparison, its car sales in India are expected to either decline or remain at the current level. This is despite company’s plans to introduce two new models in the country—a premium sports utility vehicle (SUV) Trailblazer and a multi purpose vehicle (MPV) Spin.

GM will introduce Trailblazer in 2015. The model will be imported from Thailand as a complete built-up unit (CBU) and will be utilized to boost GM’s brand, which took a beating after the controversy over a massive recall of its vehicles in 2013. GM will start selling Spin in India in 2016 and is exploring possibilities to export the model to Mexico. “I’ve been working primarily on how do we restructure our business and how do we make our business far more sustainable—both for us and our dealers,” said Saxena, adding that his company has not firmed up product plans for the medium-to-long term. “We are really focusing on exports for last six months...now we’re fairly geared up to handle bigger volumes and markets.”

“We would be exporting to almost 30-plus markets worldwide, while the major export would be to Chile and Mexico,” said Saxena.

GM has taken a logical step after a long time in India, according to Deepesh Rathore, co-founder and director, Emerging Markets Automotive Advisors (EMMAAA)—a sector specific consulting firm. “Exports offer better margins and it will help them utilize their capacity,” Rathore said.

Exports from India help firms improve profitability and reduce operational costs by utilizing the production capacity. Currently, GM only uses 35% of its 280,000 annual installed capacity at its two plants in the country.

Saxena said that in 2015, the company will sell as many units as it sold last year but a person who is familiar with the company’s plans said GM has drastically reduced the sales target for domestic market for 2015 and 2016. “This year, they aim to sell 55,000 units while the target for 2016 is 50,000,” this person said requesting anonymity.

Sales in domestic market will rise substantially to 93,000 units in 2017 when the company is expected to introduce two models in volume segment, according to this person.

By then, India is expected to be the world’s third-largest market for automobiles, behind only China and the US. GM expects India to be world’s third-largest car market by 2020. Saxena said GM believes in India’s growth story and it is here for the long haul.

The company has outlined product quality as another area of importance in order to make its business more sustainable.

“We would also focus on quality, which would be done by us and we are already seeing some significant improvement in the way we track quality and from the dealer’s point of view, we are focusing on the consumer experience to impact our brand image more positively in the market,” he said.

In July 2013, GM India recalled as many as 114,000 vehicles that failed to meet emission norms. Mint first reported on 11 June 2013 that GM had halted the sale of its Tavera and Sail models over quality issues. On 26 July 2013, Mint reported that as many as 20 senior executives were sacked following the recall.

GM had then admitted to the government that its officials had fudged emission data related to the recalled Tavera vehicles. The then ministry of road transport and highways-appointed panel headed by Nitin Gokarn, chief executive of the National Automotive Testing and R&D Infrastructure Project, which submitted its report to the government on 21 October 2013 in which it termed the whole issue a “corporate fraud”.

On Monday, Saxena said his company is still in process of rectifying problems in the Taveras that it had recalled.

“We have identified and have replaced parts in at least 50% of the Taveras that we recalled. We are trying to identify others as the ownership of vehicles has changed hands multiple times.”

Source:livemint.com

India: Onion Export Down In First Half

Onion export from the country has declined by 3% in the first seven months (April-October) of the 2014-15 financial year as against the corresponding period last fiscal following scarcity of good or export quality onions, hike in the Minimum Export Price (MEP), its inclusion in the essential commodity act and delayed kharif season.

The country exported 765,000 tonnes of onion in the first seven months by October 31 in the current financial year as against 787,000 tonnes during the same period in 2013-14, sources in National Agriculture Co-operative Marketing Federation of India (Nafed) said.

The district contributes 80% of the country's total onion export. Unseasonal rain and hailstorms had damaged the crop last summer, affecting its quality to a great extent. The summer crop, harvested in March and April with a shelf life of six to seven months, continued to reach the market until arrival of the fresh kharif crop, which generally begins from mid-September. Moreover, the kharif season was delayed by two months due to delayed monsoon. The lack of export-quality summer crop, delay in the arrival of kharif crop and hike in MEP of onions altogether led to the decline in export in the first seven months.

National Agriculture Co-operative Marketing Federation of India director Nanasaheb Patil, "The policy the central government adopted in first three four months of the current financial year to stabilize onion prices in domestic market led to decline in onion export of the country. The higher MEP of onions, scarcity of good quality summer crop, inclusion of onions in essential commodity act and delayed kharif season overall led to decline in onion export from the country."

On March 3, the central government had removed the MEP of onions due to a rise in late kharif production. On June 17 last year, the Centre introduced the MEP of $ 300 a tonne and again hiked MEP to $500 a tonne on July 2, 2014 to bring under control the rising onion prices. After pressure from farmers, the Union government reduced MEP to $300.

Source:freshplaza.com

Online System To Generate Import-Export Code

Seeking to streamline the procedure, the Commerce Ministry has put in place an online system for instant generation of import-export code on submission of documents.

The move would help companies or an individual wanting to enter the trade sector. Import-Export Code (IEC) is needed for shipments.

"This is a major step towards improving ease of doing business in the country. If all the documents are in place, a trader would get the code in a few minutes. Otherwise, if there is a problem, an automatic email or an sms would be generated and it will be sent to the concerned person," a senior official in the DGFT said. Earlier it used to take weeks to six months to get this code, the official added.

On February 1, the Directorate General of Foreign Trade (DGFT) made it mandatory to submit online applications for IEC. Within a week, the DGFT has got over 2,500 applications for IEC code.

Federation of Indian Export Organisations (FIEO) said that the move would help in reducing transaction costs for both exporters and importers.

The online submission system would also help the DGFT office to save lakhs of rupees which were spent on renting godowns to store these applications. The Delhi office of DGFT used to get about 60,000 applications per year and one application consists of about 20 pages.

The DGFT has set a checklist for its officials through which they can easily process an IEC application. For example to check PAN and DIN details, officials can verify it from the website of Income Tax Department and Ministry of Corporate Affair?s website respectively.

"The new IEC system will reduce time in grant of IEC as applications with all details and attachments will be cleared quickly. The verification of document has been provided online with authorities like CBDT, MOCA etc which will reduce transaction time," FIEO President Rafeeque Ahmed said.

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 the ease of doing business.

The 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.

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.

Source:igovernment.in

Rupee Ends Higher For The 2Nd Consecutive Day Vs Us Dollar, Up 3 Paise

The rupee today ended higher for the second consecutive day, moving up by another 3 paise to close at 62.16 against the dollar on continued selling of the US currency by banks and exporters.

The rupee resumed higher at 62.15 per dollar as against the last weekend's level of 62.19 per dollar at the Interbank Foreign Exchange (Forex) Market and firmed up further to a high of 62.0750 per dollar on initial selling of dollars by banks and exporters.

However, it washed out initial gains and ended at 62.16 per dollar, still showing a marginal gain of three paise or 0.05 per cent from its last close.

The domestic currency has gained by 15 paise or 0.24 per cent in the two days. The local currency hovered in a range of 62.0750 per dollar and 62.2300 per dollar during the day.

The dollar was lower against the yen in thin and direction-less Asian trade today with investors having a relatively muted reaction to weaker-than-expected Japanese gross domestic product data. Adding to the mood was the closure of U.S. markets for the Presidents Day national holiday.

In the New York market the ICE US Dollar Index finished lower for the third week in a row on last Friday as a mixture of weak US data and signs of growth in the eurozone threatened the buck's seven-month rally.

Veracity Group, CEO, Pramit Brahmbhatt said: "Rupee started the week on positive note. However, it ended the day almost flat. Investors are being cautious and are waiting for the Eurozone meeting which scheduled in the evening even as we have seen the sell-off in the local equities which pushed the dollar up towards near previous day close".

Meanwhile, the Indian benchmark Sensex rose further by 40.95 points or 0.14 per cent to close at 29,135.88.

The forward premia showed a mixed pattern of trading. The benchmark six-month premium payable in July ruled eased to 209-211 paise from 210-212 paise on last Friday while forward contracts maturing in January 2016 moved up further to 421-423 pasie from 420-422 paise. The Reserve Bank of India fixed the reference rate for dollar at 62.2023 and for Euro at 71.0039.

The rupee recovered against the pound to 95.60 per pound from 95.74 previously and rebounded against the euro to 70.95 per euro from 71.00. However, it declined further to 52.42 per 100 yen compared to 52.35 last weekend's level.

Source:economictimes.indiatimes.com

LIBOR is appropriate benchmark for charging interest on loans advanced to foreign AEs, says Mumbai I

IT/ILT : Interest charged as LIBOR plus 200 basis points on foreign currency loan given abroad is most correct benchmark

Tribunal couldn't brush aside material evidence, being confession of partners on clandestine removal

Excise & Customs : Confession of partners/authorised signatories have a material bearing on issue of clandestine removal of excisable goods; said evidence cannot be brushed aside

Stay order passed by Tribunal would remain in force even after power to grant stay was expunged by L

Excise & Customs : Any stay order passed by Tribunal, if it is in force beyond 6-8-2014, it would continue till disposal of appeals and there is no need for filing any further applications for extension orders granting stay either fully or partially

Govt. notifies agricultural extension projects of 'Godrej Agrovet Ltd' for purpose of Sec. 35CCC ded

IT : Section 35CCC of The Income-Tax Act, 1961 - Expenditure on Agricultural Extension Project - Notified Eligible Agricultural Extension Project – Godrej Agrovet Limited

Govt. notifies projects of various entities for purpose of relief under section 35AC

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 – Dr.lalmohan Memorial Trust, Manipur, Etc.

AO to invoke sec. 44BB after determining correct receipts from providing services for extraction of

IT/ILT: It is duty of Assessing Officer to determine correct tax liability of assessee

Sum paid to labourers for execution of contract without transfer of responsibility won't attract sec

IT: Where assessee contractor in order to execute its work orders had engaged services of labourers through Jamadar, same could not partake nature of sub-contract in absence of any obligation or responsibility being fastened upon said Jamadar or labourers, hence, there was no requirement to deduct tax at source out of such payments

No penalty for incomplete import declaration form if goods were found recorded in books of accounts

CST & VAT: UP VAT - Merely because column 6 (providing for bill/cash memo/challan/tax invoice No. & date) of Form 38 was found blank, penalty could not be levied when goods were found recorded in books of account and there was no intention to evade tax

HC denies sec. 54F/54B relief to mother for buying properties in name of her married daughters

IT : Assessee is not entitled to sections 54F and 54B relief in respect of properties acquired in name of her married daughters

Fee for providing assistance for borrowed service was business profits in absence of FTS clause in I

IT/ILT : Consideration received from providing assistance in the form of borrowed service to associated enterprise was business income in absence of FTS clause in India-Greece DTAA

Sum received on redemption of stock appreciation rights under ESOP was taxable as cap gains and not

IT: Amount received by assessee on redemption of Stock Appreciation Rights received under ESOP was to be taxed as capital gain and not as perquisite under section 17(2)(iii)

Issue of applicability of suitable method for TP study was remanded to ITAT following order of prece

IT: Following order of Tribunal for preceding year, issue of application of most appropriate method for computation of arm's length price was restored back to Tribunal for fresh consideration

No reassessment to deny sec. 54 relief alleging sale of agricultural land, as such sale was otherwis

IT : Where Assessing Officer completed assessment under section 143(3) allowing assessee's claim for deduction under section 54, subsequently he could not initiate reassessment proceedings taking a view that property transferred by assessee was agriculture land and, thus, deduction in question was wrongly allowed

ITAT allowed sec. 24 interest deduction as borrowed funds were used for construction of house proper

IT: Interest paid on funds borrowed for construction of property would be allowed as deduction under section 24