ITAT erred in passing ex-parte as it didn’t consider adjournment on medical grounds of assessee’s co

IT: Where Tribunal did not consider pray for adjournment sought on medical ground of assessee's advocate, order passed by Tribunal in absence of assessee was unjustified

No TDS on commission paid to NR agents for services rendered outside India in absence of their PE in

IT/ILT : Sales commission paid by assessee to non-resident commission agents for services rendered by them outside India was not chargeable to tax in India as commission agents did not have a permanent establishment in India, hence not liable to TDS

Assessee couldn’t challenge sec. 69 additions just because his statement during survey wasn’t on oat

IT : Even though statement by assessee during survey regarding undisclosed investment was not given on oath, same could not be retracted at whim and fancy of assessee

CIT(A) should adopt market rates in valuers directory/stamp duty reckoner in absence of sale instanc

IT: Where no sale instances was available of same area, Commissioner (Appeals) was right in working out Fair Market Value of land by relying upon rate mentioned in Indian Valuers Directory and Reference Book and Stamp Duty Ready Reckoner and by adopting annual rate of appreciation method

Entity working for ex-servicemen and enjoying exemption under Sec. 10(26BBB) gets immunity from TDS

IT : Section 10(26BBB) of the Income-tax Act, 1961 – Corporation established for welfare and economic upliftment of ex-servicemen – Requirement of tax deduction at source in case of corporations whose income is exempt under section 10(26BBB) – Exemption thereof

Customer/supplier base acquired along with business was intangible asset; entitled to depreciation

IT: Where assessee acquired a business which included intangible assets such as customer base, technical know-how, manpower, etc., depreciation under section 32(1)(ii) was to be allowed on same as intangible assets

India Likely To Remain Net Importer Of Iron Ore In Fy16

India is likely to remain a net importer of iron ore in 2015-16 as the falling international prices might encourage steel majors to continue import of key steel-making raw material through the current year. However, the quantity of imports may not be as high as last fiscal owing to an expected increase in the domestic production of iron ore.

In 2014-15, India imported 15 million tonnes of iron ore, an all-time high and for the second consecutive year the country's imports will far exceed exports. Exports out of the country is pegged at a meagre 4.5 million tonnes.

During this year, imports are likely to be around 10 million tonnes. This is despite reopening of mines in Odisha and the huge pile ups in several mines. But, the fact that international prices are continuing their downward journey and are ruling at below $50 per tonne CFR China would keep the interest of importers in the global seaborne trade. Also, inconsistency in supply of iron ore and availability of high grade ore at cheap prices will be encouraging for the steel mills to keep their import intact.

Indian steel mills, which do not have captive mines, require around 95 million tonnes of iron ore per annum.

JSW Steel, which was the largest importer last year at 10 million tonnes, will continue to be the major importer in FY16. Other importers include Tata Steel and Welspun among others.

"This year, we are going to increase our capacity utilization above 90%. Though the availability of domestic iron ore will improve during the year, we will continue to import to meet the requirement at our plants. However, we may not import as much as last year and might end up at around 6 million tonnes from places like South Africa," Vinod Nowal, deputy managing director, JSW Steel said.

Tata Steel, which imported around 2 million tonnes last year, is expected to import this year too to feed its Kalinganagar steel plant, which will be operational, analysts tracking the sector said.

Last year, imports took place at $70-90 per tonne and this year, prices are hovering around $50 per tonne, which is a good enough reason for the mills to import iron ore containing very high grades, Nowal added.

He, however, said price correction carried out by NMDC last week was not enough. Instead of Rs 500 per tonne reduction in prices of fines, they should have reduced by at least Rs 1,000 per tonne, he said.

"The recent correction of Rs 500 per tonne in domestic prices of iron ore fines by NMDC is welcome. However, more downward correction in ore prices are required to ensure imports are totally avoided. We need to continuously evaluate this domestic pricing aspect of iron ore fines vis a vis import offers in view of continued pressure on global steel pricing as well," H Shivramkrishnan, Chief Commercial Officer, Essar Steel said.

The production of domestic iron ore is pegged at 137-140 million tonnes for 2014-15 and for the current financial year, a growth of 15% is expected. The growth will come from NMDC, mines in Karnataka and Odisha. Recently, Rungta has received EC nod for 16.5 million tonnes in Odisha. NMDC has announced that it would increase production by 20% to 35 million tonnes as against 31 million tonnes in FY15.

In Karnataka, production is set to increase by over 20% to 22 million tonnes in 2015-16. Goa is also likely to commence production towards the second half of this year.

"With the current prices in international market, there will be no scope for Goan miners to export. Moreover, the prevailing 30% export duty on iron ore and differential freight tariff charged by the Railways will not encourage exports to happen,"  an analyst said.

Source:- business-standard.com

Low Global Prices To Encourage Iron Ore Import

 India is likely to remain a net importer of iron ore in 2015-16 as falling international prices might encourage steel majors to continue importing the key raw material.

The quantity imported might not be as high as in the last financial year. However, with an expected increase in domestic production of iron ore.

In 2014-15, India imported 15 million tonnes of iron ore, an all-time high. Exports were a meagre 4.5 million tonnes.

This year, the country’s imports will again far exceed exports.

During this year, imports are likely to be around 10 million tonnes despite the reopening of mines in Odisha and the huge pile-ups in several places. However, the downward trend of international prices will keep importers interested in the global seaborne trade. CFR China would be below $50 per tonne.

Also, inconsistency in the supply of iron ore and availability of high-grade ore at cheap prices will be encouraging for the steel mills to keep their import intact.

Indian steel mills, which do not have captive mines, require around 95 million tonnes of iron ore per annum.

JSW Steel, which was the largest importer last year at 10 million tonnes, will continue to be the major importer in FY16. Other importers include Tata Steel and Welspun.

“This year, we are going to increase our capacity utilisation above 90 per cent. Though the availability of domestic iron ore will improve during the year, we will continue to import to meet the requirement at our plants. However, we may not import as much as last year and might end up at around 6 million tonnes from South Africa,” Vinod Nowal, deputy managing director, JSW Steel, said.

Tata Steel, which imported around two million tonnes last year, is expected to import this year, too, to feed its Kalinganagar steel plant, which will be operational, analysts tracking the sector said.

Last year, imports took place at $70-90 per tonne and this year, prices are hovering around $50 per tonne, which is a good enough reason for the mills to import iron ore containing very high grades, Nowal added.

He, however, said price correction carried out by NMDC last week was not enough. Instead of the reduction of Rs 500 per tonne in prices of fines, they should have reduced by at least Rs 1,000 per tonne, he said.

“The recent correction of Rs 500 per tonne in domestic prices of iron ore fines by NMDC is welcome. However, more downward correction in ore prices are required to ensure imports are totally avoided. We need to continuously evaluate this domestic pricing aspect of iron ore fines vis-a-vis import offers in view of continued pressure on global steel pricing as well,” H Shivaramkrishnan, chief commercial officer, Essar Steel, said.

The production of domestic iron ore is pegged at 137-140 million tonnes for 2014-15. For the current financial year, a growth of 15 per cent is expected. The growth will come from NMDC and mines in Karnataka and Odisha.

Recently, the Rungta mines received environmental clearance for 16.5 million tonnes in Odisha. NMDC has announced it would increase production by 20 per cent to 35 million tonnes, as against 31 million tonnes in FY15.

In Karnataka, production is set to increase by over 20 per cent to 22 million tonnes in 2015-16. Goa is also likely to commence production towards the second half of this year.

"With the current prices in international market, there will be no scope for Goan miners to export. Moreover, the prevailing 30 per cent export duty on iron ore and differential freight tariff charged by the railway will not encourage exports," an analyst said.

Source:- business-standard.com

China Import Curb Has Hit Milk Producers Badly

Milk producers are going through a slump and those in Maharashtra are among the worst affected, said RS Sodhi managing director of Gujarat Cooperative Milk Marketing Federation Limited (GCMMF) which sells the Amul brand.

Sodhi was in the city to deliver a lecture at National Academy of Direct Taxes (NADT). Speaking to TOI after the function, he said the dairy industry is going through a global slump with China being a major reason for the situation.

China, which was a major importer of dairy products, has curbed purchases from previous year. This has coincided with a glut in New Zealand as well as Europe. Exports by Amul, which stood at Rs510 crore in the 2013-14, came down to Rs280 crore 2014-15. This also led to crashing of rates. The international prices of milk powder have come down to $2,000 a metric tonne as against $4,500 last year, which has ultimately hampered the competitiveness of the Indian industry, said Sodhi.

"On the other hand, there has been a rise in the price of dry fodder, leading to an increase in the cost for milk producers. However, there is little scope for an increase in procurement rates. The situation is comparatively better in states like Gujarat or Karnataka where the dairy cooperatives are organized. In Maharashtra, the procurement rates are down to Rs17 a litre from Rs25-26 for cow's milk," he said.

However, the slump will benefit consumers. With no immediate chances of increase in the procurement rates, the price of milk will also not go up, said Sodhi.

India exports milk and its products to countries like Pakistan, Afghanistan, Middle-East and also China. China has been a biggest importer world over. The going was good when China was buying but it has now left the entire industry in a desperate situation. Though the dairy business is expected to revive in the coming year, it may be too late for many of the producers, he said.

Source:- timesofindia.indiatimes.com

Gem & Jewellery Export Slightly Down, Might Do Better This Year

Gem and jewellery (G&J) shipments, nearly 13 per cent of India’s overall merchandise export, fell a marginal 0.4 per cent in financial year 2014-15.

Data compiled by the Gems & Jewellery Export Promotion Council (GJEPC) showed overall G&J export was $39.9 billion in 2014-15, as compared to $40.15 bn the previous year. In rupee terms, shows data compiled by the G&J Export Promotion Council, export rose marginally to Rs 243,885.8 crore from Rs 242,837 crore a year before.

“The industry battled several economic issues — downturn in China, political and terrorist unrest in the Middle East, a declining European market and the suffering Russian rouble, which had a direct and adverse impact on export. However, foresight and agility helped survive these trying times, owing to significant action in the US and UAE to boost export,” said Vipul Shah, chairman of GJEPC.

It had organised several buyer-seller meets in the US and participated aggressively in Dubai trade fairs, both important jewellery export destinations. Also, continuous dialogue with key G&J entities in the US, with offers of value-additions, and trend forecast seminars for Indian manufacturers, had helped.

Gross export of cut and polished diamonds fell 5.5 per cent in dollar terms to $23.2 bn versus $24.5 bn a year before. In rupee terms, it was a a decline of 4.5 per cent to Rs 141,514 crore. This can be attributed to a decline in volume terms of the gross import of rough diamonds (‘roughs’ in industry parlance), at 14.73 mn carats, or 9.1 per cent, from the year before.

The lower costs of importing roughs through the notification of a special economic zone in this regard is expected to benefit the Indian industry substantially in the coming years. The industry is optimistic about maintaining the current level of performance and intends aligning with global diamond mining companies to promote diamond jewellery.

For this financial year, which began on April 1, Shah said the first quarter was set to remain flat. "Gradual growth is expected during the second quarter and onwards. The entire year is set to end with single-digit growth in G&J export,” he said.

The diamond jewellery segment, which contributes around half, is likely to remain flat but shipment of gold and silver ornaments is expected to see good growth.

Source:- business-standard.com

Rupee Loses 11 Paise Against Dollar In Early Trade

The rupee declined by 11 paise at fresh three-month low of 63.43 against the US dollar in early trade today at the Interbank Foreign Exchange on renewed demand for the American currency from banks and importers amid foreign capital outflows in the equity market.

Besides, a lower opening in the domestic equity market weighed on the local currency but the dollar's weakness against other currencies overseas capped the rupee's losses, forex dealers said.

The rupee had plummeted to over three-month low of 63.32 by losing 50 paise against the US dollar in yesterday's trade on renewed demand for the American currency from banks and importers amid foreign capital outflows in the equity market.

Source:- dnaindia.com

Mere visit of officers of foreign service provider in India doesn't impose ST liability on service p

Service-Tax : A foreign company having no business establishment or operations in India, cannot be asked to pay service tax on services provided by it to Indian recipient merely because of a visit of its officers in India in course of providing service

Regional director entitled to voice his apprehension before Court at time of sanctioning of scheme o

CL : If Regional Director nurtures any doubt qua any of clauses in a scheme of amalgamation, and finds that same is contrary to law or apprehends that on strength of such a clause contained in scheme, company, after obtaining sanction from Court, may use or misuse same for contravention of any law including provisions of Income-tax, he is entitled to voice his doubt/apprehension before Court, at time Court considers grant of sanction to scheme

AO’s order granting partial stay after examining materials needs no interference as AO had discretio

IT: Power of stay governed by clause (c) of section 220 is a discretionary one

No denial of sec. 54 relief to eligible assessee just because he had inadvertently made claim under

IT: Where assessee fulfilled all conditions prescribed for claiming deduction under section 54, claim could not be denied for mere fact that he raised claim inadvertently under wrong of section 54D in return of income

Summoning of petitioner for FEMA offence in a mechanical manner is bad in law : HC

FEMA: Legal bar imposed in proviso to section 61 of FERA is ought to have satisfied at first instance before issuance of process about compliance of proviso to section 61(2) about factum of opportunity given to accused and his satisfaction to this effect must be there before taking cognizance against petitioner in exercise of this legal duty, as there is a statutory bar imposed upon ACMM from taking cognizance

Co. involved in development of software products isn't comparable with co. rendering ITES services

IT/ILT : Where TPO made addition to assessee's ALP in respect of rendering ITES services to AE, in view of fact that some comparables selected by TPO were developing software products and, thus, there existed a functional difference, impugned addition was to be set aside and, matter was to be remanded back for disposal afresh

No denial of sec. 54F relief on pretext of two houses when assessee had gifted one of them orally un

IT : No denial of section 54F relief on pretext of two houses when assessee had gifted one of them orally under Muslim law

Jobbing or arbitrage transaction carried out by broker to hedge its business loss isn't a speculativ

IT: Where assessee-broker's business was trading in shares on behalf of its clients, loss sustained by assessee was a business loss which could be set off against income from other sources

Sec. 11 relief available to Indian Medical Association if it was endorsing health products to promot

IT : Where assessee, Indian Medical Association, engaged in promoting public health, endorsed products of various companies on claims of health and nutritional benefits, said activity could not be regarded as violative of provisions of section 2(15) and, thus, assessee's claim for exemption of income was to be allowed

Govt. notifies Registrar/Sub-Registrar as person carrying on designated business under Money Launder

MONEY-LAUNDERING/FEMA/ILT : Section 2(1)(sa)(vi) of the Prevention of Money-Laundering Act, 2002 - Person Carrying on Notified Activities - Notified Activity

AO can’t examine reasonableness of exp. while allowing deduction under sec. 37(1)

IT : Whether or not advertisement or brand building expenditure should have been incurred is prerogative and right of assessee and Assessing Officer cannot question and challenge same

No denial of sec. 12AA registration to educational institution just because it was eligible for sec.

IT: Where assessee was carrying out its object of imparting education by establishing an educational institutation, merely because it was also preparing students for compertitive entrance exams, it could not be said that it was not a charitable institution

IRDA issues updates of syllabus for Insurance agent's exam in line with Insurance Laws (Amendment) B

INSURANCE : IRDAI (Appointment of Insurance Agents) Guidelines, 2015 – Revised IC-33 And IC-34 Syllabus

Govt. notifies ‘Institute of Chemical Technology, Mumbai ’as scientific research association under S

IT : Section 35(1)(ii) of the Income-Tax Act, 1961 - Scientific Research Expenditure - Approved Scientific Research Associations/institutions – Institute of Chemical Technology, Mumbai

Retraction made by assessee after 2 years and just before finalization of assessment wasn't acceptab

IT : Where assessee made an admission regarding unaccounted investment and belatedly retracted from same on basis that admission was based on coercion and force without giving any reason, same was not acceptable and addition as undisclosed investment was to be upheld

HC affirms ITAT’s order denying condonation of delay in filing appeal considering assessee’s lazines

IT : Where assessees were lackadaisical in their approach and in a non-chalant manner they tried to seek condonation of delay over 1100 days in filing appeals, Tribunal was justified in declining condonation of delay

Rajasthan High Court upheld imposition of penalty due to incomplete declaration form

CST & VAT: Rajasthan VAT - Where Form No. ST-18 accompanied with goods under transport was found incomplete to extent that it did not disclose bill No. and date, levy of penalty under section 78(5) was justified

Kerala Knocks At Pm’S Door For Higher Import Duty On Rubber

The Kerala government has appealed to the Centre to hike the import duty on natural rubber besides seeking more funds for the price stabilisation fund. State Finance Minister KM Mani met Prime Minister Narendra Modi on Wednesday and discussed the issue.

“Rubber prices have come down to ?110 a kg this year from a high of ?270 last year. The main reason for this is increasing imports,” Mani told reporters here.

Against the deficit (between demand and supply) of 60,000 tonnes, total import was actually four lakh tonnes. This kind of dumping was done to affect the domestic price, he said.

Mani requested the Prime Minister to increase the import duty to 25 per cent ad valorem (duty as a percentage of the value). Currently, the duty is 20 per cent or ?30 a kg, whichever is lower. “Although, the PM did not give any commitment, I am confident that something will be done,” he said.

The southern State also asked for an additional ?500 crore allocation for the price stabilisation fund. Currently, the corpus is ?300 crore.

“A total corpus of ?800 crore will help to purchase 50,000 tonnes of rubber at reasonable price,” Mani said, adding that this will aid in improving the yield.

Kerala accounts for over 90 per cent of total rubber production in the country. Around 11.5 lakh farmers are engaged in rubber plantation on around 5.5 lakh hectares land in the State.

However, due to un-remunerative prices, production of natural rubber has dropped to around 6.55 lakh tonnes in 2014-15 from 7.74 lakh tonnes a year ago, according to the latest figures released by the Rubber Board.

Total rubber consumption by various industries, including tyre manufacturers, was 10.18 lakh tonnes during 2014-15, 3.7 per cent more than the previous year.

Recently, the Association of Planters of Kerala analysed the production, imports, exports and consumption patterns. It revealed that an additional stock of approximately 5.5 lakh tonnes is available in the country, which is enough to meet the demands of the consuming industry even if no production takes place.

Source:- thehindubusinessline.com

Global Headwinds Drag India’S Exports

The slowdown in global growth has hit India’s exports. In FY15, India registered $310.5 billion of goods shipment, down 1.2% from $314.4 billion the year before, and far lower than the government’s $340 billion target. Despite the depreciation in the rupee—from 60.5 to a dollar in FY14 to 61.1 in FY15—India’s merchandise trade could not get the edge.

Imports, too, declined to $447.5 billion in FY15 from $450 billion in FY14, thanks to the over 16% drop in the oil import bill as crude prices crashed globally. Gold imports were up 22% year-on-year as quantitative restrictions on the metal’s imports were lifted by November last year. Non-oil, non-gold imports picked up 7% in FY15, reflecting stronger domestic demand of goods.

In terms of the country’s export destinations, the slowdown was more visible in Asian nations such as China (minus 19%) and Singapore (minus 20%), while exports to the US and the UAE were stronger. Interestingly, India’s engineering goods exports increased 14%, which is a positive development given the fact that the Modi-government’s focus is on the manufacturing sector for job creation through its Make-in-India initiative.

Source:- financialexpress.com

Rising Gold Imports No Cause For Alarm

The Government, on Wednesday, said that rising amount of gold imports was no cause for an ‘alarm’ and action would be taken at an appropriate time.

Gold imports in March nearly doubled to $4.98 billion. In January and February, it rose to $1.55 billion and $1.98 billion, respectively. “The (gold) imports have surged in February and March. We will keep a watch. I think that we do not have to be alarmist and see whatever action is required at an appropriate time,” Commerce Secretary Rajeev Kher told reporters here.

He was speaking on the sidelines of the 49th convocation of the Indian Institute of Foreign Trade.

Relaxation in gold import norms by the Reserve Bank led to a spurt in imports of the precious metal in the recent months.

On November 28 last year, the RBI had scrapped the controversial 80:20 scheme.

Under the programme, which was put in place in August 2013 to put a tight leash on gold inflows, at least 20 per cent of the imported gold had to be exported before bringing in new lots.

Increasing gold import was one of the reasons for the widening trade deficit in March, which stood at $11.79 billion, a 4-month high.

India is the largest importer of gold, which mainly caters to the demand of the jewellery industry.

On declining merchandise exports, Mr. Kher said it was ‘indeed a cause of concern.’

“But we are aware of the reasons. We are aware that globally everything is slowing down, and, therefore, opportunities for Indian exports to that extend are limited. We need to find new areas, new markets, produce better quality products and more value added product. That is the way we can diversify,” he added.

Source:- thehindu.com

Exports May Not Even Touch $300 Billion

Exporters on Wednesday painted a grim situation saying that it will be difficult to even achieve even $300 billion exports in 2015-16 due to tough market conditions. In fact exports in 2014-15 had contracted by 1.23 per cent to $310.53 billion. This comes at a time when the BJP-led NDA government in its Foreign Trade Policy (FTP) 2015-2020 has targeted to raise India’s share in world exports from 2 per cent to 3.5 per cent by 2020.
 
Federation of Indian Export Organisations (FIEO) director general and CEO Ajay Sahai said that the trend right now, looks difficult for exports to touch $300 billion. “If global situation improves and currency changes its movement, then it is a different matter. But at the moment, it does not look (that the exports will touch $ 300 billion),” said Mr Sahai.
In one of the biggest decline in last six years, India’s exports fell by 21 per cent in March due to uncertainty in economic revival in key exporting markets. This was the fourth straight month of decline in Indian exports.
 
“Exporters need oxygen to survive,” said FIEO President S.C. Ralhan.  FIEO warned that if  exports contraction also impacted the volume for a long time, then it will result in job losses.  “If something does not happens from the side of government or exports does not pick up then there is going to be big job losses,” warned Mr Ralhan.

Source:- deccanchronicle.com

Rupee Up 3 Paise Against Dollar

The rupee on Wednesday strengthened by another 3 paise to 62.82 against the dollar on persistent selling of the American currency by banks and exporters amid fresh foreign capital inflows into the equity market.

The rupee resumed flat at 62.85 per dollar at the at the Interbank Foreign Exchange (Forex) market and hovered in a range of 62.7150 and 63.02 before concluding at 62.82 per dollar, showing a gain of 3 paise of 0.05 per cent from its last close.

The rupee has gained 9 paise, or 0.14 per cent, in the last two days.

In Asian market, the dollar was trading lower against the yen on Wednesday, getting a boost as Japan’s main stock market trimmed its earlier gains, action that limited selling of the Japanese currency.

In New York market on Tuesday, the dollar ended mixed against major currencies, with the euro pivoting to modest gains against the greenback after euro zone Finance Ministers moved away from fixing a deadline for Greece to come up with fiscal reforms.

Source:- thehindu.com

No writ against CBDT's order denying sec. 80-IA relief due to deceptive figures of allocable area of

IT : When applicant seeks benefit of deduction under section 80-IA, it must state correct facts at very first instance and not when authorities point a flaw in figures given of allocable area of industrial units, and thereafter keep changing it on grounds of typographical error and/or mistake

Misleading ad that 'Dettol' is far superior than 'Betadine' is unfair trade practice by respondent

Competition Law: Where respondent was attempting to mislead through advertisements that strength of its product Dettol and its efficacy was far superior to that of complainants product Betadine, advertisements issued by respondent being false and disparaging fell within ambit of unfair trade practice

Rajasthan High Court upheld imposition of penalty due to incomplete declaration from

CST & VAT: Rajasthan VAT - Where Form No. ST-18 accompanied with goods under transport was found incomplete to extent that it did not disclose bill No. and date, levy of penalty under section 78(5) was justified

Additions of unexplained investment made on buyer on basis of statement of seller during survey and

IT: Where assessee purchased a plot vide registered sale deed for certain consideration but during survey under section 133A, vendor of plot declared higher consideration which remained unrebutted, amount of difference was added to assessee's income as unexplained investment in plot under section 69

AO couldn't disallow direct exp. without rejecting books if assessee had shown profit higher than ea

IT : Where profit rate as declared was better than rate accepted in last year, amount of profit disclosed deserved to be accepted

No recovery proceedings against garnishee once it filed an affidavit that it didn't owe any sums to

IT : Proceedings under section 226 could not be quashed for non-service of notice where petitioner participated in proceedings subsequently

Utility bills and Bank Statements of clients acceptable as address proofs under Money Laundering nor

MONEY-LAUNDERING/ILT/INDIAN ACTS & RULES : Prevention of Money-Laundering (Maintenance of Records) Amendment Rules, 2015 – Amendment in Rule 2

Internal TNMM has to be applied to compute ALP if AE segment and non-AE segment are functionally com

IT/ILT : Where assessee had entered into international transaction with its AEs as well as third parties, AE segment and third party segment being functionally comparable, internal TNMM was to be applied to determine ALP of transaction with AEs

Advertisement to create public awareness and consciousness of product isn’t capital exp; allowable

IT : Expenditure incurred by assessee in field of advertisement with a view to create brand value of its product, was to be allowed as business expenditure

SEBI directs its employees to declare their assets and liabilities as per Lokpal and Lokayuktas Act,

SEBI/INDIAN ACTS & RULES : SEBI (Employees' Service) (Second Amendment) Regulations, 2015 – Amendment in Regulation 66

Fee paid to electricity board for using distribution network isn't FTS as it doesn't involve human i

IT : Rule 8D being not applicable for relevant year, Commissioner was not justified to hold order passed by Assessing Officer to be erroneous and prejudicial to interest of revenue simply because disallowance under section 14A was made without invoking this rule

Unabsorbed deprecation to be reduced from profit before allowing Sec. 10A deduction

IT : Unabsorbed depreciation shall form part of current year's depreciation and same is required to be deducted before allowing deduction under section 10A

No attempt to evade tax in absence of proper docs when goods in transit were meant for return and no

CST & VAT: Punjab VAT - Where Authorised Officer checked a vehicle carrying goods of assessee and having found that bills accompanying goods were not from regular bill book and an attempt to evade tax was made imposed penalty upon assessee under section 14B(7)(ii), since during assessment proceedings Assessing Authority had accepted bill book and stand of assessee that it was an agent of one 'E' and above goods had been returned to 'E' on cancellation of agency, there was no question of attempt

Losses already set-off prior to initial year of claiming sec. 80-IA relief couldn't be set-off again

IT: Loss prior to initial assessment year of claiming deduction under section 80-IA which has already been set-off cannot be brought forward and set-off while applying provisions of section 80-IA(5)

EOU outsourcing its manufacturing activity after carrying out engineering drawing was entitled to se

IT : Where assessee undertook detailed engineering drawings while outsourced production work and thereafter goods produced were re-inspected and assembled before they were exported, assessee's claim for exemption under section 10B was to be allowed

Receipts by NR on transportation of rig outside Indian territorial waters is includible in presumpti

IT/ILT: Amount received by assessee non-resident on account of reimbursement of expenses and mobilization revenue attributable to transportation of rig outside India territorial waters was to be added to its total income for arriving at profit and gains at rate of 10 per cent under section 44BB

Discretionary reduction of penalty by Tribunal in judicious manner doesn’t give rise to question of

VAT/CST : Guj. VAT : Where Tribunal had, looking to facts and circumstances, exercised its jurisdiction to reduce penalty from 50 per cent of tax to 10 per cent of tax, said exercise of jurisdiction does not give rise to any substantial question of law

CLB declared appellant as owner of shares as transferor didn't come forward to claim ownership of sh

CL : Where appellant transferee purchased shares from broker, but registrar and transferor raised objection that due to difference in signatures on transfer deeds, transfer would not be effected, in view of fact that inspite of several reminders, transferor had not come forward to claim ownership of impugned shares, appellant was to be declared as owner of shares

No interest for default in payment of advance tax by NR when all its receipts from payee were subjec

IT : Where assessees were non-resident companies, entire tax was to be deducted at source on payments made by payer to it and there was no question of payment of advance tax by assessees; therefore, revenue could not charge any interest under section 234B from assessees

Parking charges collected on vacant land were taxable even if developer was following project comple

IT : Where assessee developer was following project completion method for payment of taxes, parking charges collected by him on vacant land belonging to him had nothing to do with completion of assessee's project; assessee was obliged to pay on parking charges in current year

HC dismissed writ against SCN seeking service tax on 85-year lease by City Development Authority

Service Tax : Where department issued notice invoking extended period to demand service tax on premium for leasing out property for 85 years by City Development Authority, High Court dismissed writ against said notice citing availability of alternate remedy of adjudication and appeal

Iran, Major Steel Exporter To Iraq

Iran’s Trade Promotion Organization has announced itself as the major steel and other mineral exporter to Iraq in 2013. Iran’s state news agency IRNA report quoted the Organization’s publications showing that Turkey, Ukraine, China, Jordan, Italy, India, Russia, South Korea, Germany and Czech Republic as Iran’s major rival countries in exporting steel and iron to Iraq.

In 2013 Iran exported steel worth $187.3mn, constituting only 3 per cent of Iran’s total exports to Iraq.

Iran competed with Turkey, Pakistan, India, Oman, China, Jordan, Spain, Egypt, the US, and Saudi Arabia in exporting salt, sulfur, and other ores, with exports worth $716mn of ores, which was a 11.8 share in Iran’s total exports to Iraq in 2013.

In export of ceramic products, Iran competed for Iraqi market with China, Turkey, Spain, India, Germany, Egypt, Italy, Austria, Britain and the US; Iran’s ceramic exports to Iraq totalled $437mn, which was 7.2 per cent of total exports to Iraq. In exports of finishd steel products (steel girders and rebar), Iran was in thrid place, with Turkey, China, Italy, South Korea, India, Germany, Saudi Arabia, Jordan, Russia, and Brazil as rivals in finished steel and iron markets.

Iran exports to Iraq total $12bn annually, and government projections estimate the fiture would rise to $26bn.

Figures provided by Iran’s Customs Office indicate that in fiscal year ending in March 21, 2013, Iran’s non-oil exports totalled 93 million tones, worth $41.7bn, which displayed a growth in weight, of 16.7 per cent and in value of 0.4 per cent compared to that in the year before.

Source:en.mehrnews.com

Govt May Hike Sugar Import Duty To 40% To Check Price Fall

The government is likely to raise import duty on sugar to 40 per cent from the current 25 per cent to check sliding price of the sweetener and enable mills to clear mounting cane arrears of about Rs 20,000 crore.

A meeting of informal group of ministers, headed by Food Minister Ram Vilas Paswan, today decided to recommend a hike in import duty of sugar.

A consensus also emerged on the issue of creating buffer stock, restructuring of loan, promotion of ethanol output, export subsidy on white sugar among others to help solve the current crisis faced by farmers and millers.

"We discussed the suggestions made by farmers and state governments for early clearance of cane dues. Looking at the plight of farmers and unprecedented situation which sugar industry is facing, we have arrived at a consensus on couple of them to help in solving the problems in short term as well as long term," Paswan told PTI after the meeting.

To implement some of the suggestions, the Cabinet proposals will be moved, while import duty can be hiked by the Finance Ministry through an executive order, sources said.

In August last year, import duty on both raw and refined sugar was raised to 25 per cent from 15 per cent to bail out the cash-starved sugar industry.

Besides Paswan, Transport Minister Nitin Gadkari, Agriculture Minister Radha Mohan Singh, Commerce Minister Nirmala Sitharaman, Petroleum Minister Dharmendra Pradhan, Women and Child Development Minister Maneka Gandhi and Minister of State for Agriculture Sanjeev Balyan were present in the meeting. On April 15-16, Paswan had called two separate meetings of farmers and chief ministers to resolve the cane arrear crisis.

Sugar industry is finding difficulty in paying cane price to farmers as mills have been incurring losses for the last few years due to low realisation and high cost of production.

The Centre has recently provided a subsidy of Rs 4,000 per tonne for the exports of 1.4 million tonnes of raw sugars to improve cash-flow of millers.

Industry body ISMA has been demanding that the government give exports subsidy on white sweetener, create buffer stock of 2 million tonnes and also restructure millers' debt over Rs 36,000 crore. Ex-mill prices of sugar have fallen to Rs 21-24/kg in the country, while the cost of production is over Rs 30/kg.

Sugar production of India, the world's second largest producer, is estimated to be higher than the domestic consumption for the fifth year in a row this season.

The government has pegged sugar output at 26.5 million tonnes for the 2014-15 marketing year (October-September), as against 24.3 million tonnes in the previous year. The annual domestic demand is about 24.8 million tonne.

Source:business-standard.com

Coal India Output Won’T Keep Imports Low

Despite Coal India reporting the sharpest production growth in two decades in FY15 and the momentum expected to remain in the current fiscal, the country’s coal imports are set to accelerate. Power companies, one of the major consumers of coal, have firmed up plans to import 73 million tonne of coal this fiscal, up more than a third from last year.

Higher imports have been scheduled because of the fuel’s declining prices in global markets and the transportation bottlenecks that made domestic coal relatively unattractive for coastal power stations.

With the planned hike in coal imports by power plants, the consensus estimate of the overall coal imports for the fiscal—up 10% at 220 million tonne—could go awry. The relentless rise in coal imports in recent years has put pressure on the current account, along with the heavy oil import bill, which has been a perennial issue for India.

The current account deficit (CAD), which had hit a record 4.8% of GDP in FY13, dropped to 2.3% in FY14 and further to 1.7% during April-December 2014.

In what could be a relief to the managers of the country’s current account balance, the higher coal imports in the current fiscal won’t add too much to the country’s import bill, unlike in FY13 when the prices of the commodity skyrocketed. Global coal prices have declined dramatically over the last two years from a high of over $100 per million tonne to a modest $50 per million tonne, currently.

The import bill for FY15 was around Rs 64,500 crore, nearly 40% cheaper than in the previous year, although the volume of imports increased from 170 million tonne in FY14 to 200 million tonne in FY15.

According to sources, the Central Electricity Authority (CEA) has finalised the list of power developers, which have raised the demand for importing coal. “The demand for import has risen because of capacity addition and falling imported coal prices, making the prospect attractive to power producers in view of congested and inefficient transportation available for procuring domestic coal,” a CEA official told FE on the condition of anonymity.

The CEA’s “approval” is sought by the power companies to import coal because it allows them to pass on the additional cost, if any, to the distribution companies.

Recognising that transportation constraints need to be removed for CIL to supply coal to coastal power units, the government is exploring forming joint ventures among the Indian railways, CIL and mineral-rich states to build rail connectivity to pitheads. CIL’s plan to augment production to 1 billion tonne relies heavily on improving railway infrastructure, including in many cases, last-mile connectivity to coal mines.

CIL’s production stood at 494.23 million tonne in FY15, up 7% over the previous year. The company has set a target of 550 million tonne for the current fiscal.

The largest thermal power developer NTPC will alone import 30% of the total CEA-approved coal imports in FY16, at 22 million tonne. “NTPC has 11 new units. Given that CIL only assures 67% of the total requirement to plants commissioned after 2009, we need to tie up imports,” a company official told FE. He, however, added that the company would cease to import coal in five years as its own mines will start producing.

Source:financialexpress.com

"Expeditious Customs Clearance Of Goods" Reaches Centre's Table

The Revenue Department has decided to set up a high-level administrative body at all seaports and airports to ensure expeditious Customs clearance of goods. The goods are subjected to certain legal and procedural formalities before any decision is taken.

Any delay in securing the approval from one regulatory agency holds up the Customs permission, said the Central Board of Excise and Customs (CBEC).

"Accordingly, the Board has decided to set up a Customs Clearance Facilitation Committee (CCFC) at every major Customs seaport and airport with immediate effect," it said.

The CCFC will be headed by the Chief Commissioner of Customs/Commissioner of Customs in charge of the seaport and airport concerned.

It will have as members the senior-most functionary of Food Safety Standards Authority of India/Port Health Officer, plant quarantine and animal quarantine authorities, Drug Controller of India, and Port Trust/Airport Authority of  India/Custodians, and Railways/CONCOR, among others.

The CCFC has been tasked with monitoring and ensuring speedy clearance of imported and export goods in accordance with the timeline. It has also been asked to identify and resolve bottlenecks, if any, in the clearance procedure.

"The CCFC shall meet once a week or more frequently, if considered necessary by the chair," the CBEC circular read.

The government, in recent times, has taken a number of steps to create a more friendly business environment and trade facilitation, and setting up of the CCFC is a step in that direction, it added.

Source:dnaindia.com

Don't Pay 14% Service Tax As Yet, It's Illegal

Finance Minister Arun Jaitley, in his budget speech of 2015, had hiked service tax to 14% from the current 12.36%. Parts of the service industry, including restaurants, started charging their customers are higher rates from April 1.

However, they missed an important detail. The higher service tax is not yet in force as the Indian Parliament is yet to pass the Finance Bill.

In an interview to CNBC TV 18, Kaushal Srivastava, Chairman of Central Board Excise and Customs (CBEC) said that it is illegal for the industry to charge higher service tax and warned it against doing so.

He said that the service tax rate is still 12.36% across the board and all industries must charge only this and not 14%. Many consumers have reported that restaurants have started charging for higher service tax from April 1 pushing up their food bills.

CNBC reported him saying, "“We have already issued instructions to our field formations that it should be made known to the public by issue of public notices. If any instances of overcharging of service tax rate coming to notice of any members of the public, they are welcome to report it to our local officers.”

So, the next time you go to your favourite restaurant for that sumptuous meal, do keep an eye on what service tax it charges you.

Source:dnaindia.com

Electrical installation in hotel building has to be treated as plant; entitled to 25% depreciation

IT : Electrical installations and sanitary fittings, even if, installed in a hotel building would be regarded as plant and same were entitled to depreciation at rate of 25 per cent

HC quashed reassessment as impugned issue was decided by SC in favour of assessee in earlier year

IT : Reassessment on ground that assessee had paid commission without deducting TDS to advertising agents, could not be upheld where Supreme Court had decided same issue in assessee's favour in earlier assessment year

Akshay Tritiya: Gold Imports May Rise 89% In April

India's gold imports is likely to rise more than 89 per cent at 100 tonnes this month compared with last year, mainly due to weakness in international prices and easing of restrictions by the RBI, an industry body said.

The gold import stood at 53 tonne during April last year, according to data given by The All India Gems and Jewellery Trade Federation (GJF).

"Till now we have imported nearly 100 tonnes of gold. So we are expecting the total imports to be a little over 100 tonnes," GJF's new Chairman Manish Jain told PTI here.

However, imports will be lower than March, when India had shipped in 159.5 tonnes of gold as jewellers were stocking up in preparation for Akshaya Tritiya and the marriage season, Jain said. The country had imported 72.5 tonnes gold in March last year, he said.

In the first three months, the country has imported 286.2 tonnes gold compared with 137.5 tonnes in the corresponding period last year.

In 2013, the government had imposed several restrictions, including increasing the import duty and introducing 80:20 scheme, under which at least 20% of the imported gold had to be exported before bringing in new lots.

In November last year, the Reserve Bank had scrapped the 80:20 scheme citing that the current account deficit level is comfortable.

However, the government has so far refused to bring down the import duty to 2% from the current 10%, as demanded by the industry.

Source:dnaindia.com

Indian Rupee Off 100-Day Low As Exporters Sell Dollars

The Indian rupee on Tuesday (21 April) came off the tax shock-driven low of the previous day as exporters cashed their dollar stocks after sharp gains in the greenback.

The USD/INR pair slipped to 62.75 from Monday's close of 63.11, further off the previous day's intra-day high of 63.17, which was its highest since 8 January.

The sharp rise in the pair over Friday and Monday had weakened the rupee by 1.2% against the dollar and at Tuesday's low of the pair, the Indian unit has recovered 0.6%.

The surprise government move over the weekend to issue notices to several foreign firms asking them to pay tax dues was the main drag on the rupee over Monday.

Another development in the market that weighed on the rupee was Indian pharmaceutical firm Sun Pharma coming under selling pressure as its Japanese stake holder Daiichi Sankyo offloaded its entire stake through multiple block deals.

Sun Pharma shares fell more than 10% on the announcement adding to the pressure on the rupee as Daiichi repatriating its proceeds will increase demand for the dollar.

According to the latest official data, foreign investors pumped in more than $3bn in the Indian capital markets last month, and total foreign inflows during the first quarter of 2015 touched $13bn. The dollar rally since Friday (17 April) and month-end dollar demand form oil importers are also weakening the rupee.

Source:ibtimes.co.uk

Now insurance broker shall be deemed as person carrying designated business or profession under mone

MONEY LAUNDERING : Section 2(1)(sa)(vi) of the Prevention of Money-Laundering Act, 2002 - Person Carrying on Notified Activities – Notified Activity

Deeming fiction of Sec. 50C not be considered while computing exemption under Sec. 54

IT : When a property is acquired by inheritance, cost of acquisition and period of holding of previous owner is to be taken as cost and holding period of assessee

Bank couldn’t defer deduction of tax and wait for lower TDS certificate from depositor; held as asse

IT: Bank cannot simply defer deduction of tax at source on interest on deposits and keep on waiting for certificate under section 197 to be obtained by depositor; it is liable to deduct tax as per mandate of section 194A

HC couldn’t reject winding up plea just because trustee of bondholders didn’t agree to debt restrict

CL: Where winding up petitioner providing trusteeship service to bondholders of respondent-company rejected scheme proposed by respondent-company for securing debt due to bondholder it was to be held that petitioner was trying to protect interest of bondholders and, hence, winding up petition filed by it was to be admitted

Royalty for know-how of manufacturing taxable at its situs while know-how for product functionality

IT/ILT : When royalty is for use of a technology in manufacturing, it is to be taxed at situs of manufacturing product, and, when royalty is for use of technology in functioning of product so manufactured, it is to be taxed at situs of use

VAT paid on goods consumed in manufacturing of taxable goods is eligible for set off even if by-prod

[2015] 56 taxmann.com 187 (Madhya Pradesh)

AO couldn’t take into account profit margin of principle-contractor to estimate profit of sub-contra

IT: On rejection of books of account under section 145, profit margin of assessee, a sub-contractor, is to be estimated at rate much less than average profit margin worked out by Assessing Officer of its principal (i.e., contractor)

Addition of unexplained bank deposits upheld on failure of assessee to prove that they were disclose

IT : Where Assessing Officer made addition with respect to income of Electro Medical maintenance centre not included in return of income but assessee showed that said income had been offered in return of subsequent year, matter was remanded back to Assessing Officer for verification

Govt. grants excise duty exemption on machinery supplied for setting up of power project of 'Rattan

EXCISE LAWS/NT : Section 5A of the Central Excise Act, 1944 - Power to Grant Exemption from Duty of Excise - Exemption to Specified Excisable Goods - Provision of Concessional Rate of Central Excise Duty on Specified Goods - Amendment in Notification No.12/2012-C.E., Dated 17-3-2012

If assessee forgoes excise exemption on deemed exports, he may claim its refund in terms of Foreign

Excise & Customs : FTP : In case of deemed exports, assessee has two options : (a) first, to claim exemption; or (b) seek refund of duty paid by him; hence, where assessee had not availed of exemption, refund of 'duty paid' cannot be denied

No TP adjustment on interest rate charged from AE if it was higher than rate computed by LIBOR

IT/ILT : Where in terms of agreement, assessee was entitled to receive 2 per cent extra mobile phones along with its purchased quantity from Chinese parties, in view of fact that apart from confirmation from suppliers, assessee brought on record bill entry, purchase invoice etc. in support of its claim that value of said swap units was duly accounted for, impugned addition made in that respect by Assessing Officer was to be set aside

Cancellation of house allotment due to non-payment of deposit didn't amount to unfair trade practice

MRTP : In a complaint filed against GDA under MRTP Act for unfair trade practice no direction could be issued for delivery of possession of flat allotted to complainant when that flat had already been issued to another person and complainant had not challenged cancellation of allotment

Pressure cooker is taxable at 12.5% under Assam VAT Act

CST & VAT : Assam VAT - Pressure cooker being sold by assessee would fall under residuary Entry No. 1 of Fifth Schedule to VAT Act and was liable to tax at rate of 12.5 per cent

No pre-deposit of interest if pre-deposit of principal demand of service tax is waived off

Service Tax : Where pre-deposit of principal demand of service tax is waived off, Tribunal cannot order pre-deposit of mere interest component, as interest is consequential; hence, direction of pre-deposit of interest was set aside

Organizing seminar by State forum of bankers club for benefit of bank employees wasn't charitable ac

IT: Where assessee-trust was rendering service to banks by organizing lectures and seminars for benefit of bank employees, same was not charitable activity and assessee was not entitled for recognition under section 2(15)

Cme: Asian Demand Influencing World Meat Markets

The report is published in April and October and can be found on the web at the following

Over the years, global trade in livestock and poultry has become a significant factor, in part because of the surge in demand from emerging markets but also due to the emergence of large global producers in Asia and South America, challenging traditional exporting countries in North America, EU and Oceania.

Shifts in global meat trade have significant implications for prices in the US domestic market and thus deserve attention.

The data set from USDA covers all large players and USDA offers three updated forecasts for a given year, becoming an important resource for market participants.

Some may not realise that the US is the largest world beef importer in the world. Most of the beef coming here is lean manufacturing beef that goes into hamburger production, and a strong US dollar and record high lean beef values have made the US the most valuable grinding beef market in the world.

As a result, most beef suppliers to the US have ramped up shipments. US beef imports for 2015 currently are projected at 1.320 million MT (carcass wt.), revised by 95 thousand MT compared to the October forecast but still slightly lower than in 2014.

However, note that US beef imports are 387,000 MT (+41%) higher than in 2011. China has emerged in recent years as a global beef buyer and the latest USDA data confirmed that position.

Combined beef imports of China Mainland and Hong Kong in 2015 are projected at 1.250 million MT, revised lower from the 1.265 MMT projected in October but still about 18 per cent higher than in 2014. It is truly impressive than in 2011, combined beef imports from China/Hong Kong were a mere 181,000 MT.

The growth in Chinese beef demand has certainly transformed beef world trade. China has been able to fill its growing needs through both direct purchases from Australia and Uruguay as well as indirect flows from Hong Kong, which in turn relies on USA and Brazil for its beef.

But if China has been the major market mover on the import side, India has become by far the largest beef exporter in the world. Keep in mind that almost all Indian beef exported comes from water buffaloes, otherwise called carabeef.

Its products are shipped across Asia, the Middle East and Africa. Some product likely finds its way into China through grey channel trade but because of its FMD status it does not compete directly with the US.

As with China, India beef supply bears watching as it has an outsize influence on global beef trade.

Brazil exports in 2015 are currently forecast to be 2 million MT, revised down by 235 million MT compared to the October forecast but still 5 per cent higher than a year ago and 50 per cent higher than in 2011.

World beef trade has been shifting, with more product available in South America and India and increased demand in North America and Asia.

Source:thecattlesite.com

Sharp Decline In Rubber Production In Kerala, Output Declines More Than 15%

Production of natural rubber in Kerala has declined by more than 15 per cent during last fiscal as against the yield for the corresponding previous year as unremunerative prices kept rubber growers away from tapping.

Production of natural rubber during 2014-15 was 6,55,000 tonnes which is 15.4 per cent lower than 7,74,000 tonnes produced in 2013-14, according to the latest figures released by the Rubber Board.

Kerala accounts for more than 90 per cent of the total rubber production in the country. The total area under rubber cultivation in the state is 5.45 lakh hectares. Besides, some 11.50 lakh farmers, most of whom are small-holders, are engaged in cultivation of the commodity.

"The main reason for reduction in production is that rubber growers desist from tapping due to sharp fall in prices of natural rubber," Cochin Rubber Traders Association President N Radhakrishan told PTI.

Production decreased by 26.6 per cent to 35,000 tonnes in March 2015 from 47,700 tonnes during March 2014, Rubber Board said. Total rubber consumption by various industries, including tyre manufacturers, was 10,18,185 tonnes during 2014-15 which was 3.7 per cent more than the previous year. Total rubber imports for 2014-15 were 4,14,606 tonnes, an increase of 54,000 tonnes over previous year.

Natural rubber production was at a low ebb ever since the prices nosedived to as low as Rs 120 a kg from as high as Rs 250 a kg two years ago.

"The poor return and high labour cost has forced many of the growers, 75 per cent small and marginal farmers, to keep away from tapping," Radhakrishnan said.

Mathew, a small-farmer, said rubber has become a "very unattractive venture. The unrestricted massive imports by tyre companies have also pushed down domestic demand," he said.

Hiking import duty on rubber and bringing port restrictions would push up the domestic demand for the commodity, thereby providing provide relief to farmers, he added.

source:economictimes.indiatimes.com

India Exports 10.81 Million Tons Of Rice In First Eleven Months Of Fy 2014-15, Up 8.5% From Last Year

India exported around 10.81 million tons of rice (including basmati and non-basmati) in the first eleven months of FY 2014-15 (April - March), up about 8.5% from around 9.96 million tons exported during the same period in FY 2013-14, according to provisional data released by the Agricultural and Processed Food Products Export Development Authority (APEDA).

In value terms, India’s total rice exports have earned around Rs.43,722 crore (around $7.16 billion) during April 2014 – February 2015, up about 2% from around Rs.42,733 crore (around $7 billion) earned during the same period in FY 2013-14. In USD terms, value of rice exports during the eleven-month period increased by about 2% y/y.

India's basmati rice exports have declined about 4% to around 3.3 million tons in April 2014 - February 2015 from around 3.44 million tons exported during the same period in FY 2013-14.

In value terms, basmati rice exports declined to about Rs.25,087 crore (around $4.12 billion) during the first eleven months of FY 2014-15, down about 5% from around Rs.26,515 crore (around $4.4 billion) earned in the same period in FY 2013-14. In USD terms, India’s basmati rice exports declined by 6% y/y in April 2014 – February 2015.

India's basmati rice exports were primarily impacted due to Iran's ban on rice imports since November 2014.

India’s non-basmati rice exports in April 2014 - February 2015 increased to around 7.51 million tons, up about 15% from around 6.52 million tons recorded in the same period in FY 2013-14.

In value terms, non-basmati rice exports earned about Rs.18,635 crore (around $3 billion), up about 15% from around Rs.16,218 crore (around $2.67 billion) in the same period in FY 2013-14. In dollar terms, non-basmati rice exports increased by 12%y/y during the ten-month period.

Source:oryza.com

‘India To Cut Down 10% Crude Import By 2022’

The Bharatiya Janata party (BJP)-led government at the Centre would cut down India’s crude oil import by at least 10 per cent in the next seven years and bring it down to 67 per cent of the country’s total demand, Dharmendra Pradhan, Union minister of state (independent charge) for petroleum and natural gas, said.

Simultaneously, domestic output would be also increased, he said. “Right now we import about 77 per cent of our crude oil requirement. It is a matter of shame that we are importing such a huge quantity of crude oil even after 68 years of Independence.

By the time Independence completes 75 years, we want to bring this down to 66 per cent, for which we will of course have to step up our domestic output,” Pradhan said. He was addressing a press conference at the end of his four-day tour of Assam.

Source:hellenicshippingnews.com

 

Builder entitled to deduction of interest if bank loan was transferred to housing society as per dev

IT : Interest paid to bank on borrowed fund which was advanced by builder to housing society and recoverable later on from purchasers of flats, would be allowable

Mmtc To Import Lng From The Spot Market

The Bharatiya Janata party (BJP)-led government at the Centre would cut down India’s crude oil import by at least 10 per cent in the next seven years and bring it down to 67 per cent of the country’s total demand, Dharmendra Pradhan, Union minister of state (independent charge) for petroleum and natural gas, said.

Simultaneously, domestic output would be also increased, he said. “Right now we import about 77 per cent of our crude oil requirement. It is a matter of shame that we are importing such a huge quantity of crude oil even after 68 years of Independence.

By the time Independence completes 75 years, we want to bring this down to 66 per cent, for which we will of course have to step up our domestic output,” Pradhan said. He was addressing a press conference at the end of his four-day tour of Assam.

Source:hellenicshippingnews.com

 

No tax recovery from director of public Co. without issuing notice of lifting corporate veil to dire

IT : Director of a public limited company could not be treated as director of a private limited company, by lifting corporate veil under section 179 without issuing show cause notice to him

Actual management of operations is 'Business Auxiliary Service' and not Management Consultancy Servi

Service Tax : Management of a factory is different from management consultancy and such management services which are executory in nature would merit classification under 'Business Auxiliary Service' and not under 'Management Consultancy Service'

Removing moisture from raw honey is deemed as manufacturing activity for sec. 10B relief

IT : Activity of removing moisture from raw honey and thereupon repacking and exporting same to various countries amounted to 'manufacturing' activity eligible for exemption under section 10B

Earlier assessments couldn't be held erroneous on ground of non-genuine transactions of subsequent y

IT/ILT: Where Assessing Officer passed earlier assessment order after examining all facts and evidences relating to transaction of know-how and DMF, Only because TPO in subsequent year took a view that purchase of technical know-how and DMF was not genuine; assessment order could not be revised under section 263

Commission paid to NR agent for procurement of export orders outside India wasn't taxable; not liabl

IT : Where commission paid by assessee to non-resident agent for procuring export orders was not chargeable to tax in hands of said agent, assessee was not liable to deduct tax at source

HC admits winding-up plea against company on its wilful failure to pay an admitted debt

CL: Where a company wilfully neglected to pay an admitted debt, winding up against company was to be admitted

No assessment of escaped turnover solely on basis of statements collected by enforcement wing during

CST & VAT : Tamil Nadu VAT- Assessment cannot be mechanically done by placing reliance on statement collected by enforcement wing; it is to be done by Assessing Officer independently

No penalty for claim wrongly made under old law when assessee had paid taxes when it was brought to

IT : Where revenue brought to notice of assessee that capital gain was to be taxed in view of change in law from current year and assessee paid tax accordingly, there being no suppression, no penalty could be levied

Car parking area can’t be treated as part of built-up area of residential unit while computing sec.

IT: Assessee 'engaged in business of developing and construction of housing project need not be owner of property so as to claim deduction under section 80-IB(10)

Payment of data storage charges to NR doesn't constitute either royalty or 'FTS'

IT/ILT : Payment of data storage charges made by assessee to a non-resident did not fall either under royalty or fee for technical services and, thus, assessee was not required to deduct tax at source while making payment of said charges

Exporters Need More Policy Support

India’s Foreign Trade Policy (FTP) 2015-20 sets an ambitious target of $900 billion in merchandise and services export by 2020. Which means, exports of goods and services must grow at CAGR of over 15 per cent in the next five years to double from its current levels of $ 450 billion.

The new FTP seems to be guided by the following considerations: keeping tabs on how much money goes out on account of export incentives given the fiscal constraints; WTO obligations to phase out export subsidies; linking the FTP to the Make in India initiative; and improving FTAs utilisation in trade.

Thus, the number of countries covered under the new merchandise export from India scheme (MEIS) that replaces five existing incentive schemes, including FPS and FMS, has been pruned to a keep a tab on fiscal outgo. The quantum of export subsidies is lower than earlier.

Reduction of export obligation by 25 per cent under the EPCG (export promotion capital goods) scheme is expected to boost indigenous production of capital goods.

The introduction of online filing of documents is to reduce trade transaction cost and help manufacturing exports by increasing their cost competitiveness. Merchandise falling under the categories of handloom products, books/periodicals, leather footwear, toys and customised fashion garments, with fob values of up to ?25,000/consignment and their sale finalised through e-commerce, would get the benefit of FTP.

The exports from SEZs suffering from high MAT would now be eligible for incentives. Another notable positive is the introduction of transferability of duty free scrips and allowing them for payment of customs, excise duties and service tax without any conditionality. However, it would be worth examining how effective the new FTP would be in pushing India’s merchandise exports.

It is very difficult to decode what forms the basis of categorising India’s export destinations into three groupings as well as allocation of MEIS rates for different commodities. What could explain the exclusion of countries such as Brazil, Bangladesh and China for export promotion with respect to top textile products?

Again, increasing exports to China should have been top priority, but there is no real incentive for China in the new FTP even though it is a top export destination for cotton fibre and yarn.

From a strict reading of the FTP, only direct export to Japan and the US should be eligible for MEIS. The problem is India mostly exports fabrics to Bangladesh, Indonesia, Myanmar and Vietnam for conversion into garments that are ultimately shipped to Japan and the US.

It is worth mentioning that some of India’s well intentioned trade policy actions (to help LDCs like Bangladesh), though outside the purview of the FTP, are hurting indigenous manufacturing.

For instance, allowing duty free, quota free import of garments from Bangladesh (or Myanmar) without imposing sourcing obligations promotes the backdoor entry of Chinese textile material into India, and hurts the whole textile value chain in the country from fibre to yarn, fabrics and apparel.

The FTP needs to follow up with other actions like making the use of fibres, yarns and fabrics of Indian origin mandatory for allowing duty free imports of apparel from Bangladesh and other LDCs seeking preferential market access on non-reciprocal basis.

It’s not that India would be the first country to impose sourcing restrictions for allowing duty free imports of apparels. The US imposes sourcing restrictions in all its existing and proposed trade pacts. Why can’t India?

Because of India’s FTAs and other trade deals such as Information Technology Agreement (ITA), India’s manufacturing sector has to suffer what is called inverted duty structure, that is, high import duties on inputs/ raw materials and lower duties on finished goods. Thus, one can import an apparel item duty free in India but its basic raw materials are subject to 5 to 10 per cent import duties. The last Union Budget did attempt to address some of the cases of inverted duties, but only partially.

Again, increasing the use of FTAs would require addressing non-tariff barriers in partner countries. For instance, Japan, as per the terms of the India-Japan CEPA, allows duty free import of apparels from India only if all the material used for the manufacture of apparels are either of Indian or Japanese origin.

Indian businesses should realise that the days of export subsidies are numbered because of WTO obligations. To deal with slowing demand and rising cost on a long-term basis, businesses must develop suitable global strategies for sourcing, production and trade.

Source:thehindubusinessline.com

Rupee Strong Against Dollar

THE rupee displayed a strong performance against the dollar last week, aided in part by the increase in foreign exchange reserves following the $1.2bn HBL transaction. However, the local currency lost value against the euro.

The rupee started the week in the interbank market by picking up one-paisa for buying and two paisas for selling, as the dollar slipped to Rs101.85 and Rs101.86 in the first trading session, against the previous week’s close of Rs101.86 and Rs101.88.

It then rose by six paisas for buying and four paisas for selling in the second trading session, sending the greenback down to Rs101.79 and Rs101.82. The rupee picked up a further 12 paisas for buying and 13 paisas for selling in the third trading session, pushing the dollar down to Rs101.67 and Rs101.69.

The rupee’s rising streak continued in the fourth trading session, as it rose by another two paisas, sending the dollar down to Rs101.65 and Rs101.67. It then went up by a further 15 paisas for buying and 12 paisas for selling in the last trading session, as the dollar closed the week at Rs101.50 and Rs101.55.

During the week, the dollar depreciated by 36 paisas for buying and 33 paisas for selling in the interbank market.

In the open market, the rupee displayed a largely stable performance against the dollar last week. It remained unchanged from the prior week’s closing level of Rs102.40 and Rs102.60 in the first two trading sessions of the week.

In the third trading session, the rupee edged up by five paisas, sending the greenback lower at Rs102.35 and Rs102.55. However, the dollar rebounded in the fourth trading session, picking up five paisas to revert to Rs102.40 and Rs102.60.

The rupee-dollar parity then remained unchanged at this level in the last trading session. As a result, the dollar remained flat against the rupee on a net basis in the open market last week.

Meanwhile, the rupee weakened against the euro last week after its recent rising streak. Yet, it had started the week by gaining 50 paisas in the first trading session, sending the euro down to Rs108.25 and Rs108.50 against the prior week’s close of Rs108.75 and Rs109.00.

It rose by a further 55 paisas in the second trading session, as the single currency dropped to Rs108.20 and Rs108.45. However, the euro bounced back in the third trading session, regaining five paisas against the rupee to close the day at Rs108.25 and Rs108.50.

The rupee then suffered a bigger fall of 125 paisas in the fourth trading session, as the euro ended the day at Rs109.50 and Rs109.75.

The single currency finally picked up a further 65 paisas in the last trading session to close the week up at Rs110.15 and Rs110.40. As a result, the euro appreciated by a net 90 paisas against the rupee last week.

Source:dawn.com

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