Income tax department to issue directive on safe harbour rules

The income tax department will issue a directive to its officers on the implementation of safe harbour rules in a move that is aimed at allaying fears of companies regarding various aspects of these and which should make transactions between multinationals and their Indian subsidiaries easier and, possibly, litigation-free.

The circular is expected to state that the relatively higher profit margins under safe harbour rules cannot be taken as a benchmark by the transfer pricing officer (TPO) and will not be counted against the company in subsequent evaluations.

In September, India’s finance ministry issued safe harbour rules to reduce transfer pricing litigations after taking into account feedback from all stakeholders on the draft provisions. Safe harbour rules are circumstances under which the tax department will accept the transfer price given by the assessee. Information technology (IT) and Information technology enabled service (ITeS) companies, contract research and development (R&D) centres in IT and pharma sectors, and auto component manufacturers are expected to benefit from these provisions.

Transfer pricing refers to the practice of arm’s length pricing for transactions between group companies based in different countries to ensure that a fair price—one that would have been charged to an unrelated party—is levied. It has been an area that the income tax department has been aggressively pursuing to garner revenues but has also led to large scale disputes between companies and the tax department.

Companies have to declare a higher operating profit margin—much above what will be considered an arm’s length price—to avail the safe harbour provisions but there was a fear that the transfer pricing officer may quote this margin in all future transactions.

“Apprehensions have been raised by the industry after we notified the safe harbour rules. We will issue written directives to the officers on how to handle these cases. In the event a company does not qualify for safe harbour, the TPO cannot take that price as the benchmark. The TPO will have to do his own analysis and decide on the right price,” said a finance ministry official who did not want to be identified. “A few other concerns have also been raised which will be addressed through the directive,” the official said.

Another finance ministry official said that the concerns of the industry will be addressed. “Reducing disputes related to transfer pricing was one of the main reasons for the introduction of safe harbour norms. So if industry has concerns, they will be addressed by CBDT (Central Board of Direct Taxes),” the official said.

Safe harbour rules were part of the Finance Act of 2009 but due to the lack of consensus, the rules were not notified. The need for safe harbour rules gained momentum after Prime Minister Manmohan Singh set up a committee under N. Rangachary, former chairman of CBDT and Insurance Regulatory and Development Authority (Irda), to address the concerns of the industry around transfer pricing and recommend safe harbour rules.

The tax department has been aggressively scrutinizing cases related to transfer pricing, leading to an increase of Rs.60,000 crore in claims.

Samir Gandhi, a partner at Deloitte Haskins and Sells, said the safe harbour regime will take at least a year to settle down and for the issues to be addressed.

“The government is trying to ensure smooth implementation of safe harbour and the promised directive to the cadre is one such step. Safe harbour markups should not be considered or deemed arm’s length pricing,” he said. “However, there will be issues as it will not be easy for the TPO to determine whether a company is providing software service or acts as a contract R&D centre for software services.”

It is important that the government ensures that this does not become a detailed and long exercise, he added.

Indian Firms Seek To Renegotiate $10.8 Bln Afghan Iron Ore Deal

29-Oct-2013

A consortium of Indian companies led by Steel Authority of India is seeking to renegotiate the terms of an iron ore deal in Afghanistan worth up to $10.8 billion, a senior official at the Ministry of Mines said on Tuesday.

The situation arose after India's finance ministry refused to help finance the consortium without a detailed study about the commercial viability of the project.

Investment in Afghanistan's mining sector is considered one of the greatest hopes of the country attaining economic independence and the halt will add to concern that it will not be able to support itself economically as aid flows shrink.

"The negotiations are suspended for some reason ... (but) they haven't withdrawn from this process," the official told Reuters, asking for his name to be withheld because he was not authorised to speak to the media.

An Indian official with knowledge of the matter said the finance ministry had told the consortium to draw up a fresh viability study, adding that the studies submitted by the companies dated back to the 1950s and 1960s.

"They are asking for government funding. But that cannot be done without first evaluating the profitability of the project," said the official, who asked not to be identified.

India's economic slowdown has hit the country's finances, forcing the ministry to consider spending cuts to prevent a budget blow-out. However, the official said the initial proposal was not rejected to trim expenditure and that the project would be looked at again once the consortium improved its pitch.

The Steel Authority of India and the two countries' mine ministries were not immediately available for comment.

The Afghan official did not give a reason for the suspension, but the investment, at the Hajigak mine, is in the once peaceful province of Bamiyan where increasing insurgent attacks mean it is now only safely reachable by air.

About two months ago, Chinese firms demanded a review of the country's landmark deal to produce copper in Afghanistan, agreed in 2007. [ID:nL6N0GS1ZB] According to the ministry official, the suspension of talks with the Indian firms was partly owed to a Chinese refusal to build a railway as initially planned.

The 900-km railway under consideration was to run from northern Pakistan, through Kabul, and then across the country up to Uzbekistan in the north.

"The Chinese were going to build the railway for the Aynak mine, and now the Chinese company don't want to build this railway, so the question is (how to find) another, alternative way to export iron," the official said.

He added that other issues in the contract that had come up for review included a plan to build a steel plant.

"Maybe within a month or two months we will restart the negotiations," he said.

The Hajigak deposit contains an estimated 1.8 billion tonnes of ore, with an iron concentration of 62 percent, according to the ministry, basing its figures on a survey carried out in the 1960s.

It is located in mountainous Bamiyan, where Afghanistan's world famous ancient Buddha statues once stood in the cliffs before being bombed to rubble by the Taliban.

It was once considered Afghanistan's most peaceful province due to the dominant local Hazara tribe's opposition to the Taliban, who are mostly ethnic Pashtuns and who massacred thousands of Hazara during their austere rule.

But now that foreign combat troops are withdrawing, with plans to exit by the end of 2014, violence is returning to the province and insurgent attacks make its roads dangerous.

Source:- in.reuters.com

Tata Steel Says Could Cut Around 500 Uk Jobs

29-Oct-2013

Tata Steel (TISC.NS), Europe's second-largest steel producer, said on Tuesday it could cut around 500 jobs under plans to restructure the part of its British business that supplies the construction and engineering industries.



Changes to its long products business - which makes tubes, rails and rods, used in many industrial sectors - will affect management and administrative jobs at sites in northern England, primarily Scunthorpe, where 340 positions could be lost, Tata said.



It blamed a prolonged downturn in demand, particularly for construction steel in Britain, a market which is at about half of 2007 levels.



"European steel demand this year is expected to be only two-thirds of pre-crisis levels after falls in the past two years," Karl Koehler, CEO of Tata Steel's European operations, said.



"On top of the challenging economic conditions, rules covering energy and the environment in Europe and the UK threaten to impose huge additional costs on the steel industry."



The $500-billion-a-year steel industry, a gauge of the health of the global economy, has suffered from a drop in demand from austerity-hit Europe and worries about the outlook for the Chinese economy.



Tata has battled tough conditions in Europe almost since taking over steelmaker Corus in 2007, just before the global financial crisis, and Tuesday's cuts follow a major restructuring of its long products unit in 2011, with the loss at the time of about 1,500 jobs in Britain.



Tata said then that it was mothballing parts of its Scunthorpe plant to refocus on high-value markets.

Source:- in.reuters.com

Govt To Consider Lowering Wheat Export Price

With government’s effort to liquidate 2 million tonnes of wheat evoking poor response from traders due to high base price, the cabinet committee on economic affairs is soon expected to consider a proposal to lower the base price of such exports from the existing $300 per tonne (Rs 18,372 per tonne assuming an exchange rate of 61.42) to $260 per tonne (Rs 15,969.2 per tonne).



However, how far the proposal will be carried through remains to be seen as some ministries and department are against the move to lower the base price and increase the burden on the exchequer at a time when there is a possibility of international wheat prices firming up in the next few months.



BY lowering the base price, officials said it will enable FCI get more bidders for the wheat offered by it and enable quicker liquidation of its inventories. The cabinet could also consider allow FCI time till June 30 to export wheat from its warehouses as against the current deadline of March 31.



The government has planned to export around 2 million tonnes from central pool over and above the already exported 4.5 million tonnes to create space for the new harvest.



However, it had fixed a base price of $300 per tonne for exports, while the market rate dropped much below $300 due to arrival of fresh wheat from Russia. In the last tender invited by FCI the highest bid to export wheat came at around $269 per tonne, almost $31 per tonne less than the base price fixed by the government.



The result was that the entire tender was cancelled by FCI. “If the CCEA reduces the base price of wheat then there is possibility that Indian wheat might get some buyers,” a senior official from a global grain trading firm said.



He said Indian wheat has the potential to sell at around $270-275 per tonne as its quality is somewhat better than some of the alternatives available in the global market.



“But, if someone feels that Indian wheat will quote $300 per tonne in the international market, then he has not read the market properly as global prices are much lower than that,” the official said.



India produced around 92.4 million tonnes of wheat in 2012-13 crop year that ended in June, around 2.53% less than the previous year. State-run agencies like FCI procured around 26 million tonnes of the same.



According to latest FCI data, as on October 1, foodgrains stocks in state-run warehouses is estimated to be around 55.13 million tonnes as against a requirement of 21.2 million tonnes. Of this wheat comprises of 36.1 million tonnes, while the rest is rice.

Source:- business-standard.com

CAT annuls appointment of senior revenue official

The Central Administration Tribunal (CAT) has quashed the appointment of Central Board of Direct Taxes (CBDT) member Parvinder Sohi Behuria, seven months after she took charge.

This is for the first time that a serving member’s appointment has been declared invalid on the grounds that the vacancy did not exist when the orders were issued. The 1977 batch Indian Revenue Service officer is handling the charge of revenue at the administrative body for collecting income tax.

The appointment was challenged by a Chief Commissioner of Income Tax, Dileep Shivpuri, also in the fray for the post. In his petition, he alleged finance secretary R S Gujral, who was handling the revenue portfolio at that time, had “unduly favoured” Behuria.

He alleged she didn’t meet the criteria of one year of regular service in the post of chief commissioner or its equivalent, and had less than one year’s residual service on the date of occurrence of vacancy.

Behuria was appointed member in place of S S Rana, who retired on March 31. The CAT has ruled that since no vacancy existed on that day, no selection or appointment could have been made against the post before April 1. The government will now have to make a fresh selection for the post.

The CAT, however, did not accept the objection raised by the petitioner on relaxing criteria regarding working on an equivalent post outside the cadre. Before her appointment as CBDT member, Behuria was secretary at the Public Enterprises Selection Board (PESB) in the rank of chief commissioner.

“Since others also had been given such relaxation in similar circumstances in the post, we would feel that this constitutes a category in itself,” it said.

It also refused to get into comparative evaluation of the merits of Shivpuri’s application for the post and allegations of “undue favour” being made against him by Gujral.

Behuria, a doctorate in business administration, is married to heavy industries secretary, Sutanu Behuria,. She was appointed PESB secretary on January 1, 2008. She was part of the core team that implemented the Income Tax Department’s Permanent Account Number for tax payers.

At CBDT, she is handling all matters relating to revenue budget, including the assigning of budgetary targets among chief commissioners throughout the country, recovery of taxes, write-offs of income tax demands, all matters relating to widening of tax base, and general coordination of the work.

India's Iran Oil Imports Drop As Refiners Await Insurance Fund

29-Oct-2013

India's crude imports from Iran fell 40 percent in the first nine months of this year as some refiners cut purchases from the sanctions-hit nation while waiting for New Delhi to back local insurers covering plants processing the oil.



European reinsurers, due to Western measures targeting Iran's disputed nuclear programme, have added a clause in contracts with Indian refiners that could mean claims arising during the processing of Iranian oil would not be met.



New Delhi has decided to set up a sovereign fund to back local insurers covering such refineries, hoping to boost imports paid for in rupees to ease its current account deficit.



But the fund has yet to start and this could lead to import cuts larger than the goal of about 15 percent.



Despite a near doubling of Iran oil shipments from August as one refiner stepped up purchases, the year-to-date volumes are still down sharply from a year ago.



India's imports of Iranian oil have fallen to 194,000 barrels per day (bpd) for January-September, down from 324,000 bpd in the same period last year, trade data made available to Reuters shows.



September barrels from Iran rose to 296,100 bpd from 151,000 bpd in August, partly due to Indian Oil Corp (IOC.NS) taking 2 million barrels of oil from Tehran, the data showed.



The September volumes were down 8.1 percent from a year ago.



Despite signs of a thaw in relations between Washington and Tehran, Iran's Asian oil buyers - its main clients - are not ready to risk letting imports creep higher.



To win waivers from the U.S. sanctions, Iran's oil customers must continually reduce their shipments. Japan won its fourth six-month waiver last month, while Iran's other top buyers - China, India and South Korea - will have their exemption from sanctions reviewed in early December.



Iran's oil sales in October will fall to their lowest in months, according to sources who track tankers, indicating no sanctions relief to Tehran despite its apparent willingness to compromise on its disputed nuclear work.



Iran's deputy foreign minister said he had made proposals to the U.N. nuclear watchdog chief on Monday after pledging "a new approach" to easing international concerns about Tehran's nuclear programme.



GAINING GROUND



Overall shipments in June-September were about 34 percent less than the average of December-May period, the data shows.



The comparison with the previous six months will be most relevant to the renewal of India's sanctions waiver in December.



Refiner Mangalore Refinery and Petrochemicals Ltd (MRPL.NS) was the biggest importer of Iranian oil in September, replacing Essar Oil (ESRO.NS) by shipping in 133,000 bpd, the data showed.



MRPL resumed imports from Iran in August after a four month halt over the insurance issue, while Hindustan Petroleum Corp Ltd (HPCL.NS) has decided against buying oil from Tehran in the fiscal year that began April 1.



Iran was the fourth biggest crude oil supplier to India in September, improving its ranking from ninth place in August.



India imported about 51 percent more oil from Latin America in the first nine months of the year as the Iranian shipments dropped. Crude imports from Iraq over the same period increased by 20 percent.



Overall, Asia's third-largest economy shipped in slightly more oil in September than a year ago, while imports for the January-September period rose about 11 percent, the data showed.

Source:- in.reuters.com

Govt’S Onion Import Plans Come To Nought

29-Oct-2013

The Government’s plans to import onion to rein in its high prices have come a cropper as five of the six bids received were invalid and one eligible supplier quoted high price.

On government’s instruction following retail price soaring up to Rs 100 a kg, co-operative major Nafed floated a tender on October 23 to import onion from Pakistan, Iran, China and Egypt. The bids were opened on Tuesday.

“We have received a total of six bids, but only one is valid and it does not suit our requirement,” NAFED Managing Director Sanjeev Chopra said.

The valid bid quoted Rs 50 per kg at ex-Delhi price for Chinese onion. “At this rate, we are getting onion in the domestic market and import at this price does not work out to our favour.”

Five bids were found invalid for various reasons and a detailed report on this is expected tomorrow, he added.

“We cannot take a decision based on one valid bid. As per CVC guidelines, at least 3 tenders should be there,” he said.

Source:- thehindu.com

Complaint for dishonour of cheque allowable if accused fail to justify such dishonour

Negotiable Instrument Act: Where against complaint filed for dishonour of cheques, accused raised a defence on basis of agreement of sale but same was not produced in Court, complaint was to be allowed

Consumer inflation-linked savings plan for retail investors by year-end

MUMBAI: The Reserve Bank of India will soon launch an inflation-linked saving instrument for retail investors, offering people an alternative to parking their savings in gold. The central bank plans to launch the 10-year Inflation Indexed National Saving Securities (IINSS) for retail investors in consultation with the government before the end of December, RBI said in its second quarter review of monetary policy on Tuesday.

The rate of interest on these securities will be a fixed rate plus inflation based on the new (combined) consumer price index. The instrument will be distributed through banks.

The move aims to revive small investors' interest in financial assets. With unabated inflation, investors have been moving away from financial assets such as bank fixed deposits and small savings schemes, instead opting for physical assets such as gold.

Experts say IINSS will offer investors a good option to hedge against inflation.

Some say the government can make it more attractive by making the securities tradable. "This is a good option for investors who are of the view that inflation is going to rise," Joydeep Sen, senior vicepresident, advisory desk, fixed income at BNP Paribas Wealth Management, said. "However, since the returns will be received only at the time of redemption, these bonds should be made more liquid by listing them on exchanges. This, and a wide investor base, will make the instrument more attractive," he added.

The Union Budget 2013-14 presented in February had proposed a saving instrument to protect small investors from inflation. RBI governor Raghuram Rajan too had talked about such an instrument when he assumed office last month.

Inflation-linked bonds now available are linked to wholesale price indices. They have not taken off in a big way, partly because the returns on these are lower than consumer inflation, thus eroding the value of one's financial savings.

Inflation based on the wholesale price index for September was 6.46%, while consumer price inflation was 9.84%. As for bank deposits, the returns are in the range of 8-9%.

Unlike bank deposits where the individual has an option to receive interest payments at regular intervals, the return on these securities would be compounded half-yearly and paid cumulatively at redemption. Individuals, Hindu undivided families (HUFs), trusts and charitable institutions will be eligible to buy these securities.

Data processing cost couldn’t be deemed as royalty under IT Act; no disallowance for TDS default

IT/ILT: Data processing cost by no standards could be treated as royalty as a consideration for use of assets specified under Explanation 2 to section 9(1)(vi)

IRDA sets deadline for corporate surveyors to comply with revised norms on Insurance Surveyors and L

INSURANCE : Insurance Surveyors and Loss Assessors (Licensing, Professional Requirements and Code of Conduct) (Amendment) Regulations, 2013 – Specified Clauses of Said Regulations Which Require Immediate Attention and Necessary Action From all Existing and New Corporate SLAs

SEBI strives for transparency in complaint redressal system; revises format for disclosing investor’

SEBI : Disclosure of Investor Complaints on Websites of Stock Exchanges

SEBI simplifies norms for transmission of securities from deceased person’s account

SEBI : Standardisation and Simplification of Procedures for Transmission of Securities

Reassessment can't be initiated if excess managerial fee is paid in violation of law and disclosed i

IT: Initiation of reassessment on ground that managerial remuneration in excess of prescribed limit was paid and same was not approved by Government, when all material facts relating to same had been disclosed by assessee in original assessment, was unsustainable

Software exports can claim credit of ST paid on rent, security and maintenance of AC

ST : Rent services, Security services, Repair & maintenance of Air-conditioner services, Man Power services, Bandwidth services, etc. used for export of information technology software services are eligible for refund under rule 5 of CENVAT Credit Rules, 2004

An order by ITAT without cogent and convincing reasons would be in violation of principles of natura

IT: Order of Tribunal passed without giving cogent and convincing reasons would be in violation of principles of natural justice

Subsidy on sales tax, entry tax and electricity duty to be treated as revenue receipts

IT : Assessee could be allowed to claim depreciation on WDV basis, though in earlier years depreciation was claimed on straight line method

Land adjoining factory utilized for industrial purposes wouldn't be liable to wealth tax

IT : Land adjoining factory utilized for industrial purposes would not be liable to wealth tax

No sec. 54 relief for payment of legal fees for acquisition of a new asset if actual work not yet st

IT: In absence of any evidence with regard to actual work undertaken, legal fees could not be said to be forming part of cost of purchase

Upcoming projects of different developers rule out dominance of one player in that relevant market

Competition Act : Presence of several upcoming projects by different developers in relevant market of development and sale of residential flats in Pune rules out dominance of OP in relevant market

Small investors to get inflation-linked savings scheme soon

MUMBAI: The Reserve Bank of India plans to soon launch a 10-year savings instrument that will offer inflation-linked returns to small investors as an alternative to investing in gold.

"It is proposed to launch Inflation Indexed National Saving Securities (IINSSs) for retail investors in November/December 2013 in consultation with the government," the RBI said today in its Second Quarter Review of Monetary Policy 2013-14.

The inflation-indexed securities for retail investors will be linked to the new (combined) consumer price index (CPI). The interest on these securities would comprise of a fixed rate plus inflation.

"Interest would be compounded half-yearly and paid cumulatively at redemption. These securities will be distributed through banks to reach out to the masses," the RBI said.

Eligible investors would consist of individuals, Hindu undivided families, trusts and charitable institutions.

The Union Budget for 2013-14 had proposed introducing instruments that would protect savings from inflation and provide an alternative to gold as an investment avenue for individuals.

Both the government and the RBI have imposed a host of restrictions on the import of gold, one of the major reasons for the record high current account deficit in the previous financial year.

In another decision, the RBI allowed banks to pay interest on savings and term deposits at shorter-than-quarterly intervals. Banks are currently required to pay interest on such deposits at quarterly or longer intervals.

Higher depreciation to be allowed on vehicle given on lease

IT: Where assessee engaged in business of leasing and financing leased vehicles to third parties, assessee would be entitled to depreciation at higher rate of 40 per cent

Bharat Petroleum Corporation Ltd vs. ITAT (Bombay High Court)

Tax-free bonds: 10 facts you need to know before investing

Tax free bonds have emerged as a popular investment option due to the taxation benefits they offer. The interest income on these bonds, generally issued by government enterprises, is exempted from taxation.

Here are the salient features of the tax-free bonds:

What are tax-free bonds: These bonds are mostly issued by government enterprises and pay a fixed coupon rate (interest rate). As the proceeds from the bonds are invested in infrastructure projects, they have a long-term maturity of typically 10, 15 or 20 years.

Tax benefits: The income by way of interest on tax-free bonds is fully exempted from income tax. The interest earned from these bonds does not form part of your total income. There is no deduction of tax at source (TDS) from the interest, which accrues to the bondholders.

But remember that no tax deduction will be available for the invested amount. Interest rate: The coupon (interest) rates of tax-free bonds are linked to the prevailing rates of government securities. So these bonds become attractive when the interest rates in the financial system are high. Interest payment:

The interest on these bonds is paid annually and credited directly in the bank account of the investor. Tax free bonds vs bank fixed deposits (FDs): The interest earned on bank FDs and other normal bonds are added to the income of the investor and taxed as per the income-tax slabs. As interest earned from tax-free bonds are not taxed, investors in higher tax brackets mostly earn a better post-tax return than from FDs.

But remember, the bank FDs score over tax-free bonds in terms of liquidity as these bonds have a longer maturity tenure. Credit risk: Since tax-free bonds are mostly issued by government-backed companies, the credit risk or risk of non-repayment is very low. Liquidity: The tax-free bonds get listed and then traded on the stock exchange(s) to offer an exit route to investors.

But these bonds might not enjoy high liquidity as they are long-term in nature. Do you need a demat account? The bonds could be issued both in demat and physical mode. Secondary market: Investors can buy and sell these tax free bonds on the stock exchanges.

Though the interest earned on these bonds is tax-free, any capital gain from sale in the secondary market is taxable. Short-term capital gains from sale of tax-free bonds on exchanges are taxed at the normal rate, while long-term capital gains are taxed at 10% without indexation and 20% with indexation, whichever is lower. By indexing, you adjust the purchasing price with annual inflation.

Who should invest? Tax-free bonds are suitable for investors looking for a steady source of income annually and can afford to lock-in their capital for the long term. (Disclaimer: Investors are advised to make their own assessment before acting on the information.)

For filing an application before SetCom limitation period to issue sec. 143(2) notice is irrelevant

IT: Even if notice of initiation under section 143(1) for relevant year is in appeal before an Appellate Authority, it would still be open to an assessee to file an application before Settlement Commission so long as no order of assessment under section 143(3) has been passed within period of time provided under section 153

Prior to 8-5-2010 sponsorship of IPL teams was not liable to service tax

ST: Sponsorship of teams taking part in IPL Tournaments amounts to sponsorship service 'in relation to' sports event and is not liable to service tax prior to 8-5-2010

Assessee needn't be unemployed while going abroad for a job; only stay in India would determine resi

IT/ILT : Where status of assessee was a non-resident, fact that assessee was already employed before leaving India should not effect his residential status

Chidambaram To Drive Voluntary Service Tax Scheme

28-Oct-2013

The Finance Ministry intends to intensify its strategy for service tax mop up, as the collections were below the desired levels.



While Finance Minister P. Chidambaram will meet industry associations on Service Tax Voluntary Compliance Encouragement Scheme next month, the Service Tax Department is in the process of dispatching letters to nearly 10 lakh non- filers/those who have stopped filing service tax returns. The Ministry is also in the process of simplifying the settlement process.



This exercise is taking place at a time when there is a threat of the fiscal deficit exceeding the Budget target of 4.8 per cent. Services (excluding constructions) account for nearly 57 per cent of the gross domestic product.



The Budget has set a target of Rs 1.80 lakh crore for the current fiscal, which requires a growth of 36 per cent. However, in the first six months (April-September) of the current fiscal, service tax collection grew by only 16 per cent to touch Rs 59,000 crore. This tax constitutes nearly 14 per cent of the total tax collection and 32 per cent of the indirect tax (Custom duty, Excise duty and Service tax) collection.



Talking about voluntary scheme, a senior Finance Ministry official said that till date, it has got nearly 5,000 applications with tax payments of little over Rs 1,000 crore. The scheme has been operational since May 10 and will continue till December 31.



The scheme offers ‘no penalty, no interest’ and provides a one-time opportunity to defaulters to come clean. Under it, defaulters have to pay at least 50 per cent of arrears for the five-year period ending 2012 and the balance in another six months without interest.



Now with just two months left in the scheme, the Finance Minister, himself, will steer the scheme by speaking to industry bodies and other associations, the official added. He also said that usually people join the scheme in the last few days, as no interest can be earned by depositing arrears early, while it can fetch some interest if it remains in the bank.



On non/stop filers of service tax returns, the official said a common format of letter has been approved and sent to various units of the department. Now, local commissionerate will dispatch reminding them about the scheme and asking to deposit the dues immediately.



Earlier on August 8, the Finance Minister had said that about 10 lakh non-filers or stop filers of service tax are in a way defaulters and they are liable to punishment. The Government in the Service Tax Act has already provided for monetary penalty and punishment. Those who have collected service tax in excess of Rs 50 lakh and not deposited to Government face punishment of imprisonment up to seven years.

Source:- thehindubusinessline.com

Kudankulam Nuclear Plant Generates 20% Of Capacity

The first unit of Kudankulam Nuclear Power Project (KNPP) Monday fed the southern power grid with 20 % of its rated capacity at an average, stated a report Tuesday.



The 1,000 MW unit, which was resynchronised with the grid Oct 25 night generated 200 MW power at an average Oct 28, up from 188 MW generated Oct 27, according to a Power System Operation Corporation Ltd report.



Power System Operation Corporation operates the power grids - regional and national - and is a wholly owned subsidiary of Power Grid Corporation of India Ltd.



On Oct 22, the 1,000 MW capacity KNPP unit was synchronised for the first time with the power grid at 2.45 a.m., and generated 75 MW of power.



The power generation was subsequently increased to 160 MW and nearly two hours later, the unit tripped due to reverse power.



On Oct 25 9.43 pm, the unit was reconnected to the grid and generated around 160 MW.



The power (infirm power) generated by KNPP's first unit will be supplied to Tamil Nadu as the unit has not started commercial generation.



Only when the unit is declared as commercially operational then the power generated will be shared with other southern states, officials added.



India's atomic power plant operator Nuclear Power Corporation of India Ltd (NPCIL) has been setting up two 1,000 MW Russian reactors at Kudankulam in Tirunelveli district, around 650 km from here. The total outlay for the project is over Rs.17,000 crore.



KNPP is India's first pressurised water reactor belonging to the light water reactor category.



The first unit attained criticality July 2013, which is the beginning of the fission process.



In August, the Atomic Energy Regulatory Board gave its nod to KNPP to raise the reactor power levels to 50 % and for synchronisation of the unit with the power grid.



The Nuclear Power Corporation of India Ltd earlier said it would connect the first unit to the grid end-August, generating 400 MW power.



But that did not happen due to issues with the equipments the sorting of which and the testing took time.



According to NPCIL officials, the power out at the first unit of KNPP will be increased gradually and by December this year the unit is expected to touch its rated capacity of 1,000 MW.

Source:- dnaindia.com

Aircraft used by Co. for its business purposes would be exempt from wealth tax

WT: Where aircrafts owned by assessee was used for its business purpose, same would be exempt from wealth tax

Asia's Export Engine Stuck In Neutral Despite U.S. Uptick

Asia's once-reliable export engine remains stalled two years into a global economic recovery, raising concerns about the region's competitiveness and its ability to motor through the next tough time for emerging markets.



Exports from seven of East Asia's biggest exporters - Japan, China, South Korea, Taiwan, Thailand, Hong Kong and Singapore - grew by just 0.8 percent in the third quarter, according to a Reuters analysis of national trade data, led by a 3.1 percent gain in exports to the U.S. from the same three months of 2012.



The data reinforce a worrying trend in a region where gross exports represent more than a third of its combined economic output: since peaking in 2010 as the global economy rebounded from financial crisis, Asia's export growth has rapidly cooled.



Double-digit growth, common to the past decade, petered out in 2011 and has not recovered.



"There is really no change in the main thing that's going on across Asia - which is no growth in exports the past two years," said Tim Condon, head of financial markets research at ING in Singapore.



"I think it's weak global spending, it's as simple as that."



There is a growing consensus that Asia faces slower growth and more uncertain prospects once the U.S. economy improves to the point where the Federal Reserve begins scaling back five years of radical monetary stimulus.



If exports fail to offset rising interest rates and ebbing global capital flows, economists say, Asia will have to rely on domestic demand to take up the slack - a difficult proposition given aging populations and other structural hurdles.



The failure of Asian exports to rise in tandem with global recovery has sparked a debate among economists about whether Asia might be losing its competitiveness as wages and other costs rise. But Asia's share of U.S. imports, according to data from the U.S. Census Bureau and Bureau of Economic Analysis, has been growing since 2002 alongside a steady climb in China's exports since its 2001 entry into the World Trade Organization.



"There's no compelling evidence that the competitiveness of EM (emerging market) Asia's exports has fallen," said Johanna Chua, head of Asia economics and market analysis at Citigroup in Hong Kong. The sluggish recovery in U.S. imports reflects the lopsided nature of the U.S. recovery, she said, one led by housing and shale gas instead of consumer spending or business investment.



"We're not getting a broad-based recovery," said Chua.



JAPAN'S 'HOLLOWING OUT'



Japan, however, is a different story.



The world's third-largest economy has slowly been losing market share in the United States. Japanese exports fell almost 11 percent to $180.4 billion in the third quarter, leading Asia's export decline.



In local currency terms, Japanese exports climbed nearly 13 percent in the quarter because of a sharply weaker yen over the past 12 months. But the volume of shipments was virtually flat.



And while Japan lost its lead as Asia's top exporter to the United States and Europe a decade ago, it now appears to be losing its edge in China to neighbor and rival South Korea.



Asia's exports to China in the third quarter rose 1 percent, with a 9 percent rise in exports from Korea offsetting an 11 percent decline in exports to China from Japan. Indeed, in the past five years, Korea has edged out Japan as Asia's biggest exporter to China.



That may be a reflection less of declining popularity or competitiveness of Japanese products than a shift of production out of Japan to other production bases in Asia and the United States - the "hollowing out" of Japanese industry.



This phenomenon explains how a weak yen can boost exports in yen and the earnings of Japanese exporters calculated in yen even though shipments from Japan are falling. Japan's exporters are earning more from products sold - and manufactured - overseas.



"Japanese automobiles and general machinery remain competitive and, in fact, Japanese auto sales have increased in the United States this year from last. But exports have not increased as much," said Yasuo Yamamoto, senior economist at Mizuho Research Institute in Tokyo.



"The reason is their continued shift to local production. The weak yen at current levels won't help reverse the trend of hollowing out of industry and is unlikely to boost exports as much as it used to." (Additional reporting by Michael Gold in Taipei; Editing by Mark Bendeich)



Source:- business-standard.com

Maruti Suzuki Sees Higher Import Costs On Weak Rupee

India's biggest carmaker Maruti Suzuki (MRTI.NS) said a weak rupee would increase import expenses in the second half of its fiscal year, after costs cuts led to a better-than-expected tripling in quarterly net profit from a low base.



Maruti Suzuki India Ltd, like all automakers in the country, has been battling a depreciating rupee, while the industry faces a second year of falling sales because of high inflation and meagre urban salary hikes in a slowing economy.



"The depreciation of the rupee made imports expensive but owing to inventories the impact will reflect with a lag in the second half of the year," Managing Director Kenichi Ayukawa told reporters. "We have to be cautious of this."



The Indian rupee weakened 5 percent versus the dollar and 5.7 percent against the yen in the September quarter. Maruti, controlled by Japan's Suzuki Motor Corp (7269.T), is estimated to spend the equivalent of a quarter of its revenue on parts from Japan and royalties to its parent.



Maruti had previously said it expected domestic sales to grow between 0 and 5 percent in the fiscal year that ends in March. "Our target is still above last year ... But that could be a tough target, I know," Ayukawa said.



Still, rural incomes are likely to rise thanks to bumper harvests after strong monsoons, and could be spent on vehicles in the year-end festive season when Indians traditionally buy expensive goods. Maruti is well placed to gain because of a wide dealership network, analysts say.



"This year, the contribution of the rural market has increased to 31 percent for the first six months, and rural markets have grown by around 24 percent plus," said Mayank Pareek, chief operating officer of marketing and sales.



"Going forward, I think personally we've just touched the tip of the iceberg. There should be huge demand yet to be tapped."



Net profit in the July-September quarter was 6.7 billion rupees compared with 2.27 billion rupees a year earlier when a riot at its Manesar factory led to one death, over 100 injuries, a month-long shutdown and a $250 million production loss.



The mean estimate of 12 analysts according to Thomson Reuters I/B/E/S was 5.52 billion rupees.



Revenue rose 27 percent to 102.12 billion rupees.



Operating margin rose to 12.6 percent from 11.4 percent in the previous quarter, calculated on total operating income, helped by a positive foreign exchange impact, despite Maruti being forced to offer discounts to push sales.



Ayukawa also said he expected a small delay in starting Maruti's new Gujarat plant in western India, which is to be commissioned by fiscal 2016, but did not give a new timeframe.



Maruti is the first of the three biggest domestic carmakers to report second-quarter earnings. Analysts estimate profit to fall 2 percent at Mahindra and Mahindra <MAHM.NS, India's biggest utility vehicle manufacturer, and rise 22 percent at Tata Motors (TAMO.NS), India's largest automaker by revenue - rescued by strong sales at its luxury Jaguar Land Rover unit.

Source:- in.reuters.com

Tea Export Earnings Reach Rs 142 B Upto September

Sri Lanka’s overall tea export earnings during the period January – September of the year has increased by Rs. 10.6 billion year on year (YoY) to record Rs. 141.9 billion, according to a Forbes and Walker report.



However, overall export volumes in the first nine months of the year has decreased by 1.4 million kg year on year to 234.5 million kg.



The total tea export earnings in August also increased to Rs. 123.1 billion while tea export earnings in September was Rs. 18.5 billion. The volumes decreased by 3.1 million kg to 28.7 million kg.



CIS, Iran, Turkey, Iraq, Syria, UAE, Kuwait, Japan, Jordan and Libya are currently the Sri Lanka’s top ten tea importers .



“In spite of the erratic weather conditions experienced in the high and medium elevations, the Black tea production for the month of September and for the cumulative period, January to September 2013 have recorded positive variances compared to 2012,” John Keells Tea Market Report said.



High grown production has gained by 18% whilst Medium Grown production has shown an increase of 14% for the month. Cumulatively too, the production of these two elevations have shown increases of 3.47% and 5.55% respectively. In contrary, Low grown production has recorded a significant negative variance of as much as 20% for the month.

Source:- dailynews.lk

Stringent Gold Import Norms May Be Relaxed

28-Oct-2013

The government and the Reserve Bank of India (RBI) are considering easing the 80:20 principle for import of gold. The rule requires importers of the commodity to supply at least 20 per cent of their imports to exporters.



Traders have said this is inhibiting imports and have made a presentation to the government to relax the condition. They have argued that it is troublesome for them to show proof of export for every lot of imports and as a result their consignments often get held up at customs warehouses.



“Some discussions are going on to relax the rule. The government is considering a proposal whether importers can be allowed to make the declaration less frequently, say on an annual basis,” said a finance ministry official, who did not wish to be identified.



On July 22, the RBI had said that a fifth of the gold purchases by importers in every lot would have to be exclusively made available to exporters. It said only 80 per cent of the imports could be used for domestic purposes, and that too for entities engaged in jewellery business, bullion dealers and banks.



Traders and jewellers have argued that the rule is putting them under pressure to export at any given price, and as one would try to recover the loss on domestic sales this would make gold costlier.



In a letter to Finance Minister P Chidambaram last month, All India Bullion & Jewellers Association said the formula was not practical. It said agencies nominated by the government for gold imports were charging from them a “hefty premium” instead of a nominal service charge.



Exports of gold jewellery in quantity were in the range of 35-40 tonnes per quarter in the last six months. Imports, on the other hand, stood at 335 tonnes in the June quarter and 71 tonnes in the September quarter. Due to 10 per cent customs duty and import curbs, the government is expecting gold imports to be below 750 tonnes this year — a drop of 11 per cent from last year.

Source:- business-standard.com

Indian Rupee Down 16 Paise To 61.68 Against Dollar In Early Trade

Increased demand for the US currency from importers ahead of the RBI's policy review meeting led the Indian rupee fall by 16 paise to 61.68 against the US dollar in early trade on Tuesday at the Interbank Foreign Exchange market.



The rupee had lost six paise to close at 61.52 against the dollar in Monday's range-bound session in line with a fall in local equities.



Dealers attributed the rupee fall to a cautious approach adopted by participants ahead of the RBI's second quarter monetary policy review on Tuesday. Dollar's strength against other currencies overseas also weighed on the Indian unit, they said.



Besides, a lower opening in the domestic equity market too weighed on the rupee, they said.



Meanwhile, the BSE benchmark Sensex fell by 38.50 points, or 0.19 per cent, to trade at 20,531.78 in early trade on Tuesday.

Source:- businesstoday.intoday.in

'Incentives Available Only If Imported Goods Are Re-Exported With A New Identity'

October 28, 2013

Can we claim benefits under Focus Product Scheme, Focus Market Scheme or Incremental Exports Incentivisation Scheme against export of imported goods after subjecting them to the processes mentioned in the definition of 'manufacture' at Para 9.36 of the Foreign Trade Policy (FTP)?

In all the above schemes, incentives are not available against re-export of imported goods. Para 9.36 of the FTP gives a wide definition of 'manufacture', including processes such as refrigeration, re-packing, polishing, labelling, re-conditioning, repair, remaking, refurbishing, testing, calibration and re-engineering. Many of these processes do not change the identity of the imported goods. In my opinion, if the process you carry out on imported goods brings into existence a new product with a different name, character or use and you export that new product, then you will be eligible for incentives under the schemes you have mentioned. However, if the product that you export has the same identity as the imported goods, then you will not be eligible for incentives.



Is there any restriction of land routes through which exports under bond/UT-1 or rebate claim can be made to Nepal?

Notifications no. 42/2001-CE(NT) dated 26.06.2001 dealing with exports under bond/UT-1 and no. 19/2004-CE(NT) dated 6.9.2004 dealing with exports under rebate claim do not make any mention of any specific land routes for exports to Nepal. However you must take note of the notification no. 63/94-Cus (NT) dated 21.11.1994, as amended, which lists the Land Customs Stations (LCS) notified under Section 7 of the Customs Act, 1962. You can export to Nepal only through the notified LCS.



As indenting agents, we earn commission from our foreign principals. The Services Exports Promotion Council has advised us to obtain a Registration-Cum-Membership Certificate from them and claim Served from India Scheme (SFIS) benefits under the head distribution services. We are interested, provided we can use the SFIS scrips for payment of duties on import of tanning chemicals for our trading business. Can we do that?

Your services are not covered under Appendix-41 of the Handbook of Procedures, Vol.1 (HB-1), which lists the services eligible for SFIS benefits. Secondly, even if you get SFIS duty credit scrips, you can use them only for capital goods and consumables relating to your service sector.



We have obtained licence / authorisation under Post Export Promotion Capital Goods scheme. However, we are unable to get it registered with Customs because the same is not transmitted from the website of DGFT to ICEGATE. We are unable to file the EDI Bill of Entry under Scheme Code 34, as the system does not accept it. Our goods imported three weeks back are incurring demurrage. What to do?

Please approach the Commissioner with a request to file a manual Bill of Entry. If you apprehend further delay, to save on demurrage, you may ask for permission to move the goods to a public bonded warehouse under Section 49 of the Customs Act, 1962. Meanwhile, you may take up the matter with EDI section in the DGFT's office.

Source:-www.business-standard.com

Cadre Recast Only If Cbec Meets Tax Collection Target

Given that achieving the tax revenue target is critical to keeping the fiscal deficit within the budgeted level of 4.8% of GDP, the cabinet secretariat has told the Central Board of Excise and Customs (CBEC) that the proposed cadre recast of CBEC officials hinges on the board hitting the tax collection figure set for this fiscal. The indirect tax (excise, customs and service tax) target for 2013-14 is R5.65 lakh crore.



The cadre restructuring promises better career prospects for CBEC’s 20,000-strong staff and more secretary-level jobs in the department.



Sources privy to the development said that CBEC has given an undertaking — to meet the revenue target — to the cabinet secretariat in the form of a memorandum of understanding and is awaiting a decision by the Cabinet. Although the cost of the restructuring would only be about R2,000 crore a year, the government wants to ensure that every paisa it spends yields results. Official sources said the cost of hiring more officials is negligible compared to the revenue collected by the department, for which a stronger field force is vital. “We are not even getting replacements for officials who are retiring as the cadre restructuring proposal is pending,” said an official, who asked not to be named.



The direct tax collection target for 2013-14 is R6,68,109 crore, up 19.69% from last year. This now looks difficult as GDP growth has been lower than what the Budget pegged it at.



Following the CBEC’s MoU with the cabinet secretariat, one could expect more aggressive field staff at customs centres and excise evasion is likely to be checked more meticulously. A drive to step up service tax collection is already on.



Although missing the revenue target is a distinct possibility, going by the persistent slow growth in manufacturing, the CBEC's optimism stems from last year's trend of collecting more taxes in the second half of the fiscal. It collected 62% of the total central excise duty, 63%of service tax and 53% of the customs duty in the October-March period last fiscal.



The board is now paying extra attention on collecting tax arrears and tackling possible

Source:-www.financialexpress.com

India Allows Bangladesh To Import Motorcycles Through Land Route

NEW DELHI: India has allowed Bangladesh to import motorcycles through the land customs stations, a move that is expected to give a big leg-up to exports of country's two-wheel makers.



"Bangladesh had requested India and it has been permitted after inter-ministerial consultations," said a finance ministry official.



A decision to this effect was taken at the India-Bangladesh joint group of customs in Dhaka led by revenue secretary Sumit Bose and Ghulam Hussain, chairman of National Board of Revenue of Bangladesh, last week in Dhaka, the official said.



Motorcycle trade was allowed through the sea route but that pushed up costs in the local market in Bangladesh. This was one of the key demands of Bangladesh that has been met by India and motorcycles can now be shipped from Petropole and Agartala land customs stations.



Both sides have been scaling up land customs infrastructure to boost bilateral trade.



Bangladesh has also agreed to review the restrictions on goods that can be imported or exported through each land customs station as part of reciprocity.



New Delhi is developing integrated check posts, state-of-art infrastructure and all regulatory agencies under one roof at Agartala, Petropole and Dawki to be inaugurated in November 2013, 2014 and 2015, respectively.



Both sides have also agreed to open Petrapole land customs station on all seven days from next calendar year to help speedy clearance of cargo.



There are 53 land customs stations between Bangladesh and India. Both sides have identified 16 out of them as of 'high bi-lateral importance' to upgrade infrastructure. The meeting also agreed to allow cross border entry of trucks up to the land custom station for discharge of cargo and return. "This measure is expected to reduce time and costs for business community since, in its absence, the truck of the exporting country has to off-load the cargo onto the truck of the importing country at zero line (in the open), which is neither secure nor safe," the official said.



Both sides will also synchronise working hours and days at these land customs stations and New Delhi has decided to observe Friday as the weekly holiday as part of goodwill gesture.

Source:-economictimes.indiatimes.com

Winding up petition dismissed as Co. honoured all its obligations towards creditors and was financia

CL : Winding up petition against company which had paid entire principal amount of creditors and had bonafidely disputed interest claimed by creditor, was to be dismissed

TP adjustment quashed as comparables chosen were improper due to functional differences and higher t

IT/ILT: Where in course of transfer pricing proceedings, TPO made certain adjustment to assessee's ALP, in view of fact that some of comparables selected by TPO were not appropriate on account of functional difference, high turnover, established brand value etc., impugned adjustment was to be set aside and matter was to be remanded back for disposal afresh

Indians, Chinese not saving enough for comfortable retirement: Study

NEW DELHI: Indian and Chinese employees are at risk of not saving enough for a comfortable retirement as they often put their money in short-term instruments that may not provide a long-term hedge to inflation, a Towers Watson survey said.

According to the global professional services firm, workers in both countries are facing challenges accompanying increased life expectancies and post-retirement days, and they are at risk of not saving enough for a comfortable retirement. Given high rates of savings, it is hard to envisage a retirement crisis, but there are clear risks in translating them into a comfortable standard of living in retirement, the report said.

According to Towers Watson's Savings Attitudes Survey (India and China), approximately 90 per cent of workers in China and 80 per cent in India expect to retire at the age of 60 or less, with only moderate reductions in their spending power thereafter.

The most popular means of investment in India is purchasing gold or silver, with 41 per cent people considering buying jewellery a form of saving. In China, the most popular savings methods are bank deposits, mutual funds, pension plans, insurance products and equity investments. "Secure retirement benefits, whether mandatory or voluntary, are critical for an employee's future. With benefit costs ever increasing, employers need to facilitate retirement savings and raise awareness among employees by going beyond mere provision," Towers Watson India Benefits Director Anuradha Sriram said.

Sriram added "avenues such as the National Pension System will definitely attract employer attention as a sustainable retirement investment vehicle for employees going forward". The survey further said that in India, across age groups, "rising living cost" emerged as the single largest risk factor to live comfortably post-retirement. Housing and children's expenses (wedding/education) are the top two motivating factors for Indians above 35 to save. Moreover, there is a strong correlation between health status and financial decisions, it said.

INCOME TAX APPELLATE TRIBUNAL,CHENNAI BENCHES,CHENNAI.CONSTITUTION FOR THE WEEK COMMENCING FROM THE WEEK COMMENCING FROM 21.10.2013 TO 24.11.2013

[unable to retrieve full-text content]INCOME TAX APPELLATE TRIBUNAL,CHENNAI BENCHES,CHENNAI.CONSTITUTION FOR THE WEEK COMMENCING FROM THE WEEK COMMENCING FROM 21.10.2013 TO 24.11.2013 {ad} For more information...

INCOME TAX APPELLATE TRIBUNAL,HYDERABAD BENCHES,HYDERABAD.CONSTITUTION FOR THE WEEK COMMENCING FROM THE WEEK COMMENCING FROM 28.10.2013 TO 07.11.2013

[unable to retrieve full-text content]INCOME TAX APPELLATE TRIBUNAL,HYDERABAD BENCHES,HYDERABAD.CONSTITUTION FOR THE WEEK COMMENCING FROM THE WEEK COMMENCING FROM 28.10.2013 TO 07.11.2013 {ad} For more information...

Mess, hotel charges and laptops given to students not includible in value of ‘Commercial Training Se

ST: Mess charges and hostel fees are for providing boarding and lodging to students and amount recovered for supply of laptops viz. supply of goods and cannot be attributed to training or coaching rendered and are excludable from taxable value of Commercial Training or Coaching Services

Allowability of revenue exp. can't be judged merely on basis of treatment given to it in books: HC

IT : Where assessee incurred certain expenditure towards research and development and in books of account treated one-third of expenditure as relating to assessment year 1992-93 and remaining two-third was written off in succeeding two financial years and further in assessment year 1992-93 claimed entire expenditure as deductible, assessee was entitled to claim entire expenditure as deduction in assessment year in question and it had to be allowed

Developing Geographical Information System software by converting raw data into Maps gets sec. 80-IB

IT : Deduction under section 80-IB could not be denied to assessee who was engaged in development of Geographical Information System software by converting raw data supplied by its customers into maps by digitizing and vectorizing it

Any exp. paid during year without TDS to be disallowed; Amritsar ITAT distinguished Merilyn Shipping

IT: Provision of section 40(a)(ia) are applicable not only to amount which is shown as payable on date of balance sheet, but it is also applicable to such expenditure, which become payable at any time during relevant previous year and was actually paid within previous year

Systematic investment with Bullion India makes gold and silver easily affordable this Diwali

KOLKATA: Gold and Silver prices reaching new highs, it has become very difficult for a common man to buy and posses these auspicious metals. Gauging this scenario, Bullion India, has launched a very unique investment plan, Unit Systematic Plan (USP), which helps customers accumulate physical gold and silver conveniently in small amounts through periodic systematic investments in a safe and secured manner.

The Unit Systematic Plan is available online on the website and interested customers can register online and upload their KYC details. Customers can also register and apply for the plan through the agent and broker network of Bullion India .The customer can invest in systematic investment options ranging from a period of minimum 6 months to 36 months.

The minimum investment amount has been kept as low as Rs 1000/- in this Unit Systematic Plan of investment, to make Gold and Silver easily affordable. At the end of the tenure, customers can redeem their units into physical gold and silver coins through Bullion India's website with an option of doorstep delivery across India or at multiple delivery centres. There are no activation or registration charges and the customers can also sell back their gold and silver units on the online platform of Bullion India at the end of the tenure.

This is the first structured bullion investment model that allows you to accumulate silver on daily basis

The customers will be credited with gold and silver units on a daily basis into their account. These units are backed by physical gold and silver which is kept with the vaulting agencies and is controlled and monitored by an independent trustee, IDBI Trusteeship Services, thereby offering maximum security and safety of the customer's investments.

Commenting on the benefits of the plan, Mr. Sachin Kothari, Director, Bullion India said, "In India, investing in gold and silver is considered to be a prerogative of the rich. We at Bullion India wish that even a middle class Indian gets an opportunity to reap the benefits of making investment in gold and silver. Through our Unit Systematic Plan, we aim to provide a common man with an opportunity to own small quantities of gold and silver at the lowest costs of buying. This will allow one to meet up with ones investment, savings goals, and other objectives like daughter's wedding, etc. A daily holding statement will be available to customers on the Bullion India website. Customers will receive e-mail and SMS confirmation at the time of application, and on days of deposits."

Unit Systematic Plan provides numerable benefits to the customer. It allows customers to average their price on gold and silver over a period of time. More grams are credited to a customer's account when the price of gold and silver is low. Customers get receipts for every payment made, and they can also access their account online.

Bullion India commenced its operations in October 2012 and has more than 50000 registered customers who invest in Gold and Silver online. Bullion India is jointly promoted by RiddiSiddhi Bullions limited, India largest bullion trading company and Finkurve Financial Services Limited.

ITAT disallowed vehicle running exp. as no evidence was filed by assessee to substantiate its claim

IT: Where no evidence had been filed by assessee to substantiate claim of vehicle running expenses, addition in respect of same was confirmed

Claiming sec. 10B relief even after allowable period by artificially creating another unit invokes r

IT: Where sister concern could not make claim for deduction under section 10B after expiry of specified period, assessee-company was incorporated to which business and assets of sister concern were transferred and assessee claimed deduction under section 10B, said claim being wrong, would form 'reasons to believe' so as to initiate reassessment

Revenue couldn't invoke Rule 8D even after allocation of actual exp. by assessee to earn exempt inco

IT : Where assessee diverted expenditure relating to investment activity including those providing tax free income, to his capital account, it could not be said to be case of nil expenditure enabling revenue to apply rule 8D

Withdrawal of petition under sec. 163 held as constituting ‘Forum Shopping’

CL : Where petitioner filed an application under section 163 before CLB and also filed petition for writ of mandamus, in view of fact that petitioner had abandoned proceedings before CLB, he would have to re argue whether he was entitled to inspection under section 163 and thus, that was an attempt at forum shopping

Delhi ITAT can decide fate of an appeal filed against order of CIT(A) Lucknow

IT : Where Tribunal Delhi decided appeal against order of Commissioner (Appeals) Lucknow, in view of Evidence Act, same was to be presumed to be regularly preformed

AO can invoke best judgment assessment for not complying with sec. 142(1) notice lacking specific re

IT : Mere non-compliance of a notice under section 142(1) having no terms or requirements, cannot be sufficient reason for making assessment under section 144

Transportation of goods to depots is an eligible input service

ST: Outward freight for transportation of goods to depots is an 'input service' eligible for credit

Buyer should withhold tax from sum paid to a non-resident co-owner to acquire a house property

IT/ILT: Where assessee purchased a property jointly owned by co-owners, in view of fact that one of co-owners of property was a non-resident, assessee was required to deduct tax at source under section 195 to extent sale-consideration was paid to said co-owner

Mere compliances with requirements for sec. 80-IA relief isn't enough to grant immunity from conceal

IT : Merely because assessee complied with statutory procedural requirement of filing prescribed form and certificate of Chartered Accountant as required for claiming deduction under section 80-IA, it could not be absolved of its liability to pay penalty under section 271(1)(c), if act or attempt in claiming such deduction was not bona fide

Prices Of Staple Vegetables Shoot Up In Kochi

October 27, 2013

Though prices of most vegetables have cooled in the weeks following Onam, the prices of onion, ginger, potato and tomato have got hotter over the last fortnight.



The prices have skyrocketed largely due to the shortage of supplies caused by crop loss, which traders here blamed on the extended monsoon.



While best quality ginger was being sold at Rs.120 a kg in the retail market, medium quality ginger was selling between Rs.60 and Rs.80 a kg in retail outlets in the city. The price of ginger in September was Rs.160 a kg; the price peaked during Onam.



It has been a steady rise for ginger throughout the year with price of the produce ruling firm at Rs.60 a kg in March this year.



Medium quality potato was selling at Rs.30 a kg in the retail market on Saturday; the price has been ruling steady for over a month. The price of best quality potato was Rs.24 a kg in March.



Onions also continue to hog the limelight. The price of medium quality big onion was Rs.70 a kg in the city markets.



The price of the bulb had peaked ahead of Onam and then cooled a little though the early months of 2013 gave an indication of the shape of things to come. The price of onion was Rs.20 a kg in March and it went up to Rs.55 kg in September.



Union Minister of State for Food, Consumer Affairs and Public Distribution K.V. Thomas told The Hindu over phone that he expected the onion price to come down within a week.



He claimed that the arrival of imported onions would have a defining impact on the market. Onions are being imported by the National Agricultural Cooperative Marketing Federation.



The price of tapioca has not come down and rules almoston par with some varieties of rice at Rs.30 a kg.



The price of the tuber has risen rapidly from last October, when it cost Rs.12 a kg. The price of the tuber went up to Rs.20 a kg in March this year.



Extensive loss of crop due to flooding of fields during the heavy rain in June and July has been blamed for the high price of tapioca, a staple crop throughout the year.



The price of the nendran variety of bananas continues to be high at Rs.56 a kg in the retail market. The price has not eased much since early this year though the Onam season saw it peak at Rs.62 a kg. Beetroot (Rs.24 a kg in the retail market); bitter gourd (Rs.40), vegetable cowpea (Rs.40) and green chilli (Rs.40) make up the list of other items that are on the everyday shopping list.



The price of tomato rules at Rs.40 a kg in the retail market now. The price has risen from Rs.16 a kg in October last year to Rs.20 in March and Rs.30 in September this year.

Source:-www.thehindu.com

Speciality Chemicals Market May Reach $70 Billion By 2020: Report

27 Oct, 2013

MUMBAI: Indian speciality chemicals market has the potential to reach $ 60-70 billion by 2020 from the present value of $ 23 billion, a report said.



"Indian speciality chemicals market is currently valued at approximately $ 23 billion and has shown a strong growth at 14 per cent per annum over the last 5 years. Our estimates show that Indian speciality chemicals market has the potential to reach $ 60-70 billion by 2020," Tata Strategic report on 'Indian Chemical Industry' said.



Although the growth rate is encouraging due to small base, the consumption and overall penetration levels of speciality chemicals and additives are still very low in India.



With increasing consumption and high growth in end use industries several speciality chemicals would see a point of inflection in next 3-7 years, the report said.



Domestic demand of speciality chemicals is expected to follow an accelerated growth path. This demand is mostly driven by the strong growth outlook for end use industries. This, along with increased adoption of speciality chemicals and newer applications, can propel the growth further.



Indian speciality chemical manufacturers have strong presence in export market also.



APIsBSE 0.00 % and colourants (including dyes and pigments) are the key products exported. India exports speciality chemicals to nearby Asia-Pacific countries which don't have competitive scale of production.



India also exports to developed countries of Europe and USA where it leverages its low cost of production and quality talent pool.



Ability of companies to comply with global regulations and India's manufacturing competitiveness has helped the export market grow significantly.



The key speciality segments in India are agrochemicals, paints coating and construction chemicals, colourants, fine chemicals, personal care chemicals and aroma chemicals.



Going ahead innovation and sustainability initiatives are expected to be major factors for competitiveness. Development of processes/ products which eliminate or reduce the use of hazardous substances could become the key priority of producers. Consumers would be expected to pay premium for green chemistry and environmental preservation initiatives and appreciate this globally, the report said.



Moreover, stringent regulatory norms could further push the need to innovate cost effective industrial green chemicals.



Currently, the domestic speciality chemical producers also face challenges related to feedstock availability, higher operational costs, outdated technology/ process, limited investment in R&D & a negative perception amongst end consumers.



Apart from depending on regulatory interventions, Indian players should come together and pro-actively work towards collaborative investment to avert global competition, it said.

Source:-economictimes.indiatimes.com

Cotton Price Under Pressure On High Output, Low Exports

Oct 27 2013

The production of cotton, like other kharif crops, has been higher this time. A bigger crop is expected to bring down cotton prices further in the short term. However, much will depend on government policies and demand from China to determine whether prices get firm after Diwali.



“As per available estimates, the production this year is on the higher side. Against 340 lakh bales last year, we would probably see 370-380 lakh bales coming into the market this year,” said Ajitesh Mullick, assistant vice-president for retail research at Religare Commodities.



Most cotton growing regions of the country has received normal to higher rainfall this year, which has increased production not just of cotton, but all kharif crops. The rain also helped the sowing of rabi crops.



“While increased supply has brought in bearish sentiments in the market, demand from China too is expected to be lower this time,” he said.



Market reports said Chinese imports of cotton should drop by around 20 per cent this year. Chinese purchases were down 36 per cent between January and July to 810,311 tonnes compared with the same period in 2012, as per Chinese customs data. China, which holds around 60 per cent of global cotton stocks, is reportedly preparing to end its stockpiling programme to support its farmers.



Kapas prices in the Multi Commodity Exchange have dropped from Rs 1,100-Rs 1,150 per 20 kg level in December last year to around Rs 975. Increased production and lower exports are expected to bring down the price to Rs 940 or Rs 950 in the short term.



“In October, new arrivals start coming to the market. The market will wait for the prices to cool down. Usually demand picks up after Diwali. By the end of the year, prices generally remain firm while they remain subdued between January and April, when there is least activity in the market,” said Mullick.



However, much depends on export policy. If the government eases restrictions on exports due to surplus production, prices may get firm.



Last week, a group of ministers (GoM) headed by agriculture minister Sharad Pawar rejected a textile ministry proposal to impose a 10 per cent duty on overseas sales of cotton beyond a declared exportable surplus.



The GoM found that as country’s cotton production has been increasing every year and there should be no restriction on export of raw cotton, as it would penalise farmers. The country consumes around 250 to 260 lakh bales of cotton, while over 100 tonnes is usually sold overseas. If the export demand picks up by Diwali, prices can get firm by mid-December.



“The price can move up to Rs 1,050 level, but getting back to last year’s Rs 1,150 level looks difficult,” said Mullick.

Source:-www.mydigitalfc.com

Indian Rupee Opens Higher At 61.40 Per Dollar

Indian rupee gained 6 paise in early trade Monday to 61.40 per dollar as against Friday's closing of 61.46.

According to Agam Gupta of Standard Chartered, currency markets are expected to remain muted and cautious today ahead of monetary policy review tomorrow. "The range for the day is seen between 61.25-61.75/USD," Gupta said.



Source:-www.moneycontrol.com

Rain Brings Port Operations To Crawl

Oct 27, 2013

VISAKHAPATNAM: Cargo handling operations in at least eight berths have been hit at the Visakhapatnam Port Trust (VPT) due to the incessant rains over the last 72 hours. Ships docked at the port have neither been able to load or unload cargo, resulting in heavy losses for vessel operators.



The heavy rains have also brought to a standstill the conveyor system handling iron ore during the last three days as part of it has got inundated. According to sources, the delay in handling cargo to the tune of around 2.4 lakh tonnes of cargo has caused losses of around Rs 60 crore to the industry. According to VPT sources, vessels at five berths handling dry bulk and break bulk cargo in the inner harbour, including EQ (East Quay) 3 to 7, have been unable to discharge cargo due to continuous rains. At the same time, cargo handling operations of at least three berths of WQ (West Quay) 3 to 5 in the inner harbour have also been hit due to the downpour, apart from the two berths (OB1 and 2) in the outer harbour.



While operations at the Visakha Container Terminal Private Limited continued, sources said the pace of operations at the terminal, which usually handles around 25 containers per hour under each crane, has slowed down with the terminal now handling around 15 to 17 containers per hour. Industry sources said that cargo including edibles such as maize, pulses and other materials such as fertiliser have not been unloaded due to the heavy rains. In another worrying sign for the port, a shipping source said, "The iron ore belt has got inundated. Ships with cargo that is not compatible with rain are now stuck and unable to move out. Since berths are also not vacant, many vessels have been waiting outside for two days now. There is a total mechanical failure on the West Quay."



Slamming VPT for failing to take any measures, he said, "In a meeting held on Friday, the port authorities expressed their helplessness on the issue. They said nothing can be done till the rains stop." A custom house agent said, "Nearly 90% of the port operations have come to a standstill. Except petroleum products and containers all other operations have stopped. Iron ore handling has also stopped. We are expecting no demurrage for anyone as it's a natural calamity."



However, he put the number of ships unable to move out at a higher number. He said, "Twenty ships are berthed and not able to move out and at least 20 more are waiting at the anchorage." Expressing worries over the rains, a stevedoring agent said, "Vessels are just sitting there and our customers don't want to listen to reasons. It's really been a terrifying wait for us due to the rains."While pointing out that incessant rains were beyond anybody's control, a stevedore said, "If it is for one day, it's manageable. But when work is disrupted for 3-4 days continuously, nobody can do anything. The rain is interfering with work.



The last time work was hit so badly at the port was probably when the trade unions went on strike a decade ago." Meanwhile, due to the stoppage of port operations, nearly 600 lorries involved in evacuation of cargo from the port have also come to a complete halt. A lorry operator said, "For the better part of the past one week, not even a single lorry has been able to take out any cargo due to the rains." Admitting to the disruption in port operations, VPT deputy chairman GVL Satyakumar said, "Operations are not going on as per the normal routine. Some iron ore and fertiliser cargo cannot be handled during rains.



These are the two commodities that are affected. In terms of throughput, we do an average of around 1.5 lakh to 1.7 lakh tonnes per day, but now we are doing around 90 to 1 lakh tonnes per day." Confirming that the iron ore conveyor had stopped, he said the ground conveyor system has been affected by water logging. However, he said, "We are doing pretty well as compared to other ports." He also confirmed that nearly 20 vessels are in the waiting due to the effect of heavy rains on operations.

Source:-timesofindia.indiatimes.com

Assam To Produce Onions For Reducing Import

Oct 27, 2013

GUWAHATI: Prices of onions in Guwahati are ranging between Rs 70 and 80 a kg with no signs of any fall in the near future. The Tarun Gogoi-government, in order to keep onion prices under check, has decided to go for large-scale cultivation of the bulb and reduce dependence on imports.



The agriculture department's directorate of horticulture and food processing has identified 21 districts where the chief minister's onion mission will be implemented from November 1.



Officials said sowing will start from November 1 and the crop will be ready for harvest by March next year. The target is to produce 1,00,000 tonne of onion against the present production of 25,000 tonne, they added. "Onion cultivation and harvest season varies from state to state. For Assam the season is between November and March," an agriculture official said.



Onion production in Nasik, from where the major part of the produce is imported, suffered this year because of heavy rain during harvesting season.



DHFP information officer Mowsam Hazarika said an area of 2,000 hectares in 21 districts will be brought under onion cultivation. An agrifound light red (ALR) onion seed variety will be used for cultivation, he added. "ALR is an improved variety of onion seed and has been procured from the National Horticultural Research and Development Foundation. The seeds have already been distributed among selected farmer groups. Each group will cultivate around five hecter," he added.



Horticulture officials said germination tests for the ALR variety in the state have shown more than 90% success. The districts identified for this mission are Barpeta, Goalpara, Kokrajhar, Bongaigaon, Dhubri, Nalbari, Kamrup (including Kamrup-Metropolitan district), Darrang, Sonitpur, Nagaon, Morigaon, Golaghat, Jorhat, Tinisukia, Lokhimpur, Dhemaji, Cachar, Korimganj, Baska, Karbi Anglong and Sivasagar.

Source:-timesofindia.indiatimes.com

Transfer of shares from promoter’s account not an immoral act of circular trade or creating false vo

CL : Where appellant purchased shares of a company in an auction by making direct payment to bank with which those shares were pledged and, thereupon, he did not transfer those shares to second level entities or to any other person, in such circumstances mere fact that shares were transferred to appellant from account of one of promoters would not result in drawing a conclusion that he was guilty of circular trading or creating false volume in scrip

Smart things to know about transfer of EPF account

1) The contributions to the Employee Provident Fund (EPF) account are made by the member (employee) and the employer. A new account is opened every time the employee changes jobs.

2) The contributions made by the previous employer and employee, as well as the interest earned on it, continue to be held in the previous account unless it is transferred to the new one.

3) The older accounts can become inoperative and may not earn any interest. The EPF accounts become inoperative if no contribution is made for a continuous period of 36 months.

4) Since no interest is paid on the balance in inoperative accounts, it is essential for employees to get this amount transferred to the new EPF account and earn interest on the consolidated amount.

5) The EPFO has launched its online transfer facility from October this year. The employees will be able to request for such transfers through its Online Transfer Claim Portal (OTCP).

The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre and Arti Bhargava.

How should a young investor deal with a new inheritance?

Shaila Shah has just inherited a house from her deceased grandmother. She lives with her husband and child in Mumbai. She paid a high rent during the first three years of staying in the city, but did not have adequate income to afford a property. Her husband thinks they should sell the property and buy a new one, since the EMI will be lower if a large sum is paid after selling the house. How should Shah deal with her new inheritance?

Young investors like Shah are unlikely to have built a lot of wealth. The inheritance makes her wealthy, but comes with inflexibilities. It will not be possible for her to access parts of the property's value for any need. It is a bulky asset, which can be sold to realise its worth, or can earn a small rental yield. It's usefulness for Shah lies in its ability to help her save more than she did earlier.

Since there is no rental outgo now, Shah can use the savings to build wealth in addition to the new asset. If she builds equity and debt assets with the savings, in a few years, she will have a balanced portfolio that will be more accessible and flexible. So, if she wants to provide for the education of her child, she may not be able to sell the house, but can liquidate the investments she makes from the rental savings.

Selling the house to buy a new one might constrain Shah unless the latter costs the same. Adding an EMI to income at this stage will reduce her ability to save and concentrate her wealth in a house. She will also incur additional costs on stamp duty, registration and fees, besides the interiors of the new house. Shah should use her inheritance to augment her savings, and should take on any other commitment only when her finances are on a firm footing.

The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre and Arti Bhargava.

Maximise returns: 5 things that long-term investors do differently

By Uma Shashikant

A frequent question asked by investors is: how long is long term? As a research student working with annual returns, I would have answered the question with the results of my number-crunching exercises. Having witnessed several market cycles since then, I would now say that long term is infinite. A long-term investor would want to hold on to his investments forever.

It's more about attitude than number. When we choose a career, we do not invest in ourselves hoping to 'cash out' some time soon in order to pursue something else. Even those who switch careers successfully give their all to what they do. They invest in their careers as if it was all that they would do for a long, long time. Long-term investing requires this attitude. What would we do differently if we were long-term investors?

First, long-term investors take the time to understand what they are doing and why. Those who buy an IPO because they have made money mostly by buying IPOs earlier are not long-term investors. They are only replicating a lazy tactic to make money. If there is no method to selecting investments, they are not longterm investors. Such people want to know all about the investments they are buying. They spend time and effort on learning, research and analysis. Many take offence when I tell them they have bought a stock or a mutual fund on a whim or a tip. I then ask them to list their investments and tell me why they bought those.

By the time we reach the fourth item, the truth is out. Most investors buy without adequate groundwork and think that if they hold it for a long time, they are long-term investors. This is not true.

Second, long-term investors understand that returns will be reasonable; they do not expect miracles. If they manage a multi-bagger stock or a winning fund, they know that in the process of acquiring this star, they have also bought a few not-so good investments.

They may have exercised the same diligence in selecting the latter. Despite this, all their investments will not rise and shine. Long-term investors know that there is no formula for picking winners, that they will be fine on an average, and hence, keep their return expectations normal. If they earn a return of 15-16% in the long term, they have beaten inflation, earned more than the bank deposit rates, and built reasonable wealth. Getting to this number involves a few losing picks and a few multi-baggers, and longterm investors know this is the process to build wealth. They do not insist that each investment earn a high rate of return every year.

US DTAA/MAP : Bombay HC rejects Revenue's interpretation of 'admitted' in CBDT's Instruction No. 2/2

IT/ILT : MAP invocation application under DTAA before US Competent Authority and furnishing Bank Guarantee to Revenue in India suspends assessment & collection of taxes in India. The word "admitted" by Indian Competent Authority in CBDT's Instruction No. 2 of 2003 only means that the Competent Authority in India has to admit i.e. acknowledge that the MAP proceedings have been invoked by tax payers through the Competent Authority in USA. It does not mean that the invocation of the MAP proceedings

Reimbursement to Foreign AE towards salary of employees on secondment with assessee in India wasn’t

IT/ILT: Where assessee rendered investment advisory services to its foreign AE, reimbursement of salary that was paid by foreign AE to seconded employees would not be FTS

Renting of buses to State Road Transport Corporation is rent-a-cab-service; liable to ST

ST : Renting of buses to State Road Transport Corporation (SRTC) on per day rent basis amounts to renting of 'cab' and is liable to service tax under rent-a-cab services

Tribunal's subsequent recall order quashed as appeal was pending before HC against Tribunal's earlie

IT: In view of appeal admitted by High Court against order of Tribunal, Tribunal's subsequent order recalling said order was to be quashed

No concealment penalty if CIT(A) couldn't doubt assessee's explanation as to claim for a deduction

IT: Where Commissioner (Appeals) had disallowed assessee's claim for deduction of expenditure and also imposed penalty under section 271(1)(c) upon it, since there was no finding by Commissioner (Appeals) that explanation offered by assessee was not a bona fide one, imposition of penalty was illegal

HC could hear all questions of law even if assessee preferred separate appeals on similar issues for

IT: Where separate appeals were filed against common judgment of Tribunal pertaining to assessment of two different years having similar question of law in respect of same assessee, it would be appropriate to hear appeals on all substantial question of law as framed thereunder

Petitioner can implead a Co. in petition complaining of oppression in affairs of another respondent

CL : If an independent entity, even if it is a company in which petitioners are not members, has colluded with members/directors of respondent company resulting in prejudice to interest of respondent company and its stake holders, petitioners can seek to implead that entity as respondent in petition under section 397 complaining oppression and mismanagement in affairs of respondent company

No sec. 68 addition on mere suspicion of bogus entry; IT Act doesn’t bar an assessee from disclosing

IT : Where entries in books of account were not proved to be bogus, addition can't be made on credit of cash received by selling agriculture produce

AO couldn’t apply Rule 8D blindly despite assessee’s contentions that no exp. was incurred to earn e

IT: AO couldn’t apply Rule 8D blindly despite assessee’s contentions that no expenditure was incurred to earn exempt income

Services availed of prior to period of export isn’t eligible for refund

ST: Services availed prior to July 2008 could not be treated as used for goods exported from July to December 2008; hence, refund claim under Notification No. 41/2007-ST for July to December 2008 cannot cover services availed prior to July 2008

Assessee can’t ask to reopen and reargue whole matter in garb of rectification, says ITAT

IT: In garb of an application for rectification under section 254(2), assessee cannot be permitted to reopen and reargue whole matter as same is beyond scope of section 254(2)