No evasion penalty on wrong availment of credit if credit was reflected in records and returns were

Excise : Where credit is availed by reflecting same in statutory records and proper ER-1 returns are being filed and issue involved was one of legal interpretation of provisions of law, it cannot be said that there was any suppressions or misstatement with any mala fide intent on part of assessee, so as to levy penalty

Statement given freely during search puts an estoppel against assessee from retracting; HC affirms a

IT: Where assessee had freely given statement that deposited amount belonged to him and authority had acted on same, assessee could not retract his statement

Now, Onion Over-Supply Leads To Crisis

The government seems to be facing another onion crisis. If just a month ago it was scarcity and high prices that forced the government to almost stop export, this time abundant production and crashing prices is likely to cause unrest among onion growers ahead of the general election.



There were reports of farmers halting business in Nashik on Tuesday as the wholesale price touched Rs 9.5 per kg at Asia's largest onion mandi, Lasalgaon. Though for the past one month farmers' leaders and observers had been maintaining that the huge supply can be addressed only by substantially reducing minimum export price (MEP) for onion or scrap it altogether, the government has now reduced it by about 30%.



In November, the crisis of onion was so acute, with the vegetable selling at Rs 80 per kg, that the government almost stopped export, increasing the MEP to make overseas selling unviable. But with the wholesale price of onion now touching as low as Rs 9-10 per kg and likely to fall to Rs 5 in next one month, the government has taken a U-turn to promote export. The MEP has been reduced from $1,150 per tonne to $800.



While farmers have demanded that it should fall further to $300 so that Indian produce finds takers in the international market, experts feel the government and state agencies' failure to manage the crisis has been exposed.



"It's not something unusual that there is supply shortage between August and November every year. Steps have to be taken to ensure that the fresh kharif onion reaches markets by October. The summer crop is stored to meet the demand during lean months. The government must incentivize creating more storage space for onion. The summer crop (rabi) can be stored for longer duration," said Hari Prakash Sharma, deputy director (statistics) at the National Horticulture Research and Development Foundation.



He added that the government can help provide incentives such as good quality seed and bulbs which will increase the certainty of the fresh produce reaching markets in October.



Meanwhile, there has been a huge reduction in wholesale prices in the past one month at major mandis across the country.



There were reports of farmers halting business in Nashik on Tuesday as the wholesale price touched Rs 9.5 per kg at the Lasalgaon mandi.

Source:-articles.timesofindia.indiatimes.com

Andhra Govt Plans To Link Research Institutions, Academia And Industry

Taking a cue from the Research Triangle Park in North Carolina, the government of Andhra Pradesh is mulling linking research institutions, academia and industry in and around Hyderabad under the umbrella of Research and Innovation Circle of Hyderabad (RICH), said state minister for major industries, sugar, commerce and export promotion J Geetha Reddy on Wednesday.



"RICH will bridge the gap between industry and academia while encouraging applied research and commercialisation. The initiative is aimed at creating an environment where innovation is encouraged and commercialisation of research is promoted and the formation of new enterprises as well as the growth of small enterprises is supported," Reddy said while speaking at the inaugural session of the TiE Entrepreneurial Summit organised by the Hyderabad chapter of The Indus Entrepreneurs (TiE) on Wednesday.



She also pointed out that the government would be creating a fund named, 'Research to Market Fund' to fund entrepreneurial activity. However, she did not reveal the size of the fund or the timeline for setting up of RICH or the fund.



"RICH and RMF will function autonomously but work in tandem. RICH will be the technology and innovations commercialization entity, while RMF will be the investment arm," she said, adding that the prime focus will be on sectors such as life sciences, food and agri-business, clean and green technologies, IT, manufacturing as well as precision engineering in the area of defence and avionics.



Meanwhile, addressing the summit, Andhra Pradesh governor ESL Narasimhan said that budding entrepreneurs must not only focus on making big bucks but also keep their responsibility towards society in mind.



He said there was a pressing need for innovations in the area of education and healthcare in the country and urged entrepreneurs to actively look at these segments as well.



Giving details about the summit, TES 2013 chair and Peepul Capital managing director Srini Raju said that over the course of three days, more than 100 learning and mentoring sessions with entrepreneurs would be conducted. "Through TES, we are trying to bring together venture capitalists, angel investors, small and medium business owners, service providers, aspiring entrepreneurs, foreign delegates and policy makers onto a common platform to understand the opportunities in various sectors, entrepreneurial ecosystem and get motivated from the success stories of successful entrepreneurs and leaders. We feel such a summit can provide a boost to the overall entrepreneurial ecosystem and lead all stakeholders to an inclusive growth path," TiE Hyderabad president Murali Bukkapatnam said.



Among industry experts and investors who participated in the opening day sessions were Ravi Narayan, director, Microsoft Ventures, serial entrepreneur Jorden Woods, who is also the president and co-founder of Silicon Valley Fundraising, former IIT-M incubator CEO Vijay Anand, Nishant Verman of Canaan Partners, Grant Thornton partner Mahadevan Narayanamoni and TalentSprint CEO and managing director Shantanu Paul.

Source:-indiatimes.com

No treaty relief to charterer of ship as chartering party agreement proved owner of ship as freight

IT/ILT : Where one 'P', a Netherlands based shipping company, chartered a ship, which was owned by an Iranian company, and said ship was engaged by assessee to carry goods from Mangalore to other countries and further charter party agreement executed by Iranian company and 'P' showed that 100 per cent freight charges minus 3.75 per cent commission was payable by 'P' to owner of ship and out of commission of 3.75 per cent, 2.5 per cent would go to 'P' and 1.25 per cent to assessee, assessee was a

Concessional rate of duty applies to DTA clearances made by 100% EOU up to 50% of value of same good

Excise : In case of DTA clearances of 'Turbine wheels' by 100 per cent EOU, concessional rate applies to clearances upto 50 per cent of value of export of 'Turbine wheels'; export clearances of 'Bearing Housing Assembly', which is not similar goods, cannot be considered

Presence of other builders offering residential flats in same area rules out dominance of opposite p

Competition Law : Presence of other builders of repute having similar projects in area as launched by OP rules out dominance of OP in relevant market

Car Exports To Eu May Take Another Beating

Car exports to the European Union, which saw a negative trend beginning two years ago, may face another blow starting January 2014 with the EU set to raise the current 6.5% Customs duty to 10%.



The move, which would significantly increase costs by around INR 15,000 per car, comes as part of the EU’s new policy of denying preferential tariff to exports from developing nations that have become sufficiently competitive and no longer require a tax incentive.



Meanwhile, Indian auto makers are grappling with the declining demand and profits in the domestic market.



The EU is the single largest trade bloc for car exports from India. Around 40 per cent of India’s total passenger vehicle exports (5.54 lakh units) in FY13 went to the region. Of these, 80 to 90% were small cars.



Nissan-Renault, Hyundai and Maruti Suzuki, followed by Ford and Mahindra are currently among the largest exporters of passenger vehicles from India to the 28-nation union.



The EU’s decision aims at graduating a host of exports from India such as motor vehicles, bicycles, aircraft, mineral products, chemicals, raw hides, skins, leather, ships and boats, from its Generalised System of Preferences, as imports of each of these products from India has reportedly crossed 17.5% of the overall import of the items into the EU from developing countries.

Source:- steelguru.com

Indian Farmers Lack Understanding Of Good Quality Cotton

The Government of India commissioned the Technology Mission on Cotton (TMC) on February 21, 2000 to address the issues of raising productivity, improving quality and reducing the cost of production and thus provide competitive advantage to the textile industry along with ensuring attractive returns to the farmers.

The 10th Plan scheme was operational upto 31.03.2007. However, the Scheme MM III and IV of TMC were further extended in the 11th Five Year Plan for two years i.e. upto 31.3.2009 to accomplish target and completion of the projects.

In order to protect the interests of the farmers, every year, Government fixes the MSP on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP). Accordingly, taking into consideration recommendation of the CACP, the support price during 2013-14 for medium staple length cotton has been fixed at Rs.3700/- per quintal and for long staple at Rs.4000/- per quintal.

No specific study on difficulties being faced by cotton growers has been undertaken. However, Government of India had engaged the services of ICRA Management Consulting Service Ltd., in 2011 for assessing the impact of TMC under Mini Missions MM-III & IV.

The study interalia revealed that farmers lacked understanding of good quality cotton and have limited awareness of good harvesting, storage and transportation practices and that there is a scope for education, training of farmers in areas of best farm practices, usage of new technologies and better packing, storage and transportation practices.

Source:- fibre2fashion.com

Gold Artisans Feel The Heat In India

More than 50% of India's million-plus gold industry workforce face a bleak future as high gold prices and heavy import taxes on gold have taken the sheen off the country’s insatiable hunger for the precious metal.



These artisans could soon become jobless if the government continues with its decision to discourage gold imports into the country, say retailers. Pritam Solanki, a bullion retailer from Mumbai said he was forced to cut down his employee complement to just 20 workers from the over 50 employees he had last year.



“Our orders have shrunk massively and it has become impossible to keep people on the rolls any longer. The high prices of the raw stock of gold and the high gold premiums have led to demand coming down from several quarters,'' he said.



He added that, earlier, his store would daily get jewellery orders of around 200 grams, especially in the middle of the year, now, over the last few months, this has fallen to just 25-30 grams.



Most of artisans and goldsmiths come to Mumbai from the eastern Indian state of West Bengal, with nearly a quarter of them moving back to their villages given the lack of jobs, said goldsmiths in Mumbai.



Bengal is the leader in hand made jewellery, followed by Coimbatore in the South and Rajkot, in Gujarat, said Samar Kumar De, committee member of the Gems and Jewellery Trade Federation. He pointed out that the government could prevent high net worth individuals from parking large funds in gold bars to improve the current account deficit situation. This would help cut down imports by around 75-150 tonnes per annum and ensure employment.



“Around 2 million skilled workers are employed in about 40,000 jewellery manufacturing units across one state. They face unemployment as their main raw material, gold, is fast depleting. The restrictions and the confusion regarding gold imports have been impeding raw material supplies to the units,'' says Haresh Soni, chairman of Gems and jewellery trade federation.



He adds that raw material stocks are drying up and that artisans are sitting idle in several units due to non-availability of the raw material.



The slowdown in the jewellery manufacturing industry has meant many artisans have sought alternative employment opportunities to feed their families, said M Jain of the Mumbai Jewellers Association.



Pankaj Parekh, vice chairman of the Gems and Jewellery Export Promotion Council noted that around 4.5 million artisans work in the jewellery manufacturing sector across the country. Of them, almost 1.5 million work for the export segment and 1 million workers tend to work on gold supplied by the grey market.



He added that between February and April, several jewellery units imported more gold than was needed, in anticipation of duty hikes and other restrictions from the government. The excess stock has pared down now, with most retailers exhausting their stock last month, forcing many companies to retrench workers en masse.



He said that the curbs in gold imports have been pushing the price higher and also encouraging smuggling, black marketing, hoarding and panic buying of the precious metal.



Industry estimates suggest that India's stringent strictures on gold imports has rendered jobles more than 500,000 gold artisans, craftsmen and salesmen across the country since June this year. Referring to the jobless figure, the All India Gems and Jewellery Trade Federation has said that India's stiff increase in import duty has worked adversely. ``While gold consumption increased, shortage was created due to slow supply,'' said regional chairman of the Federation Mitesh Khimji.



Among several recommendations sent across to the government, the Federation has encouraged unlocking domestic gold by introducing a disclosure scheme. With an estimated 2,50,00 tonnes of gold locked in Indian households, most of this could be made available to the artisans, rather than have the country indulge in pricey imports.

EASTERN INDIA



In West Bengal too, the government's curbs to control current account deficit, has hit the industry hard. Bachhraj Bamalwa, president of All India Gems and Jewellery Trade Federation said more than 10 million people were involved in the trade, since the majority of the work is handmade jewellery.



"It is a labour intensive industry. Millions of artisans are dependent on this sector for their livelihood. In the absence of any duty differential between articles of jewellery and primary metal, which was 8% in the case of gold jewellery and 4% in the case of silver jewellery in January 2012, there is an apprehension that Indian jewellery makers would not be able to compete with cheaper imports,'' he said.



He added that a majority of the imported jewellery was machine made. To protect the interests of small artisans however, customs duty on articles of jewellery and of goldsmiths’ or silversmiths’ wares was increased from 10% to 15% by the Finance Ministry recently.



However, Bamalwa states that the government's move to revise upward the customs duty on raw gold has nullified this incentive. The nodal agency for jewellers has warned that the ongoing supply shortage could result in more job losses in the sector.

Source:- mineweb.com

Sania Mirja scored game point in IT return; HC confirmed true disclosure of income and deleted conce

IT: Where receipt in question was correctly mentioned in return of income, penalty under section 271(1)(c) could not be imposed

Mere denial of sec. 11 relief won’t invalidates trust registration, rules HC

IT : Mere fact that an income is not exempt under section 11 would not by itself render Tamil Nadu Cricket Association's registration under section 12AA liable to be cancelled

Revenue couldn't object to interest on refund on pretext of assessee's fault if CIT(A) allowed it as

IT: Where Commissioner (Appeals) observed that interest under section 244A was allowed on refund and same was affirmed by Tribunal, it could not be apprehended that they had not verified fact as to whether assessee was in default

A person paying duty and deemed as an assessee is eligible for Cenvat credit

Excise : Where, despite process not amounting to manufacture, by retrospective amendment of rule 16 of Central Excise Rules, 2002, wire drawing units were deemed to be assessee for certain period in respect of duty paid by them, said units were eligible for Cenvat credit as per CENVAT Credit Rules

Income from shares admitted as capital assets in previous year returns can't be taxed as business in

IT: Where shares were shown as capital balance in Income-tax return of previous year as such on sale of shares, sale proceed would be long/short-term capital gain of assessee and not income from business

India-Macedonia ink new DTAA

IT/ILT : Signing of Agreement Between Government of Republic of India and Government of Republic of Macedonia for Avoidance of Double Taxation and Prevention of Fiscal Evasion With Respect to Taxes on Income

CBDT seeks to release legitimate tax refunds; relaxes time-limit for issuance of intimation in refun

IT : Section 143 of The Income-Tax Act, 1961 - Assessment - Issue of Intimation under Section 143(1) Beyond Time

Population of Municipality and not of village Panchayat decides whether asset is a capital asset or

IT : Population of Municipality and not of village Panchayat decides whether asset is a capital asset or not

Excess freight charged by assessee isn’t includible in value of excisable goods

Excise & Customs : Since transportation activity is not connected with manufacturing activity, excess recovery of transportation charges from customers cannot be added to assessable value of excisable goods

MCA exempts contribution to Electoral Trust from separate disclosures under Companies Act, 2013

COMPANIES ACT, 2013 : Section 182 of The Companies Act, 2013 - Political Contributions - Prohibitions and Restrictions Regarding - Clarifications as to Requirements of Disclosure on Part of An Electoral Trust Company of Any Amount or Amounts Contributed by it to Any Political Parties Under Section 182(3)

No extended period against assessee if exemption was withdrawn due to buyer's fault without assessee

Excise & Customs: In case an exemption availed by assessee is withdrawn due to an act of buyer, mere allegation that assessee should have taken necessary steps to ensure non-violation of condition of exemption by buyer, is not sufficient for invocation of extended period, except where violation took place by consent/knowledge of assessee

Reassessment to deny sec. 10B relief confirmed as assessee didn't repatriate export revenue in time

IT: Where assessee did not realize sale proceeds of exported goods within stipulated period, reopening of assessment on issue of section 10B deduction was valid

Financial analysis of borrowers won't be deemed as facilitation of loan agreement as per India-Franc

IT/ILT: Where role of assessee in inninged transactions of foreign currency loan under ECB was to provide financial analysis of borrowers, general market conditions and regulatory environment, nature of services provided by assessee did not fall under terms of facilitation of conclusion of loan agreement or signing thereof as stipulated under para 4 of protocol between India and France

Cooling zone isn't includible in determining number of chambers to compute production capacity based

Excise & Customs : Cooling zone, which is neither installed in nor attached to stenter and did not aiding in process of heat setting or drying of fabrics but merely cooled fabrics which came out of stenter, cannot be counted as chamber for determining annual capacity of production for levy of excise duty

Eac Losing Battle Against Illegal Fishing

While this God-given resource has to be enjoyed, both for food and revenue, greed has sidestepped sustainability of the fisheries resource, risking the industry’s survival.



As 2013 goes to bed, the question how illegal fishing can be wiped out in its entirety is still a big one not just for Uganda, but all the other East African Community (EAC) countries. Here are highlights from the sector.



President endorses fish ban



President Yoweri Museveni endorsed a move by Mukono district leaders in May to impose a fishing ban in the area between July and October every year to allow fish to mature.



The step, considering that fish revenues constitute a big percentage of revenue for Mukono and other districts bordering Lake Victoria, was one worthy of emulation.



The President also supported the ban on the importation of illegal fishing gear used in catching immature fish.



Rise in trade deficit



Uganda’s trade deficit rose by 14% in June from the previous month, driven up by imports, amid falling commodity exports due to the euro area crisis, announced Bank of Uganda.



The country’s trade deficit climbed to $252m in June, from $221m in May, as balance of payments position was expected to worsen in the months ahead as the Euro Zone crisis curbed remittances, foreign direct investment and earnings from exports of commodities.



Europe is the main buyer of Uganda’s fish, flowers and coffee. It is also host to a number of Ugandan immigrants who usually send money back home.



Fish prices fall



In November, a kilogramme of Nile Perch cost sh7, 000, compared to sh13, 000 in October. A medium sized Tilapia fish also costs about sh25,000, down from about sh35,000 months ago.



Fish is plenty during April and May, as well as November and December.



Fish holidays



The Government is planning to introduce fishing holidays in a bid to enable the fish breed and increase stocks.



Fisheries state minister Ruth Nankabirwa said the Government collaborated with Uganda Revenue Authority (URA) to strengthen security on border points to hinder the entry of illegal nets into the country.



It also investigate and arrest culprits involved in catching immature fish.



Government statistics



Fish exports have over the years emerged as Uganda’s second major non-agricultural foreign exchange earner, with exports to premium international markets rising from $0.40m (about sh820m) in 1998 to over $145m (about sh297.3b) in 2008.



However, this fell to $117m in 2007 and finally $82m in 2010 as the country exported 15,600 tonnes of processed fish. The free-fall continued well into 2011, with 14,500 tonnes of fish exported, a drop from 18,000 tonnes in 2009.



The peak exports was 37,000 tonnes in 2005. Of the 660,000 tonnes of fish produced, 100,000 tonnes of the Nile Perch are processed for export to EU markets, with 100,000- 150,000 tonnes salted and dried or smoked for regional markets.



Sustainable and prudent harnessing of fisheries resource still eludes Uganda, with 60% of fish traded in local and regional markets being immature and handled under unhygienic conditions. About 300,000 tonnes of fish are traded locally, according to data from the department of fisheries resources, Entebbe.



Formal regional trade earns $35m on average, whilst Illicit and informal regional fish trade has grown from under $10m a year five years ago to $70m today. Illegal fishing practices culminated in a $60m (about sh120b) loss in returns in 2008, $39m in 1996, $28m in 1997 and $34m in 2000.

Source:- newvision.co.ug

India To Issue Circular On Excise Duty Soon

In a move that may end months of uncertainty for industry following the Supreme Court’s decision in the Fiat India case, the finance ministry on Tuesday said the government would issue a circular by next month specifying how excise duty will be levied on goods that are sold below their cost of production.

The court had ruled last year that Fiat India will have to pay excise duty on the basis of cost of production plus a notional mark-up, rather than on the selling price, which was lower than the production cost. This ruling affected many auto makers and fast-moving consumer goods producers and other manufacturers, who often sell goods below their cost price to capture market share or prune inventories— especially in a slowing market. In the 11 months ended November, passenger vehicle sales have fallen 7.4% in India as compared to the same period last year.

In the absence of clear rules, the tax department, looking at ways to raise tax revenues and narrow the fiscal deficit started scrutinizing past sales. Following concerns expressed by the industry in mid-2013, after the Union budget was presented on 28 February, the government promised to set up a committee in a month but that did not materialize.

It is still not clear whether manufacturers will get any relief from the proposed circular.

“The tax department has been writing to companies and asking if they have been selling goods below market price and nudging them to furnish details of the same,” said Harishanker Subramaniam, partner and national leader, indirect taxes, at audit and consulting firm EY. “The circular that comes out may explain in which cases the Fiat judgement will be applicable,” he said.

In a statement, the finance ministry said the modality of implementation of the decision of Supreme Court is under consideration of a committee of chief commissioners and a circular in this regard will be issued by 15 January.

This decision was taken following the suggestions by a forum headed by Parthasarathi Shome, adviser to the finance minister, that was set up in July to exchange views between industry groups and government for tax issues.

Vishnu Mathur, director general of Society of Indian Automobile Manufacturers, declined comment stating that nothing has been communicated to the auto lobby.

The government will also ensure that the pending service tax refunds for export of services are made available to the taxpayer.

“It is a good move on part of the government to push through rebates and refunds. The delay in refunds of service tax has been one of the major issues faced by the industry,” said Subramaniam.

The finance ministry will also address the problem of service tax on reinsurance agents, distribution of Cenvat (central value added tax) credit to input service distributors to any unit of the entity so long as the unit to which the credit is getting distributed is manufacturing dutiable goods or providing taxable output services.

Source:- livemint.com

AO to give a chance to assessee to cross-examine witness prior to sec. 68 addition if he has letter

IT : Where assessee-trust claimed that amount in question was given as loan by a party but such party before Assessing Officer denied such transaction, assessee should not be denied an opportunity to cross examine said party

Finmin Set To Implement Supreme Court’S Decision On Excise Duty

The finance ministry will soon come out with a circular to implement a Supreme Court decision regarding valuation of goods sold below the cost price for levying excise duty.



The case pertains to Fiat India (P) Ltd where the apex court has ruled that where products are sold at considerable losses for an unduly long period of time for the purpose of market penetration, price is not the sole consideration and excise duty should be paid on manufacturing cost, plus a reasonable profit margin.



While the company was insisting that the duty should be levied on the discounted sale price, the revenue department was calculating it on the cost of car produced. After the ruling, the Central Board of Excise and Customs (CBEC has started asking assessees to furnish cost data of various products for the previous years.



"The modality of implementation of the decision of the Supreme Court is under consideration of a committee of Chief Commissioners. The circular in this regard will be issued by January 15, 2014," the ministry has said.



The decision comes after a forum under Parthasarathi Shome, advisor to finance minister P Chidamabarm, set up in July, heard industry groups and government on tax-related issues or disputes to iron them out.



On service tax to be paid by reinsurance agents, the statement said the department will seek inputs from the insurance industry to ascertain whether there is double taxation of the brokerage paid to reinsurance agents. The panel suggested that a process is being designed to get the importers to register with the tax department, who may then more easily pass on the Cenvat credit of counter-veiling duty to a manufacturer. The new mechanism will be in place by December 31.



The guidelines will also be issued with regard to service tax refunds for exporters, distribution of Cenvat credit by input service providers and clarifications with regard to status holder incentive scheme.

Source:-indianexpress.com

Govt. could object to share exchange ratio in proposed scheme even if scheme was approved in shareho

CL: In a proposed scheme of compromise and arrangement, Central Government can raise objection in relation to share exchange ratio even though in shareholders' meeting entire scheme has been approved unanimously

Parts and components of capital goods are eligible 'capital goods', irrespective of their tariff cla

Cenvat Credit: Parts and components of specified capital goods (falling under Chapters 82, 84, 85 and 90 as well as tariff headings 6804 and 6805) are eligible as capital goods even if such parts/components are not classifiable under Chapters 82, 84, 85 and 90 as well as tariff headings 6804 and 6805

Initiating re-assessment to verify certain known facts would be 'change of opinion'; re-assessment q

IT : Re-opening of assessment for purpose of "verifying" or "verification" will be necessarily an action based on a mere change of opinion

No denial of sec. 80-IB relief on DEPB discount in search proceedings if same was allowed in scrutin

IT: Where deduction under section 80-IB was allowed on DEPB premiums and discount in scrutiny assessment under section 143(3), same could not be disallowed in proceedings under section 153A

No reassessment to deal with an accommodation entry if AO has such info during assessment as well

IT : Where all information relating to alleged accommodation entry providers were available with Assessing Officer at time of assessment proceedings and Assessing Officer also applied his mind on such information, reassessment proceedings were not valid

Services in relation to aircraft used for business visit of Managing director of co. are eligible fo

Cenvat Credit : Maintenance of aircraft owned by assessee and used by its Managing Director in course of its business activity is eligible for input service credit

Quotation price isn’t analogous to actual price paid; former can’t be used for benchmarking under CU

IT/ILT : Under CUP method, a quotation which hasn't fructified into a transaction cant be used for benchmarking

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