No reversal of Cenvat credit if no credit was taken on moulds cleared as waste or scrap

Cenvat Credit : Rule 3(5A) of CENVAT Credit Rules applies only if cenvated capital goods are cleared as waste/scrap; if no credit was taken on capital goods and credit was taken only in respect of inputs/input services used for making capital goods, no reversal is warranted on waste/scrap clearance of such capital goods

Korea Wants Duty Cuts For Auto, Machinery Exports To India

South Korea has demanded a deep cut in tariffs on its goods entering India, under the Comprehensive Economic Partnership Agreement, signed by the two countries in 2009 and taking effect from 2010.

The two governments had decided to revise the pace, during the recent visit here of South Korea’s President Park Geun-hye.

“We have been urging India to liberalise tariff duties, especially in automobiles, auto parts and Korean machinery. We want drastic reduction in this,” Dong Seok Choi, director-general, Korea Trade-Investment Promotion Agency, told Business Standard.

Talks for revising the pact are expected to begin by the middle of this year. The first round will be in Seoul, said Dong.

The Indian government has asked South Korea for greater market access for its information technology export, generic medicine and textiles. Dong said Korea was aware of these wishes.

India’s trade deficit with Korea rose from $5.1 billion in 2009-10 to $8.9 bn in 2012-13. The matter was raised by commerce and industry minister Anand Sharma with South Korean counterpart Yoon Sang-jick during a meeting here early this month.

On the pending approval for the $12-bn project in Odisha of Posco, the Korean steel giant, Dong said this would induce more Korean companies to invest. “Korean SMEs (small and medium enterprises) are very keen to do business here and Posco will give them a boost. Korea is also keen to invest in India, mainly in aerospace, ship building, construction and urban development,” he added.

He also said some Korean companies, such as Hyundai, Samsung and LG, had planned to expand in the country in the next couple of years. “Many Korean companies want to make India their research and development hub,” he said.

Source:- business-standard.com

India Adds 5% Duty On Iron Ore Exports Lme Steel Billet Improves

Looks as though India has “imposed a 5 percent duty on exports of iron ore pellets, taking yet another step in conserving the raw material for domestic steelmakers that has slashed its shipments to top market China,” reports Reuters.

“India already levies a 30 percent tax on exports of iron ore fines and lumps since December 2011. Along with mining and export curbs in key producing states Karnataka and Goa aimed at addressing illegal mining, the tariffs have helped cut India’s iron ore exports by around 85 percent, or 100 million tonnes, over the past two years.”

“Iron ore pellets had been exempted from any duty previously given negligible exports out of India.”

Strengthening prices ended a two-day flat streak as the steel billet cash price moved up by 4.3 percent on Monday, January 27 on the LME to $365.00 per metric ton. The 3-month price of steel billet rose by 1.4 percent on the LME to $360.00 per metric ton.

* Get the complete prices every day on the MetalMiner IndX

Chinese steel prices closed flat for the day. The price of iron ore 58% fines from India were range bound. The price of Chinese HRC showed little movement yesterday. Chinese coking coal held its value yesterday.

The US HRC futures contract 3-month price continues hovering around $629.00 per short ton for the fifth day in a row. The US HRC futures contract spot price remained essentially flat at $672.00 per short ton.

Source:- agmetalminer.com

Issues well-settled in favour of assessee can't be reopened subsequently on same grounds

IT : Where question as to deduction under section 80-IB(10) was squarely covered in favour of assessee for preceding assessment years, Assessing Officer could not reopen assessment on merit on same ground in succeeding assessment year

India Export Incentives Restored For Cotton Yarn

The temporary restoration of the Incremental Exports Incentivisation Scheme (IEIS) for Indian cotton yarn exporters will make local spinning more viable in 2014, an industry spokesman has said.

Under the IEIS, exporters earn credit amounting to 2% of the duty on annualised increases in exports over qualifying periods and for particular markets, and may either use this to import industry-related goods for themselves or sell the credit to another yarn manufacturer.

The industry believes central government's decision to withdraw the incentive in September last year was intended to discourage cotton yarn exports in favour of higher value-added finished textiles.Cotton yarn prices in the local market have been affected by the earlier decision.

"The prices of cotton yarn are not increasing in tandem with the rise in cotton prices in India," DK Nair, secretary-general of the Confederation of Indian Textile Industry, told just-style.

India's Directorate General of Foreign Trade has now restored the benefit from for the period from September 2013 to 31 March 2014.

"Since this year's exports of cotton yarn are going to be higher than the previous year, this will be beneficial to the exporters," Nair said.

With so little time remaining, the move may have only limited impact on Indian cotton yarn prices - but will help exporters "to cut their losses or improve profits," Nair added.

Source:- just-style.com

India Miscellaneous Chemical Products Exports Rise To Us$ 265.21 M In December- 2013 - Infodriveindia.Com

This finding is based on India Miscellaneous Chemical products export data of InfodriveIndia.com and is based on export shipping bills filed at Indian customs by exporters from India through December- 2013 at more than 170+ ports in India like JNPT, Bombay Air and Sea , Chennai Air & Sea , Delhi IGI Air, Delhi Tughlakhabad ICD, Delhi Patparganj, Kolkata Air and Sea, Bangalore Air and many more. InfodriveIndia.com India Miscellaneous Chemical products Export database is considered to be the most comprehensive, up-to-date and authentic information on India's foreign trade of Miscellaneous Chemical products.

According to Pradeep, Chief Research Associate of InfodriveIndia.com, compared to November 2013, a increase of USD 265.21 M in December- 2013 has been noticed. He further gives a analysis and break up of major product categories , major countries and major Indian ports under Miscellaneous Chemical products as follows :

A. Exports of Insecticides, Rodenticides, Fungicides, Herbicides, Anti-Sprouting products and Plant-Growth Regulators, Disinfectants and similar products has grew month on month basis by 28.3%.

Total value of exports in December- 2013 was 173.71 M, compared to November 2013 , there is a increase of 38.32 M in December- 2013, growth rate in percentage terms is 28.3%, the major destination countries were United States, Brazil, Germany, Belgium and France and major Indian ports were JNPT, Goa Sea, Vizag Sea, Madras Sea and Delhi TKD ICD.

B. Exports of Industrial Monocarboxylic Fatty Acids and Acid Oils from Refining has grew month on month basis by 47.55%.

Total value of exports in December- 2013 was 24.21 M, compared to November 2013 , there is a increase of 7.8 M in December- 2013, growth rate in percentage terms is 47.55%, the major destination countries were United States, Germany, Saudi arabia, China and Iran and major Indian ports were JNPT, Bombay Sea, Mundra, Thar Dry Port ICD/Ahmedabad Gujarat ICD and Ankleshwar.

C. Exports of Prepared Binders for Foundry Moulds or Cores Chemical products and Preparations of the Chemical has grew month on month basis by 29.02%.

Total value of exports in December- 2013 was 16.31 M, compared to November 2013 , there is a increase of 3.67 M in December- 2013, growth rate in percentage terms is 29.02%, the major destination countries were United States, United arab Emirates, Turkey, Germany and Indonesia and major Indian ports were JNPT, Mundra, Madras Sea, Calcutta Sea and Bombay Air.D. Exports of Reaction Initiators, Reaction Accelerators and Catalytic Preparations has grew month on month basis by 12.62%.

Total value of exports in December- 2013 was 11.56 M, compared to November 2013 , there is a increase of 1.3 M in December- 2013, growth rate in percentage terms is 12.62%, the major destination countries were United Kingdom, United States, Malaysia, Saudi arabia and Indonesia and major Indian ports were JNPT, Kanpur ICD, Cochin Sea, Madras Sea and Bombay Air.

Pradeep says that the above information is on major product categories, and users requiring detailed analysis and reports on their specific products can contact Sales team at InfodriveIndia.com with detailed description of their product, brand names and its uses.According to Pradeep, usually InfodriveIndia.com team delivers most of the projects within 3 working days.

InfodriveIndia.com analysis and research is done from export statistics from Indian customs which is based on export shipping bills filed at various ports, InfodriveIndia reporters collect this data from every Indian port, and InfodriveIndia database yields the most timely, accurate, comprehensive information available on trade through India Ports. Recently after a long and persistent lobbying with Indian Govt, InfodriveIndia.com has been able to release export import data almost on realtime basis, bringing the backlog time to just 3 days, compared to Govt sources which are around 6 months old. Another unique feature of InfodriveIndia.com database is unparalleled coverage of 110 ports in India.

InfodriveIndia.com is 16 year old market leader and primary source of India Export data in India. The India Import Export data bank, which is at the core of InfodriveIndia.com trade information services is unique and has been categorized by Harmonized system in over 25,000 product codes. InfodriveIndia researchers provide expert data analysis and interpretation tools, Charts, Pivot reports in MS Excel and detailed item wise records to support decision-marking for International Trade, understanding India export market, competitive intelligence and brand protection.

World's top market research companies, Export promotion councils, trade associations, domestic and foreign governments, and over 16,000 corporates from more than 65 countries rely on InfodriveIndia.com for meaningful export import trade intelligence to guide their International business strategies.

Source:-indiaprwire.com

Must Review Norms On Gold Import

Union commerce minister Anand Sharma said he was in favour of a review of the country's gold import regulations, and added that he would discuss the matter with finance minister P Chidambaram shortly.

While the finance minister has said that a review of the subject wouldn't be possible before the budget, Sharma said, "We will revisit this matter and see how to have a balance."

The All India Gems and Jewellery Trade Federation had earlier written to UPA chairperson Sonia Gandhi demanding a reduction in import duty on gold to 2% from 10%. The industry body had also demanded relaxation of RBI's 80:20 rule on gold imports, wherein merchants have to re-export 20% of each gold consignment before placing orders for a fresh shipment.

This 80:20 rule resulted in lower bullion imports, which subsequently helped in lowering the country's ballooning current account deficit. Last week, Sonia Gandhi had requested the commerce ministry to look into the request of the gems and jewellery industry stakeholders.

"We have by and large gone with the revenue department and the RBI on the matter. We are equally keen to ensure that we remain strong and competitive in the gems and jewellery sector," Sharma said on the sidelines of the CII Partnership Summit 2014 in Bangalore.

Sharma also said the government was thinking of opening up the construction sector to FDI to re-energize economic activity in this sector, which is a large employer. "We are also looking at FDI in the railway sector," said Sharma. He said that in the last four years India had received FDI worth $176 billion.

Over 1,000 delegates from 45 countries are participating in the Confederation of Indian Industry's Partnership Summit 2014, being held in Bangalore from January 27 to 29. The summit will highlight investment opportunities in India and offer ideas for how a new class of consumers can become a new engine for growth. The theme of the event is 'Emerging global value chains: building partnerships'.

Source;- timesofindia.indiatimes.com

Pharmexcil To Hold Meeting With Gs1 India To Discuss Bar-Code Implementation For Mono Cartons

Aimed at dispelling the doubts and apprehensions of the industry over the bar-code implementation for mono cartons, the Pharmexcil is organising an interactive meeting with GS1 India to discuss the issue in detail. The meeting is scheduled to be held on February 6, 2014 at Orchid Hotel, in Mumbai.

Earlier the Director General of Foreign Trade (DFGT) under government of India had notified the mono cartons containing strips, vials, bottles as primary level packaging vide through a public Notice no 31 (RE-2013)/2009-2014, dated October 17, 2013. With regard to this, many companies have raised doubts and apprehensions over the issue and are seeking clarifications on the container to be considered as mono carton.

In view of this, the central government has directed GS1 India to review the status of mono carton for implementation of bar code system and asked it to discuss the issue with the industry stake holders and submit a report on the same.

“This meeting is mainly aimed at dispelling the doubts and apprehensions of the industry over the bar-coding implementation for mono cartons. Many of them wants to have clear view as to what kind of containers constitute mono cartons to be considered under primary packaging,” informed Raghuveer Kini, executive director, Pharmexcil.

Earlier last year in January, the DGFT had made it mandatory to have 2D bar coding for the secondary level of packaging. This is part of the DGFT's plan to have track and trace mechanisms at the primary, secondary and tertiary levels of packaging for all export products. The new regulations are aimed at safeguarding India's pharma exports from drug counterfeiters.

The major reason for implementing bar-coding is because India's pharma supply chain has been breached by the drug counterfeiter in the past. For example, in November 2011, counterfeit anti-malarial drugs with a 'Made in India' labels but actually originating from China, were seized by Nigerian port authorities. The loss of reputation resulting from this incident and other similar incidents resulted in the DGFT opting for track and traceability systems like bar-codes in the hope that counterfeiters would find it more difficult to infiltrate the pharma supply chain.

Even though the industry appreciates the rationale behind the DGFT's stance, over the past year, they have asked for and got extensions of the deadlines as smaller players were finding it difficult to arrange finances to put in place the 2D technology required for the secondary level of packaging.

In view of recent doubts among the industry players over the mono cartons for implementation of bar-coding, Pharmexcil is seeking industry members to participate in the meeting and get the necessary clarifications on implementation of trace and track system and also present their opinion on the status of mono carton.

Source:- pharmabiz.com

Rupee Closes At 62.52 Against Dollar

The rupee rose sharply against the dollar on Tuesday after foreign banks started selling the US currency following the Reserve Bank of India’s (RBI’s) third quarter monetary policy announcement.

The RBI on Tuesday hiked its key lending rate by a quarter of a percentage point, continuing its fight against inflation in Asia’s third-largest economy. RBI hiked the repo rate, at which it lends short-term funds to banks, to 8%. The apex bank retained the cash reserve ratio (CRR), or the amount of deposits banks needs to park with the central bank and on which they earn no interest, at 4%.

RBI governor Raghuram Rajan’s statement that the central bank is far from accepting Urjit Patel committee but is only looking at the suggestions, indicated that the central bank has not yet embraced an inflation targeting mandate, foreign exchange dealers said. Rajan also said the monetary policy could be more “accommodative” if inflation eases in the coming months.

“RBI’s statement that even in the face of a growth slowdown, it increased the rate to stem out inflation is a very strong and excellent external image to have,” said Arvind Sampath, head of treasury at Fullerton India Credit Co. Ltd.

“Some of the statements by the RBI governor assured the market that the policy rates could soften going forward and that the approach is very flexible. This is good for the market,” said a currency dealer of a foreign bank who did not want to be named.

Rajan’s statement suggesting that long-term debt investors remain committed to India if the RBI can bring down inflation to assuage these foreign investors was also seen as a positive for market sentiment, said currency dealers.

The domestic currency closed at 62.515 per dollar, up 0.94% from the previous close of 63.10. The unit had opened at 63.18 per dollar and strengthened as much as 62.505 per dollar.The yield on India’s 10-year benchmark bond ended at 8.751% as compared with its previous close of 8.768%.

Source:- livemint.com

TPO can't count upon multiple year's data of comparables under TNMM if their current year's data is

IT/ILT : TPO cannot determine arms length price under TNM method by relying upon multiple year data where current year data of comparable companies are available on public domain

Insurance of capital goods and inventories are eligible for input service credit

Cenvat Credit : Insurance services in relation to insurance cover of plant and machinery (viz. capital goods) and inventories are eligible for input service credit

No abuse of dominant position if party fails to provide evidences to show anti-competitive practices

Competition Act : Where there was no evidence to show that opposite party or other glass manufacturers were using their market power to eliminate processors from market, no case of contravention of provisions of section 4 was made out against OP

In The House, A Little Quid Pro Coal?

Coal is down but not out thanks in part to a pro-coal rider passed in the omnibus spending bill [pdf]. Are we looking at pro-export policy or just a little mutual back-scratching.The Bluegrass State’s coal industry has been singing the blues of late, but they’ve been handed a small victory courtesy of Representative Hal Rogers (R-KY), who, surprise, surprise, has the coal industry to thank for filling his election coffers.

When it comes King Coal in the United States, Wyoming and West Virginia are at the top, responsible for 39 and 12 percent of total coal production, respectively. But at nine percent, Kentucky is right behind.

And it’s not just about production. In 2012, a whopping 92 percent of Kentucky’s net electricity generation came from coal-fired power plants.*

Little surprise, then, that the majority of Kentucky’s congressional delegation is staunchly pro-coal (see here and here) — some might even say that the coal industry has them in its back pocket hoping to find a bit of largess in the form of spare change. And that is where our tale begins.

As has been documented in TheGreenGrok, King Coal’s seat on the throne of the U.S. energy kingdom has been a bit wobbly of late. U.S. coal production has been declining; in Kentucky production over the first three quarters of 2013 was down by 13 percent [pdf] relative to 2012. While coal consumption increased a bit in 2013, the net trend has been decidedly negative since 2011 [pdf]. And then there are the jobs — mines in 2012 employed fewer workers than in 2011, and Kentucky lost more mining jobs than any other state — shedding 2,283 employees [pdf] .

Many of those who would like to see coal maintain its kingly position blame Obama and his so-called “war on coal” for this turn of events. While it’s certainly true that his administration’s promulgation of standards on mercury emissions is not helping the coal industry — and the proposed regulations on carbon dioxide emissions from new power plants won’t cause coal’s profits to rise either — most experts agree that the real reason for King Coal’s fall is economic: the unexpected glut of natural gas from fracking has lowered its price making it competitive with coal.

And, to be fair, it should be pointed out that if the regulations being promulgated by the Obama administration are a war on something, that something is more accurately characterized as pollution, not coal.

Unfortunately for the king, coal happens to be the dirtiest of the fossil fuels, and is almost by necessity going to be placed at a disadvantage when the environment and people’s health are priorities. Given the stalemate in Congress, Obama’s only recourse to protect the environment, save lives, and slow climate change is to promulgate the regulations that the coal industry finds anathema. As they say: “It ain’t personal.”

A sign of coal’s decline can be seen in what’s been going on at the Tennessee Valley Authority (TVA).Time was, four out of every five watts of electricity generated by TVA came from burning coal. Today it’s less than half.

And in November, to add insult to injury, TVA announced it was shuttering eight plants, six in Alabama and two in Kentucky — much to the chagrin of the Kentucky congressional delegation, including Sen. Mitch McConnell (R-KY), who wrote a note of protest [pdf] warning of job losses.

But TVA President Bill Johnson wouldn’t budge, explaining his decision like so: “our objective is to make the best decision for the entire region, and that’s what we did.”

But it hasn’t been all bad news for coal; while U.S. production and consumption have slipped, U.S. exports are on the rise. And quite spectacularly so: between 2009 and 2012, exports doubled.** Part of that increase reflects growing markets for mostly metallurgical coal in China, South Korea, and India, but by far the largest share is shipped to Europe.

In January 2010, Obama committed the United States to cut its greenhouse gas emissions by 17 percent relative to 2005 by 2020 in the Copenhagen Accord. And it’s a bit surprising but we’re not all that far off from meeting that goal despite the lack of any significant national climate legislation. Unfortunately the same cannot be said of global emissions. And the United States may be reversing its trend too — emissions ticked upward in 2013.

Last October the Treasury Department issued new guidelines that seemed to reflect a concern about growing greenhouse gas emissions from other countries. These guidelines will limit U.S. bankrolling of the building of new coal-fired power plants abroad. Projects in all but the poorest countries must use carbon capture and storage to get U.S. funding under these guidelines — that is, they must meet the same greenhouse gas emissions standards that apply to domestic plants.

Rogers was most definitely not happy. Noting that “coal exports are just about the only bright light in the coal business these days,” he predicted that the new guidelines “obviously would curtail a lot of coal exports.” That may be obvious to Rogers, but to me, that seems a bit of a stretch. For one, just because the United States doesn’t finance a new power plant doesn’t mean the plant, when it is operational, won’t buy its coal from the United States. Secondly, most U.S. coal exports are metallurgical and are not used in power plants anyway.

Still, Rogers decided, true to his cause, to do something about those nasty export-killing guidelines. That something turned out to be placing a rider on the congressional omnibus spending bill [pdf], the tried and true method for legislators to get their special interest legislation through Congress under the radar. (See here, here and here.) The bill passed on January 16, and as TheHill.com reports:

“Rogers made sure the bill contains several crucial pro-coal riders that help out one of Kentucky’s primary industries. The bill stops administration plans to curtail Export-Import Bank and Overseas Private Investment Corporation financial help for coal plants overseas.”

So, chalk one up for King Coal, no doubt Rogers’ rider will mean a considerable chunk of extra change in coal’s coffers. But you can also chalk one up for Rogers and his coffers. Coal interests have given him quite a bit of money over the years, and Rogers’ latest exploit should keep the contributions flowing.

Source:- energyblog.nationalgeographic.com

Tractor-trailer is 'goods carriage' and not tractor for service-tax purposes

Service Tax : Though 'tractor-trailer' cannot carry any goods as such but, since it is adapted for carrying goods as counter-weight when trailer is carried, it became a 'goods carriage' for taxation purposes; more so, as it was registered under RTO as 'goods carriage' and taxation authorities cannot go behind registration certificate

Provision for AMC charges equivalent to actual payment in next year was an allowable expenditure

IT : Where assessee made payment to maintenance agency at end of year on basis of actual consumption of electricity, provision made was to be allowed under section 37

Co's inability to arrange funds due to losses would tantamount to commercial insolvency; HC orders i

CL : Where in response to notice issued by petitioner-company to respondent to repay amount of inter-corporate loan, respondent-company admitted its liability to pay loan, however, it was unable to arrange for funds due to incurring of huge losses, a case of commercial insolvency of respondent-company was made out and, thus, petition seeking its winding up was to be allowed

ITAT deletes concealment penalty on disclosure by assessee about his past income and payment of taxe

IT : Where assessee admits undisclosed income for earlier years which had ended prior to date of search under section 132(4) and also specifies manner in which such income had been derived, and thereafter pays tax on that undisclosed income with interest, such undisclosed income would get immunized from levy of penalty

Share application money received by a co. can't be taxed as deemed dividend if it isn't a registered

IT : Where assessee-company received share application money from another company, in view of fact that assessee was not a registered shareholder of said company, amount in question could not be taxed as deemed dividend in its hands

Goods in transit being inter-State sales to be accompanied by prescribed form; non-compliance attrac

CST & VAT : Whether goods are put in movement under local sales, imports, exports or inter-State transactions, they are goods in movement, therefore, they have to be supported by requisite declaration under Rajasthan Sales Tax Act, failing which penalty is leviable

Payment made to repossess property from tenant is capital in nature; eligible for depreciation

IT: Where relevant lease agreements, bills for purchase of assets, inspection reports, insurance papers, etc., were produced, sale and lease back transactions could not be treated as sham so as to deny depreciation thereon

Assessee to file separate appeal against assessment order even if it was incidental to writ decided

IT: Where primarily assessee had challenged vires of section 143(1)(a), which had been affirmed, challenge to assessment order being only incidental, assessee should avail its alternative remedy of filing appeal

Cricket Association not to loose its registration merely on receipt of its share in broadcasting rig

IT : Where assessee cricket board arranged international matches and received share in broadcasting right and advertisement sales from its apex body BCCI, under section 12AA(3) Commissioner could not cancel its registration by invoking first proviso to section 2(15)

Appeal lies to HC for every order passed by Tribunal 'in appeal' and not against its revisional orde

CST & VAT : An appeal lies to High Court from every order "passed in appeal" by Tribunal and not against order "passed in revision"; therefore, order passed in revision by Gujarat VAT Tribunal were held non-appealable before High Court with liberty to approach by way of writs under Constitution

SC: Respondent couldn't be prosecuted for cheque dishonour if petitioner rejected its offer to clear

Negotiable Instruments Act : If offer of respondent to pay amount of cheque which had been dishonoured along with interest was not acceptable to complainant, it was complainant's choice but that would not allow it to prosecute respondent in pursuance to complaint which it had lodged for dishonour of cheque

PANs are issued without de-facto verification, these can’t solely divulge real identity of individua

IT : PANs are issued without de-facto verification, these can't solely divulge real identity of individual: Delhi HC

Mumbai ITAT advocates for disallowance under sec. 14A even if no exempt income is actually earned

IT : Where income, whether it is actually earned or not, is not includible in total income corresponding expenditure has to be disallowed

A person publishing a false brochure aiding importer to evade duty is abettor in smuggling: HC slaps

Excise & Customs : Where an indenter had published a false brochure to enable importer in evading duty by misdeclaration of goods, such indenter was abettor of act of smuggling and was liable to penalty under section 112 equal to that levied on principal offender

AO to examine circle rates before making any addition merely on his apprehension of suppression of c

IT: Where shops sold by assessee were registered with Sub-Registrar and sale deeds were executed for them, Assessing Officer without examining those sale deeds or even making inquiries about circle rates fixed by Sub-Registrar for purpose of stamp duty valuation, could not make addition to assessee's income by merely taking a view that shops were sold below their cost of construction in terms of square feet area

Canada, Pakistan Frown At India’S Foodgrain Exports, Farm Subsidies

Rice and wheat exporting countries have raised fresh concerns about India’s food stocks and farm subsidies at the World Trade Organisation (WTO).

This comes less than two months after Western countries promised India that no action would be taken against it for breaching food subsidy levels prescribed by the multilateral body at least for the next four years. The WTO’s Committee on Agriculture (CoA) will take up the questions raised by Canada and Pakistan on India’s wheat and non-Basmati rice exports, existing levels of stocks and the subsidies extended, in a meeting scheduled on January 29, a Commerce Department official told Business Line.

Canada has asked India to give details on the volume of wheat stocks held by the Food Corporation of India (FCI) in the light of recent reports that the country would be exporting up to 20 lakh tonne of wheat due to surplus stocks.

In a representation to the CoA, Canada has also asked India to specify how it calculates the floor price (minimum price) for wheat exports. “Reports (news) indicate that the Government of India has lowered the floor price for wheat to $260 per tonne from $300 per tonne which is lower than the price of the same quality wheat from Canada (and other countries) sold in the range of $270 to $275 per tonne,” the representation said.

India and a number of other developing countries have been granted a reprieve by the WTO against legal action for breaching farm subsidy limits, fixed at 10 per cent of total produce, on items covered under the country’s food security programmes.

This was part of the deal struck at the WTO Ministerial meet in Bali, Indonesia, in December. Members are now supposed to work on a permanent solution to the problem.

India is likely to breach the prescribed subsidy limits once it fully implements its Food Security Programme which offers 5 kg of subsidised foodgrain to about two-thirds of its population. The reprieve, however, would not be applicable if the subsidised foodgrain is released in the export market and affects global prices. India is also obligated to supply all data related to production, pricing, procurement and subsidies demanded by WTO members who would want to ensure that subsidised food was not distorting the global market.

A number of civil society organisations, such as Right to Food Campaign, Action Aid and Third World Network, had earlier warned that the temporary reprieve, called the Peace Clause, would lead to insufficient protection and onerous data sharing obligation.

Pakistan, in its representation to the CoA, has asked India to furnish details of rice exports in the last two years. It has also asked the country to clarify if all non-Basmati rice varieties were eligible for market price support. “India will get some time to reply to the questions,” the official said.

Source:- thehindubusinessline.com

Isuzu Motors To Make India An Export Hub

Isuzu Motors Ltd. will make India one of its hubs to export passenger utility vehicles and pickup trucks to emerging markets in West Asia, Africa and Southeast Asia, a top company official said, as the company began construction of Rs3,000 crore factory in Andhra Pradesh.

The facility is coming up in Sri City, a special economic zone in Chittoor district bordering Tamil Nadu.

The company expects to commence operations at the plant by early 2016 with an initial production capacity of 50,000 units annually. The plant will initially cater to the domestic market. Isuzu will gradually begin exports to emerging markets in the vicinity of the Indian subcontinent as the plant reaches full capacity of 120,000 units a year.

“India is a key region in Isuzu’s global strategy for its emerging markets and as an important manufacturing hub in the future,” Takashi Kikuchi, president and managing director of its Indian subsidiary Isuzu Motors India Pvt. Ltd, said in a statement.

The Indian factory, coming up in 107 acres, will work in collaboration with Isuzu’s existing facility in Thailand, Shigeru Wakabayashi, executive vice-president and deputy managing director of Isuzu Motors India, said. Isuzu’s Thailand plant (with an annual capacity of 300,000 units) is the only facility currently producing light commercial vehicles.

“Our focus is to accelerate our business and establish Isuzu as an important player in the pickup trucks and utility vehicles market in India,” Kikuchi said.

Isuzu, which entered the Indian market in 2012, currently has two vehicles in its portfolio—sports utility vehicle MU-7 and pickup truck D-Max. Japan’s oldest vehicle manufacturer has four dealerships currently in Hyderabad, Chennai, Coimbatore and Cochin, which it will expand to nine by opening showrooms in Bangalore, Visakhapatnam, Tirupati, Madurai and Delhi by March.

It aims to have 60 dealerships by the time its manufacturing facility commences the first phase of production in 2016. It plans to expand showrooms to 180 by 2018.

Source:- livemint.com

India Imposes 5% Export Duty On Iron Ore Pellets

India imposed a 5 per cent duty on exports of iron ore pellets, taking yet another step in conserving the raw material for domestic steelmakers that has slashed its shipments to top market China.

India already levies a 30 per cent tax on exports of iron ore fines and lumps since December 2011. Along with mining and export curbs in key producing states Karnataka and Goa aimed at addressing illegal mining, the tariffs have helped cut India's iron ore exports by around 85 per cent, or 100 million tonnes, over the past two years.

Iron ore pellets had been exempted from any duty previously given negligible exports out of India.

"However, in April-November 2013, exports of iron ore pellets have risen sharply, causing an apprehension about shortage of iron ore in the country," the Ministry of Finance said in a statement on Monday.

India's steel producers last month sought a tariff on exports of iron ore pellets to safeguard domestic supplies.

India's iron ore exports to China, most of them in the form of fines, dropped 65 per cent to 11.7 million tonnes last year, Chinese customs data showed.

"I don't think the tax move will have much impact on the Chinese market," said an iron ore trader in Shanghai.

"Chinese buyers are not that interested in Indian pellets because the price is always high so they are sold mostly to the Japanese and Korean markets."

India's efforts to curb iron ore mining and exports via bans and higher taxes have choked the industry so hard that companies which have invested in the sector are throwing in the towel and exiting.

Top trader MMTC's $80 million iron ore export terminal, ready since 2010, has never handled a cargo and now the company wants to spend $16 million to convert the terminal to ship coal

Source:- profit.ndtv.com

India’S Gems And Jewellery Imports Decline 11% In December

India’s imports of gems and jewellery fell over 11% to Rs.15,735 crore in December after a sharp drop in shipments of gold bars and jewellery due to government curbs, the industry body said.

The country had imported gems and jewellery worth Rs.17,692 crore in the same month in 2012, it said. “There has been a significant decline in import of gold bars and jewellery because of restrictions. However, import of diamonds is on the rise,” Gems and Jewellery Export Promotion Council (GJEPC) chairman Vipul Shah told PTI.

Import of gold bars fell 45% to Rs.2,111.58 crore last month from Rs.3,816 crore a year earlier, according to GJEPC data. Inward shipments of gold jewellery dropped 25% to Rs.453.95 crore from Rs.606.26 crore.

India, the world’s largest gold consumer, meets its entire demand through imports. The government introduced restrictions on gold imports last year to curb the current account deficit (CAD), which had widened to a record high in 2012-13.

Besides gold bars and jewellery, the country imports diamonds, coloured gemstones, pearls, platinum and synthetic stones among others. Purchases of rough diamonds from overseas rose 6% to Rs.10,230.83 crore. Shipments of cut and polished diamonds were 24% lower at Rs.2,355 crore.

Import of rough coloured gemstones increased 14.34% to Rs.176.63 crore, while shipments of rough synthetic stones rose to Rs.41.84 crore from Rs.18 crore.Import of raw pearls increased to Rs.4.79 crore from Rs.3.16 crore.During the April-December period, gems and jewellery imports declined over 10% to Rs.1,33,980 crore from Rs.1,49,570 crore in the year-ago period, the GJEPC data showed.

The government increased import duty on gold thrice to 10%, banned inward shipments of gold coins and medallions and made it mandatory for importers to export 20% of their shipments before purchasing more of the metal from overseas.

Source:- livemint.com

Govt To Revisit Gold Import Curbs, Says Anand Sharma

We have by and large gone along with the revenue and the Reserve Bank on this matter. We are equally keen to ensure that we remain strong and competitive when it comes to the gems and jewellery sector and exports," he told reporters here on the sidelines of the inauguration of CII Partnership Summit 2014 while replying to a question on Congress president Sonia Gandhi's letter on relaxation of a rule linking imports of gold.

He said, "My officials are presently addressing- the Secretary Commerce and DGFT (Director General of Foreign Trade). On my return to Delhi I will be discussing this issue with the Finance Minister (P Chidambaram). I would like to assure that whatever changes are required in the rule when it comes to the interest of Indian economy and the jewellery industry surely we will look into that very seriously."

"At the best we will revisit this and see that how to have a balance. I can only discuss and make recommendation because these are matters that are dealt directly by the Finance Ministry and the Reserve Bank but definitely there is no question of delaying....this is very much on my table," he added.

Gandhi, without spelling out her own opinion, had last week asked the Commerce Ministry to look into demands made by gems and jewellery exporters for a cut in customs duty on gold and relaxation of a rule linking imports of the metal with exports.

"You are requested to kindly look into the matter (demands of the gems and jewellery industry) for appropriate action," said a letter written by the office of Gandhi to the Ministry of Commerce and Industry.Meanwhile, Chidambaram today said the restrictions will be reviewed by March end.

"I am confident that by the end of this (financial) year we will be able to revisit some of the restrictions on gold import but we will do so only when we are absolutely sure that we have a firm grip on the current account deficit," he said.

Source:- post.jagran.com

Karnataka, Dgft Ink Pact To Access Electronic Bank Realisation System

Karnataka Government and the Director General of Foreign Trade (DGFT) have signed a Memorandum of Understanding (MoU) to get access to the electronic-Bank Realisation Certificate (e-BRC) System.

Karnataka Finance Secretary I.S.N. Prasad and Director General of Foreign Trade Dr Anup K Poorjari signed the MoU.

The electronic Bank Realisation Certificate System facilitates the banks to electronically submit the details regarding foreign exchange realised along with other information pertaining to exports.

Thereafter, the exporters verify such data on the Portal of the Director General of Foreign Trade and furnish a declaration regarding the correctness of the uploaded data.

The information available on the DGFT Portal is helpful for the State government to facilitate early settlement of tax refund claims, filed by the exporters and also to extend tax exemption to goods, exported by them, said I.S.N. Prasad.

The access to e-BRC System is expected to help the Department of Commercial Taxes to extend consistent services relating to refund and exemption to the exporters quickly, he added.

Karnataka Commissioner for Commercial Taxes, Ajay Seth, said access to the e-BRC System will facilitate the department to know whether the export has really taken place and speedily process the tax refund claims by the exporters.

Source:- thehindubusinessline.com

ITAT granted further stay of demand as sum involved in MAP was fully covered by bank guarantee

IT/ILT: Where it was apparent from records that amount involved in MAP was fully covered by bank guarantee furnished by assessee and, moreover, assessee did not seek adjournments during hearing of MAP proceedings, its application seeking extension of stay of demand was to be allowed

In COD plea assessee not to justify delay of each day, details from date of limitation till filing o

Excise & Customs : If assessee had 3 months to file appeal, assessee could very well have become active only towards end; delay is to be explained from last day of limitation onwards and what transpired during period from receipt of order till last date of limitation is not required to be explained

Proceeding against ex-directors dropped as these were initiated after prolonged delay from non-compl

CL: Where prosecution against ex-directors was launched much after there was alleged non-compliance and ex-directors were not in possession of required documents due to lapse of time, proceedings against ex-directors were to be dropped

Excise duty based on capacity of production - Actual production not relevant

GST : CENTRAL EXCISE : Section 3A of The Central Excise Act, 1944 - Charge/Levy - Excise Duty Based on Production Capacity - In Case of Duty Based on Capacity of Production, Actual Speed of Machines and Actual Production is Irrelevant; Duty is Payable Based on Deemed Production

Issue revolving around status of assessee which impacts his tax liability can be raised first before

IT : Where determination of correct status of assessee impacts ultimate tax liability, such an issue can be admitted for first time before Tribunal even if it was not raised before lower authorities

15 days period for factory closure not to be reckoned for each month; HC approves of abatement based

Excise & Customs : Where assessee's factory remained closed for a continuous period of 36 days (1-3-2011 to 5-4-2011), abatement of duty was available for entire 36 days including 5 days of April; abatement cannot be denied on ground that period of 15 days is to be reckoned for each month separately

Broker held guilty for manipulative trade as it funded and carried out forged transactions to raise

SEBI : Where appellant not only carried out manipulation in scrip of a company in his own account, but also in account of others whom he provided necessary funds and this led to synchronised and structured trade, raising price of scrips, appellants should be held guilty of manipulative trade

Urban land continues to be an urban land even if jurisdiction of municipality and land falls in diff

IT : If a land is adjacent to a municipality and is urban land covered under section 2(14), though municipality and land fall in different States, land will continue to be urban land

Abatement of ACP based excise duty is available even if 15 days closure period for factory falls in

Excise & Customs : In case of excise duty based on annual capacity of production, abatement is available if factory remains closed for a 'continuous' period of 15 days; there is no further requirement that 15 days period is to be reckoned for each month separately

Prosecution of trustee won’t authorise Dept. to deny registration to trust as long as its objects ar

IT: Where assessee, a public religious trust, made applications seeking registration under sections 12A and 80G, registration could not be declined merely because once upon a time assessee's founder trustee had been accused of heinous crimes and he was awarded life imprisonment

Revenue to rely on Local PWD rates instead of central PWD rates to value construction cost of proper

IT : Local PWD rates should be relied upon rather than Central PWD rates in order to arrive at valuation of renovation and construction of residential property

Adoption of CPM necessitates adjustment of normal GP margin of comparables for functional difference

IT/ILT: Where cost-method was adopted, normal gross profit of comparable was required to be adjusted taking into account functional and other difference, if any, between international transaction and comparable uncontrolled transaction before it could be made applicable for determining arm's length price in regard to international transaction entered into by assessee

HC nods to penalty under Rajasthan VAT as existence of bill without bill no. established evasion cha

CST & VAT : Where, on interception at check post, goods were found with a bill without mentioning bill number, charge of evasion was established; and, therefore, penalty under Rajasthan VAT/Sales-tax law was leviable

Repayment of loan is an application and not diversion of income; can’t constitute as revenue exp.

IT: Where repayment of loan amount was application of income and not diversion of income by way of any overriding title, such loan amount could be claimed neither as a deduction from business income nor as revenue expenditure

Once Compromise Scheme is sanctioned, neither Court nor Company can rescind it

CL : Neither Court nor company can abrogate/rescind/cancel scheme once sanctioned and effective; if scheme is not workable, company can seek necessary directions for modifications in it

Sec. 47(iv) exemption allowable as condition of 100% shareholding is impossible to comply due to the

IT : Where under a development agreement with a developer assessee merely realised sale proceeds of capital asset held for 30 years, same would give rise to 'capital gains', and not 'business income'

No addition under sec. 69B as sums were paid by directors in their individual capacity and not by as

IT: No addition could be made in hands of company under section 69B for on money payment to purchase land by directors individually

Lower Realisations To Worsen Sugar Firms' Losses

Sugar mills’ financial health is unlikely to see a significant change soon, due to a continued price decline in the sweetener and uncertainty on allied products, despite the government’s short-term relief measures.

Fundmentally, mills’ cost of producing sugar is substantially more than the price they get. And, the latter continues to decline. The average price (M-30 variety) at the major wholesale Agricultural Produce Marketing Committee market at Vashi (Navi Mumbai) near here fell 13 per cent to Rs 3,124 a quintal in the October-December quarter, compared to Rs 3,583 a qtl a year ago. The price has fallen a further four per cent this month, to Rs 3,000 a qtl. This spot price is at least Rs 250-300 a qtl lower than the cost of production in major producing states.

“Sugar mills in Uttar Pradesh will continue to suffer losses due to high cane prices (Rs 280-290 a qtl), despite their close integration with by-products, including co-generation and distillation. But by-products will prove a saviour for integrated mills in Maharashtra, as their cane cost stands at Rs 240-250 a qtl,” said Chaitanya Raut, an analyst with CARE Ratings. Port-based sugar mills are able to export at competitive prices, enabling them to recover the production cost, a benefit not available to UP mills.

In the past two financial years, this situation has persisted, of a higher cost of production than actual realisation from core and allied activities. The losses have deepened steadily in the past two quarters, due to a rising interest burden on the working capital raised by companies during the crushing season. Poor offtake by state governments for supply through the Public Distribution System has swelled the inventory.

Leading producer Bajaj Hindusthan incurred a loss of Rs 509 crore in the September quarter, on a turnover of Rs 1,327 crore; it was one of the biggest quarterly losses in the company’s history. In the June quarter, it had a loss of Rs 157 crore on a turnover of Rs 1,256 crore.

Shree Renuka Sugars had a loss of Rs 63.6 crore on a turnover of Rs 1,937 crore in the June quarter, deepening to a Rs 120-crore loss on a turnover of Rs 1,535 crore in the September quarter.

Sugar mills' fortune will not change till a long-term formula is devised to align the cane price with sugar realisation, said Sanjay Tapriya, chief financial officer, Simbhaoli Sugar Mills.

Last month, an Empowered Group of Ministers (EGoM) recommended to the Cabinet Committee on Economic Affairs to allow four million tonnes more of sugar export. The sector has this much surplus but prices in the global markets are lower than in India, said Abinash Verma, director-general, Indian Sugar Mills Association.

The EGoM’s other recommendation was to raise the compulsory blending of ethanol with petrol up to 10 per cent from five per cent. However, oil marketing companies (OMCs) are not willing to pay the Rs 44 a litre demanded by the mills. In the first tender for five per cent mandatory ethanol blending, the OMCs had invited supply orders at Rs 34-36 a litre.

In the Indian markets, the average cost of sugar production works out to Rs 3,250 a qtl against the average realisation between Rs 2,900 and Rs 3,100 a qtl. There has been a further fall of Rs 150 a qtl in the past

Source;- business-standard.com

Dispute on clubbing of clearances for SSI exemption was related to rate of duty; issue appealable to

Excise & Customs : Dispute as to whether clearances of two or more persons are to be clubbed for SSI-exemption is related directly to rate of duty applicable and, hence, appeal involving said issue would lie before Supreme Court and not High Court

Another Year Of Bumper Crop And Bumper Prices

Current spot prices at Rs 20,500 a bale (170 kg) are 12 per cent below the levels seen at the beginning of the Indian cotton season October 1, 2013. This was expected as the cotton crop was expected to make new records in 2013-14. What has come as a surprise is prices have rebounded by 10 per cent since they bottomed in the first week of December at around Rs 18,500 a bale. Different scenarios could play out regarding the direction in the days to come.

So far, robust demand has supported the price. Export numbers suggests till mid-January, 5.5 million bales have been exported. This means 65 per cent of the total estimated exports of 8.5-9 million bales has been achieved in the first four months of the season. As against this, arrivals have been one-third of the total expected crop of 37.5 million bales during the same period. Clearly, higher demand has driven the prices since December. Consumption seems to be on the ascending path for the rest of the season that ends in September.

In the January-March quarter, 53-55 per cent of the total crop is expected to arrive, amounting to a little over 20 million bales. Because of delayed rain, a lot of cotton is still maturing. As against this, exports might dip a little at 3.5 million bales, compared with 4.4 million in the first quarter. Recently, import parity emerged and 200,000 bales of imports were contracted. Clearly, the quarter would be supply-heavy.

And yet, prices are unlikely to dip below the previous lows, as the annual cotton balance sheet of India remains tight. Assuming a crop of 37.5 million bales and exports of nine million bales and consumption of close to 30 million bales, ending stocks would look similar to what it was last year, which is close to 4.5-5 million bales. Prices will not fall in anticipation of higher prices in the second half.

Since the last couple of years, cotton yarn has emerged as a proxy to cotton imports from China. Cotton imports attract 40 per cent import duty, while cotton yarn attracts none. India remains the top supplier of yarn, and its yarn remains the cheapest in world. As a result, robust cotton exports and equally robust demand from domestic consumers will keep cotton demand in a very healthy shape.

Internationally, too, cotton prices have rallied quite sharply and the demand rationing has not really appeared at higher levels. The rally is supported by the understanding that US ending stock is the lowest in four years.

On the other hand, China with 60 per cent of total global stocks and 162 per cent stock to use ratio, has declared it would discontinue its controversial stock reserve policy in 2014-15. As a result, as we get closer to 2014-15, chances rise of global prices coming under pressure. While a lot will depend on the 2014-15 acreage and crop, the prices will remain under selling pressure in anticipation.

It can be concluded the prices are currently running ahead of their time. Reduced activity on account of the Chinese New Year holiday might provide a much-needed break to the current price rise. A five to seven per cent correction in the January-March quarter cannot be ruled out. The second half of the cotton year will see firm prices, as the Indian balance sheet is tight; a rally of 10-15 per cent after the correction is most likely. If the demand-side story remains strong, we might end up revisiting the prices seen during last year-end at Rs 23,000 a bale

Source;- business-standard.com

Lic Agents Protest Levy Of Service Tax On Insurance Premium

The introduction of service tax of 3.09 per cent on traditional products is unnecessary; the insurance business has been on decline for the last three weeks”

Over 7,000 LIC agents from Tamil Nadu, Kerala and Puducherry assembled here on Friday to oppose the levy of service tax on insurance premium, with effect from January 1 and sought its immediate withdrawal.

The rally was spearheaded by Life Insurance Agents’ Federation of India Southern Zone president V. Ganeshan to raise awareness on the levy of service tax that was bound to give a blow to the public’s saving habit and to the livelihood of insurance agents.

Participating in the Golden Jubilee celebrations of southern zonal council meet, the Federation president H.M. Jain said, “At a time when we are asking the management to extend more benefits to the policyholders and introduce user-friendly policies, the introduction of service tax of 3.09 per cent on traditional products is unnecessary. It will pinch their pockets as it is an extra burden. This will force most of them to discontinue the policies. There are over 11.4 lakh LIC agents in the country and equal number of agents in the private sector. LIC has 30 crore policyholders and they should not be exploited in the name of new taxes.”

Federation secretary general N. Gajapathi Rao mentioned that the insurance business was on the decline for the last three weeks and said as a next step they would meet officials concerned during the second week of February seeking withdrawal of service tax.

In his welcome address, Mr. Ganeshan said the service tax would affect LIC’s business as more than 20 crore policyholders are from lower and middle-income groups.“In the coming days, it might delay settlement of death claims or maturity claims and affect LIC reserves too,” he added.

Source:- thehindu.com

Oil Groups Pressed To Restrain Spending

It seems someone was listening. A short time later, Shell dropped plans to build a new gas-to-liquids plant in Louisiana – a highly ambitious project that would have tied up several billions of dollars.“The penny seems to have dropped,” says Mr Wheaton, manager of Allianz Global Investors’ Global Energy fund.

Mr van Beurden has probably been inundated by such advice in the past few months from irate shareholders alarmed by what is afoot at Shell. A fortnight ago, it issued its first profit warning in ten years, telling the market its fourth-quarter earnings would be $2.9bn – down 48 per cent year on year.

Analysts at Credit Suisse say the warning was a harbinger of weak results across the European oil sector, which has been hit by factors ranging from weak refining margins and higher exploration expenses to unrest in Libya. The bank cut its earnings-per-share estimates for the European group by 22 per cent.

Despite all the headwinds, western oil companies are holding up well against some of their rivals. Last year, majors such as Total of France and Chevron of the US outperformed national oil companies from China, Russia and Brazil in terms of stock market valuation.

But by other comparisons, they are doing worse. Morgan Stanley says Europe’s integrated oil companies underperformed the broader European equity market by about 37 per cent since the start of 2012.

Meanwhile in the US, Chevron’s shares have risen 1 per cent and Exxon’s 5 per cent over the past year, while the S&P 500 is up 22 per cent.

The root of the problem is concern about spending. Over the past few years, all the western majors have increased capital expenditure as they venture into ever more challenging regions and take on more complex projects.

But, at a time when industry costs are rising and oil prices are stagnant, many think companies should be spending less, not more. Pressure is building on them to plough their earnings into higher dividends and share buybacks rather than increasingly expensive new ventures.

“Investors are fed up with always being so low down in the queue for cash flow,” says Mr Wheaton.

Shell stands out in this regard. Europe’s largest oil company by production, Shell’s capital investment rose from $27bn in 2007 to $44.3bn in 2013 – but that has not translated into a better financial performance. Instead, Martijn Rats of Morgan Stanley wrote in a recent note, the company has seen falling profits, weakening returns and deteriorating free cash flow.

Shell’s return on average capital employed – a key metric in the oil industry – was relatively steady at about 20 per cent during the mid-to-late 2000s, but more than halved to 9 per cent last year, Mr Rats says.

Meanwhile, free cash flow is not growing nearly as quickly as Shell management said it would. The company said in 2012 that it would generate $200bn of operating cash flow over the ensuing four years. But so far, it has only realised about $40bn a year, putting it well behind its target.

That is a dilemma for Mr van Beurden, who moved into the top job at Shell at the start of January. Many expect him to modify or even abandon some of Shell’s objectives when he gives his first strategy presentation in March.

“He has to reset the cash flow target,” says Charles Whall, co-portfolio manager at Investec Asset Management. “He has to do it from a credibility perspective.”

But such issues are not unique to Shell. Even ExxonMobil which reports fourth-quarter earnings this Thursday – a day ahead of US rival Chevron – is no longer generating enough cash to cover capex and payouts to shareholders, according to Robert Kessler of Tudor Pickering Holt & Co.

He says its free cash flow fell short of shareholder distributions by $10bn in 2012, and the gap will be $9bn in 2013. Meanwhile, net debt has risen as the group borrows to cover the shortfall.

Mr Kessler thinks something has got to give – and ultimately it will be spending levels. “In future, the majors are going to be more selective about capex,” he says. “They’ll complete their big capital projects and then let free cash flow grow.”

Already, there are signs of this more choosy approach. Norway’s Statoil, in particular, has deferred a number of oil projects in the North and Barents seas, and recently shelved an export plan for its Kristin gasfield in the Norwegian Sea because of rising costs.

Total cheered investors last July when it said its capex would peak in 2013 and start falling in 2014. Chevron also said it planned lower capital spending this year than in 2013, which it described as a relative peak year for investments.

The spending slowdown is being combined with an increase in the pace of divestments. BP said in October that it would sell a further $10bn of assets by the end of 2015, on top of the $38bn in disposals made since the 2010 Deepwater Horizon disaster.

Shell is also expected to speed up divestments. Analysts say it must sell at least $14bn worth of assets if it is to stay within its current financial framework. It took a first step along that road last week, announcing the sale of its stake in the Wheatstone LNG project in Australia to a Kuwaiti company for $1.14bn.

Investors appear to be giving Mr van Beurden the benefit of the doubt. Shell’s shares have moved up by 7.6 per cent since the start of December. “A new face brings hope,” says Neill Morton of Investec. “People were taking a bet that he would do things differently.”

Tellingly, even Shell’s profit warning failed to put a big dent in the rally. For Mr Wheaton, that was a sign that, despite the drip-drip of bad news from the sector, “people want to own Big Oil”.

The majors may be languishing, he says, with valuations at multiple-year lows – but “there’s a feeling that a turnround is coming. And investors want to buy into it”.

Source;- ft.com

Assessment of a person, other than searched person, can be done only under section 158BD and not und

IT: Assessment of a person, other than searched person, based on materials recovered during search is authorised only under section 158BD and not under section 158BC

Coming, Additional Export Incentives For Select Industries

Exporters of garments, chemicals and pharmaceuticals can look forward to some additional sops soon.The Government is working on a small package of incentives for select sectors to help exporters tackle the difficult global market.

The package, which is likely to include a bonus amount for garments and chemicals exports to Europe linked to the value of shipments, is awaiting clearance from the Finance Ministry.

The Commerce Ministry has also proposed reimbursement of registration fees for pharmaceutical exporters.

CAD worries

It is important that exports, which have posted sluggish growth so far this year due to continuing slowdown in the Western markets, get back on the growth track to keep the widening current account deficit in check.

“Discussions are on with the Finance Ministry and a nod is expected soon. But it remains to bee seen whether all the demands are accepted because of the fiscal constraints,” a Commerce Department official told Business Line.

The Finance Ministry’s focus on keeping the fiscal deficit in control is the main reason why the size of the package is small. Other products would have to wait till the new Government assumes office and announces the annual Foreign Trade Policy for the year.

But this could take a few months as the General Elections are due not before mid-April.

“The idea is to give incentives to items that urgently need help and cannot be made to wait for a few months,” the official said. Exporters of garments and chemicals to Europe have a strong fight in store this year as the sectors have graduated out of the EU’s Generalised System of Preferences (GSP) scheme and would no longer be eligible for lower import duties.

Not only will these products have to face full import duties, ranging between 6 per cent and 12 per cent, exporters will have to face competition from countries such as Pakistan and Bangladesh that can export to the EU duty free under the GSP plus scheme.

“Although a number of other items including leather, auto and minerals will also be affected, it is garments and chemicals that are likely to be hit the most,” the official said. The Government is considering a 2-3 per cent incentive for the two items.

Pharmaceutical exports have been registering low growth over the past few months due to growing competition from China and stricter quality control procedures in the US and the EU.

“Reimbursement of registration charges for drugs can be a big help to exporters as in markets such as the US, the amount is substantial,” the official said.

In the first three quarters of 2013-14, exports posted a growth of 5.9 per cent to $230.33 billion compared to April-December 2012-13.

Source;- thehindubusinessline.com

India Imports Of Inorganic Chemicals, Organic Or Inorganic Compounds Of Precious Metals Of Rare-Earth Metals And Radioactive Elements Of Isotopes Rise To Us$ 421.16 M In December- 2013

New Delhi, Delhi, January 24, 2014 /India PRwire/ -- InfodriveIndia.com, India's premier research company in export import data, announced today that India's Inorganic Chemicals, Organic or Inorganic Compounds of Precious Metals of Rare-Earth Metals and Radioactive Elements of Isotopes imports in December- 2013 has grew to US$ 421.16 M, a increase of 0.6% compared to November 2013.

This finding is based on India Import Market data of Inorganic Chemicals, Organic or Inorganic Compounds of Precious Metals of Rare-Earth Metals and Radioactive Elements of Isotopes of InfodriveIndia.com and is compiled from Imports bills of entry filed at Indian customs through December- 2013 at more than 170+ ports in India like JNPT, Bombay Air and Sea , Chennai Air & Sea , Delhi IGI Air, Delhi Tughlakhabad ICD, Delhi Patparganj, Kolkata Air and Sea, Bangalore Air and many more. InfodriveIndia.com India Inorganic Chemicals, Organic or Inorganic Compounds of Precious Metals of Rare-Earth Metals and Radioactive Elements of Isotopes Import database is considered to be the most comprehensive, up-to-date and authentic information on India's foreign trade of Inorganic Chemicals, Organic or Inorganic Compounds of Precious Metals of Rare-Earth Metals and Radioactive Elements of Isotopes.

According to Pradeep, Chief Research Associate of InfodriveIndia.com, compared to November 2013, a increase of USD 421.16 M in December- 2013 has been noticed. He further gives a analysis and break up of major product categories , major countries and major Indian ports under Inorganic Chemicals, Organic or Inorganic Compounds of Precious Metals of Rare-Earth Metals and Radioactive Elements of Isotopes as follows .A. Imports of Ammonia and Anhydrous has grew month on month basis by 19.03%.

Total value of imports in December- 2013 was 103.2 M, compared to November 2013 , there is a increase of 16.5 M in December- 2013, growth rate in percentage terms is 19.03%, the major destination countries were Saudi arabia, Iran, Russia, Ukraine and Qatar and major Indian ports were Paradip, Kakinada, Vizag Sea, Kandla and JNPT .

B. Imports of Diphosphorus Pentaoxide, Phosphoric Acid and Polyphosphoric Acids has fallen month on month basis by -19.27%.

Total value of imports in December- 2013 was 93.53 M, compared to November 2013 , there is a decrease of -22.32 M in December- 2013, growth rate in percentage terms is -19.27%, the major destination countries were Morocco, United States, Senegal, China and Taiwan and major Indian ports were Kandla, Calcutta Sea, Kakinada, Goa Sea and Paradip .

C. Imports of Radioactive Chemical Elements and Radioactive Isotopes has grew month on month basis by 168.6%.

Total value of imports in December- 2013 was 24.41 M, compared to November 2013 , there is a increase of 15.32 M in December- 2013, growth rate in percentage terms is 168.6%, the major destination countries were Russia, United States, Israel, France and Turkey and major Indian ports were Hyderabad Air, Bombay Air, Delhi Air, Bangalore Air and Calcutta Air .

D. Imports of Sodium Hydroxide (Caustic Soda), Potassium Hydroxide (Caustic Potash) and Peroxides of Sodium or Potassium has grew month on month basis by 86.91%.

Total value of imports in December- 2013 was 24.4 M, compared to November 2013 , there is a increase of 11.34 M in December- 2013, growth rate in percentage terms is 86.91%, the major destination countries were Iran, Saudi arabia, Korea, Republic of, Japan and Qatar and major Indian ports were Vizag Sea, Bombay Sea, JNPT, Kakinada and Madras Sea.

Pradeep says that the above information is on major product categories, and users requiring detailed analysis and reports on their specific products can contact Sales team at InfodriveIndia.com with detailed description of their product, brand names and its uses.According to Pradeep, usually InfodriveIndia.com team delivers most of the projects within 3 working days.

InfodriveIndia.com analysis and research is done from India import market data from customs statistics which is based on the Bills of Entry filed at various ports, InfodriveIndia reporters collect this data from every Indian port, and InfodriveIndia database yields the most timely, accurate, comprehensive information available on trade through India Ports. Recently after a long and persistent lobbying with Indian Govt, InfodriveIndia.com has been able to release India Import Statistics almost on realtime basis, bringing the backlog time to just 3 days, compared to Govt sources which are around 6 months old. Another unique feature of InfodriveIndia.com database is unparalleled coverage of 170+ ports in India.

InfodriveIndia.com is 16 year old market leader and primary source of India export import market intelligence in India. The India Import Export data bank, which is at the core of InfodriveIndia.com trade information services is unique and has been categorized by Harmonized system in over 25,000 product codes. InfodriveIndia researchers provide expert data analysis and interpretation tools, Charts, Pivot reports in MS Excel and detailed item wise records to support decision-marking for International Trade, supply-chain management, competitive intelligence and brand protection.

World's top market research companies, Export promotion councils, trade associations, domestic and foreign governments, and over 16,000 corporates from more than 65 countries rely on InfodriveIndia.com for meaningful export import trade intelligence to guide their International business strategies

Source:- indiaprwire.com

Case remanded to allow assessee to file additional evidence in support of its claim that cost was al

IT/ILT: Where in course of transfer pricing proceedings, TPO made certain adjustment in respect of cost allocation from AEs, in view of fact that in appellate proceeding assessee sought to file certain additional evidence in support of its claim that cost allocation had been made at arm's length price, impugned adjustment was to be set aside and, matter was to be remanded back for disposal afresh

Department can’t levy interest if no custom duty is payable on goods due to exemption notification,

Excise & Customs : Its only when duty is payable, interest is chargeable; since, because of an exemption, as in case of production of advance licences, no customs duty was payable in respect of warehoused goods, no interest was chargeable

Combination ensuing acquisition of marginal share in market held valid as no adverse effect found on

Competition Act : Where proposed combination relating to acquisition by acquirer of electrical transmission and distribution equipment did not have an appreciable adverse effect on competition in India, same was to be approved

Rupee Slips To 62.78 Per Dollar, Awaits Rbi Policy For Further Cues

The Indian rupee on Monday opened lower against the dollar, tracking losses in Asian currencies, ahead of the Reserve Bank of India (RBI) monetary policy review on Tuesday.

At 9.04am, the Indian currency was trading at 62.78 per dollar, down 0.16% from its previous close of 62.68. Majority of the Asian currencies were trading lower against dollar.

Dealers will closely watch for RBI intervention at current levels after the central bank was suspected to have sold dollars in late session on Friday.

Since the beginning of this year, the rupee has lost 1.55% against dollar and has recovered better than its peers, unlike Korean won and Thai baht which have fallen the most.

Most traders are expecting RBI to keep key rates unchanged on Tuesday but the tone of the policy will be crucial.

Recent comments from the central bank chief Raghuram Rajan and the monetary policy panel report suggest rates may remain elevated for some time to come.

Source:- livemint.com

IRDA focuses on persistency of policies; devises standardized method for working out persistency rat

INSURANCE : Report on persistency rate and renewal rate

Loss from revaluation of defective stock isn’t provision for unascertained liability; no adjustment

IT: While computing book profits under section 115JA no adjustment can be made on account of defective stock on ground that it was 'provision for unascertained liability'

RBI exempts NBFCs from restrictive norms on money received by them for issue of Prepaid Payment Inst

NBFCs : Prepaid Payment Instruments issued by Non-Banking Institutions

Opportunity of being heard before transfer of case isn’t absolute right of assessee; can be bypassed

IT: Though section 127 talks about giving assessee a reasonable opportunity of being heard in matter of transfer of jurisdiction, but this is not an absolute right of assessee in all cases

No collection of CST at higher rate if rate of tax on intra-state sales of same goods was reduced un

CST & VAT : Where rate of tax on intra-state sale of Hydraulic Excavators was reduced by way of an unconditional exemption to 2 per cent, inter-state sale of such goods without C-Form cannot be charged to a higher rate viz. 4 per cent and would be liable to tax at 2 per cent

Once scheme of amalgamation is approved, plea for investigation in affairs of company is liable to b

CL: Prayer for investigation in affairs of transferor company after its merger with transferee company is liable to be rejected

Loss from revaluation of defective stock isn’t provision for unascertained liability; not adjustment

IT: While computing book profits under section 115JA no adjustment can be made on account of defective stock on ground that it was 'provision for unascertained liability'

Petition for oppression and mismanagement rejected as shareholder failed to prove minimum shareholdi

CL: On failure to adduce evidence regarding shareholding in company to extent of 10 per cent, petition for oppression and mismanagement was to be dismissed

No surcharge leviable on unconditional rate of tax prescribed under sec. 8(5) of CST Act

CST & VAT : If a general and unconditional rate of tax on inter-state sales is prescribed under section 8(5) of Central Sales Tax Act, 1956, no additional sales-tax/surcharge can be levied over and above such rate

Cost of gas fire equipment excluded from plant and machinery to compute limit of investment for sec.

IT: Where it was apparent from records that assessee's investment in plant and machinery after excluding cost of gas fire equipment falling in category of 'gas producer plant', did not exceed Rs. one crore, it was to be treated as small scale industry and, therefore, its claim for deduction under section 80-IB was to be allowed

No assessments in haste, AO to supply copy of seized docs to assessee before assessment, rules HC

IT : Where pursuant to search proceedings, assessee filed an application seeking copy of impounded documents so as to file revised return of income and Assessing Officer passed assessment order on basis of original return without supplying said copies, order so passed by Assessing Officer was not sustianable

No exclusion of comparables due to turnover unless assessee proves that turnover influenced operatin

IT/ILT : Where assessee claimed that comparables selected by TPO were not good on ground of turnover, assessee was to demonstrate that turnover factor influenced operating profits of said comparables

HC levied penalty under Rajasthan VAT Act due to overwriting in Form ST-18A proving that form was re

VAT & CST : Overwritings and cuttings in columns of declaration form ST-18A as regards material particulars leads to conclusion that such form was re-used and, therefore, penalty under Rajasthan VAT law is leviable

Non-availability of PAN of deductee treated as sufficient cause for delay in issuing Form 16A; penal

IT : Where assessee was prevented by sufficient cause in not issuing Form 16A within prescribed time to persons from whom tax was deducted as PANs of deductees were not available with him, penalty order passed under section 272A(2)(g) in respect of default committed under section 203 was to be set aside

Petition for oppression and mismanagement as rejected as shareholder failed to prove holding of min

CL: On failure to adduce evidence regarding shareholding in company to extent of 10 per cent, petition for oppression and mismanagement was to be dismissed

Investment allowance can’t be denied if assessee uses composite technology to manufacture two produc

IT : Where technology developed by research institute was a composite one, both for manufacture of TSIA as well as for its utilization in manufacturing caustic soda, assessee, who produced caustic soda by using TSIA manufactured by third party, was also eligible for higher investment allowance under section 32A(2B)

Sec. 13 not violated if firm owned by trustee won tender floated by trust or when trustee got busine

IT: Where firm of managing trust won construction bids on competitive basis and sum was advanced to said firm, neither section 13(2)(c), nor section 13(1)(d) was violated

HC set aside CESTAT’s order for pre-deposit as it didn’t consider Commissioner (A) judgment in favou

Excise & Custom : Where CESTAT had directed pre-deposit without considering judgment of Commissioner (Appeals) in favour of assessee on merits, matter was remanded back to Tribunal to consider matter afresh in light of judgment of Commissioner (Appeals)

Penalty order void as AO slapped penalty on deceased assessee instead of his legal heir

IT : Where Assessing Officer passed penalty order under section 158BFA(2) in name of deceased assessee and son of deceased was never impleaded as a legal heir of his father, said penalty order was null and void

ITAT restores case as CIT(A) passed ex-parte order in case of TDS default on royalty payments

IT/ILT: Where Assessing Officer treated payments made to foreign companies for purchase of software as payment of royalty in terms of section 9(1)(vi) and held assessee as assessee-in-default on account of non-deduction of tax on said payments, in view of fact that effective opportunity of hearing was not granted to assessee and order of Commissioner (Appeals) was passed ex-parte, issue was restored to Commissioner (Appeals) for de novo consideration

Appeal can’t be kept pending merely because a judgment relied upon is pending before larger bench of

Excise & Customs : Merely because a reference is pending before larger bench, judgments referred to, do not cease to be binding and, therefore, appeals must be disposed of accordingly; appeals cannot be kept pending in suspended animation

CLB denied to hold investigation as shareholder failed to establish its allegation through fabricate

CL: Where a shareholder failed to give proof or evidence regarding non-compliance of statutory requirements by company, order for investigation could not be entertained

RBI tweaks norms on restructuring of advances by NBFCs on line of norms specified for banks

NBFCs : Review of Guidelines on Restructuring of Advances by NBFCs

RBI allows securitization cos. to acquire financial assets of other securitization co.

NBFCs/SARFAESI : Conversion of Debt into Shares, Consent Level of Security Enforcement Actions and Permission to Acquire Debt From Other SC/RCS

No appeal lies to High Court against a finding of fact

Excise & Customs : Question whether assessee had actually received inputs and used them in manufacture of final product was a pure finding of fact and did not involve any substantial question of law; hence, no appeal could be filed before High Court

DVAT-Entries in Sixth Schedule reorganized

GST : VAT/CST: Refund of Tax for Embassies Officials, International and Public Organizations - Entries in Sixth Schedule to Delhi Vat Act have been Recognized

Processing of burnt oil to obtain pure oil therefrom tantamounts to deemed manufacture

Central Excise : Procuring waste/burnt oil from service stations and processing (dehydration, distillation, clay polishing and filtration etc.,) of such oil, thereby, removing impurities and selling same as base oil, lubricating oil and transformer oil etc. to consumers amounts to deemed manufacture under Note 4 to Chapter 27

Court should not reject sec. 391 scheme if it isn’t contrary to any law or is against public interes

CL: Unless scheme under section 391 was shown to be contrary to any law or shocks conscience of court or was patently unfair to members or creditors or any class of them or was against public interest or against public policy, same should not be rejected

Valuation method devised under Wealth-tax Act can’t be used to fix value of undisclosed investment u

IT: Provisions of Wealth-tax Act, 1957, and Schedule III thereto can not be imported into provisions of section 69B because enquiry under Wealth-tax Act is towards estimating market value of property which is different from actual price paid for property

Central Excise Rule providing for interest rate in excess of rate specified in Excise Act is ultra v

Excise & Customs : Rule cannot provide for rate of interest in excess of that provided in section/Act itself; Rule 8(3) of Central Excise Rules providing for interest at rate exceeding that provided in erstwhile section 11AB of Central Excise Act was held ultra vires

Revenue can’t doubt genuine transaction unless it is shown as a colourable device to reduce tax, rul

IT : Where none of grounds assigned by Tribunal to show genuineness of transaction, was even commented upon by revenue, transaction could not be suspected as colourable

Tribunal couldn’t dismiss revenue’s appeal without allowing it to correct defects in memo of appeal,

IT : Where memo of revenue's appeal was defective, Tribunal should have allowed revenue to correct defect instead of dismissing appeal as duplicate

Sum paid for data transmission via satellite is 'royalty' in view of amended sec. 9; case remanded t

IT/ILT : In view of Explanations 5 and 6 to section 9(1)(vi) which were inserted retrospectively by Finance Act, 2012, receipts earned from providing data transmission services through satellites is to be considered as royalty

Order prohibiting CHA from transacting business mandates post-decisional hearing instead of pre-hear

Excise & Customs : In case of order prohibiting CHA from transacting business, there is no requirement of grant of pre-hearing but since such order entails severe adverse consequences, assessee will be entitled to post-decisional hearing

Amended sec. 36(1)(vii) doesn’t authorize revenue to scrutinize reasons for writing of debt, says HC

IT: After amendment in section 36(1)(vii) with effect from 1-4-1989 reasons for which amount was written off as irrecoverable is not subject to scrutiny

Different bidders quoting almost identical prices tantamount to unlawful price determination and bid

Competition Act: Opposite party bidders by quoting identical rates had indirectly determined prices/rates in rate contracts finalized by informant and indulged in bid rigging in contravention of provisions of section 3

HC slams Setcom for making addition on basis of affidavit given by dept. officer without confronting

IT : Where Settlement Commission received a statement made and an affidavit sworn by an officer of department after conclusion of arguments and on basis of said affidavit it made addition to income of assessee and assessee was not confronted with said statement or affidavit, Settlement Commission had violated principles of natural justice rendering impugned order illegal and void