CA Terminal

Monday, 27 July 2015

Interest on tax refund having nexus with PE of NR in India would be assessable under article 7 of In

IT/ILT : Since international shipping profits earned by assessee did not fall or was not dealt with any other articles of Indo-Swiss Treaty, it was governed by residuary article 22 of DTAA and, therefore, applying article 22 of DTAA, income from shipping was not taxable in India

Bajaj To Export 48,000 Units To Nigeria

Country’s third largest two-wheeler manufacturer will soon send out nearly 48,000 bikes to the African country. These are good signs for the company as recently its exports had slowed down. Currently exports contribute to 47 percent of overall sales and stand at 3, 89,000 units.

With this, the company also reported a 37% rise in its net profit when compared to the last quarter. The profits are also helped by dividends coming from KTM. The Indian manufacturer has almost 50% stake of the Austrian sports bike makers.

In Nigeria, only three products are on sale which includes two-wheelers Boxer 100 and Boxer 150 and a three-wheeler RE 205. Since Bajaj has claimed that the number 48,000 includes only bikes, it is not confirmed that all of those are Boxers or not. Nigeria is the biggest market for the company in terms export and accounts for 12% of the company’s overall turnover.

Boxer is the market leader in the African nation and around 35% of its yearly exports are to Nigeria only. The company has also hiked its prices there as it aims to get more profits and also because of the devaluation of Naira (Nigeria’s currency) to US Dollar. It exported around 5 lakh units last year to Nigeria alone and always maintains a market share of above 40%.

The report did not have any significant affect on the stick prices of the company as it closed 0.90% down. Bajaj is more focussed on the sports bike segment in India and developing its 100 cc commuters for markets like Nigeria. The company is expected to launch 400 cc variants of its flagship Pulsar bikes very soon. Bajaj has benefitted from its partnership with KTM as Pulsar 200 NS is based on KTM’s Duke and RS 200 is based on the Austrian’s RC series of bikes.

Source:cartrade.com

Oil Processors, Us Body Join Hands To Promote Soya Foods

The US Soyabean Export Council (USSEC) has joined hands with the Soya Oil Processors Association (SOPA) of India to make Indians consume more soya food, though the two seem to have conflicting interests - one is seeking to boost exports to India and the other is hoping to increase the consumption of locally-produced commodity.

The two bodies signed a memorandum of understanding on Saturday to increase soya bean consumption in India, both as human food and as feed by the poultry and aquaculture industries. The Indian soya bean industry has interest in boosting the local demand as it is struggling to increase exports of soya meal. "Because of the import of cheaper soya oil in the country, our realisation from oil has reduced. As a result, soya feed, the other byproduct of soya bean processing, has become expensive, out-pricing us in the export markets," said SOPA chairman Davish Jain.

Last year, soya bean processors were not able to export their desired quantity and the industry survived on local demand.

Of the eight million tonne soya meal production in the country, only five million tonne is consumed locally. For the rest, the processors have to depend on exports. Increasing local consumption is one way for the industry to reduce dependence on export markets and that is what it is hoping from the tie-up with the US council.

The USSEC, meanwhile, is willing to spend its resources to develop demand in India because it sees the country as a big future market for the exports of US soya bean. Also, if the local demand for soya meal goes up, Indian processors will vacate their ex port markets, creating space for US producers.

For the local association, working with the USSEC involves risk of cheaper imports from the US. The US grows genetically-modified soya bean, which has higher yields than India's open-pollinated straight varieties. Both the bodies plan to work with the Centre to include soya bean food in its social welfare projects such as mid-day meal and the Integrated Child Development Services programmes, educate people about soya food and develop new soya food products.

Source:economictimes.indiatimes.com

No need to declare MRP on cement cleared to builders and Govt. as they are industrial/institutional

Excise & Customs : Builders, government and RMC (Ready-mix Concrete) producers quality as 'industrial/institutional buyers' and there is no need to declare RSP (retail sale price) on cement cleared to them

Rbi Sets Rupee Reference Rate At 64.0028 Against Dollar

The Reserve Bank of India on Monday fixed the reference rate of rupee at 64.0028 against the US dollar and 70.6143 for the euro as against 63.8916 and 70.1210 respectively as on 24 July 2015.

According to an RBI statement, the exchange rates for the pound and the yen against the rupee were quoted at 99.4348 and 51.85 per 100 yen, respectively, based on reference rates for the dollar and cross-currency quotes at noon. The SDR-rupee rate will be based on this rate, the statement added.

Source:moneycontrol.com

Interest on FD wasn't taxable in hands of HUF as FD was transferred by HUF to its daughters on dispo

IT: Where asset was disposed in favour of six minor daughters of Karta in form of fixed deposits, interest thereafter could not be treated as part of wealth of assessee-HUF and would not be taxable in hands of HUF

New entry introduced in Finance Bill to increase tax vide notice of amendments doesn't have immediat

Excise & Customs : An entry which was not there at all in original Finance Bill and was subsequently brought in vide amendment thereto, cannot be said to have been protected by declaration made under section 3 of Provisional Collection of Taxes Act, 1931; hence, said new entry would come into effect from date of enactment of bill

Sunday, 26 July 2015

No reassessment on basis of survey report if it didn't indicate that any income escaped assessment

IT : Where neither survey report nor any other material indicated that any income chargeable to tax for relevant assessment year had escaped assessment, issue of reassessment notice on basis of survey report was invalid

Tata Motors Banks On Defence Sector Business, Exports

Tata Motors, India's largest commercial vehicle maker, is banking on growth in its defence sector business and exports to drive 30-40 per cent of its revenues in the next three to four years as it seeks to derisk the domestic commercial vehicle business from its inherent cyclicality.

The company expects the defence business to account for 15 per cent of its total revenues, a fivefold jump from 3 per cent at present, and exports volumes to increase to 150,000 units from about 50,000 in 2014-15.

"The potential is very large...10 per cent is not a good number, our defence business can be much bigger than 15 per cent in the future," said Ravindra Pisharody, executive director and head of commercial vehicle business at Tata Motors. Pisharody was referring to Rs 900 crore order that Tata Motors secured from the Indian Army for supplying 1,200 trucks for material handling cranes for loading, unloading and transportation of ammunition pallets, spares and other operational equipment.

The company will start delivering the vehicles by December. Tata Motors is making a gradual transition from just providing logistic support to supplying combat vehicles including front line combat vehicles. Simultaneously, the company is planning to open up new overseas markets through the hub-and-spoke model in Eastern Europe, Africa, Asean and Latin America.

Tata Motors collaborated with SUPACAT a UK-based high mobility vehicle specialist, for technical assistance for its Light Armoured Multi-role Vehicle (LAMV) project, a combat vehicle based on a defence ministry programme. The company also has a partnership with Malaysian-based DRB-HICOM for import, distribution and assembly of Tata
Motors' commercial vehicles and defence range in Malaysia, a step towards expanding into the international market.

The company has developed the WHAP (Wheeled Armoured Amphibious Platform) besides the LAMV and its upgrade programmes include missiles carriers, mine protected vehicles, main battle tanks and infantry combat vehicles.

"The first order is always difficult, with various vehicles under trial. We definitely do expect significant business from defence going ahead, as long as orders keep flowing from the government," said Pisharody .The recent order is a major shot in the arm for the company, which has an order book of Rs 1,500 crore in its defence business. It expects to post a 20 per cent growth in the segment this year, owing to increased buying by government agencies.

Apart from India, Tata Motors has supplied defence vehicles in markets including the ASEAN, SAARC and Africa. The company recently received an order from Myanmar for about 500 units and it completed deliveries for 520 defence vehicles to the United Nations Multidimensional Integrated Stabilisation Mission in Mali.

The company's defence division will be bidding for government contracts to supply light specialist vehicles and light armoured multi-role vehicle. The technical evaluation for both types of vehicles has been completed and the prototypes will now be tested, the company said. It is eyeing this additional Rs 3,000 crore business opportunity.

Source:economictimes.indiatimes.com

Presence of big players like HP, IBM, Lenovo in relevant market of 'x86 server' in India ruled out d

Competition Act : Where big players such as HP, IBM, Lenovo were operating in relevant market of x86 server in India, Dell was not dominant in relevant market and, therefore, question of abusing dominant position did not arise

Three Indian Diamond Labs Receive Duty Exemptions

The Indian Central Board of Excise and Customs (CBEC) has exempted three diamond laboratories operating in India from customs duty, reported The Hindu.

Cut and polished goods imported for grading or certification and then re-exported from the country by the GIA (Mumbai), the Indian Diamond Institute (Surat) and the International Institute of Diamond Grading and Research India (Surat) are exempt from customs duties. The move comes in the face of falling diamond exports.

Diamonds imported into India for the purpose of certification must be re-exported within three months to be eligible for the exemption, said a notification from the CBEC.

The Hindu said that strict checks will be enforced to verify that the diamonds being re-exported are the same as those that were imported.

Source:idexonline.com

Sharp Drop In Gold & Oil Prices Brings Cheer For Modi Govt; Public Investments May Rise Too

Thanks to god, gold and oil, India's businesses and consumers may be in for somewhat better times than has been the case in recent months.

Rain gods have been kind, gloomy monsoon forecasts have proved off the mark so far, with rains just 5% short of normal. Oil and gold - two of India's biggest imports - have seen sharp price falls. Crude oil prices are down 15% in the past month and trading at half the price that prevailed in June last year.

Gold has plunged to a multi-year low. Most analysts expect these trends to continue. The implications of god, gold and oil being kind to India now and in the near future means the festive season - India's annual high point of consumerism - will likely see consumers feeling they can spend some serious money.

Businesses will both have healthy demand and be free of fear of interest rate hikes. And the government may find it easier to pump prime the economy, thanks to better
current account and fiscal situation.

Think basics: gold is cheap, cooking oil prices are down and likely good harvests means higher rural demand for cars, motorcycles, tractors, jewellery and FMCG products. Plus, the rare combination of near-normal rain and much lower import bill for oil and gold means the government and RBI need not lose sleep over fears of inflation. So, little pressure on raising rates.

Jyotinder Kaur, Principal Economist, HDFC Bank, said India was lucky that global prices of commodities, particularly energy, had softened. "This has provided a buffer to us and will help keep headline inflation below the nearterm target of 6% set by the RBI.

This will, needless to say, provide comfort to Governor Raghuram Rajan in his deliberations about the future course of monetary policy," she said.

Analysts also say the government can raise public investment to offset private sector capital spending blues and raise more money from disinvestment as blue-chip oil firms now command a better value.

The oil price fall will reduce the borrowings of refiners and cut ONGC's subsidy burden. "This, along with the policy reforms augurs well for the sector, and will help the government get good valuations if it goes ahead with divestment in these companies," said K Ravichandran, Senior Vice-President and Co-Head, Corporate Ratings, ICRA.

Source:economictimes.indiatimes.com

Steel Firms Cut Prices As Imports Pour In

Local steel makers are cutting prices to avert loss in market share as cheaper imports from China, Korea and Japan flood the market.

Hot-rolled steel prices dropped by Rs.3,000-4,000 a tonne in the April-June quarter, said Vikram Amin, executive director, strategy and business development, Essar Steel India.

As on 1 July, the average price of hot-rolled steel was Rs.36,100 per tonne in Delhi, according to data available with the Joint Plant Committee (JPC) of the steel ministry.

This, industry experts and traders say, has led to a gap between the landed cost of imported steel and domestic steel prices narrowing down in the last few months, a clear indication of steel companies focusing on volumes and giving up on margins.

During the March-April period, the landed cost of imported steel in the hot-rolled category in India was lower by about Rs.2,000-3,000 per tonne, said Ajay Srinivasan, director, Crisil Ratings. This gap, Srinivasan said, has narrowed to Rs.1,000 per tonne now.

Vivek Gupta, vice-president, Indian Chamber of Steel, and a leading steel dealer in Mumbai said for a broader category of steel products, the difference between imported and domestic steel prices has narrowed from a range of 15-20% in April to 5-15% now, depending on the product category.

Amin from Essar added that the domestic steel price correction is a result of cheap imports and the depreciation in the currencies of various steel exporting countries.

According to JPC data, total finished steel imports by India rose 53.1% in the April-June period on a year-on-year basis. The average spot price of hot-rolled steel sheets in China, a major exporter for steel to India, corrected 12% from April to June-end.

“There is a surge in volumes in imports due to dumping, resulting in squeezing the margins of domestic companies,” said Jayant Acharya, director (commercial and marketing), JSW Steel Ltd. He did not share details on the steel price movement as the company is in its silent period ahead of its earnings report next week.
JSW Steel produced the highest ever quarterly crude steel volume of 3.4 million tonnes for the June quarter, it said in a statement on 13 July. The company is yet to disclose the sales figure for the same period.

Tata Steel Ltd said its sales volumes for the June quarter rose 2% to 2.14 million tonnes in a statement sent to BSE on 9 July. “Being an industry with high capital investments and hence high fixed cost, focus is generally on increasing capacity utilization to recover maximum fixed cost and improve margins in spite of reduction in prices,” said a SAIL spokesperson.

“Falling international steel prices have affected domestic prices of steel. The average price realisation for SAIL has dropped by 17.4% in the June quarter with respect to the corresponding period last year,” the SAIL spokesperson said.

Srinivasan of Crisil Ratings explained, “Notwithstanding the weak rupee and rise in import duty, domestic steel makers are under tremendous pressure with steel prices falling globally. Domestic steel makers have been forced to bring down prices, focusing on volumes than margins.”

Jimesh Sanghvi, an analyst at IL&FS Broking Services, in a 9 July note said the drop in steel prices will adversely impact integrated steel players such as Tata Steel and SAIL.Some expect pressures on margins to continue in the September quarter.

Srinivasan expects global steel prices to fall below $370-390 per tonne. “This (global price correction) will force domestic steel companies to follow suit,” Gupta said. In addition, July-September is a weak quarter for steel companies.

“The demand and prices start to pick up after October. We expect the same trend to continue even this year,” said Amin.

Source:livemint.com

Rupee Falls Against Dollar In Early Trade

The rupee depreciated by 4 paise to 64.08 against the dollar in early trade due to month-end dollar demand from importers.

Besides, a weak opening in the domestic equity market weighed on the rupee, dealers said. A weakness in the US dollar against major world currencies in global market however limited rupee fall.

The rupee had lost 27 paise to close at more than 5—week low of 64.04 per dollar in the precious session on Friday following persistent demand for the US currency from banks and importers.

Meanwhile, the benchmark BSE Sensex fell below the 28,000—mark to trade at 27,875.31, down by 237 points, or 0.84 per cent over previous close.

Source:thehindubusinessline.com

Prior to 7-9-2007, 'reversal of credit' can't be made a condition precedent for remission of duty

Cenvat Credit : For period prior to 7-9-2007, in absence of any condition of reversal of credit in case of grant of remission, department cannot order 'reversal of credit' as a condition for grant of remission of duty

Denial of part of sec. 80-IC relief doesn't lead to imposition of concealment penalty

IT : Penalty need not be imposed when part of deduction under section 80-IC to assessee was denied on basis of some estimated addition

Saturday, 25 July 2015

Trust can’t carry forward excess application of fund over and above its income

IT: Excess application of funds over and above income of trust can arise only when funds are applied from the corpus of the trust, accumulated funds, loans or goods and services received from the creditors. When funds are applied from borrowed funds or by way of sundry creditors the same can be treated as application of funds in the year in which such loan/sundry creditors are repaid from the income of the trust. However, when amount is applied from the corpus fund or accumulated fund the same c

Orders passed under Service Tax Amnesty Scheme are appealable

Service Tax : 'Designated authorities' under Service Tax Voluntary Compliance Encouragement Scheme amount to 'adjudicating authorities', as they pass order/decision; hence, orders passed by them are appealable as per Finance Act, 1994

Assam Govt. notifies 6% VAT rate without any input credit for liquor dealers

VAT/INDIAN ACTS & RULES : Assam Value Added Tax (Amendment) Ordinance, 2015 – Amendment in Sections 10, 14, First Schedule, Second Schedule and Third Schedule of the Assam Value Added Tax Act, 2003

AO gets flak from High Court for assuming discrepancies in stock when assessee had explained such di

IT : Where Assessing Officer rejected assessee's books of account and brought to tax sum in respect of unaccounted purchases, unaccounted sales and embroidery charges on basis of surmises and assumed discrepancies in closing stock, deletion of addition was justified

Welding electrodes used for repairing of plant and machinery aren't eligible for credit as inputs or

Cenvat Credit : Welding electrodes used for repair and maintenance of plant and machinery are ineligible for credit as inputs as well as capital goods

Govt. reduces minimum land area to establish SEZ in Gujarat for textile sector

SEZ /INDIAN ACTS & RULES: Special Economic Zones (Amendment) Rules, 2015 – Amendment in Annexure II

Allowability of depreciation on acquiring dormant subscribers from Reliance is debatable issue

IT : Where Assessing Officer conducted enquiry and allowed depreciation on purchase of dormant subscribers, since said issue was a debatable issue, Commissioner was unjustified in invoking revision proceedings merely because he did not agree with view taken by Assessing Officer

Refund of Cenvat credit allowable on export of goods even if proceeds weren't realized

Cenvat Credit : In absence of any such condition in rule 5 of CENVAT Credit Rules, 2004 and Notification 5/2006-C.E. (N.T.) issued thereunder, refund of credit cannot be denied on ground that export proceeds have not been realized

CESTAT, Delhi calls for list of pending cases from Advocate involving duty/penalty below 50 lakhs

EXCISE : Section 86 of the Finance Act, 1994 – Appellate Tribunal, Appeals to – Increase in Monetary Limit for Single Member Case Where Issue Does not Involve Classification/valuation or Intepretation of a Notification

Friday, 24 July 2015

'EMI' method allowed to compute income from hire purchase transactions even if books weren't maintai

IT : Where a hire purchase agreement was entered into between assessee and purchasers for purchase of vehicles on hire purchase basis, while computing taxable income assessee could follow Equated Monthly Instalment (EMI) method, even though he had maintained books of account on Sum of Digits (SOD) method

Govt. establishes 'Serious Fraud Investigation Office' under Companies Act, 2013

COMPANIES ACT, 2013 : Section 211 of the Companies Act, 2013 – Serious Fraud Investigation Office – Establishment of – Notified Serious Fraud Investigation Office

Undue delay in allotment of shop and illegal demand of maintenance charges by developer was an unfai

MRTP : Where respondent had unreasonably delayed allotment of shop/showroom to complainants and illegally demanded maintenance charges on quarterly basis and disconnected supply of electricity, respondent was guilty of practicing unfair/restrictive trade practices

Mere use of own name on goods doesn't make those goods as 'branded'

Excise & Customs : Where goods were cleared with superscription 'manufactured and packed by SVS & Sons' on packaging, said use of assessee's own name on goods does not make those goods 'branded'; said goods can be regarded as cleared without any brand name and eligible for exemption accordingly

Rents of unsold flats weren't business incomes just because they were shown as stock-in-trade in wea

IT : Where assessee-property dealer, disclosed rental income derived from letting out of unsold flats as 'income from house property', rental income could not be treated as business income merely because assessee in wealth tax proceedings claimed said unsold flats is its stock-in-trade

‘1081’ is notified as Cost Inflation Index for Financial Year 2015-16

IT/ILT : Section 48 of the Income-tax Act, 1961 – Capital gains – Computation of – Notified cost inflation index u/s 48, explanation (v)

No transfer can take place under an unregistered Joint Development Agreement

IT : There can be no "transfer" u/s 2(47)(v) of the Act read with sec 53A of the Transfer Of Property Act,1882 under an unregistered agreement in view of sub-section (1A) of section 17 of the Registration Act,1908 .Also, there is no transfer under the said provisions if possession is delivered to developer in his capacity as licensee for the development of property and not in his capacity as transferee

No denial of credit of insurance service/repair service used for motor car to firm even if car is in

Cenvat Credit : Credit of insurance/repair of motorcar is available to assessee-firm even if car is in name of partner, provided car is shown as assets in books of firm and depreciation and other expenditure thereon is incurred/borne by firm

If rebate is allowed on export then differential duty can't be demanded on supplementary invoice iss

Excise & Customs : Where goods are exported on payment of duty under claim of rebate and rebate has been allowed, assessee cannot be asked to pay differential duty on supplementary invoice raised for price-difference on such 'completed export'

ITAT rejects 'bright line test' for AMP expenditure; follows ratio of High Court in case of 'Sony Er

IT/ILT : Following Order passed by jurisdictional High Court, it was to be held that TPO could not make addition to assessee's ALP in respect of AMP expenses incurred on behalf of AE by working out non-routine AMP expenses on basis of bright line test

Mere absence of 'dissolution clause' in trust deed doesn't lead to denial of trust's registration

IT : Where genuineness or bona fide of assessee-trust was never doubted in earlier years, registration of same cannot be refused on mere ground that trust deed did not consist of 'dissolution clause'

No denial of credit of insurance service and repair service used for motor car to firm even if car i

Cash deposits made to make bogus purchases couldn't be held as unexplained under sec. 68

IT : Where assessee had not produced its books of account on plea that same were destroyed by fire and failed to satisfactorily explain various discrepancies/deficiencies pointed out by Assessing Officer, book results were rightly rejected

Premium received by society on transfer of plots wasn't taxable as it was utilized for benefit of it

IT : Where assessee-society received contribution from outgoing members as premium on sale of plot, since said amount was to be utilised for benefits of members of society, it could not be regarded as 'taxable income' in hands of assessee

CIT rightly made revision as AO failed to examine accrual of capital gains in development agreement

IT : Where in pursuance of development agreement, assessee handed over possession of land to developer, there was 'transfer' in terms of section 2(47)(v); and failure on part of Assessing Officer at time of assessment to make any or examining issue of accrual of capital gains would render assessment order erroneous and prejudicial to interest of revenue

Amendments to framework for revitalizing distressed assets in the economy shall also apply to NBFCs:

NBFCs : Early recognition of financial distress, prompt steps for resolution and fair recovery for lenders : Framework for revitalising distressed assets in economy – Review of guidelines on Joint Lenders' Formum (JLF) and Corrective Action Plan (CAP)

Thursday, 23 July 2015

Govt. appoints Session Court, Chennai for speedy trial of offences under SEBI Act and depositories A

SEBI : Section 26A of the Securities & Exchange Board of India Act, 1992, Read with Section 26A of the Securities Contracts (Regulation) Act, 1956 and Section 22C of the Depositories Act, 1996 - Special Courts - Establishment of - Notified Special Court

If assessee doesn't raise a plea for waiver of penalty then penalties shall be imposed mandatorily

Service Tax : If there is no plea seeking waiver of penalty under section 80, penalties as mandated in sections 76 to 78 are imposable mandatorily

Sugar Exports From India Surge As Mills Rush To Pay Growers

Sugar exports from India will climb more than forecast previously as mills accelerate sales to clear $2.8 billion debt to cane growers.

Shipments will surpass 1 million metric tons in the 12 months through September, said Yatin Wadhwana, managing director of Sucden India Pvt. Mills may export about 400,000 tons of mainly white sugar between now and September, he said. Wadhwana’s forecast for full-year sales compares with 800,000 tons predicted by the Indian Sugar Mills Association last month.

Inventories in India are poised to jump to a seven-year high after production outpaced demand for a fifth year and a slump in global prices slowed exports. With another bumper crop in the making and government threatening action against producers for not paying farmers, mills are selling below production cost to clear dues to growers. That may weigh on futures in New York which slumped to a six-year low this week.

“Mills are forced to sell at a loss because of government’s pressure to pay farmers on time,” Sanjeev Babar, managing director of Maharashtra State Cooperative Sugar Factories Federation, said by phone from Mumbai on July 20. “We don’t have enough money to run the mills.”

Factories owed farmers about 181 billion rupees ($2.8 billion) as of June 15, according to the mills association. Under the law, factories are required to pay farmers within 14 days of supplying cane, Babar said. Failure to pay up on time would entitle growers to 12 percent interest on dues and the government can seize sugar stockpiles and auction them to pay the farmers, he said.

Prices on the ICE Futures U.S. fell to as low as 11.35 cents a pound on Monday, the lowest level since January 2009. The contract for October delivery rose 1.1 percent to 11.55 cents a pound in New York on Wednesday while prices in Mumbai were 0.9 percent lower at 2,165 rupees per 100 kilograms (220 pounds).

Mills in Maharashtra state, the nation’s biggest producer, sold about 300,000 tons of white sugar in the past two weeks to mobilize money to pay farmers, Babar said. Mills there owed farmers 33 billion rupees as of June 15, he said.

“Mills were helpless due to the sword hanging on them in the form of cane payments,” said Kamal Jain, managing director of brokerage Kamal Jain Trading Services Pvt.

Factories sold sugar at prices between 19 rupees a kilogram to 19.50 rupees a kilogram, the lowest since May 2007, when the rate was 10.68 rupees a kilogram, Babar said. The production cost is as high as 34 rupees a kilogram, he said.

The slump in prices forced the government to subsidize exports and waive interest on bank loans to processors. Stockpiles of 10.2 million tons at the start of new crop season from Oct. 1, the highest since 2008-09, will add to supplies of about 27.25 million tons in 2015-2016 estimated in a Bloomberg survey last month.

Source:hellenicshippingnews.com

Welcome Boost For India's Knitted Fabric Exporters

Knit production in India has been boosted by the inclusion of a range of different knitted fabrics in an export incentive scheme.

The introduction of a new list on the Merchandise Exports from India Scheme (MEIS), which rewards producers with a financial incentive equivalent to two per cent of the total amount of exports, could see cotton fabric exports rise by around 10 per cent rise year because of inclusion of the fabric when sold to Bangladesh and Sri Lanka.

Source:knittingtradejournal.com

Co's plea to classify it as a secured creditor was rejected as its charge on assets of liquidating-c

CL : Applicant having failed to prove that its charge on assets of company-in-liquidation was duly registered, its claim to classify it as secured creditor while distributing assets of company-in-liquidation was rejected

Copper Producers Face Risk Of Losing China Market

Domestic copper producers, who have had to exit lucrative export markets in South East Asia and the West Asia in recent years due to lack of competitiveness, are now at risk of losing out in China too, which is the largest market for copper products from India.

Copper producers in private say that the removal of 2% duty incentive on the sales of refined copper exports starting April 1 will make copper exports uncompetitive as margins will shrink by 2 percentage points from 5.5% to 3.5%. Industry estimates suggest that earnings per tonne will also shrink as a result of the withdrawal of incentives to $565/tonne from $686.3/tonne.

The Foreign Trade Policy 2015-2020 earlier this year withdrew the 2% duty incentives available to producers of copper rods and cathodes. Apart from the withdrawal of duty incentive, the high cost of production, huge working capital requirements and rising competitive scenario are putting Indian copper exports at risk.

With copper prices sinking owing to concerns arising out of Greece and China, the problems faced by producers are set to get worse. The three major producers of refined copper products in the country are Hindalco, Vedanta and Hindustan Copper. The price of imported ore accounts for around 85% of cost of production of copper products, therefore leaving low margins for companies to operate under. The industry will lose close to R250 crore with the withdrawal of the incentives.

“It was a significant incentive that is gone away and the profit margins are very thin,” said a senior official of a copper company.

To make matters worse imports into India from free trade agreement (FTA) signatory countries like Japan are continuing to surge with a near 100% rise in imports from 86,000 tonne in 2012-13 to 166,000 tonne in 2014-15, eating into the market share of domestic players. Copper producers argue that the withdrawal of export incentives will not aid in pushing up exports.

The Indian Primary Copper Producers Association and Assocham have made various representations to the ministry of commerce for the reinstatement of the exports incentive under merchandise exports from India scheme (MEIS), with little luck so far. “In the absence of an export incentive, they (domestic companies) will be forced to withdraw from some markets. Coupled with increased imports and shrinking domestic markets, they will be forced to cut back on production,” said an Assocham letter to the commerce ministry dated May 13.

The Assocham letter adds that over the last three years Indian copper rod producers have lost markets in South East Asia and West Asia owing to weak infrastructure facilities and high freight charges in India.

The Indian refined copper exports to China for the financial year 2013-14 was Rs 11,200 crore, which rose marginally to Rs 11,338 crore in 2014-15. “The sudden withdrawal of incentive will hugely impact Indian refined copper export to China which does not augur well for India-China trade,” said one company official.

Source:financialexpress.com

India Emerges As Sri Lanka's Top Import Source Nation; Auto Inc Witnesses 87 Pc Increase

India has emerged as Sri Lanka's top import source during the first five months of this year, the Central Bank said here on Thursday.

India was followed by China, Japan, UAE and Singapore. These nations accounted for 60 per cent of the total imports of Sri Lanka which amounts to $1,585 million. The country wise breakdown of foreign trade was not given.

"Total import expenditure in May 2015 increased for the second consecutive month recording a significant increase of 17.2 per cent, year-on-year, to $1,585 million led by vehicle imports, which include personal motor vehicles categorised under consumer goods and commercial vehicles categorised under investment goods," the bank said.

The import of motor vehicles has increased over 87 per cent year on year, while the import of transport equipment has increased by over 177 per cent year on year, mainly due to the increase in autorickshaws, it said.

Indian companies like Maruti and Bajaj dominate Sri Lanka's passenger car and autorickshaw markets.

Meanwhile, earnings from exports further moderated in May 2015 to US dollars 883 million, recording a marginal decline of 0.1 per cent, year-on-year, the bank said.

Source:auto.economictimes.indiatimes.com

India's Coal Imports Could Slide 3 Per Cent In 2015/16: Piyush Goyal

India could import 3 per cent less coal in the year to next April despite a jump in demand, the coal minister said on Thursday, as local output rises at a record pace in Prime Minister Narendra Modi's push for power to all.

The world's third-largest coal importer wants to end its dependence on foreign supplies this decade, mainly for the variety used in power generation, and has set ambitious targets for state-run Coal India. It is also working on opening the nationalised sector to private companies.

If India manages to become self-sufficient in thermal coal, it would be a double blow for exporters Indonesia and Australia, already grappling with depressed demand from top buyer China.

India, however, is expected to keep consuming increasing amounts of coal as Modi tries to step up economic growth and provide continuous power, even to the third of India's 1.25 billion people who still use oil lamps or other traditional means to light their homes.

Coal requirements will jump 10 percent to 910 million tonnes this fiscal year, Piyush Goyal told lawmakers in a written reply. Domestic supplies are estimated to be 700 million, 15 percent more than last year, and imports could drop to 210 million tonnes.

Coal India's April-June output rose 12 percent to 121.3 million tonnes as it opened new mines and received environmental approvals to expand existing ones. The government wants to double the company's output to 1 billion tonnes by 2019/20.

Source:economictimes.indiatimes.com

India Rules Out Further Rise In Gold Import Duty

The Indian government announced that it has no immediate plan to hike gold import duties. Any rise in import duty could lead way for increased gold smuggling, it noted. Further it noted that increase in gold import duty may badly impact the industry.

According to government officials, the drastic fall in gold prices is likely to trigger fresh bout of purchases, ahead of the upcoming wedding season demand. Household purchases are likely to remain robust, mainly on account of normal monsoon season in the country. Meantime, gold imports may remain flat in the coming months as banks and importing agencies are reportedly holding adequate gold stocks.

Trade sources indicate that the plunge in gold prices has not resulted in rise in gold demand in the country. Analysts warn further downside risks to gold in case of US Fed rate hike later in the year. This has taken a lot of investor money from the safe-haven asset into stock market and other performing financial instruments that have yielded decent return to investors over the past several months.

The overall gold demand has seen sharp decline in the country during the first quarter of the current fiscal year. Retail sales are down. Many jewellery stores in the country indicate that footfalls have not improved considerably despite gold touching the lowest level in five years.

Meantime, gold imports by the country during June totaled $1.96 billion, significantly lower when compared with the previous months this fiscal. The country’s gold imports during April and May this year had totaled $3.13 billion and $2.42 billion respectively. Also, gold imports during June ’15 were significantly lower when compared with $3.12 billion in June 2014.

Source:metal.com

Wholesale Onion Price Soars 70% In A Month

Wholesale onion price at Lasalgoan in Maharashtra, Asia's biggest market for this kitchen staple, has shot up by 70 per cent in just about a month, hitting its highest level for the month of July in the past two decades.

Prices in July usually tend to be higher because the supply goes down and the onset of monsoon season also affects the onion quality.

The onion was being sold at Rs 25.50 per kg in Lasalgoan market today, while the retail prices are in the range of Rs 35-40 per kg here in the national capital. Lasalgoan accounts for a bulk of the supply in various parts of the country, including Delhi region.

The prices have shot up by 70 per cent since June 27 when the government increased the minimum export price (MEP) for the commodity. Spiralling prices could further fuel the food inflation in the coming weeks.

As per the data maintained by the Nasik-based National Horticultural Research and Development Foundation (NHRDF), the average price at Lasalgaon stood at Rs 15 per kg last month. A sharp increase is being seen in the retail markets in most parts of the country.

The prices in both wholesale and retail markets have been rising in recent weeks due to sluggish supply of good quality onion in the wake of the crop getting damaged in storage across major growing states, including Maharashtra.

Apprehending further increase in onion prices, the government has already increased MEP of the commodity to USD 425 per tonne and and extended by another year the ban on hoarding of the key kitchen staple beyond a prescribed limit.

The Centre is also planning to import onion, though in limited quantity, to boost the domestic availability.

Much of the Rabi (winter) onion crop is stored to meet the demand in lean period. But this year, most of the onion kept in storage is of poor quality as the Rabi crop got damaged due to unseasonal rains in early March.

According to agri-experts, high storage losses have reduced availability of onion in the market and put pressure on prices and this situation will continue till the arrival of new kharif crop from mid-September.

To check prices, the government had imported a small quantity of onion last year too. It had also eased fumigation norms for smooth shipment of onions.

The country's onion production is estimated to have declined to 189.23 lakh tonnes in the 2014-15 crop year (July-June), as against 194 lakh tonnes in the previous year, as per government data.

The country's onion exports declined to 10.86 lakh tonnes in the 2014-15 fiscal due to high MEP (minimum export price), as against 13.58 lakh tonnes in the previous year.

Source:economictimes.indiatimes.com

Rupee Depreciates 17 Paise To Settle At 63.76 Against Dollar

Rupee depreciated 17 paise to settle at 63.76 against dollar on Thursday.The local unit had weakened 3 paise to settle at 63.58 against the greenback in the preceding session.

Data released overnight showed a better-than-expected recovery in the US home resales.

The home resales rose in June to their highest level in over eight years, signaling a recovery in the US housing market. The numbers have raised hopes that the US Federal Reserve is on track to raise interest rates later this year.

Dollar index, which tracks the movement of dollar against a trade-weighted basket of six major world currencies stood at to 96.98.

On Thursday, currency markets will be keenly awaiting more cues on the US economy. Data on initial jobless claims and leading indicators will be released later in the day. Friday will see realease of PMI readings in the euro zone and the US.

Source:economictimes.indiatimes.com

Hazardous waste material sold after being destroyed as per environment laws isn't a marketable commo

Excise & Customs : Hazardous waste material sold, after being destroyed as per environmental laws, cannot be regarded as marketable commodity known to commerce and worthwhile to trade in; hence, same cannot be charged to excise duty

Govt. revises protocol for India-specific and regional studies conducted by Multilateral Development

COMPANIES ACT, 2013 : Guidelines for Processing Cases of India-Specific and Regional Studies Conducted by Multilaterial Development Banks

TP adjustment set aside as TPO didn't consider variation in closing stock while computing cost under

IT/ILT : RPM cannot be applied in case of exporter

Commission paid by financial institution towards its obligation to provide guarantee to lenders was

IT : Where assessee was a State Financial Corporation and paid guarantee commission to State Government towards its obligation for providing guarantees to lenders under section 7 of State Financial Corporations Act, 1951, as commission was paid for business purpose, same would be an allowable expenditure

Govt. to set-up a Central KYC Records Registry under Money Laundering norms

MONEY LAUNDERING/INDIAN ACTS & RULES : Prevention of Money-Laundering (Maintenance of Records) Amendment Rules, 2015 – Amendment in Rules 2, 9 & 10 and Insertion of Rule 9A

Deliberate suppression by assessee would always invite penalty

Service Tax : When finding of adjudicating authority of deliberate suppression by assessee remains unchallenged, imposition of penalty becomes mandatory and authorities cannot depart from imposing such penalty

Profit on sale of land was cap gain as earlier AO had accepted such view and there was no change in

IT : Where assessee declared profit arising from sale of land as long-term capital gain, in view of fact that assessee showed plot of land as investment in relevant year as was done in earlier years, impugned order treating amount in question as 'business income' was to be set aside

Highlights of Report of 'Rajya Sabha Panel' on GST Bill

Provisional assessment is allowable if value of goods is dependent upon discount quantifiable after

Excise & Customs : If discounts are allowed based on achievement of sales target, value cannot be determined at time of removal, as discounts can be quantified only later on; therefore, assessee must be allowed provisional assessment facility

House taken on lease for 999 years was eligible for sec. 54F deduction

IT : Where assessee having sold long term capital asset, purchased a flat on lease hold basis for a period of 999 years, she was to be regarded as absolute owner of said property and, thus, her claim for deduction under section 54F was to be allowed

No reassessment to challenge nature of exp. if all details regarding exp. were disclosed at assessme

IT : Where Assessing Officer completed assessment accepting assessee's claim for payment of management fees as revenue expenditure and assessee had disclosed all material facts, assessment could not be reopened on ground that amount so paid was capital expenditure

Value of set-top boxes provided for DTH services would be chargeable to VAT

CST & VAT : Tripura VAT - Where assessee entered into a contract with its customer to provide direct-to-home service to him, whereby customer by using set top box provided by assessee was able to decode signals and watch programme on his television set, transaction entered into by assessee amounted to transfer of right to use goods, i.e., set top box

Info under RTI Act revealing failure of AO in recording satisfaction note leads to quashing of searc

IT : Where Assessing Officer of searched person had not recorded requisite satisfaction in respect of assessee, impugned assessment proceedings under section 153C against assessee were to be quashed

In an oppression plea, not only co. whose affairs are gone into but anyone can be impleaded as respo

CL : In a petition under sections 397-398 not only company whose affairs are gone into but anyone can be impleaded as respondent

Cement bags are taxable separately as it is established that sale of cement and bags are separate tr

CST & VAT: Andhra Pradesh VAT - Where assessee was engaged in business of manufacture and sale of cement and it had established that sale of cement and HDPE bags in which cement was packed was distinct and separate sale and there was a contract for such separate sale of cement and bags, sale of HDPE bags should be subjected to tax at rate applicable to it

Sum paid by Hospital for administration of drug store would attract sec. 194C TDS and not sec. 194H

IT : Where assessee-hospital engaged two ladies to facilitate and manage its drug store, drug handling charges paid to said ladies would be liable to deduction of tax at source under section 194C and not under section 194H

Assessee has no right over sale proceeds of confiscated goods as property in goods vests in the Gove

Excise & Customs : Where assessee did not opt for redemption of confiscated goods, property in confiscated goods stood vested with Government; hence, assessee had no right to claim refund of sale proceeds

Addition for undisclosed investment couldn't be made solely on basis of DVO's report

IT : No addition can be made with respect to difference between cost of construction determined by DVO and as shown by assessee solely on basis of DVO's report

Commissioning and installation of equipment is closely linked with manufacturing to be aggregated to

IT/ILT : Where activity of commissioning and installation of equipment arose out of manufacturing activity, both activities being 'closely linked' deserved to be aggregated and construed as a single transaction for purpose of determining ALP

Examination of AMP functions and probable comparables is essential to determine ALP of international

IT/ILT: Examination of AMP functions carried out by assessee and probable comparables is sine qua non in process of determination of ALP of international transaction, thus, where no details of AMP functions performed by assessee was available on record, matter required readjudication

ITAT couldn't set aside revisional order of CIT by re-appreciating his satisfaction recorded under s

IT : Once Commissioner has got power to point out errors which have effect on revenue, Tribunal cannot sit as an appellate authority on said order of Commissioner passed under section 263

Leasing of factory with machinery amounts to 'renting of immovable property' and not 'business Suppo

Service Tax : Leasing of entire factory with plant and machinery, would amount to 'renting of immovable property services' and not infrastructural support (Business Support Services)

Director not liable to pay tax dues of Co. if non-recovery of taxes isn't due to gross negligence of

IT : In absence of any finding that non-recovery of tax due from company could be attributed to any gross negligence, misfeasance or breach of duty on part of petitioners, no order under section 179 could be made

Garnishee notices for recovery from assessee's debtors cannot be sustained, if demand itself has bee

Service Tax : Where earlier adjudication order has been set aside and matter adjudicated afresh, garnishee notices for recovery from assessee's debtors (service recipient and bank, etc.) based upon earlier adjudication order, cannot be sustained; however, department may issue fresh notices as per law

Provisions of sec. 292BB don't cure defect of non-issuance of notice under sec. 143(2)

IT : Provisions of section 292BB do not cure virus of non-issuance of notice under section 143(2)

No denial of trust's registration without parent's confirmation that assessee had collected capitati

IT : Where investments in non-specified companies constituted only 1.68 per cent of total assets of trust, it could not be considered as a corroborative factor to deny exemption under section 11

Proceedings before DRT and DRAT couldn't be sought to be suspended even if the co. had ceased to be

SICA : Where company ceased to be a sick company and no rehabilitation package was pending before BIFR, proceedings before DRT and DRAT could not be suspended under section 22

Duty wrongly shown in invoice but not collected doesn't compel exempted SSI unit to pay same to Gove

Excise & Customs : Merely because duty gets wrongly shown in computer-generated invoice of SSI-unit due to error of a clerk, it does not amount to 'collection of excise duty' by SSI-unit despite exemption and therefore, section 11D cannot be invoked to raise demand of such duty

Tax exemption claim of society was to be allowed after examining whether all its members belonged to

IT : Where assessee, a co-operative society, claimed exemption under section 10(27), since its records did not reveal as to whether all individuals admitted as nominal members belonged to schedule tribes and how much loan was granted to them, matter was to be remanded back for disposal afresh

Govt. integrates 14 services with eBiz portal including services of issue of PAN/TAN and Co. incorpo

CL : Ease of doing business in India – Introduction of e-biz platform

IRDA notifies norms to calculate obligation of insurer on Third Party Insurance of motor vehicles

INSURANCE/INDIAN ACTS & RULES : IRDAI (Obligation of Insurer in Respect of Motor Third Party Insurance Business) Regulations, 2015

Govt. announces guidelines for permitting use of 'Make in India' logo

CL : Guidelines for Permitting Use of 'make in India' Logo

Govt. unveils second set of procedures for NGOs to claim Sec. 11 benefit on money send to earthquake

IT : Standard Operating Procedure (SOP) for Making Application for Claim of Tax Exemption U/s 11(1)(C) of the Income-Tax Act, 1961 in Respect of Remittance of Money/relief Article by Indian Ngos/charitable Organisations for Earthquake Hit People in Nepal

ICSI replies to queries received on SS-1 and SS-2

COMPANIES ACT, 2013 : FAQs on Secretarial Standard on Board Meetings (SS-1) and on General Meetings (SS-2)

CBEC issues instructions for conducting detailed scrutiny OF Excise returns

EXCISE : Returns - Instructions on Detailed Scrutiny of Central Excise Returns

Govt. explains reasons for amending exemption notification with non-Cenvat conditions

EXCISE : Judgement of Supreme Court in Case of Srf Ltd. Vs. Commissioner of Customs, Chennai [2015] 56 Taxmann.com 407 (Sc) – Clarification Relating to Notifications No.30/2004-C.e., Dated 9-7-2004; No.1/2011-C.e., Dated 1-3-2011 and No.12/2012-C.e., Dated 17-3-2012, as Amended from Time to Time

Inputs/capital goods with concessional rate of duty are also covered for 'exemptions with non-Cenvat

EXCISE : NOTIFICATIONS NO.37/2015-C.E., 38/2015-C.E., And NO.39/2015-C.E., ALL DATED 21-7-2015

Indian Cos can file unaudited accounts of subsidiaries not liable for audit in foreign Country

COMPANIES ACT, 2013 : Section 136, read with section 101, of the Companies Act, 2013 – Financial Statements – Right of Members to Have Copies of – Clarification with Regard to Circulation and Filing of Financial Statement under Relevant Provisions of Companies Act, 2013