CA Terminal

Friday, 12 June 2015

Even prior to introduction of works contract service, service portion in such contracts was chargeab

Service Tax : Service elements in a composite (works) contract (involving transfer of property in goods and rendition of services), are subject to levy of service tax even prior to 1-6-2007 where such services are classifiable under 'Commercial or Industrial Construction'; 'Construction of Complex' or 'Erection, Commissioning or Installation' (as defined)

Order of AO couldn't be held as erroneous if he had adopted one of possible views regarding TDS liab

IT : Where on scrutiny under CASS scheme, Assessing Officer allowed rent paid on mixture machine without deduction of tax at source, said view being one of possible view regarding TDS provisions, his order did not suffer from any error requiring revision

Mumbai ITAT allows set-off of long-term capital loss arising from sale of STT paid equity shares

IT : Long-term capital loss of sale of equity shares attracting STT is allowed to be set off against long term capital gain on sale of land in accordance with section 70(3)

Mumbai ITAT allows set-off of long-term capital loss on sale of STT paid equity shares

IT : Long-term capital loss of sale of equity shares attracting STT is allowed to be set off against long term capital gain on sale of land in accordance with section 70(3)

Borrower should be allowed to be represented by an advocate to determine its status of wilful defaul

CL : Whether a borrower should be allowed to be represented by an advocate in proceedings conducted by bank to determine whether borrower is a wilful defaulter

Sec. 10B relief couldn't be denied on ground that machinery wasn't installed when authorities had du

IT : Where government authorities had certified installation of machinery and commencement of manufacturing activity of assessee-firm, deduction under section 10B could not be denied to assessee on ground that machinery was not installed

Fee paid to non-resident for arranging loan is neither interest nor 'FTS'; not liable to TDS

IT/ILT : No withholding tax on "arranger fee" u/s 195 as it is not "interest" as defined u/s 2(28A) nor is it FTS u/s 9(1)(vii)

License fee and management charges aren't head office expenses; can't be disallowed under Sec. 44C

IT/ILT : Neither the payment of "license fees" nor the "management charges", falls within the ambit and purview of section 44C and, accordingly, the nature of adjustment to the total income for the purpose of disallowance is not required. In the result, assessee's appeal allowed

RBI issues master circular on NBFCs

NBFCs/MASTER CIRCULAR : RBI issues master circular on NBFCs

RBI allows 'All-India Term Lending and Refinancing Institutions' to reverse excess provision on sale

BANKING/SARFAESI : Guidelines on Sale of Financial Assets to Securitisation Company (SC)/reconstruction Company (RC) and Related Issues

Reassessment made against 'ICICI Bank' as it claimed bad-debts without considering change in quantum

IT : Where petitioner-bank claimed bad debts on basis of deduction claimed in earlier assessment order without taking into account rectification made in quantum of provision created under section 36(1)(viia) in earlier year, initiation of reassessment proceedings was justified

Tiles consisting of 85% limestone are to be classified as 'stone tiles' rather than 'plastic tiles'

Excise & Customs : Where floor tiles consisted 85 per cent limestone and 13 per cent PVC and plastic was used merely as a binder, said tiles were to be regarded as 'stone tiles' (Heading 68.07) and not as 'plastic tiles' (Heading 3918.10)

RBI dispenses with reporting requirement of banks on On-site, Off-site and mobile ATMs

BANKING : Reporting Requirement on On-Site, Off-Site and Mobile ATMs

Thursday, 11 June 2015

Scheme of raising ECBs by Civil Aviation Sector further extended till March 31, 2016

FEMA/ILT : External Commercial Borrowings (ECB) for Civil Aviation Sector

Scheme of raising ECBs for low cost affordable housing projects to continue during F.Y. 2015-16, say

FEMA/ILT : External Commercial Borrowings (ECB) for Low Cost Affordable Housing Projects

For computing sec. 234B interest terminal point is date of admission of application & not passing of

IT: Interest under section 234B would be computed upto date of admission of application by Settlement Commission under section 245D(1) and not up to date of order of Settlement Commission under section 245D(4)

Services consumed in course of export are eligible for refund irrespective of their classification b

Service Tax : If services are availed by an exporter for business of export and assessee has paid service tax thereon, classification by service provider need not be examined; hence, assessee-exporter was eligible for refund of service tax paid on Terminal Handling Charges, Customs House Agent's charges and banking charges

RBI pemits subscription to chit funds by NRIs on non-repatriation basis

FEMA/ILT : Subscription to Chit Funds by Non-Resident Indian on Non-Repatriation Basis

Shares held by relatives can't be considered to determine substantial interest of shareholder under

IT : In order to determine substantial interest of a shareholder for invoking provisions of section 2(22)(e), it is ownership of shareholder alone in company to which loan/advance has been made by assessee-company, and not his or her relative or family members, which is determinative factor

CBDT allows filing of revised return after expiry of time limit to enable refund of WT arising due t

IT : Section 10 of the Wealth-Tax Act, 1957 – Wealth-Tax Authorities – Instructions to Subordinate Authorities – Clarifications on Amendment Brought out by Finance Act, 2013, W.r.e.f. 1-4-1993 in Wealth-Tax Act for Purpose of Claiming Refund of Wealth-Tax Paid on Agricultural Land as Per Provisions of Said Act Prior to Finance Act, 2013

If Tribunal proceeded on wrong facts assessee had to file rectification application instead of appro

Excise & Customs : Where assessee disputes that Tribunal's observations on facts are incorrect and not arising from record, remedy is to approach Tribunal by way of rectification application and not appeal before Supreme Court

Orissa VAT: Officer involved in audit process is incompetent to conduct audit assessment under sec.

CST & VAT : Orissa VAT - Where Sales Tax Officer relying upon a letter of Deputy Commissioner prepared audit report in case of assessee and thereafter Deputy Commissioner on basis of said report passed assessment order on assessee, since Deputy Commissioner was involved in audit process, he was not competent to assess assessee under section 42

Co. whose nature of services wasn't clear in its annual report couldn't be chosen as comparable

IT/ILT : Where TPO made addition to assessee's ALP in respect of rendering software development services to its AE, in view of fact that one comparable selected by TPO earned abnormal profits and, moreover, exact nature of services rendered by it was not available on record, impugned addition was to be set aside

CBDT releases 14 clarifications on rollback provisions of APA in Q&A format

IT/ILT : Section 92CC of the Income-Tax Act, 1961 - Transfer Pricing - Advance Pricing Agreement (Apa) - Clarificationsa on Rollback Provisions of Advance Pricing Agreement Scheme

HC accepts high gross profit rate determined by ITAT as purchase cost and sale price of assessee wer

IT : Where assessee could not substantiate its claim of gross profit rate of 8.7 per cent declared by it as purchase cost and sale price were unverifiable, gross profit rate of 11 per cent determined by Commissioner (Appeals) and Tribunal was justified

Quantum of additions made by AO wasn't relevant to decide hearing of appeal by Single Member Bench o

IT : Single Member Bench has powers to hear any case, which is otherwise in jurisdiction of this Bench, pertaining to an assessee whose total income as computed by Assessing Officer does not exceed Rs. five lakh irrespective of quantum of additions or disallowances impugned in appeal

Indian Rupee Opens Higher At 63.81 Per Dollar

The Indian rupee has opened higher at 63.81 per dollar on Thursday against previous day's closing value of 63.84 a dollar.

The dollar slipped to two-week lows against the yen yesterday after Japan's chief central banker said the yen was "very weak" and unlikely to fall further.

The dollar eased broadly and also fell against the euro, which benefited from a rise in benchmark german 10-year bund yields to more than 1 percent for the first time since september.

Mohan Shenoi of Kotak Mahindra Bank said, "Global currency markets are experiencing high levels of volatility with uncertainty in Greece continuing. The June 16 FOMC meeting is the next key trigger for the currency markets."

"The USD-INR pair is also trading in a range with Reserve Bank of India (RBI) intervention on both sides of the market. The USD-INR pair is expected to trade today in a range of 63.70-64/dollar," he added.

Source:moneycontrol.com

CBDT extends due date of filing return from July 31, 2015 to August 31, 2015

IT/ILT : Section 119 of the Income-Tax Act, 1961 - Income-Tax Authorities - Instructions to Subordinate Authorities – Extension of Due Date of Filing Return of Income for Assessment Year 2015-16

Co. which is outsourcing its major activities can't be chosen as comparable for Co. doing its busine

IT/ILT: A company mainly deriving revenue from medical transcription and consultancy services cannot be compared with ITES provider

HC gets flak from Apex Court for quashing criminal complaint of cheque dishonouring due to factual d

Negotiable Instrument Act : Where in a proceeding under section 482 of CrPC High Court quashed criminal complaint filed under section 138 on basis of disputed factual defences, High Court committed grave error of law and its order was to be set aside

Income from letting out shops in a complex without any incidental services is taxable as income from

IT : Where assessee having constructed commercial complex, let out shops to various parties, in view of fact that it was a case of renting simplicitor and services incidental to letting out did not constitute such complex character so as to render it as a business by itself, rental income in question was to be taxed as 'income from house property'

Co. providing software development support services can't be compared with a Co. developing its own

IT/ILT : Where TPO made addition to assessee's ALP in respect of rendering software development services to group companies located abroad, in view of fact that some of comparables were improper on account of their huge turnover whereas one comparable was developing its own software products and, thus, there existed a functional difference, impugned addition was to be set aside

Warrant issued in name of any family member is valid to search a joint property without any demarcat

IT: Where warrant of authorisation indicated premises where search and seizure operation was to be conducted and said premises had not been partitioned by metes and bounds, while searching said premises, search of portions occupied by petitioners in said premises was valid and proper, even though their names were not mentioned in authorisation of search, in such case provisions of section 158BD would be attracted

CAT dismissed complaint against developer alleging abuse of dominance as it was made on false assert

Competition Act: Where appellant had filed complaint against respondent-builder on false assertion without any relevant document and respondent was not dominant in relevant market of Group Housing Project in Dharuhera, complaint against respondent for abuse of dominance was to be dismissed

A Co. developing software can't be comparable for a Co. rendering software development services

IT/ILT: A software development service provider is functionally different from a company which owns significant intangibles and has huge revenues from software products

Apex Court confirms one year's sentence against public servant for taking bribe for issuing registra

Prevention of Corruption Act : Where evidence on record showed that respondent, a public servant, had demanded and accepted bribe in lieu of registration certificate, respondent was to be convicted for offence under sections 7 and 13

Wednesday, 10 June 2015

Govt. exempts excise duty on medicines required for National AIDS Control Program

EXCISE LAW : Section 5A of the Central Excise Act, 1944 - Power to Grant Exemption from Duty of Excise - Exemption to Anti-Retroviral Drugs (Arv Drgus) and Diagnostics and Equipments

Apex Court confirms one year's conviction against public servant for taking bribe in lieu of registr

Losses already set-off couldn't be set-off again from initial year's income to restrict sec. 80-IA r

IT: Where losses in year earlier to initial assessment year already set off against other income of earlier years, such earlier losses could not be considered again for computing admissible deduction under section 80-IA

Terminal Handling incurred in export of goods were eligible for credit even when invoice was only is

Service Tax : Service tax paid on Terminal Handling Charges used for export goods is eligible for refund, even if invoice thereof is issued by Customs House Agent, who is himself not authorised for provide port services

Notice/summons listing doubts against assessee cannot be regarded as imputing a motive against asses

Excise & Customs : If department wants to seek information from assessee on doubts entertained by it, said doubts have necessarily to be stated by department; hence, notice/summons merely listing said doubts and asking for information cannot be regarded as motivated against assessee and cannot, therefore, be challenged on ground of being prejudiced

Deptt. seized bank account of assessee as it contained sale proceeds of smuggled goods

Excise & Customs : Where department alleges that assessee's bank account was credited with sale proceeds of smuggled goods and assessee fails to prove, prima facie, that proceeds were not tainted, department's action in freezing bank account was valid

A merchant banker couldn't be chosen as comparable for an investment advisor under TP study

IT/ILT : Company in business of investment, merchant banking and corporate finance cannot be compared to company engaged in investment advisory activities

Deptt. can't treat two units of same assessee differently so as to confer benefit to one unit and de

Cenvat Credit : Where, in assessee's own case, in respect of their Hinjewadi Unit, benefit of credit on outward freight services has been extended for period after 1-4-2008, same benefit cannot be denied to assessee's Chakan Unit

Buyer isn't liable to sales tax when he offered an amount inclusive of all taxes to purchase assets

CST & VAT : Kerala VAT - Where Official Liquidator issued a notice inviting tenders in respect of sale of assets of a company in liquidation and appellant had offered its highest bid which was inclusive of all statutory levies such as sales tax, etc. and offer so made was accepted by Official Liquidator, liability to pay taxes could not be imposed on appellant

Tribunal rightly disallowed purchases as assessee had inflated purchases by showing invoices of fict

IT: Assessee inflated expenditure by showing higher purchase price through fictitious invoices in name of 33 fictitious parties, Tribunal was justified in disallowing 25 per cent of purchase price

AO not to raise direct demand against an assessee wherein TDS credit mismatch arises due to default

IT/ILT : Section 199 of the Income-Tax Act, 1961 – Deduction of Tax at Source – Credit for Tax Deducted – Non-Deposit of Tax Deducted at Source

TP adjustment set aside as rate of interest on loan given to AE was higher than rate prescribed unde

IT/ILT : Where TPO made addition to assessee's ALP in respect of interest on loan given to its AE, since interest rate charged by assessee from its AE was higher than LIBOR rate in year under consideration, impugned addition was to be set aside

Apex Court upholds plea of revenue neutrality to set aside invocation of extended period

Excise & Customs : When entire exercise is revenue neutral i.e., credit of duty paid on captive consumption is available to assessee itself, extended period cannot be invoked, as assessee could not have achieved any purpose to evade duty

AO rightly rejected books due to under-reporting of output and sales of products: High Court

IT : Where on comparison of financial results of earlier year with current year, it was found that besides low G.P. rate, there were other deficiencies in books of account such as under reported yield of rice, paddy milling, sales of husk etc., books of assessee were to be rejected

Ford To Export India-Made Ecosport To Us From 2017

Auto major Ford is reportedly planning to export its popular made-in-India SUV, EcoSport, to US by 2017.

A report in Economic Times, citing sources close to the matter states that Ford is working on strategies to export its EcoSport SUV from India to the US. If this turns out to be true, Ford will be the first US car-maker to export the India-made model to its home country.

Apparently, the export order to US is for 90,000 units a year, which is more than the number of vehicles sold by the Ford in India. The sales of EcoSport in US are expected to begin in October, 2017 and considering this, Ford is likely to export the facelifted avatar of SUV to the US.

The export of India-made vehicles have helped Ford to cut down the cost of production per car and this has even led the company's Chennai plant to function 24×7 for the first time in 2014. If the company gets green signal to export EcoSport to the US market, the Chennai plant of the company is likely to be EcoSport's production base.

The latest report also adds that Ford Thailand is also trying to fetch the order for the US and Canadian markets.

Source:- ibtimes.co.in

Government To Import Pulses To Check Prices; Crackdown On Hoarders

To check rising price of pulses, the government today said it will import lentils in large quantities to boost supply and also asked states to take action against hoarders.

In a meeting chaired by Prime Minister Narendra Modi, the Cabinet expressed concern over rising prices and decided to increase imports, among other measures.

Pulses prices have risen by up to 64 per cent in the last one year as the domestic production fell by nearly two million tonnes in 2014-15 crop year due to unfavourable weather conditions.

"The government is very serious on rising pulses prices. There has been less production of pulses. We will import pulses whatever quantity is required," Food and Consumer Affairs Minister Ram Vilas Paswan told PTI.

"We have asked state governments to take action against hoarders," he added.

Briefing media after the Cabinet meet, Road Transport Minister Nitin Gadkari said: "Cabinet discussed about rising pulses prices and expressed concern about the same. Prime Minister has directed to import pulses in large quantity to keep domestic prices under check."

When asked which agencies which will import pulses, Paswan said the modalities will be finalised soon.

Pulses production is estimated to have fallen to 17.38 million tonnes in 2014-15 crop year (July-June) from 19.25 million tonnes in the previous crop year due to deficient monsoon last year and unseasonal rains and hailstorms during March-April this year.

India imports about four million tonnes of pulses, largely through private trade, to meet domestic shortfall.

Source:- economictimes.indiatimes.com

India Sees 58% Rise In Steel Imports, Domestic Producers Face Threat

India’s steel imports increased to 0.91 million tonnes (MT) in May this year, registering an increase of 58% as compared to the same month’s figure last year.

As compared to the April 2015 data, the import grew by 20.4%, said the latest report of the Joint Plant Committee under the Ministry of Steel.

“Import of total finished steel stood at 1.666 MT in April-May 2015-16 and saw a growth of 54.5% over the same period of last year,” the report said, pointing towards 7% increase in the consumption of the metal in April.

Source: thedollarbusiness.com

Govt Weighs Stepping Up Pulses Import

India’s pulse imports may touch a record five million tonne (mt) in the current fiscal if production suffers for a second straight year due to a deficient monsoon, as predicted by the India Meteorological Department (IMD), analysts and industry executives said.

The production of pulses dropped almost 10% in 2014-15 to 17.3 mt, as dryspells in summer as well as unseasonal rains before the harvesting of winter crops hurt yield, and even quality. India’s pulse imports rose to 4.5 mt in 2014-15 from 3.4 mt in the previous year. The IMD last week predcited a 12% rainfall deficit for the June-September monsoon season, the same as last year, although private forecaster Skymet has forecast normal showers this season.

India, the world’s largest producer, consumer and importer of pulses, needs 20-21mt of pulses for annual consumption. “Based on the monsoon predictions by the IMD and the fact that pulses output was adversely affected by erratic weather in 2014-15, imports may rise in 2015-16 to meet domestic demand,” said Harish Galipelli, the head of Commodity and Currency at Inditrade Capital. Since only 16% of the total area under various pulses crops have irrigation facilities, a severe dry spell in key producing regions could hurt production, although such crops are less water intensive than paddy or cane.

Pulses prices have already skyrocketed in the recent months, with wholesale price inflation in the segment having risen to 15.4% in April, the fourth straight month of double-digit inflation, even when the overall primary food inflation was just 5.73%. In 2009-10 when the country faced the worst drought in 37 years, pulses inflation of 22.4% helped drive up food inflation to as high as 15.3%.

Some analysts, however, have blamed excessive speculation in anticipation of deficient monsoon and “hoarding” for the recent “irrational” spike in pulse prices, adding, although production was affected in 2014-15, imports were as high as 4.5 mt and, therefore, there were adequate stocks in the market. Although some amount of increase in pulse prices was natural, the sharp rise isn’t in sync with fundamentals, they added.

Pravin Dongre, the chairman of the India Pulses and Grains Association (IPGA) and the executive vice-president of the Global Pulses Confederation, said reliance on imports won’t be susbtantial if rains are normal, as predicted by private forecaster Skymet. “However, if indeed monsoon fails and production is adversely affected, the government may consider imports,” he said.

Dongre, however, added that the government should enter the import market for bulk deals only after August when fresh supplies from Canada and the US reach the global market, or even in October when Australia starts pumping in new crops.

Meanwhile, Maharashtra, the second-largest producing state, has asked the Centre to import pulses to tide over a local shortage. Pulse output in the state, which was affected by droughts in Marathwada and parts of Vidarbha last year, were further dealt a blow by unseasonal rains in winter. Chief minister Devendra Fadnavis last week said although there were adequate rice and wheat stocks, pulses were a matter of concern.

Inditrade’s Galipelli said prices of chick peas, which were ruling Rs 2,600 per quintal six months ago in the wholesale market, have now touched Rs 4,700 per quintal. Similarly, prices of tur and urad have shot up to Rs 8,500 per quintal each from Rs 4,500 and Rs 6,000, respectively, six months earlier.

Last week, agriculture minister Radha Mohan Singh said the centre had asked states to submit their pulses demand so that the protein-rich grain could be imported accordingly. He assured that the centre would ensure there were enough availability of pulses in the domestic market even if monsoon failed again.

Source:timesofindia.indiatimes.com

Protecting, maintaining and developing Indian breed of cows are charitable purpose's

IT : Where assessee-trust was established with object to protect, preserve, maintain and develop Indian breed of cows and its progeny, it was to be regarded as charitable purpose within meaning of section 2(15) and, thus, assessee's application seeking registration under section 12AA was to be allowed

Notice u/s 158BC wasn't valid as revenue didn't produce evidence that AO of searched person had reco

IT : Where revenue had not produced any evidence to show that Assessing Officer of searched person had arrived at a satisfaction that undisclosed income belonged to assessee, notice under section 158BC was not valid

No need to issue separate notice to directors before filing complaint for check dishonouring against

Negotiable Instruments Act : No individual notice under section 138 is required to be sent to directors of a company before a complaint could be filed against such directors along with company

Rupee Opens Lower At 64.03 Against Us Dollar

The Indian rupee on Wednesday weakened against the dollar, tracking losses in Asian currencies. The local unit opened at 64.03 per dollar. At 9.09am, the home currency was trading at 64, down 0.13% from its previous close of 63.92. The Sensex index gained 0.23% or 59.92 points to 26,541.17 points in pre-opening trade.

Most of the Asian currencies were trading lower against the dollar. Malaysian ringgit was trading down 0.072%, Indonesian rupiah was down 0.188%, Thai baht 0.098%, South Korean won 0.096, Singapore dollar 0.155% and Japanese yen 0.088%.

The yield on India’s 10-year benchmark bond was trading at 7.80% compared with its Tuesday’s close of 7.79%. Bond yields and prices move in opposite directions.

Since the beginning of this year, the rupee has lost 1.38%, while foreign institutional investors have bought $12.46 billion from local equity and bond markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 95.16, the same level as its previous close.

Source:livemint.com

ITAT sets aside reassessment as AO failed to record reasons for making addition of unexplained inves

IT : Where Assessing Officer passed reassessment order taking a view that assessee made unexplained investment in different items exceeding funds available with him, since said belief of Assessing Officer was not based on any relevant material and, moreover, impugned order was passed for bringing to tax only those incomes in respect of which no reasons were recorded, same deserved to be set aside

Entity level margin couldn't be adopted to determine ALP if one segment didn't have any transaction

IT: When bio-division of assessee did not have any international transactions with AEs, profit or loss from said division should not affect ALP of international transaction of software development services to AEs and only margin of software services was to be considered

Prior to SC's verdict, jurisdiction of Court to entertain cheque bouncing case would be the place of

Negotiable Instruments Act : Where proceedings under section 138 were initiated prior to judgment in Dashrath Rupsingh Rathod v. State of Maharshtra [2014] 128 SCL 26 which restricted territorial jurisdiction to Court where cheque is dishonoured by bank, proceedings would be preserved at place where they were filed only when post summoning and appearance of alleged accused, recording of evidence had commenced as envisaged under section 145(2)

To disallow tax credit, assessee must have given reasonable opportunity to prove genuine of purchase

CST & VAT: Gujarat VAT - Where assessee claimed input tax credit on purchases made from one 'L' and Revisional Authority disallowed claim on ground that registration certificate of 'L' had been cancelled by appropriate authority by holding that all transactions made by 'L' were bogus and not genuine, matter required to be remitted back to Revisional Authority to consider assessee's claim afresh after providing it copy of order passed in case of 'L'

Tuesday, 9 June 2015

RBI invites comments on draft framework on issuance of Rupee linked bonds overseas

FEMA/ILT : Rbi Seeks Comments/feedback on Draft Framework on Issuance of Rupee Linked Bonds Overseas

Trust's registration denied to educational institution as it was collecting capitation fee for admis

IT: Where treasurer and secretary of a trust had admitted in their sworn statement that trust was collecting capitation fee over and above fee prescribed for admission of students which was shared amongst trustees, trust was not entitled for registration under section 12AA as it was running educational institution in a commercial manner for profit

Sec. 14A: No disallowance for interest incurred on specific project borrowings; disallowance to be a

IT : Where borrowed funds were used in particular project, no part of interest could be disallowed applying rule 8D

Interest earned by society on deposits made with banks was taxable on net basis after reducing admin

IT : Where assessee a co-operative society, earned interests on deposits kept with scheduled banks only net interest income, i.e., interest income reduced by administrative expenses and other proportionate expenses to earn said income had to be brought to tax under section 56

HC upholds validity of proviso specifying fixed period of condonation for filing appeal before Commi

Service Tax : Right to file an appeal is conferred by a statute and must, therefore, be availed along with all its impediments; hence, proviso to section 85(3)/(3A) restricting condonable period of Commissioner (Appeals) is valid

CBDT unveils new guidelines on condoning delay in filing returns involving refund claims or unabsorb

IT : Section 119 of the Income-Tax Act, 1961 - Income-Tax Authorities - Instructions to Subordinate Authorities – Condonation of Delay in Filing Refund Claim and Claim of Carry Forward Losses under Section 119(2)(b)

Non-AC restaurants are exempt from Service Tax, Govt. clarifies

ST LAWS/M : SECTION 66E(I) of the Finance Act, 1994, Read with Rule 2C of the Service Tax (Determination of Value) Rules, 2006 - Declared Services - Clarification Issued in Matter of Service Tax on Services Provided by Restaurants, Eating-Joints or Messes Which Have Facility of Air-Conditioning or Central Air-Heating in Any Part of Establishment

Assessee can't claim exemption by way of refund without challenging assessment order

Excise & Customs : Having not challenged order of assessment, assessee cannot, at a belated stage, claim refund by pressing into service a new exemption notification

High Court dismissed appeal as assessee didn't file appeal with complete documents

Service Tax : Where assessee's appeal before High Court against Tribunal order declining condonation of delay (CoD) was not supported by a copy of 'CoD application filed before Tribunal', High Court dismissed said appeal holding that assessee was not serious in pursuing matter and was trying to drag on proceedings

HC admitted winding up plea against respondent as it neglected to pay debt without a bona fide dispu

CL: Neglect in payment of debt due as statutorily defined without a bona fide dispute or substantial defence entails consequence of winding up of a company-in-default

Issuance of sec. 143(2) notice is mandatory even in case of reassessment proceedings

IT: Issue of a notice under section 143(2) is mandatory in reassessment proceedings and notices issued prior to reopening would not satisfy requirement specified under section 143(2)

Authorities rightly reduced sec. 221 penalty as assessee had no intension to delay payment of taxes:

IT: Where there was no intention on part of assessee to avoid or intentionally delay payment of taxes as admitted under section 140A and belated payment was made voluntarily without resort to any coercisve steps, authorities were justified in restricting penalty to 25 per cent

SC: Cost of packing/safety material meant for safe transport isn't includible in value of goods

Excise & Customs : Cost of boxes/containers and wooden packing meant for safe transport cannot be included in assessable value because it is not a requirement for sale at factory gate

Manufacturer of 'aluminium roofing panels' gets conditional exemption from excise registration

EXCISE LAWS : Rule 9 of The Central Excise Rules, 2002 – Registration – Exemption from Operation of Said Rule to Every Manufacturing Unit Engaged in Manufacture of Alumunium Roofing Panels

IRDA reconstitutes insurance advisory committee

INSURANCE : Section 25 of The Insurance Regulatory and Development Authority Act, 1999 – Insurance Advisory Committee – Establishment of - Reconstitution of Insurance Advisory Committee

No TP adjustment for interest free loans given to AE once loan was converted into equity

IT/ILT : Where assessee had given interest free loans to its wholly owned foreign subsidiaries and part of loan was subsequently converted into equity, no transfer pricing adjustment was required to extent of loan converted into equity with effect from date of such conversion

Now banks can get 51% stake in defaulting cos under a 'Strategic Debt Restructuring'

BANKING : Strategic Debt Restructuring Scheme

No need to issue show cause notice to recover interest if there is a delay in payment of admitted du

Excise & Customs : Where duty demand is admitted and delay in payment thereof is admitted, there may not be any need to issue SCN for recovery of interest and interest, in such cases, is payable automatically

No disqualification of director due to absence from board meetings as there was an implied leave of

CL : In case of a closely held company it can be presumed that there is an implied leave of absence granted to director who has abstained from board meetings and unless it is shown that director absented from three consecutive board meetings without obtaining leave of absence from board, he would not cease to be a director under section 283(1)(g) of Companies Act, 1956

TP : Provision for bad debts would form part of operating cost while computing operating margins of

IT/ILT: A software product company is not comparable to a software development company

Stringent action to be taken only in cases involving huge evasion of tax - CBDT's clarification on C

IT/ILT : Section 276C, read with section 276D, of the income-tax act, 1961 - offences and prosecution - wilful attempt to evade tax, etc. - clarification on prosecution of tax evaders

Ministry unveils assessment framework for State level reforms enabling ease of doing business

CL : OTHERS : Assessment Framework for State Level Reforms Enabling Ease of Doing Business (2015)

Monday, 8 June 2015

No reassessment to invoke sec. 50C if capital gain was already computed by taking deemed considerati

IT : Where assessee had already shown stamp duty value as sale consideration while computing capital gains and there was no escapement of income, notice under section 148 was not justified

Gujarat VAT : Conversion of Natural Sesame Seeds to Huld Seeds amounts to manufacture

CST & VAT : Gujarat VAT - Where assessee was in business of converting Natural Sesame Seeds [NSS] into Huld Seeds (HS) and while converting NSS to HS it was required to undertake process of cleaning, drying and brushing with chemicals and removing upper layer of NSS, process undertaken by assessee amounted to manufacture

Introduction of leasehold property as capital in consortium amounts to ‘transfer’ under section 2(47

IT : Where assessee company had entered into consortium agreement and passed bundled of rights to consortium on land and even permitted bank for mortgage on said property, there was a transfer

Norms for appointment of non-official director of a bank aren't applicable for appointment of shareh

Banking Laws: Government criteria for appointment of non-official director would not be made parameters for judging fit and proper status of a candidate who submitted nomination for post of shareholder director

India Steps Up Aluminum Production, Despite Surplus Chinese Imports

Indian aluminum is flying through some turbulence right now as neighbor China tries to push some of its surplus aluminum into India. At the same time, for some Indian manufacturers of the metal, the Chinese imports are no deterrence to capacity expansion.

National Aluminium Company (NALCO) is a case in point. Late last week, its board approved a major capacity expansion plan to set up a one million-metric-ton alumina refinery in the Odisha province for about $860 million. NALCO plans to use bauxite from its captive mine in the same province for this project. Executives there say they anticipate a spurt in demand because of the “Make in India” campaign, hence the move.

NALCO has a committed client, as well. 50,000 mt of aluminum metal to be supplied to Angul Aluminium Park, a joint venture between NALCO and the Industrial Development Corporation of Odisha.

Elsewhere, Sesa Sterlite, a Vedanta Group company, too, contemplates ramping up its aluminum capacity at its Jharsugda plant, again in Odisha. CEO Tom Albanese went on record saying his company was actively thinking of stepping up aluminum production.

For now, Sesa operates the plant at about 25% of installed capacity. What stands in the way is limited electricity supply and s raw materiadl crunch (bauxite), both of which Sesa claims to be working on.

Another aluminum major, Hindalco, is in the process of adding 720,000 mt of smelting capacity since April 2013, trying to step into the gaps left by plants shuttered in North America, Australia and Europe.

In fact, Indian exports of aluminum have been on the rise for some time now, since local use had gone down because of the economy grinding to a standstill until the election of the new government in May last.

Aluminum from Hindalco’s Mahan unit in Madhya Pradesh province is being shipped to countries such as Japan and South Korea, the US, and some African nations. A surge in demand for aluminum especially by the automobile industry and for use in cans was the driver, benefiting Hindalco and others.

Source:- agmetalminer.com

Excise Levy Makes Synthetic Textile Export Uncompetitive, Promotes Imports

Faced with rising import of synthetic yarn largely from China due to cost competitiveness, Indian textile manufacturers have urged the government to exempt excise duty to nullify the price advantage for Chinese exporters.

While synthetic filament yarn enjoys 12.5% of excise duty in India, cotton yarn has no such levy. Thus, cotton yarn import from China remains uncompetitive in India.

With this 12.5% of duty differential, import of synthetic yarn has increased substantially in the last few years. During the last financial year alone, import of synthetic yarn has shot up by upto 25%.

Staple fibres import into India shot up to $196.86 million between April – February period of 2014-15 as compared to $149.11 million in the financial year 2013-14, data compiled by the apex trade Synthetic & Rayon Textile Export Promotion Council (SRTEPC) showed.

In the last two years, Chinese cost of manufacturing has gone up with increased workers’ wages and financial costs. Rising energy cost has also gone raised cost of manufacturing in China. Consequently, export share has gone down by 10-12%.

So, they have vacated a space of $40-50 billion in global markets. But, the capacity additions made in the last two years has resulted into excess availability of synthetic yarn which is currently being dumped into India.

“Because of the contraction in exports and continuous capacity additions in the last two years, China has huge surplus of filament yarn, synthetic staple fibre and other raw materials and fabric of synthetic textiles. Now, rising import is not only idling our domestic mills but also support huge foreign currency outgo. The only way forward, therefore, is to reduce excise duty on all synthetic textile raw materials and fabric to enable Indian producers to grab the global opportunity vacated by China,” said Anil Rajvanshi, chairman of SRTEPC.

China’s vacated space is gradually being grabbed by Bangladesh and Vietnam as India remains uncompetitive in global markets with 12.5% of excise levy.

Apart from fibres, filament and spun yarns import of worth $825 million, India also imported synthetic fabric worth $780 million in 2014-15.

Filament yarn is weaved directly for synthetic saris, dress materials and shifting etc. and therefore, is an item of mass consumption which is produced by over 35 producers in India in small, medium and large segments.

“Rising import has resulted into about 30% looms closing down in major producing centres like Surat. Thus, the industry needs urgent attention,” said a senior industry official.

It is a mass commodity product and thus, sold at cheaper prices as compared to staple fibre which is mixed with cotton and viscose to produce good quality suiting and shirting etc. Thus, PSF is sold at import parity. In India, out of 4 million tonnes of polyester produced, 3 million tonnes is filament yarn.

Source:- business-standard.com

No Dairy Exports To Russia, For Now

India may not be able to export dairy products to Russia due to stiff conditions set by the latter, including that interested companies should possess at least 1000 milking animals.

This means that traders and processors of milk derivatives, such as cheese, will not be able to access Russian markets; exports of such products were allowed earlier this year.

"No exports to Russia, for now as the Russian authority has put in stiff conditions. Among others, the interested exporters should have at least 1000 milking animals," said R S Sodhi, managing director of Gujarat Co-operative Milk Marketing Federation Ltd which sells Amul brand milk and its derivatives.

In fact, Amul had already initiated dialogues with a handful of Russian buyers for export of milk derivatives but those were derailed because of impossible conditions.

Russia allowed access to its markets for Indian dairy exporters in January this year after the country's Prime Minister Vladimir Putin visited India and announced firming of trade ties between the two countries.
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Following this, Amul initiated talks with about half a dozen Russian dairy importers. Other exporters had also showed interest in Russian markets.

India is the world leader in milk production.

Most dairy producers in India operate under a co-operative model in which animals are owned by farmers and co-operative factories only process the procured milk. Under the existing Russian framework, therefore, such co-operatives do not fit the bill as they do not directly own the milch animals.

Farmers' co-operatives, however, have approached the government for a favourable revision in Russian framework.

An official from Schreiber Dynamix Dairies Ltd which sales dairy products under "Dynamix" brands, said, "As far as I know, there has been no export of dairy products to Russia."

Source:- business-standard.com

Steel Imports Surge 58% In May; Consumption Up 6.8%

India's steel imports surged 58 per cent in May to about a million tonne, indicating tough times are here to stay for domestic producers facing price pressures and cheap imports from countries like China and Korea.

On the other hand, what appears to be a silver lining for the industry, steel consumption grew 6.8 per cent year-on-year to 7.23 million tonnes (MT) last month.

In May 2015, steel imports stood at 0.91 MT, a rise of 58 per cent, compared to April 2015 when they rose by 20.4 per cent, as per data by the Joint Plant Committee (JPC), under the Steel Ministry.

For the first two months of the 2015-16 fiscal, India was a net importer of steel with in-bound shipments growing by 54.5 per cent to 1.67 MT, compared to April-May of 2014-15.

Similarly, imports grew 71 per cent to 9.32 MT in 2014-15 as compared to 2013-14, making India a net importer of steel.
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According to rating agency Moody's, steel imports are not expected to come down in the current fiscal ending March 2016.

Last week, India slapped anti-dumping duty on imports of certain steel products from three countries, including China, to protect domestic producers, a development that is expected to help contain the rising imports of the metal.

An investigation by Directorate General of Anti-Dumping Duty (DGAD) concluded that domestic industry suffered material injury, both by the volume and price effect.

Another positive development is rising steel consumption, which has been registering a gradual increase and is expected to help shore up the top and bottom line of domestic firms.

India's consumption of total finished steel rose by 6.8 per cent to 7.234 MT in May, 2015 against the year-ago period. It was up 31.3 per cent against April, 2015, JPC data showed.

Steel consumption saw a growth of 7 per cent in April-May 2015-16 at 12.742 MT over same period of last year, it added.

Similarly, consumption grew 3.1 per cent in 2014-15 at 76.36 MT over the same period of 2013-14.

According to industry body World Steel Association, steel consumption in India is expected to grow by 6.2 per cent to 80 MT in 2015 from 75.3 MT in 2014.

Similarly, Moody's expects consumption to rise on the back of an projected rise in sales of consumer vehicles.

Besides, declining prices of iron ore and cooking coal as well as the government's decision to resume mining will aid in reducing pressure on the companies, the agency added.

Source:- business-standard.com

SARFAESI Act doesn't permit secured creditor to publish photo of defaulter in newspapers/ magazines:

SARFAESI: A secured creditor, who has initiated action for enforcement of its security interest in terms of provisions of SARFAESI Act is not entitled to publish photograph(s) of defaulting borrower(s)/guarantor(s) in newspapers/magazines etc.

HC stays recovery against assessee to which sec. 11 relief was denied on act of rehabilitation of sl

IT : Where Assessing Officer held activity of assessee slum rehabilitation authority not charitable in view of newly inserted proviso to section 2(15), but assessee fairly made out a case that its activity would be charitable being its object a general public utility, pending appeal before Commissioner (Appeals), recovery of demand against assessee was to be stayed on deposit of 10 per cent of demand