Foreign tax credit should be given on tax liability computed under MAT provisions

IT/ILT : There is no provision in Income-Tax Act, debarring granting of credit for tax paid abroad in case income is computed under Section 115JB

Co. having unreliable financial data can't be chosen as comparable for TP study

IT/ILT : A software product company could not be compared with assessee-company, which was primarily designing and developing software on contract basis for its AE

SEBI releases guidelines on Annual System Audit, Business Continuity Planning and Disaster Recovery

SEBI : Annual System Audit, Business Continuity Plan (BCP) and Disaster Recovery (DR)

SEBI issues circular to streamline framework of investor redressal and Arbitration Mechanism

SEBI : Investor Grievance Redressal System and Arbitration Mechanism

Oil And Gas Block Auction Policy To Be Ready By Fy16: Dharmendra Pradhan

Government expects to finalise the new policy for auction of oil and gas blocks during the ongoing financial year, Oil Minister Dharmendra Pradhan said.

"We have brought this consultation paper and suggestions will come in by November 30. We will make the policy after considering all the views and take it to the Cabinet. It will be our endeavour to make the policy during this financial year only," Pradhan told reporters on the sidelines of Bio-Energy Summit 2015 organised by CII here.

Yesterday, Oil Ministry had issued a paper on new fiscal and contractual regime for award of hydrocarbon acreages with a view to revive investor interest in oil and gas exploration by simplifying rules.

It proposes to free natural gas pricing as well as replace the controversial Production Sharing Contract (PSC) with simpler revenue-sharing regime for all future field auctions in the backdrop of low gas prices not attracting investors in exploration and production sector.

Global players like BP and domestic companies including RIL as well as state-owned ONGC have been seeking pricing freedom as the current rates make new investments unviable.

"There were suggestion on the issue from institutions like CAG. In order to make new bidding round more progressive, transparent and market friendly, we have brought in this consultation paper," the minister explained.

In September, the government had allowed pricing freedom for the gas produced from 69 small and marginal fields it plans to auction shortly.

On the Indian basket crude oil price cracking below USD 40 barrel mark to touch USD 39.89, the minister said, "We have to accept the changing geopolitical scenario of the world. Let's see how things are coming up. But this kind of price is certainly favourable for the Indian market."

While addressing the conference, he made it clear that lower crude prices will not change India's stance on increasing share of renewables sources in its energy mix.

He also indicated that as much as 20 GW of output from bio-energy will be achieved against the envisaged 10 GW under the total renewable energy target of 175 GW till 2022.

On LPG gas subsidy to households, Pradhan said: "There should be a public discourse on the issue whether LPG subsidy should be given to higher income groups. We will take a decision on this."

The government is planning to stop providing LPG subsidy to the consumers whose income is above Rs 10 lakh.

On the issue allowing premium pricing on gas produced from difficult deep-water and ultra deep-water blocks, he said oil and finance ministries will take a decision on the issue after achieving consensus.

Speaking at the same occasion, Railways Minister Suresh Prabhu said: "We are launching our first wind turbine in Jaisalmer by the end of this week. We need to invest in R&D in green power."

Source : economictimes.indiatimes.com

Insurers no more required to state in ads that "insurance is subject-matter of solicitation" -IRDA

INSURANCE/INDIAN ACTS & RULES : IRDAI (Insurance Advertisements and Disclosure) (Amendment) Regulations, 2015 – Amendment in Regulation 9

CCE(A) has to consider request for extension of pre-deposit which is made before due date of pre-dep

Excise & Customs : Commissioner (Appeals) has power to extend due date for making pre-deposit and he does not become functus officio as regards extension till due date for making pre-deposit

Block assessment couldn't be initiated on basis of survey

IT : There being no search under section 132, block assessment invoking provisions of section 158BC would not arise

CBDT lays Std. Operating Procedure for allocation/transfer of cases and curing of defective appeals

IT/ILT : Section 260A of the Income-Tax Act, 1961 – Appeal to High Court – Procedure for Filing Appeals, Curing Defective Appeals and Effective Representation in Delhi High Court

CBEC issues directions for monitoring and disposal of pending cases

EXCISE : Monitoring and Disposal of Cases Pending for Adjudication

If pledging of shares is valid its subsequent enforcement before winding up can’t be held as fraudul

CL: Once original pledge by company-in-liquidation in favour of applicant was held to be valid, its subsequent enforcement could not be faulted on ground that it amounted to a fraudulent preference or invalid transfer during pendency of winding up

HC considers actual usage of rig instead of it being ready for use to determine PE

IT/ILT : In order to determine question as to whether assessee owing rig had PE in India, Tribunal rightly concluded that unless rig owned by assessee was actually used for a period of 120 days in India, it would not be sufficient to attract article 5(2)(j) of India - USA DTAA

Due date for filing of DVAT return of second quarter further extended to Nov 20, 2015

VAT : Filing of Online Return for Second Quarter of 2015-16 – Extension of Period Thereof

Govt. notifies accounting codes for payment of Swachh Bharat Cess

ST : Accounting Code for Payment of Swachh Bharat Cess

Base frame not classifiable under heading 'Industrial Pumps' as it isn't an essential part of indust

Excise & Customs : 'Base Frame' is not an essential part of 'Industrial Pump', as industrial pump may be sold separately; therefore, base frame was not classifiable under heading 8413 but only under heading 8485

Revenue can't challenge subsequent order of ITAT without any reasons after accepting its earlier ord

IT : Where jurisdictional Tribunal had allowed assessee's claim for exemption under section 10(10C) by following its earlier order which had been accepted by revenue by not preferring an appeal thereagainst, then it was not open to revenue to challenge Tribunal's order without giving reasons for taking a different view

Receipt shown in P&L A/c liable to MAT even if it is shown as capital receipt in notes to accounts

Remission of bank loan shown in P&L A/c shall not be excluded for computing book profits under section 115JB even if same was shown as capital receipt in notes to accounts

President promulgates two ordinances for speedy settlement of disputes

CORPORATE LAWS/INDIAN ACTS & RULES : Arbitration and Conciliation (Amendment) Ordinance, 2015

Niggling Doubts Over The New Gold Schemes

The government has launched, amidst plenty of fanfare, three new schemes to monetise gold in the country — the gold monetisation scheme, the sovereign gold bond and gold coin. The underlying objectives of all three are laudable. Households in India hold a large amount of their savings as physical assets — gold, silver and other precious metals and real estate. Gold especially has for long held a tremendous attraction both as an investment avenue as well as a store of value.

With very little of the precious metal now being mined in the country, the seemingly insatiable domestic demand is being met by gold imports. Hence a two-pronged strategy is needed to provide an instrument that would target would-be gold investors and second, to draw out gold lying idle in private hands.

Get the gold to banks

The idea behind gold monetisation is to lure gold, now held as physical assets in private hands, into productive financial savings. According to government statistics, the amount of gold with households is a mind boggling 20,000 tonnes. Even if 5 per cent can be mopped up through innovative financial instruments based on gold, the domestic demand — estimated at between 850 and 900 tonnes annually — can be met. A significant gain would, therefore, accrue to the macro-economy where gold imports, along with petroleum imports, have for long been a significant factor behind the current account deficit.

It is a different matter that with falling oil prices and consequently the reduced import bill, the current account deficit looks eminently manageable. But long term solutions are needed for gold. Those who cling to gold should be weaned away for which they need to be provided with a decent return and equally importantly a guarantee for the safety of their investment.

The gold monetisation scheme (GMS) appears to be central to the three schemes. It is a vast improvement over existing schemes in its genre and its appeal to medium and long term investors should be stronger. Under the new scheme, as small as 30 gms of gold can be accepted. The tenure can go up to 15 years and the scheme pays higher interest rates to depositors – 2.25 to 2.5 against one per cent before.

A synthetic bond?

The gold bond scheme is for those investors who buy gold as an investment. According to government estimates, a third of the domestic gold demand arises from those who buy gold bars and coins. The gold bond’s unique feature is that it will offer returns linked to market price of gold. This is akin to a synthetic bond mimicking gold prices.

Gold coins to be issued with Ashoka Chakra emblem is bound to be popular. It is hoped that the government would mop up enough gold through its monetisation scheme to meet the demand from jewellers as well as from the issuance of coins.

Compared to the draft guidelines , the new l guidelines for all the three schemes have been spruced up operationally and are friendlier to investors. Yet, niggling questions remain.

The gold monetisation scheme is no doubt an improvement over earlier scheme — it promises higher interest rate and retains the promise of returning the deposit as gold subject to certain conditions.

However, gold held as jewellery will be very difficult to be monetised. The point has been made several times before that there would be a sentimental objection to parting with jewellery, which in many households are passed on from one generation to another. In fact, no gold monetisation scheme can overcome the inhibitions of all would-be investors. People buy gold with different motivations. Pledging gold to meet seasonal requirements is very common. Many gold loan companies have grown exponentially recently, especially in Kerala. Whether the loan is taken from an NBFC or a money lender, the gold pledged can be redeemed in its original form and not melted away at the instance of a bank.

Despite much greater clarity in the operational aspects, it is obvious that the infrastructure for operationising a monetising scheme should be built up in a way that promotes efficiency as well as transparency.

There is high hopes that temples and other religious institutions who are large repositories of gold will invest in the monetisation scheme. The move will be controversial. There will always be a suspicion that politicians will get into the act. Moreover, religious traditions built up over centuries might have to reinterpreted in some cases. A better alternative to persuade the temples to convert a portion of their gold stock into coins, pendants and so on bearing the stamp of the presiding deity. This has already been tried out but from the point of bringing gold into mainstream financial sector has little relevance. One hopes that these schemes should succeed for the sake of the macro-economy. With the Prime Minister himself taking the initiative to popularise the schemes, they should make some headway. Fresh ideas are always welcome to remove possible glitches and make the schemes even more appealing.

Source : .thehindu.com

Inflation At -3.81% In October; Pulses, Onion Expensive

Deflationary pressure eased a bit with inflation rate moving up slightly to -3.81 per cent in October as pulses, vegetables and onion turning costlier.

This is 12 month in a row when the inflation at wholesale level remained in the negative territory. It has been in the negative zone since November last year.

The Wholesale Price Index-based inflation was -4.54 per cent in September. In October last year, it was 1.66 per cent.

Pulses and onion among the food items category turned costlier with inflation at 52.98 per cent and 85.66 per cent respectively during October.

The rate of price rise in case of vegetables was at 2.56 per cent as against -19.37 per cent in the same month last year, as per official data released on Monday.

Besides pulses and onion, the food items which became dearer during the month were milk (1.75 per cent) and wheat (4.68 per cent). However, inflation rate in case of potato was in the negative zone, -58.95 per cent.

Inflation rate in fuel and power segment was -16.32 per cent, while that in manufactured products was -1.67 per cent in September.

Inflation for August has been revised to -5.06 per cent, from the provisional estimate of -4.95 per cent.

The Reserve Bank would take into account WPI number for October while deciding on policy rate in its December 1 monetary policy review. RBI mostly tracks the consumer price index-based retail inflation for its monetary policy decisions.

Rising for the third straight month, retail inflation has climbed to 5 per cent in October, as against 4.62 per cent in the same month a year ago due to costlier pulses and other food items.

RBI governor Raghuram Rajan earlier this month had said that the central bank is comfortable with the current rate of interest till further room is available.

In September, RBI had reduced interest rates by more than expected 0.50 per cent and said it expects CPI inflation to reach 5.8 per cent in January 2016.

Source timesofindia.indiatimes.com