ITAT allows sec. 11 relief to a trust investing in shares of Co-op. bank as collateral for raising o

IT: Where impugned shares in co-operative banks had been acquired by assessee-trust as a pre-condition for raising loans from co-operative banks to be used for furtherance of its objects, acquisition of shares cannot be considered as an 'investment' within meaning of section 13(1)(d) read with section 11(5) to disallow exemption under section 11

Demand can't be confirmed on basis of evidences not relied upon while issuing show cause notice

Excise & Customs : All materials which are relied for adjudication of demand/imposing of penalty must be supplied to assessee; demand confirmed on basis of material not relied upon at time of issuing show cause notice was set aside

Starting production before seeking registration as software park won't nullify sec. 10A claim

IT: Where mere fact that assessee initiated production in 1999 prior to its registration as STPI in 2002, would not disentitle it from claiming benefit under section 10A

Private Cos, Dealer Network Facilitated Growth Of Bt Cotton In India: Study

A chain of farmers, technical personnel from private seed companies and network of retailers, dealers and distributors facilitated the swift and sometimes controversial growth of Bt technology among cotton farmers of India.



According to a survey conducted among 2,400 cotton farmers spread across Maharashtra, Andhra Pradesh and Punjab, the financial support system extended to cotton growers by cooperative banks and ginners also helped in adoption of this technology.



Bt cotton was commercialised in India in 2002 and since then adoption of the technology has grown at a rapid pace across the country, so much so that almost 93% of the total cotton sown in the country is now Bt cotton.



In 2012-13, cotton was sown in around 11.61 million hectares, while this year it is almost at the same level or slightly on the higher side because of good southwest monsoon. Cotton production in 2012-13 was estimated to be around 34 million bales (1 bale=170 kilograms), while in 2013-14 cotton year it is expected to be around 35 million bales. Cotton year runs from October to September.



“The demonstration by private seed companies in the fields of progressive farmers and mobilisation of farmers to these demonstrations was the most convincing and appealing methods that triggered a large scale adoption of Bt cotton in the villages,” the study said.



It said that Bt cotton technology has attracted young farmers to cotton farming in the country. "Bt cotton technology attracted young farmers to cotton farming, with more than 50% of the surveyed farmers coming from the lower middle age group in Maharashtra, Andhra Pradesh and Punjab," the report said.



Bt cotton farmers reported an average net profit of Rs 41,837 per hectare at the national level. The highest profit was in the Punjab at Rs 53,139 per hectare followed by Rs 39,786 in Andhra Pradesh and Rs 32,885 per hectare in Maharashtra, the report said.



In the states surveyed a substantial decrease of 82.8% in insecticide sprays was realised, while achieving 99.3% control of the American bollworm pest, it added.



Farmers in Maharashtra reported 78% reduction in insecticide sprays, 82% in Andhra Pradesh and 98% in Punjab, the report said.

Source:- business-standard.com

Discount paid by telecom co's on sale of recharge coupons would constitute commission liable for sec

IT : Discount paid to distributor by cellular operator for selling mobile recharge coupons constitutes commission payment liable for TDS

Value of domestic clearance may differ from value of export clearances for excise purposes

Excise & Customs : Every assessment is a separate assessment; therefore, value of domestic clearances may differ from value of export clearances for excise purposes

Iran Facing Difficulties In Exporting Its Oil

India has asked Iran to provide financial guarantees before Delhi continues to allow vessels with Iranian insurance cover to enter Indian waters, the latest sign of difficulties Iran is facing in exporting oil.

Iran and world powers reached a breakthrough agreement last month over Tehran’s disputed nuclear programme that allowed the Middle Eastern nation to continue oil shipments at current levels of about 1 million barrels per day (bpd).

India’s latest request, however, shows the struggle OPEC member Iran still faces in maintaining steady oil shipments.

International sanctions on Iran have made it difficult to insure refineries and ships involved in trade with Iran and forced India to settle 45 percent of oil payments in rupees through state-owned UCO Bank while refiners are withholding the remainder.

India is the second-biggest market for Iranian oil after China and India and Iran last week held discussions on ways to settle oil trade in hard currencies like dollars and euros. But no mechanism has been finalised yet.

In September India granted a three-month extension to Iranian underwriters Kish P&I and Moallem Insurance Co for insuring oil tankers and ships calling at Indian ports after Tehran provided a $1 billion sovereign backing.

India has sought financial security in the form of bank guarantees from Iran as sanctions by the United Nations, the United States and the European Union have reduced acceptability of the Iranian rial, according to a letter seen by Reuters.

India’s Deputy Nautical Advisor, Deepak Kapoor, sent the letter to Iran’s Economic Affairs and Finance Ministry on Dec. 10 ahead of a renewal of approval to the Iranian underwriters on Dec. 27.

India imported 47 percent less oil from Tehran in October from a year ago, helping New Delhi get a six-month waiver from the U.S. sanctions in December.

At the end of November Indian refiners owed about $2.2 billion for partial payments to Iran, while about $3 billion worth of rupees paid by refiners is lying in Tehran’s account with UCO Bank.

India has asked Iran to provide a bank guarantee for 23 billion rupees ($369.98 million) from its account with UCO Bank as “a precautionary measure to cover any potential claims that may arise due to maritime incident in Indian waters”.

India imports oil from Iran in Iranian vessels, while Indian exports to Iran of non-oilcommodities and industrial goods use the vessels of Iran’s Hafiz Darya Shipping Lines (HDS) and Safiran Payam Darya Shipping Lines (SAPID).

An early submission of a bank guarantee would enable India’s shipping ministry to consider further extension of conditional authorisation to Moallem Insurance Co and Kish P&I Club beyond Dec. 27 and promote bilateral trade, the letter said.

Deepak Kapoor and the head of India’s shipping regulator, Gautam Chatterjee, did not respond to Reuters’ calls for comment.

EU sanctions against Iran in place since mid-2012 bar members of Europe’s International Group of Protection and Indemnity (P&I) Clubs – who include most insurers that cover the tanker market – from insuring Iranian oil and other shipments, leading to the emergence of untested insurance providers. ($1 = 62.1650 Indian rupees)

Source:-yalibnan.com

Iran Backs Deep-Sea Gas Pipeline To India

Iran is focusing on exporting natural gas to India along a deep-sea route — the move coinciding with the cancellation of a loan to Islamabad to build the Pakistani section of the Iran-Pakistan gas pipeline and the signing of the Geneva nuclear accord that could help relax sanctions against Tehran.

“Negotiations were held with three Indian companies for [their] purchase of gas from Iran, and general agreements have been reached,” said Ali Amirani, director of marketing at the National Iranian Gas Exports Company (NIGEC), as quoted by the Tasnim news agency.

He added that India’s South Asia Gas Enterprise Pvt. Ltd. (SAGE) had conducted feasibility studies for the multi-billion-dollar undersea pipeline, which could carry gas from Iran’s giant South Pars gas field to India’s west coast. Mr. Amirani said the project cost estimated by the company was $4-5 billion. Once operational, it could channel 31 million cubic meters of gas per day.

“We are in regular touch with the Iranians and at this moment they are the only country, among energy rich nations of the Persian Gulf, which has the surplus gas to export to India,” said Subodh Kumar Jain, Director SAGE, in a telephonic conversation with The Hindu. He added that there were no technical hurdles to build the deep sea pipeline, and the project, which was financially viable, could be completed in 4-5 years, once the sanctions against Iran are lifted. “There could be several options but one of them could be bringing Iranian gas to the port of Chabahar from where it could either be transferred directly along the seabed or via Oman, which could also become a beneficiary”.

Iran’s interest in the India-centric project coincides with the cancellation of its $500-million loan to Pakistan to build part of a pipeline to funnel natural gas. Iran’s deputy Oil Minister Ali Majedi said cash-strapped Iran was not obliged to finance the Pakistani side of the project.

In boosting exports, the Iranians have identified countries which could be linked with cost-effective pipelines to receive gas, and others which will have to depend on LNG tankers. “The Indian Subcontinent, Turkey and Europe are good markets for pipeline gas exports from Iran and the next step will be exporting cargoes of LNG for countries located farther,” said Iran’s Oil Minister Bijan Namdar Zanganeh. He added that Iran had a solid opportunity to strengthen exports as no other country in the Persian Gulf, except Qatar had any surplus to sell gas abroad.

Source:-thehindu.com

Bid to buy at lower price isn't a crime; buying listed shares as per market mechanism isn't against

SEBI: Where appellant group placed bids, bought and sold in scrip of a company as per market mechanism, rules and regulations at par with other group which had been exonerated, appellant should not be held guilty of violating SEBI Act and Regulations

Coal Stocks At 16 Indian Ports Rise 3% On Week To 10.6 Mil Mt

Stocks of imported coal at 16 major ports in India stood at 10.6 million mt as of December 14, up 2.9% from 10.3 million mt a week earlier, data released Saturday by shipbroker Interocean Group showed.

The stockpiles comprised 8.3 million mt of thermal coal, down 4.6% from 8.7 million mt a week before, and 2.3 million mt of coking coal, up 53% from 1.5 million mt the previous week, the data showed.

The 16 ports surveyed by Interocean were Mangalore, Tuticorin, Kakinada, Paradip, Kandla, Gangavaram, Vizag, Krishnapatnam, Muldwarka, Bhavnagar, Pipavav, Goa, Dahej, Magdalla, Hazira and Haldia.

The Paradip port on the east coast had the highest coal stocks as of December 14 at 1.9 million mt, up 19% from 1.6 million mt the previous week.

Haldia port on east coast had the highest stocks of coking coal at 515,700 mt, down 10% from 575,950 mt a week earlier, Interocean data showed.

Source:-platts.com

India’S Gold Jewellery Exports Dip In November

The restrictions imposed by the Indian government on its gold imports have dampened supply of gold in the domestic market. Attributed to this, the Indian gold jewellery exports dipped almost one-third (on y-o-y basis), in November 2013. The said exports valued $476.1 million over $693.62 million in November 2012, reports say.

Although demand for gold jewellery has seen improvement in the international prices, and gold prices dipping, the restrained supplies in India have compelled high premiums. The industry is not hopeful for a quick recovery, to meet seasonal demand, reports say.

The import duty on gold was raised to 10 percent over successive increases the RBI also mandated that one-fifth of the gold imported is required to be exported.

Source:- diamondworld.net

Indian Rupee Up 39 Paise After 3-Day Losses After Rbi Said To Step In

The Indian rupee gained for the first time in four days today, appreciating 39 paise to 61.73 against the US dollar, amid indications the RBI had stepped in to support the local currency after a spate of weak economic data.

The Indian rupee also rose on fresh US dollar sales as the US currency weakened overseas before the Federal Reserve meeting.

The local currency recovered from early losses even as government data showed wholesale price index (WPI) inflation climbed to a 14-month high of 7.52 per cent in November, strengthening chances of a rate hike by the Reserve Bank at its policy review meeting on Wednesday.

Fresh capital outflows and weak local equities failed to negatively affect the rupee, a forex dealer said.

At the interbank foreign exchange market, the rupee opened lower at 62.15 a US dollar from Friday's close of 62.12 and declined further to 62.24 amid hesitancy in local stocks and dollar demand from importers.

It recovered as exporters and some banks sold dollars to settle at the day's high of 61.73, a rise of 39 paise or 0.63 per cent.

"Indian rupee was seen giving a muted reaction to the poor WPI data released today as RBI was seen selling dollars in the market. The central bank is seen coming to the rescue as economic indicators are trying to put pressure on the Indian rupee," said Abhishek Goenka, CEO of India Forex Advisors.

Retail inflation soared to 11.24 per cent last month, while factory output contracted 1.8 per cent in October.

The 30-share benchmark S&P BSE Sensex declined for the fifth day in a row and lost 56 points. Overseas investors pulled out a net Rs 432.02 crore from stocks last Friday, according to provisional data with the stock exchanges.

The US dollar index was down 0.21 per cent against a basket of six major global rivals ahead of the Federal Reserve meeting starting tomorrow. The Fed may indicate when it will tapering its stimulus programme.

"Indian rupee appreciated by over half per cent mainly taking cues from dollar index which is trading weak for the second consecutive day," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).

Source:- financialexpress.com

ITAT slams revenue for invoking sec. 194C on sums paid to NR shipping companies

IT/ILT : Provisions of section 194C are not applicable if goods are dispatched through non-resident shipping companies or through their resident agents

Wrong claim made merely due to misinterpretation of amended provision won't attract concealment pena

IT : Wrong claim made merely due to misinterpretation of amended provision won't attract concealment penalty

Manufacturer may take credit on basis of its own invoice in case of return of duty-paid goods to fac

Cenvat Credit : In case of return of duty-paid goods to factory following procedure under Rule 16 of Central Excise Rules, 2002, assessee may take credit of duty paid on returned goods, based on manufacturer's own invoice

Leasehold right in premises is an intangible asset, eligible for depreciation at 25%

IT : Payment made to acquire leasehold rights in premises for carrying on business to be recognized as intangible asset eligible for depreciation at rate of 25 per cent

ITAT weighs past experience to fix reasonable provision for warranty needed in relevant year

IT : Provision for performance warranty should be considered on basis of past data of warranty expenditure

Mobile crane 'reach stacker' is heavy goods vehicle, eligible for 40% depreciation

IT : Mobile crane 'reach stacker' is a heavy goods vehicle, eligible for depreciation at rate of 40 per cent

Credit of additional duty of custom is available even if paid through debit in DEPB scheme

Cenvat Credit : Debit of any amount under DEPB Scheme is a mode of payment of duty on imported goods; therefore, assessee was entitled to Cenvat credit of additional duty of customs paid through debit in DEBP scheme

Merchant-exports are entitled to full duty drawback including on the excise duty portion

Excise & Customs : Rule 3 of Drawback Rules, 1995 does not make any distinction between manufacture/job work exporters and traders/merchant exporters; therefore, drawback (inclusive of excise duty portion) is available to merchant-exporters as well even for period prior to issuance of Circular No. 16/2009-Cus.

ITAT weights past experience to fix reasonable provision for warranty needed in relevant year

IT : Provision for performance warranty should be considered on basis of past data of warranty expenditure

Interest paid by Indian branch to its foreign head office not taxable in India; no disallowance for

IT/ILT : Where Assessing Officer did not inquire into detail of expenditure incurred by Indian branch of Belgian bank in respect of services of credit analysis, etc. provided by head office, same was to be remanded back for consideration

Payment of duty on non-dutiable products tantamounts to reversal of credit taken in respect thereof

Cenvat credit : If duty is paid on final product and credit is availed and subsequently it is found that duty was not payable on final product, discharge of duty liability on final product by assessee would, prima facie, amount to reversal of Cenvat credit

Iran To Continue Importing More Goods From India

Iran will continue to increase imports from India despite a recent deal with Western powers that has eased economic sanctions against it in exchange for curbing its nuclear ambitions.



“A team of senior officials from Iran, who visited India recently, assured us that the West Asian nation is serious about continuing to engage more with India as we had stood by them in its time of trouble,” a Commerce Ministry official told Business Line.



The assurance has put to rest speculation that Iran may look at other trading partners more earnestly now that the sanctions regime was ending.



The key reason for the apprehension of a cutback in imports from India, according to industry observers, was India’s stance at the time of sanctions. India, seemingly under the US pressure, had drastically reduced crude oil imports from Iran, while nations such as China had sustained imports within the permissible limits.



The P5 plus One grouping of the major Western powers last month agreed to relax economic sanctions worth $7 billion in return for Iran’s promise to curb some of its nuclear activities. Iran will be watched (for any escalation in nuclear activity) for six months after which a permanent solution will be worked out, according to the deal.



India’s exports to Iran have more than doubled over the last two years and is likely to cross $5 billion this fiscal, aided chiefly by intensive business-to-business interactions by the two Governments. In fact, to sustain business even during sanctions, India and Iran had put in place a rupee payment mechanism for continuing oil trade. This was because foreign banks had refused to deal with Iran fearing action by the US.



Both nations had then started a joint effort to increase India’s exports to Iran so that the rupee payment for oil deposited in Iran’s account could be gainfully utilised. India imports petroleum products worth over $10 billion from Iran.



There has been buzz recently that Iran wants to do away with the rupee mechanism, while India sought for full payment of oil imports in the rupee. At present, India makes 45 per cent of its oil payments in rupees, which Tehran uses to purchase items such as rice, soyameal, tea, pharmaceuticals, and automobile parts. India pays the remaining trade balance in euros, but this too had been hit due to sanctions.



On whether India would seek full rupee payment for oil imports, Minister of State in the Ministry for Petroleum & Natural Gas Panabaaka Lakshmi had informed the Lok Sabha earlier this month that there was no such proposal.



According to Ajay Sahai, Director-General, Federation of Indian Export Organisations, every month letters of credit worth Rs 2,500 crore are being opened (by banks on both sides that are part of the rupee payment mechanism) which demonstrates that things are on the right track. “We are optimistic that exports to Iran would be to the tune of $5.5 billion this year,” Sahai said.



A delegation of Indian exporters led by FICCI is at the moment in Iran as part of the ongoing efforts to step up exports.

Source:- thehindubusinessline.com

Clay Craft India Plans To Set Up A Skill Development Center.

India's fastest growing manufacturer and retailer of bone china and ceramic tableware, Clay Craft India plans to set up a Skill Development Center at Ringus, Rajasthan. Group aims to train 2500 workers every year and in turn expects the growth if the industry by providing the skilled workers to the fine bone china and ceramic industry.



As per industry sources, Indian fine bone china and ceramic tableware industry's size is nearly Rs. 700 Cr. including organised and unorganised segments. Due to anti-dumping duty imposed on China by European countries, the export demand for Indian players is now growing at a rate of 30-35% comparing to earlier years. To meet this increasing demand, it is also expected that Indian players will double their production capacity and skilled labour will be also required.



Mr. Rajesh Agarwal, Director of Clay Craft India, says, "Indian fine bone china and ceramic industry is currently facing the 50% shortage of skilled labour. To meet the industry growth, the skilled labour supply will be the crucial point for any company's management. Our aim is to generate the skilled workers for the industry and in turn this will also help industry to develop the product quality standards to compete international market."



He further added, "We have purchased a land at Ringus-Jaipur and are planning to launch this center in by the end of 2014. Initially, we will provide training to existing workers for giving them technical learning and refining their skills by classroom training and factory training both. Later, we will also invite entries of freshers to make their career in fine bone china and ceramic industry."



This is the first of its kind initiative taken by any company in this industry. Clay Craft is planning to invest nearly Rs. 5 Crore to set up this center. This institute will also provide recruitment opportunities in this industry through the campus recruitment cell. Going forward, the group shall plan to launch few more such skilled development centers in other cities of country.



Source:- equitybulls.com

Illegally Mined Iron Ore Was Exported To China

Investigations into Jabalpur iron ore mining case in which top officials of city-based Indian Bureau of Mines (IBM) have been booked have revealed that huge quantities of the mineral allegedly to be illegally extracted from the mine finally reached China. The case came into limelight this September as CBI booked three senior officials including the second-in-command of IBM, the government agency for regulating mining operations. Two Jabalpur-based businessmen Sumit Agrawal and Pradip Mittal running M/s Pacific Exports the company which was allotted the mine were booked too.



The company has been charged with having extracted iron ore much beyond what it was permitted to. The IBM had fixed the limit of extraction at 80,000 tonnes a year from the mine at Selora Tehsil in Jabalpur district. Within seven months of the first year of operations, 17 lakh tonnes were mined. The value has been pegged at over Rs 1,000 crore.



The market was so flush with iron ore from this company that even sponge iron manufacturers for whom it is a raw material exported it in sizable quantities, said sources. These include quite a few firms from Madhya Pradesh and Chhattisgarh. The transactions were routed through various layers.



M/s Pacifc Exports mined the ore and sold it to different companies that included domestic sponge iron makers who ultimately exported the commodity. CBI is now looking whether sponge iron manufacturers are allowed to export ore they ostensibly buy for own consumption, said the source. The process of ascertaining the quantum of iron ore exported was underway for which the amount mined will have to be exactly assessed first, the source said.



However, sources in this industry said iron ore exports being free, there was no bar on even the sponge-iron makers selling the commodity abroad. "Certainly there is a shortage of iron ore in the country now after the crackdown on mines in Bellary pushing the rates to as much as Rs 7200 a tonne from Rs 4,000 earlier. Exports are further worsening domestic availability," said a senior officer in a city-based iron and steel unit.



Most of the consignments reached the Vizag port in Andhra Pradesh from where it was shipped to China. The investigators have compiled a list of around 50 companies that purchased the ore from M/s Pacific Exports and its related concerns. CBI is learnt to have started correspondence with these companies and some have confirmed having purchased the ore.



The affair is being dubbed as another Bellary and the IBM officers booked by the CBI are alleged to have turned a blind eye even as the rampant mining beyond the permitted limit continued. IBM did not hold a single inspection though it was mandatory soon after production crossed half the limit.

Source:- timesofindia.indiatimes.com

As Exports Fall Short Of Mark, Govt Sets $500B Target For Fy17

The government will come out with a new three-year export strategy soon to reset India’s merchandise export target beyond $500 billion a year by 2016-17. It is to be noted that the target for the three years ending in March will be missed by a wide margin.



“We are resetting our exports target for the next three years. It is expected to be ready by the middle of January. Yes, we did not achieve the target set prior to the global slowdown for three years ending March 2014. Now with the global economy recovering, we are likely to have a three-year target which will be more than $500 billion a year,” a top commerce ministry official told Financial Chronicle.



The new target will be for the three years beginning next April to March 2017.



When the economy was growing by over 9 per cent during 2004-08, India clocked over 22-27 per cent annual growth in exports. But subsequently it fell and for the most part of 2010-11 exports actually declined.



Later, with a fiscal and monetary stimulus, the economy picked up; so did exports which clocked $246 billion in 2011-12 when the target was $200 billion. Buoyed by this, the government set an ambitious target to double annual exports to $500 billion by 2013-14. This required annual exports growth of 26.7 per cent.



But actual exports are expected to be $325 billion in 2013-14, which the commerce ministry is confident of achieving.



India should be happy to clock 12-15 per cent export growth this year, a trade analyst said. In certain months clocking even double-digit growth appeared difficult, he added.



India’s export growth this year will be nowhere near the 22 per cent annual growth projected in the five-year foreign trade policy, which also expected $446 billion annual exports, analysts say.



There are lessons to be learnt from China, which kept its currency stable for decades, making manufacturing competitive and helping exports grow rapidly. “In India, our currency keeps on depreciating, hiding the deficiencies in our manufacturing,” Atul Joshi, MD and CEO of India Ratings & Research, said.



Unless India’s manufacturing became competitive, it was not possible for our exports to grow at the brisk pace of 25-30 per cent on a sustained basis like China, he said. India had a high economic growth potential, but it would take at least two years for the country to get back to 8 per cent GDP growth, he added.



Government economists say that from a longer-term perspective, accelerating growth in merchandise exports will build up the manufacturing strength of the economy. Production of goods meeting international standards requires awareness of how frontiers of technology and innovation are widening. There were also need to diversify India’s export basket and destination, they say.



The double-digit (11.7 per cent) growth in merchandise exports during July-October can be attributed to a tentative revival of global demand and a low base effect. In aggregate merchandise exports in the first 10 months of 2013 were 5.2 per cent and 2.6 per cent higher than in the corresponding periods of 2012 and 2011, respectively, India Ratings said in a report.



In the absence of any further global shocks and continuation of the easy money policy in the US and the euro zone, the revival in India’s export growth is likely to be sustained with a marginal positive bias, the report says.

Source:- mydigitalfc.com

India Likely To Meet Export Target Of $325 Bn

Industry bodies have exuded confidence that country's export target of USD 325 billion for financial year 2013-14 would be met even as growth in overseas shipments slowed to a five-month low in November, reports media.



"Export target for the current fiscal will be achieved easily and November figures may be seen as an aberration. Trade deficit will be within USD 140 to USD 150 billion in the current fiscal as against USD 190 billion recorded in 2012-13, helping to keep CAD (current account deficit) between USD 50 to USD 60 billion," said Rafeeque Ahmed, President, Federation of Indian Exporters Organisation (FIEO).



Exports increased 5.86 percent to USD 24.6 billion in November, the slowest pace in five months, as shipments of petroleum goods and rough diamonds declined. Imports stood at USD 33.83 billion last month, the lowest level since March 2011.



Imports last month fell 16.3 percent as inward shipments of gold and silver dropped sharply, helping to narrow the trade deficit to USD 9.21 billion, the second-lowest in this financial year. The gap in November 2012 was USD 17.2 billion, the report said.



"The continued rise in exports for the fifth month in a row is noteworthy. The first eight months of this fiscal have witnessed a nearly 23 percent decline in the cumulative trade deficit, which will considerably ease the pressure on the current account deficit and make the rupee more stable," Ficci president Naina Lal Kidwai said.



In April-November, exports grew 6.27 percent to USD 204 billion while imports stood at USD 304 billion.



"While a significant fall in trade deficit is a good development...it is largely a result of a steep import compression rather than a smart rise in exports," said Anupam Shah, chairman of engineering exporters body EEPC India.



"Falling imports are a welcome sign at this juncture. However, fall in the imports of capital goods owing to less investment activity and rising imports of consumer goods does not augur well," ASSOCHAM Secretary General, D S Rawat said.



"The evolving trend strongly indicates that India's trade balance in 2013-14 would improve. While exports may touch USD 325 billion, imports are expected to fall to USD 450 billion.



Gold and silver imports in November dipped by more than 80 percent from a year earlier to USD 1.05 billion. Oil imports dropped 1.1 percent to USD 12.96 billion.



"Compression of imports is a factor...However, we will be able to meet export target of USD 325 billion," said Sanjay Budhia, chairman of the CII Committee on Exports and Imports.



"The government should come out with a scheme to expand new products basket, duty drawback rates should be restored. Besides, the government should take a holistic view and make special economic zones viable," he added.



Source:- smetimes.in

Uttarakhand Should Be Made Sez: Narendra Modi In Dehradun

Addressing a rally of around 80,000 people at Dehradun in Uttarakhand on Sunday, BJP PM candidate Narendra Modi expressed his anguish over the manner in which the Central government handled the natural crisis.

He raised objections over the treatment meted out to him when he had come at the time of rescue and rehabilitation operations after the tragic natural crisis that left many pilgrims dead, injured and stuck without supplies. "I had come here to perform my duty but the government did not allow me," he said.



Modi lauded the brave men and women of Uttarakhand, whom he said have always made for fearless soldiers and dedicated servants to the national cause.



Speaking on the economic situation of Uttarakhand, Modi said he would like to see it being made into a Spiritual Environmental Zone (SEZ). That would enable greater number of people to visit the area and in turn help the localites ease their economic pressures.



Both Modi and BJP president Rajnath Singh were vocal against the Congress and the UPA government on a number of issues ranging from the mismanagement of borders to widespread corruption.



"The PM wants us to welcome intruders rather than dragging them away with our might. The ruling goverment has no respect for our soldiers even after they give their lives to defend the nation," Singh said.



Modi cited the recently concluded state elections as a signal for what is to come in 2014. "What four states did to Congress, whole India will do in the General Elections," he said.



Modi also hailed the legacy of Atal Bihari Vajpayee, who headed the NDA coalition government and served as the Prime Minister between 1998 and 2004, and was responsible for separate statehood for Uttarakhand. "We are his proud heir. He gave us Uttarakhand and now its my responsibility to fulfill his dreams," he said.



Recalling the tenure of the NDA at whose helm was the BJP, Rajnath Singh said, "Vajpayee is the real son of the soil and Narendra Bhai will now take the things further."



The rally was held at the local Parade Ground where, due to threats, the security was stringent. Despite that, locals turned up in numbers to hear the BJP PM candidate whose influence is steadily growing as the country gears up for the elections to the Lok Sabha next year.



Source:- indianexpress.com

Rise In Legal Gold Import

15-Dec-2013

Customs authorities have said that gold brought in by air passengers through the legal channel at the Kochi airport has jumped multifold while smuggling has ebbed.



While gold brought in by passengers, mostly from Dubai and other Gulf destinations, by paying the import duty in September was just 3.26 kg, it shot to 62 kg in the first two weeks of December. Since September, the import duty on gold collected at Kochi was Rs. 2.30 crore.



However, the smuggled gold seized was 20 kg in September. This dropped to zero this month. In November, 11.21 kg of gold was seized. Of this, 11 kg was from 54 Sri Lankan nationals arriving from Colombo.



Following a series of gold seizures, the Customs authorities intensified checking of passengers and their baggage deploying more personnel and using advanced equipment.



In the wake of the Central Government’s imposition of hefty duties and restrictions on gold imports, there had been a jump in smuggling through Kerala’s three international airports. A substantial part of the smuggling was from Dubai and other Gulf countries.



While the smuggling was mostly by carriers hired by smuggling rackets, the gold brought in through the legal channels was mainly by non-resident Keralites working in the Gulf.

Source:- thehindubusinessline.com

Self-proclamation of being leader in an Industry doesn't establish dominance, says Competition Autho

CL : Self claim of being 'biggest' or 'No.1' by companies do not amount to establishment of dominance as required under Competition Act

Transport subsidy aiming to reduce production cost eligible for sec. 80-IA relief, rules Guahati HC

IT: Transport subsidy is eligible for section 80-IA relief

AO can reject use of multiple year's data for TP study if this data has no influence on fixation of

IT/ILT: Where assessee was unable to point out that data of earlier years had influence on determination of transfer prices in relation to transactions being compared, use of multi-year data by assessee in its TP study was rightly rejected

Case in assessee's favour causes waiver of pre-deposit requirement even in absence of financial hard

Excise & Customs : Financial hardship is not sole criteria for dispensation of requirement of pre-deposit; if an assessee has a good prima facie case in appeal, pre-deposit should be dispensed with

CLB to be extremely cautious while rejecting oppression petition on technical grounds, directs HC

CL: CLB cannot reject petition under section 397/398 on highly technical ground

Revenue can’t ask manner of tax calculation or insists on lump-sum payments; CBEC clarifies on amnes

ST : Chapter VI of The Finance Act, 2013 - Service Tax Voluntary Compliance Encouragement Scheme - CBEC Clarifies That : (A) Assessees May Deposit First Tranche of 50% Up To 31-12-2013 in Instalments, (B) Declaration May Be Furnished For Part Period Out of Period Covered by Scheme; and (C) Department Cannot Ask For Manner of Calculation of Tax Dues, Except Checking Arithmetical Accuracy

Profit on sale of shares taxable as capital gains if such shares were deemed as investment in prior

IT : Where most of shares were from brought forward holding from preceding years which had been accepted as investment in earlier years and further assessee was maintaining separate account for investment as well as stock in trade of shares, sale proceeds of such shares were to be treated as capital gains and not business income

HC unfreezes Nokia’s assets; clears way for sale of Nokia’s mobile phone business to Microsoft

IT/ILT : Delhi HC allows transfer of assets (under provisional attachment) to Microsoft subject to foreign parent's liability to pay tax dues of Nokia India to the extent of dividend received from Nokia India even when tax disputes were pending and provisional attachment of assets was under challenge in writ petition

RBI bans residents of Hong Kong or Macau from opening branch offices in India

FEMA/ILT : FEM (Establishment in India of Branch or Office or Other Place of Business) (Amendment) Regulations, 2013 - Amendment in Regulation 4

Revenue can’t ask manner of tax calculation, insists on lump-sum payments; CBEC clarifies on amnesty

ST : Chapter VI of The Finance Act, 2013 - Service Tax Voluntary Compliance Encouragement Scheme - CBEC Clarifies That : (A) Assessees May Deposit First Tranche of 50% Up To 31-12-2013 in Instalments, (B) Declaration May Be Furnished For Part Period Out of Period Covered by Scheme; and (C) Department Cannot Ask For Manner of Calculation of Tax Dues, Except Checking Arithmetical Accuracy

CIT can't direct AO to apply different ways of income computation in respect of one of projects

IT: Where assessee had been consistently following project completion method in respect of his two projects, Commissioner was not justified in directing Assessing Officer to compute income of assessee from one project by applying percentage completion method

Assessee can't seek rectification for issues to be raised by him in cross-objections

Excise & Customs: When revenue files an appeal, assessee should file cross-objection and in absence of a cross-objection, Tribunal is not bound to consider issues that are not raised in revenue's appeal in rectification proceedings initiated by assessee.

Payment to unregistered co-owners proves fatal for registered owner; latter held taxable on entire c

IT: Where there was no materials to show that alleged co-owners had any title over property, payment made to them by assessee out of sale consideration of property could not be deducted in computing capital gains

IRDA releases master circular for insurers on preparation of financial statements and filing of retu

INSURANCE : Master Circular on Preparation of Financial Statements and Filing of Returns: Life Insurance Companies

Lease line and VSAT charges paid to stock exchange out of ambit of sec. 194J, Mumbai ITAT rules

IT : Assessee is not required to deduct tax at source under section 194J in respect of lease line charges and VSAT charges paid to stock exchange

Disputed tax liability isn't deductible in computing value for excise duty purposes

Excise & Customs : Only tax actually paid or payable is liable for deduction from assessable value; therefore, sales-tax liability disputed by assessee cannot be allowed as deduction unless it has been converted into actually tax liability

No denial of drawback if assessee was not guilty of delay in realization of export proceeds

Excise & Customs : Once sale proceeds are realized and realization certificate is issued, said aspect must be considered by concerned authority for grant of drawback, especially when assessee had already moved to RBI for extension of time of realization of proceeds in terms of FEMA Regulations

Application to rectify an ITAT's order supported by a request to consider one more argument rejected

IT : Where Commissioner (Appeals) considered all grounds raised by assessee in respect of applicability of provisions of section 194H in respect of recharge coupon and Tribunal affirmed such order, application seeking rectification of order of Tribunal for non-consideration of ground raised by assessee was not maintainable

Travelling cost reimbursed to NR by its Indian client shall be excluded from income taxable in India

IT/ILT: Reimbursement of expenses would not be liable to be included in income

Tribunal slams revenue authorities for enforcing recovery during continuity of stay

Excise & Customs : Revenue authorities cannot undertake recovery during continuation of stay especially when stay was not challenged and was binding on revenue authorities

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

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

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