Thursday, 12 December 2013

Vegetable Oil Imports Up 35 Per Cent To 9.44 Lakh Tonnes In November.

India's vegetable oil imports rose 35 per cent in November to 9.44 lakh tonnes because of higher shipments of cheaper sunflower oil, says latest industry data.



Import of edible and non-edible vegetable oils stood at over 7 lakh tonnes in the same month last year.



India's vegetable oil imports rose 4.77 per cent to a record 10.68 million tonnes in the 2012-13 marketing year (November-October) against 10.19 million tonnes in the previous year due to stagnant domestic output and rising consumption.



"Import of vegetable oils during November 2013 is reported at 9,44,309 tonnes as compared to 7,00,371 tonnes in November 2012, up by 35 per cent," Solvent Extractors' Association said in a statement.



Edible oils import rose to 9,27,111 tonnes in November from 6,76,234 tonnes in the year-ago period. Imports of non-edible oils fell to 17,198 tonnes from 24,137 tonnes.



SEA attributed the surge in import to higher shipments of sunflower oil, which was cheaper by USD 30 per tonne as compared to soyabean oil.



Sunflower oil import jumped to 1,20,197 tonnes in November 2013 from 47,500 tonnes in the same month last year.



Moreover, it said that spread between RBD Palmolein and Crude Palm Oil reduced to less than USD 10 per tonne, making RBD Palmolein attractive over crude palm oil.



"In anticipation of likely increase in import duty, palm oil shipments were higher during the month," SEA said.



The current stock of edible oils as on December 1, 2013 at various ports is estimated at 590,000 tonnes and about 880,000 tonnes in pipeline.



During November 2013, the import of refined oil has gone up by 172 per cent at 2,08,076 tonnes as compared to 76,519 tonnes in November 2012.



Import of crude oil is also up by 20 per cent at 7,19,035 tonnes as compared to 5,99,715 tonnes in November 2012.





Rupee Down 30 Paise Against Dollar In Early Trade

The rupee fell by 30 paise to trade at 62.13 against the US dollar in early trade today at the Interbank Foreign Exchange market on strong demand for the American currency from importers.



The domestic unit had lost 58 paise to close at 61.83 against the dollar in the previous session on weak local stocks and sustained demand from importers for the greenback.



Besides, dollar's strength against other Asian currencies overseas on speculation the US Federal Reserve may scale back its stimulus programme weighed on the rupee, dealers said.



They said negative domestic fundamentals, such as weak Industrial production data which contracted by 1.8 per cent in October this year and retail inflation climbing to a nine-month high of 11.24 per cent in November, too put pressure on the rupee.



Meanwhile, the benchmark BSE Sensex fell by 163.25 points, or 0.78 per cent, to 20,762.36 in early trade.


Source : timesofindia.indiatimes.com





The Rupee Fell And Bonds Yields Surged On Friday After Retail Inflation Spiked,

The rupee fell and bonds yields surged on Friday after retail inflation spiked, raising bets of a rate hike at the RBI's policy meeting next week.


The rupee fell to as much as 62.18 to a dollar and was last trading at 62.14/15. It had last closed at 61.81/82.


Bond yields surged as traders factored in the prospect of the third rate hike by Reserve Bank of India governor Raghuram Rajan.


The 10-year bond yield was up 7 basis points at 8.92 percent.


Sharply higher food prices drove up retail inflation to 11.24 percent in November from 10.17 percent in October, data released Thursday showed.


Source : in.reuters.com





Assessee gets an opportunity of examining probable source of info causing additions in its income; c

IT : Where assessee was not provided with opportunity to cross examine person providing information that lead into addition to income, fresh adjudication was required


Commerce Ministry Seeks Change To Duty Exemption For Sez Goods

Date : 12 Dec 2013


The Commerce Ministry has sought changes to a notification that exempted duty on goods from special economic zones (SEZ) sold locally to remove ambiguities and plug revenue losses. The development follows after it was found that goods from an SEZ in Mumbai were sold in the domestic market without paying the 4 per cent special additional duty (SAD) after an exemption clause was misinterpreted, the Customs sources said.



"As the whole issue has emerged from a notification of the Central Board of Excise and Customs (CBEC), there is an urgent need to amend that," a Commerce Ministry official told PTI in New Delhi. "The Commerce Ministry has already asked the Finance Ministry for its amendment," he added.



Customs sources have alleged that misinterpretation of the exemption in the Arshiya Free Trade Warehousing Zone (FTWZ), situated at Panvel in New Mumbai, which comes under the special economic zone Act, has led to losses of Rs 200 crore to the central exchequer in the last fiscal alone.



"We are an infrastructure providing company and we have got nothing to do with it. Even our clients are not at fault," Ajay Mittal, Chairman and Managing Director of Arshiya FTWZ, told PTI when sought his comments.



The FTWZ policy was announced by the Centre to create trade-related infrastructure to facilitate import and export of goods and services with freedom to carry out transactions in free currency. It is covered under the SEZ Act. Since the rules governing FTWZs have not been formalised, the vacuum has led to emergence of grey areas at these places, which are also susceptible to tax evasion, said the sources.



Some of the goods manufactured at SEZs, which have been set up to promote exports, are allowed to be sold locally or in domestic tariff areas. Such goods, including those from FTWZs, that were sold locally, had been subject to 4 per cent SAD and levies such as value added tax or sales tax. The SAD was introduced in 1998 to put certain imported items on par with locally made goods, on which local taxes were levied. Imported goods were subject to 4 per cent SAD on their value, apart from other applicable Customs duties. In 2003, the Finance Ministry exempted SEZ-produced goods sold in domestic tariff areas (DTAs) from SAD provided local taxes were applicable on them.



There was no problem until 2011, when in a Finance Ministry circular, the words 'produced or manufactured' were replaced by 'cleared from' SEZ, a Customs source explained. After this, goods were cleared from FTWZs to local areas without paying either SAD or local taxes, the source said.



This evasion came to the notice of the Customs department and other financial intelligence agencies only this year. When the clearance of goods was halted, the development commissioner of the SEEPZ Special Economic Zone in Mumbai issued a notification aimed at enforcing the exemption, a source said. "The Commerce Ministry has taken a serious view of the note giving SAD exemption and has issued a direction that SAD exemption should not be denied to DTAs and that any unjustified deviation would seriously be viewed and disciplinary action will be taken," SEEPZ SEZ development commissioner NPS Monga said in the circular issued late October.



The circular appeared to overrule directions issued by Chief Customs Commissioner CS Prasad on implementing the SAD notification by the CBEC. Prasad told PTI that he had written to the CBEC to get the clarification in place. In the absence of specific regulations, individual interpretations have taken precedence and discriminatory implementation of rules is proving detrimental to safeguard. Sources said at present goods are cleared from the Arshiya FTWZ against paying of provisional bank guarantee bond of 20 per cent of the total duty.


Source : economictimes.indiatimes.com





Increased Smuggling Of Gold In India Due To High Import Duty On The Yellow Metal

Increased smuggling of gold in India due to high import duty on the yellow metal has had interesting fallout in the neighbourhood. Pakistan's import of gold in the past one year has gone up by 400% while that in Nepal, Sri Lanka and Bangladesh have almost doubled. Directorate of Revenue Intelligence (DRI) officials say the unprecedented increase in imports to these countries without any entrenched cultural affinity to gold ornaments points to the fact that they are being brought in to be smuggled into India. Recently, DRI has even seized several consignments on Indo-Bangla and Indo-Nepal border where fake Indian currency note (FICN) networks are being used to smuggle gold.



India has been consistently increasing duty on gold to stem current account deficit for the past couple of years. From 1%, two years ago, it has gone upto 10% making smuggling of the yellow metal from neighbouring countries and South Asia, where duties range between 1% and 5%, lucrative.



According to DRI, Pakistan's import figures are a cause of worry as they correspond with high seizures within Bangladesh and on the Indo-Bangla border. Gold imports jumped by 102% in 2012-13 in Pakistan and, according to the Pakistan Bureau of Statistics, 6,745 kilograms of gold were imported in 2012-13, as compared to 3,267 kilograms during 2011-12.



This has doubled this year, say DRI sources. In Bangladesh, in the past two-three months alone, 400 kg of gold has been seized by local authorities. In Sri Lanka, the last financial year saw import of three tones of gold, but this year it has jumped to six tonnes with still a quarter to go for the financial year to end. "In Nepal too, several consignments of gold from China have been intercepted in the recent past," said a DRI official.



DRI DG Najib Shah said, "We believe this increased import in the neighbourhood is headed to India illegally." Sources said the import figures in these countries also do not correspond to exports out of these countries or the established consumption patterns.



In the past few months, over 50 kg of gold worth more than Rs 15 crore has been smuggled across the Indo-Bangla border alone. Elaborating on the modus operandi, sources said gold was bought in places like Dubai and Thailand and flown to Dhaka or Kathmandu where authorities are not all that vigilant. The consignment is then brought to the border and stored in safe houses.



"From here, human couriers are hired and given one or two bars to take across the border. It is difficult to detect such small amounts on a long border. These couriers make two to five trips a day and thus manage to carry considerable gold in a day. The gold is then collected and stored on the Indian side and transported to unscrupulous jewelers in cities," the officer said.


Source : timesofindia.indiatimes.com





Eu Ends Sops For Indian Textile, Engineering Exports

In a twin blow to local exporters, the European Union has given special preference for imports from Pakistan, which will allow duty-free access into 27 markets, while withdrawing the concessions for several Indian goods, including textiles and engineering. And, it's the Indian government, not EU, to be partly blamed, for creating this disadvantage for exporters.



While India had managed to block similar concessions nearly a decade ago after a challenge at the World Trade Organization, this time the sops have been given to deal with floods that hit Pakistan and have been given after the move was backed by New Delhi. The GSP-plus benefits will kick in from January 1.



The new concessions to Pakistan, known as GSP-plus or those above the Generalized System of Preferences, come at a time when the Indian textile sector was looking up, with exports and employment on the rise.



"Pakistan stands to gain on products on which it gets duty concessions and to that extent the competitivenss of Indian products gets eroded," said Abhijit Das, who heads the Centre for WTO Studies. While Apparel Export Promotion Council chairman A Sakthivel said garment exports will not be hit, Das identified products such as bed linen where Indian exports may be impacted.



The list of 75 goods on which Pakistan will enjoy duty concessions was not immediately available but exporters said textiles will be a major product. Although the concessions have been discussed for several weeks now, the European Parliament approved the package for Pakistan on Thursday, raising expectations of a $1 billion gain for India's neighbour.



From the same date, Indian exporters of several products ranging from chemicals, textiles, leather goods, motor vehicles, bicycles, aircraft parts and shipbuilding and components will lose 6-12% advantage



. "When it comes to bicycles, GSP benefit to China too has been withdrawn. So, we can compete there but life will be tougher for several other segments," said Anupam Shah, chairman of the Engineering Export Promotion Council.



Sources in the textiles industry said some Indian companies would look to invest in countries such as Bangladesh to claim concessions under schemes such as Everything Bur Arms (EBA).


Source : timesofindia.indiatimes.com





Only drawer of cheque was liable under Negotiable Instrument Act even if cheque was issued from join

CL: Only drawer of cheque was liable under Negotiable Instrument Act even if cheque was issued from joint account


ITAT comes down heavily on contemptuous behavior of Dept. representatives; slaps fine for intimidati

IT : ITAT imposes cost of Rs.1000 on CIT(DR) deductible from salary for contemptuous actions, behaviour & utterances


ITAT approved reference made to DVO as value of land as per stamp authority was higher than as claim

IT: Where value of land as per stamp duty authority was higher than that claimed by assessee, Assessing Officer could issue commission under section 131(1)(d) to DVO to ascertain fair market value under section 55A


Assessment witnessing detailed enquiry followed by few disallowances can't be prejudicial to revenue

IT : Where Assessing Officer had taken into accounts all details and made addition wherever required, same could not be said to be prejudicial to interest of revenue, merely because no detailed discussion was made


HC stays recovery of services tax on profit earned out of toll collection

ST : High Court stays demand of service tax on amount retained by assessee from out of 'toll charges' after payment to NHAI, treating such retained amount as 'commission'


Capital goods or inputs used at captive mines are eligible for credit

Cenvat Credit : If mines are captive mines so that they constitute one integrated unit together with concerned factory, capital goods/inputs used at such mines would be eligible for credit


Sec. 80-IC relief granted to assessee as he had shown existence of factory and manufacturing of perf

IT : Where assessee had prima facie established its claim that factory was in existence and assessee was engaged in manufacturing activity to produce perfumery oils, deduction under section 80-IC was to be granted


Rebate of purchase tax on flyash granted to cement units located in UP is voilative of article 301

CST & VAT : Grant of "rebate of tax" on fly-ash purchased from State of Uttar Pradesh by units/plants located in State of Uttar Pradesh but not to units/plants located in other States for cement sold in State of Uttar Pradesh is violative of Article 301, read with article 304(a); such rebate is available to units/plants located in other States


Wednesday, 11 December 2013

Interest on I-T refund not taxable at concessional rate of 10% as per Treaty if NR has PE in India

IT/ILT : Interest earned by a non-resident on income-tax refund is not taxable in India at concessional rate of 10% as per India-France treaty if such non-resident has a PE in India


Can Tribunal extend period of stay beyond 365 days, Ahmedabad ITAT says 'Yes'

IT : Tribunal can extend period of stay beyond 365 days


TP provisions nowhere authorize TPO to disallow any exp. on mere imprudence behind such exp., ITAT s

IT/ILT: Where assessee had paid only cost price to its AE and justified same by providing a valuation report as per external CUP, in absence of any counter report by TPO, assessee's valuation to be accepted and transaction to be held at ALP


Allowing use of passive infrastructure and mobile tower sites to be deemed as a service and not as s

CST & VAT : Providing passive infrastructure along with mobile tower site and maintenance services to various mobile operators on sharing basis doesn't amount to transfer of right to use such infrastructure; it is not a deemed sale but a service liable to service tax.


Cap gains can't be evaded due to non-receipt of consideration if transfer fulfils Companies Act requ

IT : Where pursuant to sale agreement assessee transferred certain shares owned by it to a company, in view of fact that said transactions were duly recorded in books of account and, moreover, other requirements of Companies Act, 1956 were also complied with, it amounted to transfer within meaning of section 2(47)


New Mechanism To Replace Pscs In Oil And Gas Sector On The Anvil

Date : 11 Dec 2013


Following the recommendations of the Rangarajan panel and that by the Comptroller and Auditor General (CAG), the Petroleum and Natural Gas Ministry on Wednesday said it is preparing a proposal to replace the present profit sharing mechanism under the production sharing contracts (PSCs) with a revenue sharing mechanism for the oil and gas industry in the country.


Speaking at the 12th Petro India conference here organised by the Observer Research Foundation (ORF), Joint Secretary (Petroleum) Aramane Giridhar said the government is introducing a simple mechanism to replace the present PSCs. “The new guidelines will come out in a few weeks. The PSC has to go. It is not good. The players in the sector should have freedom to take appropriate decisions without waiting for approvals from the regulator,’’ he added.


Mr. Giridhar said there no fair market in the natural gas because of the infrastructural deficit. “Some people say market should be allowed to fix the price, but what kind of market are we talking about,’’ he asked.


Petroleum Secretary Vivek Rae said while there is nothing wrong in the PSC system, one of the problems is in the lack of flexibility. “There is nothing wrong in the production sharing contracts, but we have to fix the rigidity and called for adopting international petroleum industry standards and practices in the country.


He said there was an urgent need to expand gas pipelines across the country, noting that while India has achieved only around 13,000 Km in India, China has already done over 55,000 Km. “There is no need for any more legislation as the sector is already over-legislated but still under-governed. There is also a need to expand CNG network as it is better not only in terms of environment friendliness but also from import advantages,’’ he said.


ORF Director Sanjay Joshi said while China has managed to tie up with diverse long term pipeline supplies from Central Asia, Myanmar and Russia, but India, despite being surrounded by some of the most gas prolific countries, is yet to build its first transnational gas pipeline.


Source : thehindu.com





Co. can't be restrained from holding EGM where shareholders have right to vote in democratic manner,

CL : A company cannot be restrained from holding and convening an EOGM where shareholders have right to exercise their vote in a democratic manner


Fabricating an evidence to evade tax proves to be a costly affair; 1 lakh penalty slapped

IT : Exemplary cost should be imposed where assessee had produced fabricated evidence to evade payment of legitimate taxes


Exemption u/s 11 denied to trust on its failure to file form for accumulation of unspent sum before

IT: In order to claim benefit of section 11, it is mandatory to give intimation to assessing authority in Form 10 at any time before finalization of assessment proceedings


No denial of credit to recipient merely on wrong payment of duty by supplier

Cenvat Credit : Officers having charge over recipient of inputs cannot be allowed jurisdiction to determine whether each of suppliers have rightly paid excise duty or not because if this is allowed it would lead to chaos; hence, denial of credit to recipient of inputs on ground that supplier need not have paid duty was without jurisdiction


Relief for assessees submitting inflated stock statement for bank overdraft; HC rejects concealment

IT : No penalty can be levied merely on basis of inflated stock statement given to bank for purpose of availing overdraft facilities


CBEC's circular comes into force prospectively; rules HC

Excise & Customs : Circular/Instruction issued by CBEC changing classification of goods comes into force on date of issuance thereof and is applicable prospectively


Slub yarns aren't normal yarns; are classifiable under heading 56.06

Excise & Customs : Blended yarn made of viscose fibre and polyester fibre with special mechanical stimulation creating an effect of thick and thin features in yarns while spinning to impart slub effect, known as 'slub' yarn, is classifiable under Heading 55.06


Tuesday, 10 December 2013

Assessee can't reopen and reargue whole matter in the attire of rectification application before ITA

IT: Power to rectify a mistake under section 254(2) cannot be used for recalling entire order


Revenue earned by eBay from its website won't be FTS; its Indian marketing agents won't form its age

IT/ILT : Revenues earned by foreign company through its dependent agents who were assisting said company in operating websites in India was in nature of business profits as per article 7 of Indo-Swiss DTAA but could not taxed as assessee had no PE in India


Credit of packing material is available even if final product is liable to duty on tariff value basi

Cenvat Credit : Where final product, being garments, are liable to duty based on tariff value, such tariff value is deemed to be inclusive of all charges including packing and, therefore, cost of packing used therein is eligible for 'input' credit


Isuzu Motors To Invest Rs 3,000 Cr To Set Up Plant Near Chennai

Japanese auto-maker Isuzu Motors is setting up its first car plant in South India at an investment of Rs 3,000 crore to produce light commercial vehicles and sports utility vehicles which is expected to become operational by 2016, a top company official said today.



"The Rs 3,000 crore investment is for our plant in Sri City (Special Economic Zone at Tada near Chennai).It will be operational in 2016...," Isuzu Motors India President and Managing Director Takashi Kikuchi told reporters here.



The company, which has been supplying its diesel engines to the Ambassador cars owned by Hindustan Motors Ltd, today rolled out its first assembled sports utility vehicle 'MU-7' from Thiruvallur plant near Chennai.



Isuzu Motors has inked a "contract manufacturing" agreement with Hindustan Motors Ltd in June 2013 for assembling 'MU-7', at the latter's manufacturing facility in Thiruvallur situated near Chennai.



Asked what would happen to the agreement signed with Hindustan Motors after Isuzu Motor's own plant becomes operational in 2016, Kikuchi said the company would "continue" to contract manufacture of MU-7 from Tiruvallur plant.



Declining to elaborate, Kikuchi said,"we are still in planning stage (of what will be manufactured from the company's plant at Sri City SEZ).".



The company aimed to increase the level of localisation of MU-7 to 70 per cent when its own plant in Sri City becomes operational in 2016, Isuzu Motors India Executive Vice- President, Shigeru Wakabayashi said.



"After three years (by 2019), we want to have 100 per cent localisation", he said, adding, the company would look at manufacturing one tonnage pay-load, pick-up truck from the Sri City facility.



The firm would aim to serve domestic market from the Thiruvallur plant, he said, adding, they would also look at shipping to overseas markets from Sri City plant after 2016.



To a query, Kikuchi said, the company looks at selling 5,000 units of MU-7 per year for the next three years.



On the dealership networks, he said the company would have eight outlets in South towards the end of this financial year and plans to increase it to 60 by 2016.



Isuzu Motors India had earlier sold 180 units of MU-7 in Indian market as a completely built unit (CBUs). The locally manufactured MU-7 is priced at Rs 22.3 lakh (ex-showroom Chennai) for BS-IV variant and Rs 22 lakh (ex-showroom Chennai) for the BS-III variant.



Source:- economictimes.indiatimes.com





Cad Narrows To 1.2% Of Gdp, Thanks To Restrictions On Gold Imports And A Surge In Exports.

Few would dispute policy-makers' achievement in reducing India's external imbalances, but the unprecedented release of the balance of payments (BoP) data nearly a month before schedule may not yet present the total picture.



Little wonder that the Indian rupee, which bore the brunt of high external imbalances, hardly gained. In fact, it fell four paise to the US dollar. If high current account deficit (CAD) and overseas consumption improved, the obvious move for the currency was up.



There is more to the BoP numbers than what meets the eye. It indeed appears that the cause of the rupee's decline to lifetime lows in August need not necessarily have been due to the Federal Reserve's much feared tapering, but probably because of India's heavy external debt. The CAD crashed to 1.2% of the gross domestic product from 5% a year earlier. It is down from its highest ever of 6.7% in the quarter-ended December 2012, thanks to restrictions on gold imports, which accounted for nearly half the CAD and a surge in exports due to the recovery in the West.



But what's actually hidden is the pressure of overseas loan repayments. Years of credit binge overseas because of the interest rate arbitrage could well begin to play spoilsport when merchandise trade is beginning to balance itself.



Net capital outflows, including portfolio flows, foreign direct investment, and commercial borrowings, surged to an all-time high in the September quarter to $5.38 billion. This is higher than the quarter following the September 2008 collapse of Lehman Brothers when the global credit markets froze.



Feeding the high current account deficit through capital flows, especially higher borrowing by Indian corporates, which at that time made sense, may begin to bite eventually. India's total overseas debt stands at 136% of the foreign exchange reserves as of June-end 2013. Of this, short-term debt maturing within the next 12 months stands at $96 billion.



"Our policy-makers are focussing on ways of financing the current account deficit, but not looking at ways to curtail it," says forex consultant AV Rajwade. "(Having said that) there has been some efforts being made to reduce the official gold imports."



After the current account deficit went past 5%, the government and the RBI swung into action by raising import duty and restricting imports of the precious metal by mandating minimum re-exports.



Gold imports in the July-September quarter fell to 148.2 tonnes from 219.1 tonnes in the year-ago period. For the fiscal year, it is forecast to fall to about 900 tonnes from 1,000 tonnes in 2012.



Window for Smuggling



The physical gold imports data may be encouraging, but the window for smuggling may be just getting wider. It is not that policy-makers are not aware of it, but may be under the belief that even if smuggling rises substantially, it could hardly match even a quarter of imports through official channels.



Gold smuggling has gone up. Estimates are that between January and October, the number of seizures were high at 579, and valued at Rs 153.20 crore. This does have implications on the balance of payments. Gold smuggling is financed through remittances and the hub of gold smuggling is Dubai.



Beyond the seizures by a system that is known to be corrupt, anecdotal evidence suggests that remittances from overseas Indians are sliding as smuggling may be funded through Indians living abroad.



Though there is no firm data, reading of other numbers suggest that net quarterly private transfers have dipped in the September quarter by $500 million, to $16.2 billion.



That may also be partly due to the fact that the central bank opened a liberal window of deposit swap under the so-called FCNR (B) which raised $34 billion.



Bank of America Merrill Lynch's chief economist Indranil Sengupta estimates about a third of it is likely to have cannibalised other modes of cash flows.



Tapering effect



Lower current account deficit and the record mobilisation of deposits from the special window have led to the rupee rallying more than 10% from its lows, but that does not mean that India is completely out of the woods yet. The increased possibility of the tapering bond purchases by the Federal Reserve after US third-quarter GDP growth was raised could still create a ripple in the Indian currency market.



"Early tapering could push the Indian rupee back to 68/$ levels as the import cover, at 7.5-8 months, remains below the 8-10 months needed for INR stability," says Bank of America's Sengupta.



The prospects of Bharatiya Janata Party's Narendra Modi, becoming the prime minister next year, is aiding sentiment for the time being.



In fact, a clearer picture may emerge from what the RBI has not released - the external debt statistics and net international investment position which usually is released simultaneously with the CAD numbers. That may be on December 31.



Source:- economictimes.indiatimes.com





AO to conclude reassessment after considering the revised return filed by assessee during assessment

IT: Where assessee had inadvertently offered higher income in his return but during assessment proceeding assessee filed revised computation of his total income to show that he had lower income than declared in return, Assessing Officer must compute income on basis of revised computation of income


Wto’S Bali Package Mixed Bag For India

The final text of the World Trade Organisation agreement at Bali is a victory for the WTO, which lives to fight another day, and industry, but it is not clear whether India’s 60 crore farmers will benefit. The final text on the food subsidy says a permanent solution would be found within four years and, till a final solution is found, members of the World Trade Organisation “shall refrain from challenging through the WTO dispute settlement mechanism... of the agreement on agriculture in relation to support provided for traditional staple food crops in pursuance of public stock holding programme for food security purposes...”



In effect, the problem has been postponed for four years and only time will tell whether India will get justice. For instance, the Agreement on Agriculture did not address the issue of the base period of 1986-88 as the reference year for calculating whether India oversteps the 10 per cent subsidy cap. Those prices were very low and should be changed to those around 2010 or later as inputs like fertilisers, pesticides, etc. have increased the cost of wheat and rice.



Another lacuna at the Bali ministerial meet was the failure to discuss the huge subsidies that the American and European farmers get from their governments. These subsidies are trade-distorting. Agriculture-related subsidies in developed countries increased from $350 billion in 1996 to $406 billion in 2011. Unless this is tackled, India’s exports of agricultural produce can never get a fair deal. For instance, the US in 2005 subsidised its cotton farmers to the tune of $4.6 billion, or `27,000 crore, and the Indian cotton farmer has to compete with lower US cotton prices. Brazil had filed a case with the WTO against US cotton subsidies that America lost. The dispute panel allowed Brazil to put countervailing duties. To circumvent this, America provided $147 million to Brazil every year. Why is India not able to make such deals?



Having said this, the trade agreement signed at the Bali ministerial is great for Indian industry as it seeks to lower trade barriers and speed up the passage of goods through customs. Transaction costs are expected to come down significantly through e-transactions and countries will reportedly get funding support for implementing electronic data interfaces.


Source:- asianage.com





Uk Woos Indian Investment In Textile Sector

Indian companies can invest in the textile sector in the United Kingdom which on a path of recovery after being revived by the government, Vince Cable, UK's Secretary of State (Cabinet Minister) for Business, Innovation and Skills, said today.



The government is encouraging efforts being taken to revive the textile industry, and Indian companies can also invest in the sector, Cable told reporters here.



"The textile industry had virtually died and there were hardly any mills that were operating in the UK. But that is changing now," he claimed.



"We are beginning to get high-quality wool weaving in Yorkshire and man-made and cotton fabric as well as garment assembling in Lancashire," he said.



The government has created a regional growth fund of about 3 billion pounds for firms investing in the UK, he said.



"The companies have to demonstrate that they are creating jobs. They can get funding through competitive bidding, which would help them in training and skill development," he added.


Source:- economictimes.indiatimes.com





Iran, India Meet To Discuss Oil Exports, Payments

Indian and Iranian officials are meeting this week to discuss how to unlock the first oil payments to Iran since the United States and other world powers eased sanctions last month in exchange for curbs to Tehran's nuclear programme.



Last month six world powers and Tehran reached an interim deal that provided limited relief to Iran from economic sanctions, opening the way for some oil payments to resume.



The deal is a chance for Iran's new leadership to revive the country's economy, plagued with high inflation and a weakened currency since being cut off from the global financial system after sanctions were imposed in 2012.



The West believes Iran is trying to make a nuclear bomb, while the Middle Eastern nation says its nuclear programme is for power generation.



India and Iran are to discuss how to restart oil payments in foreign currencies, including a plan to process partial payments for oil in euros through a Turkish bank, two government sources said.



A delegation of Iranian officials led by Gholamali Kamyab, deputy governor at Iranian Central Bank, is in India until December 13. The group met officials of the finance ministry and Reserve Bank of India on Tuesday.



Arvind Mayaram, a senior official at India's finance ministry, said that for now, India would not release dollar payments it was holding back from Iranian imports.



He said the meeting had mostly focused on the implications of the new deal on issues of insurance - a problem for shipping under the sanctions - as well as ways to increase oil imports from Iran and exports from India.



Iran had asked Indian refiners in mid-October, before the deal was reached with world powers, to resume paying for oil imports in euros through Turkey's Halkbank HALBK.IS but the refiners are still seeking direction from the Indian government.



"We have not received any request either from Iran or India. If one of the parties wants to pay the bill via Halkbank we will be pleased to process that payment," a senior Turkish government official said.



India started settling 55 percent of its payments for Iranian crude in euros through Halkbank in mid-2012. The rest was settled in rupees through India's UCO Bank.



But the Halkbank route was halted in February this year when fresh sanctions prevented Iran from repatriating cash earned from oil it has been able to sell, crippling its economy by choking off its biggest revenue stream.



Since then Indian refiners have been withholding payment for 55 percent of their Iranian oil imports, while Iran scouted for an alternative way to receive that money in hard currencies such as the dollar and the euro.



At the end of November Indian refiners owed about $2.2 billion for partial payments to Iran, refinery sources said. About $3 billion worth of rupees, paid by refiners are lying in Tehran's account with UCO Bank, Arun Kaul, chairman of the bank said after the meeting.



India is Iran's second-largest buyer but its oil imports from the OPEC member plunged to about 170,000 bpd in the April-October period, a decline of about 40 percent from a year ago, tanker arrival data made available to Reuters showed.



A finance ministry official said this week India would continue to settle part of its oil payments in rupees through UCO Bank until receiving further information on the lifting of U.S. and EU sanctions on Iran.



India wants to fix its trade imbalance with Iran, tilted now in favour of Tehran because of oil purchases. New Delhi wants to boost its exports to the Islamic nation by letting Iran pay for goods in the billions of rupees it has in UCO Bank.



Indian exports to Iran are expected to touch $6 billion in the year to March 31, 2014, almost double last fiscal year's $3.2 billion, said Ajay Sahai, director general, Federation of Indian Export Organisations (FIEO).



He said the rupee trade mechanism had helped exports of agricultural commodities, pharmaceutical and auto components to Tehran. An industry delegation will visit Iran next week to push up exports, industry sources said.


Source:- in.reuters.com





India Considers Importing More Iranian Crude Recent Deal Expected To Ease Sanctions On Tehran

India is exploring the possibility of increasing crude-oil imports from Iran, following a recent deal between Tehran and world powers that is expected to ease sanctions on Iranian crude, an Indian official said.



While sanctions on Iran's sales of crude oil are yet to be eased, observers say the deal is likely to lead to a gradual loosening of existing restrictions on dollar-based payments that would enable importers such as India to buy more crude from Iran.



India and Iran presently have a barter trade system in place to bypass payment problems caused by the Western sanctions. Under an agreement last year, India pays for about half its crude-oil imports from Iran in Indian rupees instead of U.S. dollars.



Indian and Iranian officials had detailed discussions on the possibility of increasing crude-oil imports from Iran, India's Economic Affairs Secretary Arvind Mayaram told reporters after a meeting with an Iranian delegation in New Delhi.



Iranian officials who attended the meeting declined to comment.



Iran was the second-largest supplier of crude oil to India until around two years ago, before the sanctions were imposed. Iranian crude supplies have gradually declined in line with a U.S. requirement that India and some other countries—including China and South Korea—steadily diminish their purchases.



India is likely to import around 11 million metric tons of crude oil from Iran in the current year ending March 31, about 15% less than the previous year. Imports from Iran are expected to start rising after six months, when Western sanctions on Iranian crude sales are expected to be eased, some observers say.


Source:- online.wsj.com





Gold Price Slips Rs 30, Silver Price Jumps Rs 830 On Fresh Buying, Global Cues

10-Dec-2013


Snapping a six-day losing streak, silver prices surged by Rs 830 to Rs 44,300 per kg here today on buying by industrial units amid a firm global trend. Gold price also slipped Rs 30 to Rs 30,725 on subdued demand at higher levels.



Traders said fresh buying by industrial units and coin makers along with higher global trend mainly led the recovery in silver prices.



Silver in Singapore, which normally sets the price trend on domestic front, added 0.5 per cent to USD 19.95 an ounce.



They said falling demand at prevailing higher levels mainly pulled down gold prices to trade marginally lower.



On the domestic front, silver ready recovered sharply by Rs 830 to Rs 44,300 per kg and weekly-based delivery by Rs 610 to Rs 44,630 per kg. The white metal had lost Rs 1,600 in the previous six trading sessions.



Silver coins also spurted by Rs 1,000 to Rs 83,000 for buying and Rs 84,000 for selling of 100 pieces.



However, gold of 99.9 and 99.5 per cent purity declined by Rs 30 each to Rs 30,725 and Rs 30,525 per ten grams, respectively. It had gained Rs 255 yesterday.



Sovereign held steady at Rs 25,200 per piece of eight gram in limited deals.


Source:- financialexpress.com





Rupee Snaps 5-Day Gain, Down 29 Paise Vs Dollar


The rupee snapped its five-day rising streak against the American currency and fell by 29 paise at 61.33 per dollar in early trade today at the Interbank Foreign Exchange market on fresh dollar demand from importers.


Besides an increased demand for the dollar from importers, a mixed trend in the American currency against other overseas currencies and a lower opening in the domestic equity market also put pressure on the rupee, forex dealers said.


The rupee had gained 9 paise to close at four-month high of 61.04 against the dollar in yesterday's trade on selling of the US currency by exporters and banks amid heavy capital inflows.


Meanwhile, the BSE benchmark Sensex fell by 90.40 points, or 0.43%, at 21,164.86 in early trade today.



Source:- dnaindia.com





Govt Considering Restructuring Of Import Duty On Edible Oils

The government is considering the proposal to restructure import duty on refined edible oils and crude (vegetable) oils, Parliament was informed today.



In a written reply to Lok Sabha, Food Minister K V Thomas said: "A proposal for restructuring of import duty on edible oils, which includes change in import duty structure on refined edible oils and crude oils, is currently under consideration of the government."



India is the world's second-largest importer of cooking oil.



At present, the import duty on refined oils is at 7.5 per cent. In January this year, the government imposed a duty of 2.5 per cent on crude (vegetable) oil from zero duty earlier.



Industry body Solvent Extractors Association (SEA) has been demanding a hike in import duty of refined oils to 12.5 per cent to curb imports and protect domestic refineries.



Thomas said there was an increase in import of refined edible oil in the marketing year 2012-13 (November-October), while the import of crude palm oil during the period remained more or less same, as compared to previous marketing year (2011-12).



According to the data tabled in the House, the import of refined edible oil has increased to 2.23 million tonnes (MT) in the marketing year 2012-13 as against 1.57 MT in 2011-12. While, imports of crude palm oil has marginally decreased to 5.88 MT in 2012-13 from 5.99 MT a year ago.



Edible oil imports rose to 10.39 MT in 2012-13 from 9.98 MT in the previous year, while the imports of non-edible oils increased to 2,93,534 tonnes during the period under review, from 2,11,098 tonnes in 2011-12, as per the SEA data.


Source:- economictimes.indiatimes.com





No investigation in order to check dominance of patry doing business in compliance with SC's order

Competition Law: Investigation is not to be ordered in case opposite party was producing iron ore and selling same in compliance with orders of Supreme Court


CBDT calls for speedy disposal of electoral trust applications; releases check-list for electoral tr

IT : Standardization of process of filing application for approval of an electoral trust


HC upholds sanctity of reassessment notice if not barred by time and issued after recording reasons

IT: Where notice issued for reassessment was not time-barred and, further, Assessing Officer had recorded detailed reasons for reopening, reassessment was held valid


Assessment to be made at correct tax rate even if assessee has made excess collection of tax

CST & VAT : If assessee has, inadvertently, collected tax at a rate higher than that leviable, assessment should be made at rate actually applicable; however, excess collection cannot be refunded back to assessee


Order of amalgamation doesn't transfer tenancy rights from transferor-company to transferee-company

CL : Where order of amalgamation wasn't served on landlord by the transferee company and landlord continued to issue rent receipts in the name of (dissolved) transferor company though he accepted rent from transferee company, no right of tenancy was created/transferred in favour of transferee company. Tenancy is a non-transferable object that could extend to others either by an explicit contract or by statute. In the instant case, there us neither any statute law to support transfer of tenancy o


Division of States divides tax burden: Corporations formed after division of States to pay tax in sp

IT: Division of States divides tax burden: Corporations formed after division of States to pay tax in specified ratio


ITAT allowed consultancy charges incurred to establish new business with existing common management

IT : If there is continuity of business with common management and fund, then even if assessee has started a new line of business in relevant year, payment made for carrying out such running of new business has to be allowed as business expenditure


If show cause notice doesn't invoke charges of suppression no evasion penalty is called for

Excise & Customs: Where provisions relating to suppression of facts, etc., envisaged under proviso to section 11A and section 11AC have not been invoked in show-cause notice, no evasion penalty can be levied


'Ferrari' still a 'new Car' for custom purposes if its previous booking was cancelled prior to sales

Excise & Customs : Where a car originally booked by a foreign buyer is not sold to him owing to cancellation of booking, but, is directly sold, for first time, in India, said car is to be regarded as 'new car' and is eligible for concessional rate of duty under Notification No. 21/2002


Monday, 9 December 2013

Hospitals wholly or substantially funded by Government get sec. 10(23C)(iiiac) relief automatically

IT: Exemption under section 10(23C)(iiiac) is automatic for Hospitals which are wholly or substantially funded by Government of India or a State Government


Revenue supposed to verify agreement between parties and relevant tax treaty to bring payment within

IT/ILT: To decide whether payment made by assessee to its subsidiary of USA amounted to 'fees for technical services' or same was reimbursement of expenses, it was necessary to look into agreement between assessee and its subsidiary and also whether services rendered fell within ambit of 'technical service' as per DTAA


Non-filing of Form 3CEB in response to sec. 142(1) notice won't allow reassessment after four years

IT: Non-filing of document, viz., Form 3 CEB, in response to notice under section 142(1) will not, by itself, without anything more entitle Assessing Officer to take action to reassess an assessee in respect of an assessment year after expiry of four years from end of relevant assessment year


Natural Rubber Imports Fall 4.6%

09-Dec-2013


India's natural rubber imports fell 4.57 percent on year in November to 22,872 tonnes, the Rubber Board said on Monday, as tyremakers reduced overseas purchases after prices in local markets plunged to their lowest level in more than three years.



Output of natural rubber fell 7.1 per cent to 91,000 in November, the trade body said. India, the world's fourth-biggest producer of natural rubber, also imports it from Malaysia, Thailand and Indonesia.


Source:- business-standard.com





How India Might Find Its Own Balance In Asia

India does not appear to be comfortable with the growing tensions in Asia that follow the United States of America’s attempts at ‘rebalancing’ the Chinese assertion of influence in the maritime regions contested by its neighbours. The discomfort comes through loud and clear in the speech given on November 22 by the prime minister, Manmohan Singh, to the combined commanders’ conference in Delhi. Getting his exact words on record would be useful to understand the prime minister’s anxiety: “If you survey the global strategic environment over the past decade, it would not escape your notice that, just as the economic pendulum is shifting inexorably from West to East, so is the strategic focus, as exemplified by the increasing contestation in the seas to our east and the related ‘pivot’ or ‘rebalancing’ by the US in this area. This, to my mind, is a development fraught with uncertainty. We don’t yet know whether these economic and strategic transitions will be peaceful....”



Singh then focuses on the global scenario of “intense competition”: “While globalization has induced growing and complex interdependencies among states and multinationals on the economic and trade front, it has also nurtured intense competition and rivalries in the security domain. Managing this contradictory tenor, which has been highlighted by the global surveillance operation mounted by the US National Security Agency, is also a policy imperative for us. Naturally, our objective must be to acquire tangible national capacity, or what the lexicon now refers to as comprehensive national power.”



India’s discomfort with the US global snooping operation revealed by Edward Snowden, in which India was an important target, also comes through clearly. India has made clear its displeasure at the US’s plans of drastic withdrawal of troops from Afghanistan because that promises a more intense jihadi campaign with Kashmir as a prime target. Indian and US diplomats have already been involved in some bitter media sparring in Bangladesh with Delhi backing the Awami League and the US, at least its local envoy, indicating a clear preference for the BNP-Jamaat-e-Islami combine.



Now after the India-US-Japan trilateral in Tokyo, it is beginning to emerge that Delhi insists on being left to do its own ‘balancing’ in Asia, and is happy to develop better relations with both China and its neighbours at the same time. Earlier this year, India’s former envoy to the US and former foreign secretary, Nirupama Rao, tried to drive home this point to an American audience. On February 4, she said in a lecture at Brown University, “We are part of the Asia-Pacific and an Indian Ocean world that traditionally lived in peace, pursuing the traffic of ideas, the peaceful absorption of different religions without proselytization, pursuing trade and commerce in a non-polarized, peaceful, common economic space. In our view, more than geopolitical, or geo-economic, this was a geo-civilizational paradigm — a creative space with revolving doors where civilizations coalesced and did not clash. One has only to visit the caves of Ajanta in western India or see the murals of Dunhuang in China’s west to see this vision of unity that marked our past... This is the region where we hear the muffled footsteps of historical travellers and thinkers like Boddhidharma of India and Xuan Zang of China beat in our blood, to use a phrase from Rabindranath Tagore. These were lives mortgaged to pilgrimage, and voyages of intellectual discovery. We see that past as a rough guide to our future.”



Seeing this past as the “rough guide to our future” may not exactly impress the US. A “geo-civilizational paradigm” is much too woolly a concept for contemporary diplomacy in a country that understands and promotes “containment” and “balance of power” — key concepts of the European colonial-era diplomacy, provided greater relevance and thrust by US policy during the Cold War and after — a policy that thrived on identifying threats and villains, the bad guys and the good guys, those who need to be boxed into corners and those who need to be used to help that happen. But India — with its long tradition of non-alignment rooted in a philosophical conviction that truth is neither here or there but often in between — has good reasons to attempt a new text of diplomacy in what appears to be an emerging Asian century.



So, Rao had to remind her American audience at the Brown India initiative, “Guided by the strong economic rationale of our ‘Look East’ policy, ASEAN and East Asian countries — including Japan, China and South Korea — have emerged as large trading and investment partners of India. The richness of this engagement is visible in wide-ranging cooperation in areas as diverse as science and technology, tourism, human resource development, transport and infrastructure, health and pharmaceuticals. Indeed, the strategic footprint of our relations with China and Japan, particularly, will exert a major impact on the future of the region.”



So if the core focus of US “rebalancing” is containing China’s growing influence by developing an Asian equivalent of Nato, India’s “rebalancing” involves developing balanced relations with both China and its Asian neighbours like Japan, Vietnam, South Korea and other ASEAN countries (together with Australia) in areas of trade and commerce as well as security. That explains why India will do everything possible to avert a conflict-like situation with China that was developing over the Depsang bulge and within six months, pull off the Border Defence Cooperation Agreement with China. That explains why India will agree to take forward the Bangladesh-China-India-Myanmar economic corridor plan, and why its foreign ministry will start backing the Kunming-Kolkata Forum. And that also explains why within a month of Singh’s Beijing visit, India will host the general secretary of the Vietnam Communist Party and then plan similar visits by the prime ministers of Japan and Australia. Otherwise, how would one be able to explain India resuming military links with China through joint counterterrorism exercises in Yunnan even when Delhi agrees to supply military hardware to Vietnam. The whole idea is to augment national military power, but use it only as a last resort, avoiding any deployment or military exercise perceived as hostile by China.



It is interesting that the Chinese have also reciprocated US “rebalancing” (essentially, redeployment of US military specially naval assets to Asia) by some aggressive “charm diplomacy” in southeast Asia. Around the time that it was trying to build bridges with India and preparing to host Singh in Beijing, the Chinese president, Xi Jinping, and Premier Li Keqiang were touring a host of southeast Asian countries. Li’s proposed “2+7” cooperation framework between China and ASEAN (two political consensuses and seven areas of cooperation) is seen as a game-changer because it seeks to upgrade the China-ASEAN region into a Free Trade Area that will ultimately draw in India and create an integrated market for an area with half the world’s population.



During Asia-Pacific Economic Cooperation’s finance ministers’ meeting at Bali, the Chinese proposed multilateral foreign-exchange swaps with ASEAN countries to help them face “external shocks”. This, after having already done similar deals involving 1.4 trillion yuan. In Indonesia, Xi proposed an Asian infrastructure bank to help finance connectivity and crucial regional infrastructure projects like the high-speed railway connecting China to Thailand and Singapore.



China has been countering Washington’s efforts to develop the Trans-Pacific Partnership with its own heightened negotiations on Regional Comprehensive Economic Partnership, an initiative to incorporate existing free-trade zones between ASEAN and other countries. The Yunnan-based Link Times was quick to point out, “Although the US and Japan have tried to highlight the potential military threat posed by China’s rise, economic issues remained the primary concern of Asian countries. For example, when the US government shut down and the threat of a treasury default loomed, it was Japan , US’ closest ally in Asia, who joined China in pressuring the US to avoid a default”.



Interestingly, this Link Times article talks of Japan and Vietnam as allies of the US, not of India. Both India and China are keen to promote ever greater regional cooperation in southeast and east Asia to create a “larger cake” (a Chinese expression for a win-win situation for all). Without this new diplomatic ethos that focuses on cooperation and not conflict or containment, an Asian century will remain a dream on paper, manipulated by non-Asians, who would like contests and confrontation to push their armaments exports to a prosperous Asia rather than allow it to emerge as the globe’s economic powerhouse.



Source:- telegraphindia.com





Indian Cotton Seen Up On Demand, Lower-Than-Expected Supply

Cotton futures in India, the world's second-largest producer, are expected to rise this week on export demand and likely lower supplies as farmers hold back hoping for better prices, though estimates of higher output could restrict the upside.



Cotton supplies across India are around 150,000-160,000 bales of 170 kg each as against the expectation of 200,000 bales as production is expected at a record high, spot traders said.



The state-run Cotton Advisory Board estimated India's cotton output at a record 37.5 million bales in the year.



Farmers have held back supplies on expectations of better prices and are selling only as per the requirement amid good export demand, traders said.



"Farmers have seen good prices, so they are not willing to sell at lower levels. If spot cotton prices fall below 38,000 rupees a candy, arrivals would fall sharply," said Manu Mangaldas Shah, a trader from Ahmedabad in Gujarat state.



In the spot market, the price of the most-traded domestic spot Shankar-6 variety fell 100 rupees to 38,900 rupees per candy of 356 kg, data from the Cotton Association of India showed.



The January cotton contract ended 0.31 percent higher at 19,130 rupees per bale on the Multi Commodity Exchange.



"Higher prices (Indian cotton) will see export demand reduce sharply, as China is getting stocks at lower prices from the reserve sales," Kotak Commodities said in a research note.



China's purchases of domestic cotton for state reserves have exceeded 3.5 million tonnes midway through the 2013/2014 year after last week's buying of 475,800 tonnes, official statistics show. Stockpiling by the world's top cotton buyer is a driver of global prices of the fibre.


Source:- in.reuters.com





India: Plan To Export 10,000 Tonnes Of Banana To Gulf Countries

09-Dec-2013


Measures are being taken to expand the area under tissue-cultured banana cultivation to 10,000 hectares from the present 6,000 hectares to tap export markets and meet the growing demand, said Agricultural Production Commissioner Sandeep Saxena.



The State government had allotted Rs.1.2 lakh crore for agriculture development under its Vision 2023 Plan, according special importance to 10 crops including banana. All required technologies and advanced crop management techniques would be offered to farmers to boost production and scale down production costs.



With effective propagation of drip irrigation system among banana growers, almost all of them in the district had switched over to drip irrigation. Such facility had scaled down use of fertilizers, reduced maintenance costs and cut down weed growth in farms. Moreover, the use of water too reduced substantially. All required inputs reached the root directly and it protected soil fertility.



The Commissioner also advised farmers to form banana clusters to produce banana on a large scale and to enable buyers to procure banana from one spot. Moreover, clusters could handle bulk orders easily and ensure instant supply of large quantities of banana in uniform quality and size. Cluster members would get more assistance under the National Horticulture Mission. Ultimately, profit margin would go up if they sold their produces through clusters, he advised.



Collector K.S. Palanisamy said that the government had constructed a banana processing and ripening chamber to process bananas at source. Seven private processing centres have also been functioning to meet the growing demand.



Earlier, banana growers had sent the raw banana to Bangalore for ripening. Some progressive farmers had been exporting hybrid banana to Singapore and Central Asian countries, he added.



Source: thehindu.com





Rashtriya Ispat Nigam Hopes For Rs 1,000-Crore Export Revenue This Fiscal

Public sector steel maker Rashtriya Ispat Nigam is hopeful of achieving an export turn over of Rs 1,000 crore this fiscal on the back of new product launches, a top company official said.



"We are hopeful that around Rs 1,000 crore of export turnover will be achieved in the current financial year," RINL commercial director TK Chand told PTI today.



The company is going to launch a new product, which will give the firm around Rs 300 crore in export revenue in the near-term, helping it to achieve the number.



RINL has registered 142 per cent rise in exports turnover during the April-November period of current financial year to Rs 519 crore against Rs 366 crore reported in the same period of last fiscal.



"We hope to export 70,000-80,000 tonnes of this new product, which will give us revenue of Rs 300 crore. This will help in achieving Rs 1,000 crore of export turnover in this fiscal," Chand said.



As per the steel firm, it is mainly exporting to South and Southeast Asia.



"As per our plan, we aim to open office in Sri Lanka in the fourth quarter," Chand said, adding it is also witnessing sound demand from West Asian economies.



RINL, which is headquartered in the port city of Vishakhapatnam, has a natural advantage for exports.



Meanwhile, the company said domestic demand till now is subdued but expected it to pick in the fourth quarter. The Navaratna public sector enterprise has a 3 million tonnes production capacity in Visakhapatnam plant which is undergoing expansion.


Source:- economictimes.indiatimes.com





A Nil Imports Year Likely For Coal India

Coal India Ltd is unlikely to import the fuel this fiscal. With just three months for the financial year to end, the public sector miner has not received a single ‘firm commitment’ from any power company asking it to provide imported coal.



“Coal India is ready for imports if asked by the power sector buyers under the fuel supply agreement (FSA). We have asked them; not a single company has given firm commitment till now,” a senior company official told Business Line.



According to the latest FSA, the company will offer 65 per cent domestic coal for 2013-14 and 2014-15; 67 per cent for 2015-16 and 75 per cent for 2016-17 to the annual contracted quantity (ACQ).



To meet the balance FSA obligation (15 per cent), Coal India may import coal and supply the same to willing power producers on a cost-plus basis. The power producer can also import coal by itself. The miner is sealing FSAs with 78,000 MW of power plants.



If power firms are not seeking imported coal, it is mainly due to lower electricity demand and improved domestic supplies, say industry watchers.



India is seeing a fall in overall electricity demand. For example, in October 2013, demand was 80,458 million units, down 6.35 per cent from 85,922 million units in October 2012.



However, the trend reveals that electricity deficit is reducing at a faster rate than the decrease in demand. This means power stations are running at lesser plant load factor (PLF), resulting in lower fuel demand. The overall PLF in October 2013 came down to 61.85 per cent from 71.04 per cent in the corresponding month the previous year.



Second, some of the power utilities such as those r un by NTPC and Tamil Nadu Electricity Board import coal themselves. In June, the Cabinet Committee on Economic Affairs gave its go-ahead for a mechanism that allows power generators to pass through to distribution utilities the cost of expensive imported coal used by them.



Coal India reported a 2 per cent growth in supplies during April-November at 292.9 million tonnes against the same period in 2012. The public sector company had earlier said it is ready to import 4-6 million tonnes through MMTC and STC. It would charge around 2 per cent as service charge.


Source:- www.thehindubusinessline.com





Goods Imported Duty Free Under Advance Authorisation Can Be Sent To A Job-Worker

We have imported our inputs duty free under advance authorisation. Can we send such imported inputs to a job-worker for carrying out part of the process of manufacture of the finished goods that we want to export? Do we need any permission for that?

As per Para 4.1.5 of the Foreign Trade Policy, goods imported under advance authorisation are subject to Actual User Condition. As per Para 9.5 of the Policy, "Actual User (Industrial) means a person who utilises imported goods for manufacturing in his own industrial unit or manufacturing for his own use in another unit including a jobbing unit." Therefore, you may send the goods imported duty free under advance authorisation to a job-worker. You do not need any permission but you must follow the procedure for job-work laid down under the relevant Central Excise notification (e.g. 214/86). It is desirable that you get the name of the job-worker as supporting manufacturer in your advance authorisation.



We want to know whether we can consider design and development of samples for exports as services incidental to manufacturing and claim the benefits of Served from India Scheme (SFIS).

The entry 'Services Incidental to Manufacturing' appears under the heading 'Other Business Services' in the list of services eligible for SFIS benefits at D(f) of Appendix-41 of the Handbook of Procedures Vol.1. However, in your case, it appears that you want to export samples and not the services incidental to manufacturing. You can try to make out a case that design and development services should be treated on a par with Research and Development services, if the billing is done for design and development charges and the results of your design and development services are sent to buyers of such services by way of samples. It is for the Director General of Foreign Trade (DGFT) to consider such a representation and take a call on whether to grant SFIS for such services.



We have imported certain capital goods under an Export Promotion Capital Goods (EPCG) licence but have not been able to install the same within six months. Can we get extension in time limit and, if so, from whom should we get the extension?

Condition no. 10 of the Customs exemption notification no. 22/2013-Cus dated 18.04.2013 does contain a provision for production of installation certificate within six months from the date of completion of imports, or such extended period as the Deputy/Assistant Commissioner of Customs may allow. Similar provisions are also there in other Customs notifications relating to imports under EPCG authorisation/licence. So, you may approach the concerned authority at the port of importation and obtain necessary extension. The Foreign Trade Policy, however, contains no such provision for extension. So, you may approach the Policy Relaxation Committee at the office of DGFT Headquarters with the necessary request, giving reasons for the delay. The EPCG committee has condoned the delay in installation in several cases.


Source:- business-standard.com





Increase In Gold Smuggling Due To Hike In Import Duty

The Finance Ministry has said incidence of gold smuggling has increased due to hike in import duty and fluctuation in global prices.



"The increase in the cases of smuggling of gold may be partly attributed to the fluctuation of the prices of gold and Customs duty rates," Minister of State for Finance J D Seelam said in a written reply to Lok Sabha.



With an aim to discourage gold imports, one of the major reason for high current account deficit, the government has raised the customs duty to 10 per cent, while on jewellery it has been increased to 15 per cent.



He informed that gold worth Rs 208.23 crore has been seized in seven months through October in the current fiscal. The seizure was 107.51 crore, 42.38 crore adn 17.22 crore in the previous three fiscal, respectively.



During April-October 2013-14 period, there were 664 cases of gold smuggling.



The Minister further said that the maximum amounts of seizures (in terms of number and value) have been reported from various international airports wherein the gold/gold jewellery was being attempted to be smuggled using the passengers as well as cargo and courier.



"Mostly the source of the seized gold/gold jewellery had been UAE, Singapore, Sri Lanka, Bangladesh, Nepal, Hong Kong, etc," Seelam added.


Source:- economictimes.indiatimes.com





Rupee Opens Higher To Breach 61 Per Dollar

The rupee on Tuesday opened higher against the dollar, carrying forward the momentum it gained on Monday, on hopes of emerging political stability in the country and tracking the strength seen in Asian currency markets.



The partially convertible rupee opened at 60.99 per dollar against Monday’s close of 61.1350. Since its all-time low of 68.85 on 28 August, the domestic currency has gained 12.67% till date, but has lost 9.97% since January.



The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.043, down 0.12% from the previous close of 80.134. Majority of the Asian currencies were seen trading higher against dollar.



The yield on India’s 10-year benchmark bond was trading at 8.920%, up from its previous close of 8.906.



At 9.10am, the rupee was trading at 61.07, up 0.11%. India’s equity benchmark Sensex was trading at 21,293.58 points, down 0.15% from its previous close.


Source:- livemint.com





Sec. 167 relief granted as co. couldn't convene AGM due to absence of one shareholder out of two

CL : Where company was not able to convene AGM in view of reason that it had only two shareholders and one of shareholder was not attending meeting, it was a prima facie case to grant relief under section 167


Society to get recognition of a trust if it extends its object to benefit public at large

IT: Where initially object clause of society was limited to benefit of business community of an area but subsequently object clause was amended to extend benefit to public at large, application of registration under section 12A to be reconsidered in light of amended object clause


No penalty if exact nature of contravention with specific clause of law isn't specified

Cenvat Credit : When particular clause of provisions of law/Rules is neither mentioned in show-cause notice nor in adjudication order and assessee is not put to notice as to exact nature of contravention for which penalty is proposed, assessee cannot be made liable to penalty


Prizes to customers are sales promotion activities and not akin to winnings from lottery to attract

IT : Where assessee had conducted sales promotion schemes and distributed prizes to customers wholly in kind of an amount of Rs. 60 lakhs, it was not obliged to deduct tax at source under section 194B in respect of prizes paid in kind


Additions on mere pretext of bogus purchases deleted as seller confirmed such transactions

IT: Where assessee was trading in ghee and Assessing Officer made addition to its income on plea that purchases shown from seller were bogus purchases and profit to this extent had been suppressed, since seller had confirmed making of purchases by assessee, impugned addition was not justified


No addition of EC or SHEC on amount of custom duty for DTA clearances made by 100% EOU

Excise & Customs : In view of unchallenged Tribunal judgments in favour of assessee, in computing excise duty leviable on DTA clearances by 100% EOUs, education cesses are not required to be added to amount of customs duty determined as per customs laws


Assessee got depreciation on a mall even if when part of it wasn't commercially exploited

IT: Where assessee allocated head office expenses on basis of capital cost of each project, Assessing Officer was not right in allocating such expenses in different ratio on estimated basis


SC slams department for levying ST penalty under Sections 76 and 78; grants stay on recovery

ST : As per section 78 if penalty is payable under this section, penalty cannot be imposed under section 76; further, in adjudication order, there was finding that assessee had not indulged in fraud, collusion or wilful mis-statement, hence, demand of penalty was stayed


Sunday, 8 December 2013

Matter remanded as CIT(A) imposed TDS liability on sum paid to NR without analyzing relevant treaty

IT: Matter remanded for readjudication where Commissioner (Appeals) allowed transponder fee paid to non-resident entity without discussing provisions of applicable Treaty


Twin conditions for transferring a case; Recording of reasons and communication of same to assessee:

IT/ILT : A company having paid tax at time of remittance to non-resident cannot again be asked to pay tax on said amount by invoking section 163


Rectification application may be filed before Tribunal within six months from date of receipt of ord

Service Tax : Rectification application before Tribunal may be filed within 6 months from receipt of order; not necessarily within 6 months from date of order


Usda Sees Fall In India's Rice Output, Exports This Year: Report

India's rice output is likely to decline to 103 million tonnes in 2013-14 on crop damage and exports are also expected to be lower at 10 million tonnes, a latest USDA report says.



The likely crop damage has pushed up domestic rice prices strongly in November and this has been a major concern for the government, which may liquidate rice stock in the local market to check prices ahead of general elections, it said.



The US Department of Agriculture (USDA) said: "Rice production has been lowered to 103 million tonnes (from 105 million tonnes) as the recent cyclones in the eastern coast and heavy rains have damaged the standing rice crop, which was at maturity and harvest stage, in eastern and southern states."



Harvesting in the rain-affected areas have been significantly delayed as the mechanical harvesters are unable to operate due to wet soil conditions, it said.



Although no official assessment of crop loss due to the recent cyclones and heavy rains is available, market sources report crop loss in the affected areas of around 3 million tonne, it added.



Despite some drop, India's rice output would be it third highest crop ever, it said. The country had achieved an all-time output of 105.30 million tonne in 2011-12 and the second highest crop of 104.40 million tonne in 2012-13.



On impact of likely output fall on prices, the USDA said: "Domestic rice prices have gained strongly in November on reports of crop damage in Andhra Pradesh and other eastern state. Rising domestic rice prices over the last few months has been a major concern for the government."



"With the Parliamentary elections due in next five months, the government may liquidate its 'more than sufficient rice stocks' to contain any further increase in domestic prices," it said.



Prices of common variety rice in India rose to Rs 29,000 per tonne level last month, from the below Rs 24,000 per tonne in the same period last year, USDA data showed.



On rice exports, the USDA said the outbound shipments are expected to decline to 10 million tonnes in the 2013-14 marketing year (October-September), from the estimated 10.9 million tonnes last year.



Noting that sowing of rabi (winter) rice, has started and will continue through December, the USDA said, "Assuming normal weather conditions, higher rabi rice production is likely to partially offset the recent crop loss."



Planting of rabi rice, mostly confined to West Bengal and southern states, is likely to be higher than last year on improved soil moisture, augmented water levels in irrigation reservoirs and relatively firm domestic prices, it said. (MORE) PTI LUX KSR STS RAH 12081128 NNNN



Since early October, three consecutive cyclones -- Phaillin, Helen and Lehar -- on the eastern coast have caused significant damage to the rice crop in the coastal belt of Andhra Pradesh and Odisha.



Also, the consequent heavy rains in the eastern states of West Bengal, Bihar, Jharkhand and eastern Uttar Pradesh have caused some crop lodging, it added.


Source:- economictimes.indiatimes.com





Sugar Production To Slump This Season

Sugar production is likely to fall this year as prolonged drought has affected sugarcane cultivation significantly. While 2.24 lakh metric tonne (MT) sugarcane was crushed in 2012-13, the factory authorities expect only 1.30 lakh MT output this season (2013-14).



"The drought has affected sugarcane cultivation to a great deal. The yield has reduced many folds," said M Sembukutty, managing director of Alanganallur National Cooperative Sugar Factory where sugarcane crushing commenced on Thursday with Madurai district collector L Subramanian inaugurating the process in the company of AIADMK MLAs. Farmers held a ritual prior to running the machines.



Alanganallur factory commands sugarcane cultivation in Madurai, Dindigul and Virudhunagar districts. Though sugarcane could be cultivated for 13,200 acres in these districts, the factory could register only 7,600 acres this season," he said.



Sugarcane farmers expressed their worries over the reduced crop and poor prices. "It costs nearly Rs 40,000 to raise one acre of sugarcane with a yield of 35 tonnes under normal conditions. But drought has reduced the yield to hardly 15 tonnes per acre," said T Alaguraja, secretary of Sugarcane Farmers Association at Alanganallur.



Farmers have urged the state government to fix the state-approved price for sugarcane at Rs 3,500 per tonne. Last season, farmers were paid Rs 2,339. This will not be sufficient this year as input costs have rose. "Cutting charge alone comes up to Rs 700 per tonne. The government can at least bear the cutting charges so that we are spared of additional burden," said K Abbas, president of sugarcane farmers. Sugarcane cultivation is no longer remunerative and if farmers are not getting adequate prices from the government, they will not be in a position to continue cultivating cane, farmers here said.



Sugar factory officials said they are procuring sugarcane at prices fixed last year. "Till the state announces new procurement prices, we will start procuring at that rate. We will disburse the additional amount for sugarcane procuring at old prices," said Sembukutty.



Crushing of sugarcane is believed to last till March next year, though the production prolonged till May last season.


Source:- timesofindia.indiatimes.com





Service Tax Goes, Buyers Smile

08-Dec-2013


Those purchasing a house have a reason to cheer. They can buy the property without having to pay any service tax for maintenance and repairs.



Flat buyers were required to pay 12% service tax as one-time maintenance fee to central excise department. Builders collect a one-time payment for maintenance and repairs of the property for a particular period post construction. The amount includes charges for lighting in the compound area, lifts and cleanliness. It is collected for a period until the residents form a housing society of their own.


Source:- articles.timesofindia.indiatimes.com





Trust not supposed to be dirt-poor; depreciation allowed to trust on Mercs purchased for its VIP gue

IT : Advertisement published in various newspapers on occasion of birthdays of trustees of assessee-trust highlighting achievement of various institution run by trust could not be said to be image building of trustees, which would violate provision of section 13(1)(c)


Ofs Route: Final Call On 5 Per Cent Coal India Stake Sale In 15 Days

Pursuing its overseas expansion strategy, state-owned Coal India Ltd is actively looking at as many as five proposals for acquisition of mines in Indonesia.



CIL's overseas plans come at a time when the company is facing flak for acute shortages of coal, which is hurting country's key sectors including power and fertiliser.



"Coal India is examining four to five proposals and they all are in Indonesia," according to Coal Ministry sources.



The sources, however, refused to give a timeline as to when they are likely to be finalised.



Coal India in September had said that it invited an expression of interest inviting global companies to offer overseas assets.



"In pursuant to the Government of India's guidelines to acquire raw material assets abroad, a notice inviting proposal offering overseas coal assets to CILBSE 0.64 % was floated... A number of proposals has been received and are being evaluated," the company had said.



Coal Minister Sriprakash Jaiswal earlier said that acquisition of coal mines overseas should be done in an aggressive manner to meet the country's energy requirements.



In order to tide over the fossil fuel shortages, the government is also proposing to import coal.



Meanwhile, CIL has already finalised bids for further drilling its twin mines in Mozambique. Two coal blocks - A1 and A2 - at Motaize, in Tete Province of Mozambique, are spread over 200 sq km.



CIL has proposed a capital outlay of Rs 25,400 crore in the 12th Five Year Plan, plus an ad-hoc provision of Rs 35,000 crore to acquire coal assets abroad and develop the acquired coal blocks in Mozambique, according to the coal PSU.



The capital expenditure for current fiscal has been envisaged at Rs 5,000 crore, along with additional ad-hoc provision of Rs 4,000 crore to acquire coal assets abroad and develop coal blocks in Mozambique, it said.



The demand-supply gap of coal was 135 million tonne (MT) last fiscal and may widen 185.5 million tonnes in 2016-17.


Source:- economictimes.indiatimes.com





Demand For Diesel Cars Sees A Drop In India

In recent times, fuel pricing is an issue that has been immensely scrutinised by the media, people and experts in India. The scrutiny is quite understandable as prices of fuels have a direct impact on lives of people, whether they are consumers of producers. This premise has great relevance when it comes to the car market in India. The price of petrol or diesel directly affects the running cost of a vehicle. In recent times, hikes in rates of petrol and diesel have had an adverse effect on the consumer sentiment in the country. While petrol has been highly expensive for a while now, it is the rise in price of diesel that has hit the market pretty badly. According to a recent report by TNN, for the first time in a decade, the demand for diesel has gone down.



R S Butola, Chairman of the Indian Oil Corporation, was present at the 3rd World Energy Summit, where he spoke about the demand of diesel in the country. "This year, there has been 0.8-1% de-growth. Small adjustments of 50 paise every month has brought some parity with cost. We believe that market forces need to be allowed to have proper inter-play (on demand and consumption),” he said. The Indian government has adopted stringent policy on the deregulation of prices, wherein it has been increasing the rate of diesel by 50 paise per month for a long time now. This deregulation has affected demand of the fuel in the country.



As far as the Indian car market is concerned, there were reports around the month of August, which stated that sales of petrol vehicles overtook that of diesel ones. Many car makers reported an increase in sales of models powered by petrol engines, thereby signifying the decline in demand for diesel. Customers across the country preferred diesel cars because of cost-effectiveness and fuel economy. However, the difference between price of diesel and petrol has reduced considerably, thereby making people reluctant.



Despite this, many models, which have been immensely successful in 2013, are diesel powered cars. In fact, Hyundai Grand i10 and Honda Amaze, two of the most popular cars in terms of sales, have been achieving such figures due to their diesel variants. Honda Amaze, in particular, has become a hit largely due to its i-DTEC diesel engine, which works on the Earth Dreams technology. Sales figures of Honda Amaze are quite incredible and suggest that a lot of people still prefer diesel cars. The Japanese car maker, even in the future, would be looking to build upon this success by launching City diesel in the January 2014. However, Grand i10 and Amaze are exceptions as there has been a direct decline in demand for many diesel cars. Experts feel that if prices of diesel keep increasing like this, things would definitely worsen for the Indian car market. The state of the Indian economy and international oil prices have adversely affected scenarios.


Source:- cartrade.com





Pakistan's Textile Group Eyeing Surat

08-Dec-2013


The Southern Gujarat Chamber of Commerce and Industry's (SGefforts to establish a strong business tie in the field of textiles with Pakistan seem to have paid off.



For the first time, Pakistan's largest textile manufacturing company Gul Ahmed is participating with its range of fashion products for women, including bed sheets, comforters, multi-needle quilts, decorative pillows, window hangings, table and kitchen linen in the three-day 'Fibre to Fashion' event inaugurated at Surat International Exhibition and Convention Centre (SIECC) on Saturday.



Since its inception in 1953, Gul Ahmed has been a trend-setter in Pakistani textile industry and has serviced a diverse range of customers across the globe.



Gul Ahmed is a vertical textile mill with state-of-the-art spinning, weaving, yarn-dyeing, piece-dyeing, printing (pigment and reactive on rotary as well as flat bed), stitching, embroidery and quilting facilities.



For the first time in the history of Indian synthetic and rayon textile export, Pakistan has emerged as the leading market for fabrics and filament yarn surpassing the United States and Saudi Arabia.



As per the latest figures available from the textile ministry, man-made fabric and yarn export to Pakistan has increased by 25 per cent in 2012-13 at Rs 21 crore compared to Rs 16 crore in the previous year.



Thanks to deeper business tie between traders in Karachi and Surat, around 60 per cent of contribution in the export to Pakistan has come from the country's biggest man-made fibre (MMF) industry in Surat. Surti traders exported dress materials, saris, and fabrics worth Rs 11 crore to Karachi, Peshawar and Lahore.



Senior manager (sales), Gul Ahmed, Rehan Khan told TOI, "Surat is a virgin market for us and we are scouting for joint ventures at the retail level to market our products here. We are also working out a strategy to source man-made fabrics from here for our home and fashion textiles. This is the beginning of our successful partnership with SGCCI and the textile industry here."



SGCCI president Kamlesh Yagnik said, "Gul Ahmed is the largest textile group in Pakistan and we are looking forward to forging cordial business tie with it. We are hoping that in the next fibre to fashion event more and more Pakistani companies would take part. This way would help foster textile business between both the countries."


Source:- timesofindia.indiatimes.com





Cairn Seeks Oil Swaps To Circumvent Export Ban: Corporate India

Cairn India Ltd., the nation’s biggest onshore crude oil producer, is proposing swap deals in the commodity to help skirt the government’s ban on exports that yield higher margins.



Some Japanese utilities and Singapore-based refiners are interested in the high-wax crude extracted from Cairn’s fields in the northwestern state of Rajasthan, Chief Executive Officer P. Elango said in an interview. The company has sought India’s approval for a tripartite agreement that would replenish the exported volume with no loss to any of the parties including the government, he said.



Billionaire Anil Agarwal, who controls Cairn India, is seeking to increase the best profit margin among the biggest Asian oil companies as his metals and mining businesses founder in the South Asian country. Shipping to customers who are best equipped to process the low-sulfur crude may help the company command a premium versus a 15 percent discount on Brent prices it offers to local refiners, including Indian Oil Corp. (IOCL)



“In our case, what we are saying is not exports,” Elango said in New Delhi. “We are saying, let’s do a swap arrangement where this crude can go to another buyer” as some of them have much more value extraction potential of the oil, he said.



Cairn India, based in Gurgaon near New Delhi, has already sent a proposal to the government, which has been “received with an open mind,” Elango said. The three-way deal would essentially require Cairn India to flout India’s ban on crude oil exports, while its local customer makes up for the deficit by sourcing the commodity from an overseas supplier.


Soruce:- www.bloomberg.com





Gold Imports May Fall To 500 Tonne In 2014: Traders

Gold imports are likely to fall steeply next year to around 500 tonne due to rising prices following higher taxes and falling stocks that have put off retail demand, traders said.



"We are expecting gold imports to decline by 20-30 per cent to around 500 tonne in 2014, from around 650-700 tonne estimated this year," All India Gems and Jewellery Trade Federation (GJF) director Bachhraj Bamalwa told . One of the main reasons for this decline is the huge price differential between international and domestic market, which is about 22 per cent higher here, he said.



"While global bullion prices are trading way below at USD 1,250 an ounce, from their 2012 highs of USD 1,908 per ounce in August 22, 2011, back here it is still ruling nearly steady at Rs 31,000 per 10 grams. The differences are mainly due to the Customs duty, local taxes and premiums," he said. This year, he said, gold imports are likely to be at around 650-700 tonne. "There was absolutely no import from July end till September.



It began from October and was robust in November, however, this month it is moderate. The bulk of imports took place in during April-May, when the demand was very high and prices were low," he explained. The government has raised the import duty to 10 per cent and tied imports for domestic consumption to exports to curb Current Account Deficit (CAD) - the difference between outflows and inflows of foreign exchange.



The import for domestic consumption was tied to exports, like out of the imported gold, 80 per cent was given to domestic users of the designated kind and 20 per cent must go to exporter. This led to scarce supply of the precious metal and boosting premiums to USD 150 an ounce.


Source:- timesofindia.indiatimes.com





Heavy Ind Min Concerned Over Higher Ecb Cap For Power Projects

The Heavy Industries Ministry has raised concerns over enhanced external commercial borrowing limit for funding domestic power projects, citing that the move adversely impacts local gear makers including BHEL.



The red flag comes at a time when the domestic power equipment makers are grappling with tough business conditions amid sluggish growth, stiff competition and cheaper imports.



"The Reserve Bank of India's decision to enhance ceiling on External Commercial Borrowings (ECBs) for financing of domestic power projects has further affected the prospects of domestic power equipment makers," an official said.



In this regard, the Heavy Industries Ministry has also written to the Finance Ministry, he added.



The major concern is that higher limit for raising funds overseas also facilitates sourcing of equipment from outside the country for power projects. Such a scenario adversely impacts the business prospects of domestic equipment makers.



Many Indian entities have sourced equipment for their power projects along with finance from overseas, especially from China.



As part of efforts to boost capital inflows into the country, the RBI recently eased ECB norms.



In September, the central bank allowed all types of companies to avail trade credit facility from overseas for import of capital goods.



"On a review, it has been decided to allow companies in all sectors to avail of trade credit not exceeding USD 20 million up to a maximum period of five years for import of capital goods as classified by Director General of Foreign Trade (DGFT)," RBI had said.



Earlier, only companies in the infrastructure sector were allowed to raise such trade credits.

Currently, local players, including state-owned BHEL, are going through a difficult period, especially from 2011-12.



Besides cheaper imports, weak investment sentiment, financing constraints and lack of level-playing field with regard to foreign competitors are hurting the domestic entities.



"... Some of the existing power projects are going slow or are being put on hold due to customer's constraints in releasing payments for deliveries and other constraints faced by them thereby curtailing progress of their projects," the official said.


Source:- zeenews.india.com





Rupee Hits 4-Month High Of 60.84 Against The Dollar

The rupee and bonds rallied on Monday after the country's main opposition party, BJP, which is widely seen by investors as being more business friendly, performed well in state elections.



The Bharatiya Janata Party (BJP) was the clear winner in three big states that went to the polls according to results on Sunday, with the count close in a fourth.



The partially convertible rupee was trading at 61.04/05 per dollar at 0913 IST (0343 GMT), after hitting as high as 60.84 to the dollar at the open, its strongest level since August 12. It had closed Friday at 61.41/42.



The benchmark 10-year bond yields fell 4 basis points to 8.81 percent.


Source:- profit.ndtv.com





CLB's order was not an infructuous order merely on non-service of oppression application to Governme

CL : Merely because notice of application/petitions under section 397/398 is not served on Central Government, CLB's order would not be invalid


Saturday, 7 December 2013

CBDT revises work distribution in Foreign Tax and Research Tax division

IT/ILT : Revision of work distribution in Foreign Tax and Tax Research (FT&TR) division under Central Board of Direct Taxes (CBDT)


CIT exercised revisionary power as AO accepted facts on their face without carrying out necessary en

IT: Where Assessing Officer did not make any enquiry on issue of outstanding credit and accepted fact on its face value, Commissioner was justified in setting aside assessment order


Principle of res judicata can override contrary ruling of Supreme Court; CESTAT rules in assessee's

Excise & Customs : Where earlier judgment of Tribunal in case of very same assessee had been accepted by Department, principle of res judicata is applicable and judgment of Tribunal will govern case despite contrary Supreme Court judgment


CIT can't exercise his revisionary power on an issue carefully considered by AO if CIT states nothin

IT : Where Assessing Officer, during course of original assessment proceedings, delved deep into question of deduction under section 80HHF and was satisfied that deduction made were as per law, Commissioner could not revise amount without recording contrary finding


Civil court has no jurisdiction to entertain suit against search proceedings made under IT Act

IT: Civil court has no jurisdiction to entertain suit against proceeding for search and seizure which were taken under section 132


Hamali charges aren't includible in value of yarn for levying excise duty

Excise & Customs : Hamali Charges, which were post-manufacturing expenses incurred after removal of goods from factory, cannot be included in value of yarn for levy of excise duty