Dept. can't deny credit to buyer for the duty paid on activity not being 'manufacture'

Cenvat : If, relying upon a circular in force at material time, duty has been paid by manufacturer on an activity not amounting to manufacture and said assessment has not been changed, availment of Cenvat credit by assessee-buyer cannot be challenged

Interest on NPAs held taxable on receipt basis even if receipient co-op. bank is following mercantil

IT: A co-operative bank is governed by section 43D and can offer its interest received from NPA on actual receipt basis even if it was otherwise following mercantile system of accounting

MCA gives discretionary powers to Govt. to extend service terms of CLB Bench

Companies Act, 1956/Indian Acts & Rules : Company Law Board (Qualifications, Experience and Other Condition of Service of Members) (Amendment) Rules, 2014 - Amendment in Rule 8

Ministry tweaks rules on remuneration and service terms of ITAT Members

IT/Indian Acts & Rules : Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Amendment Rules, 2014 - Amendment in Rule 9

Board plans to hike fees to achieve its statutory objectives

SEBI : SEBI meet: SEBI BOARD MEETING - Strengthening of Investor Awareness & Education Measures; Enlargement of Reach of Investors/Potential Investors Through Regional & Local Offices & Enhancement of Focus on Capacity Building, etc.

LG's ratio applies to both, manufactures and distributors in case of TP adjustment of AMP exp., says

IT/ILT: Both in case of manufacturers, as well as distributors, transfer pricing adjustment in relation to AMP expenses by bench marking them separately is sustainable

Losses from buyback of shares sold previously to unrelated parties at huge premium held bogus; addit

IT: Where assessee, a private limited company, sold its shares to unrelated parties at a huge premium and thereupon within short span of time those shares were purchased back even at a loss, share transactions in question were to be regarded as bogus and, thus, amount received from said transactions was to be added to assesee's taxable income under section 68

Tribunal waives off penalty under FEMA due to financial crisis of appellant's widow; allows time bar

FEMA : Where during pendency of appellate proceedings challenging penalty order passed under section 17(4), appellant died, in view of fact that appellant's widow was not in a financial condition to pay demand and her first appeal was rejected only on point of limitation, payment of pre-deposit of penalty amount was to be waived

Sec. 54F relief can’t be denied if assessee merely pays booking amount more than one year prior to d

IT : Where Assessing Officer rejected assessee's claim for deduction under section 54F on ground that assessee availed housing loan and booked flat prior to date of transfer of capital asset, in view of fact that aforesaid activities did not vest assessee with ownership of new asset and it was only by virtue of registered sale deed executed within prescribed time period under section 54F assessee became owner of flat, impugned order passed by Assessing Officer was to be set aside

Matter had to be remanded while hearing stay petition if issue raised by assessee wasn't considered

Service Tax : If, while hearing stay petition, Tribunal is of view that matter needs to go back to adjudicating authority for fresh decision on ground that various basis issues had not considered/answered in proper manner, appeal cannot be kept pending in Tribunal for longer period, instead of deciding same at stay stage itself

HC upheld decision of appellate authorities that block assessment couldn’t be reopened under sec. 14

IT : Provisions of sections 147 and 148 are not applicable to block assessment order passed under Chapter XIVB

No oppression plea if capital base of co. was increased in breach of Companies Act to meet requireme

CL : Where respondent company proved that share capital of a company was increased to meet out urgent requirement of funds, holding of EOGM and allotment of impugned shares even if not be strictly in accordance with provisions of Companies Act, did not amount to an act of oppression

Assessee subjected to block assessment if he files his return after search but before initiation of

IT : Where assessee filed return after search was conducted at his premises but prior to initiation of proceedings under Chapter XIVB, case of assessee would certainly fall for consideration under section 158BB read with section 158BD

Sums paid for smart card operating software without any copyright won't be deemed as royalty

IT/ILT : Where assessee engaged in business of providing enterprise solutions based on smart cards, bar coding, biometrics etc., purchased a readymade card operating system software from a foreign company to be used for its business purpose only and without any right of utilizing copyright of said programe, payment made in respect of same did not give rise to any royalty income

No coercive recovery if stay could not be disposed of due to vacancy in office of Tribunal

Excise & Customs : Where stay application filed by assessee before Tribunal could not be taken up due to vacancy in Office of Tribunal, Department could not initiate coercive steps for recovery

Additional claim can be made only by filing a revised return and not by filing a revised computation

IT: Where revenue raised a question as to whether assessee could file revised computation for making additional claim for deduction other than filing a revised return of income, in interest of justice, assessee was to be directed to file a revised return of income raising additional claim along with an application for condonation of delay under section 119(2)(b)

Notice won’t be presumed to be served if it was sent on wrong address and received by an unauthorize

IT : Where Assessing Officer issued notice seeking to reopen assessment on wrong address and person alleged to be an employee of assessee was not authorized to receive notice, presumption of service of notice under section 292BB would not be attracted and, therefore, impugned additions made in reassessment proceedings deserved to be set aside

Specific provision prevails over general provision when conflict arises in entries providing exempti

CST & VAT : Where Entry 1E provided 25 per cent exemption to 'large cement units' and another entry provided 75 per cent exemption to 'all prestigious units', then, for an assessee being a cement unit satisfying both entries, specific provision viz. Entry 1E would prevail and assessee would be entitled to only 25 per cent exemption

Mere transfer of an amount from subsidy account to partner’s capital account wouldn’t make it liable

IT : Merely because assessee changed nature of treatment of subsidy received in year 1995 from subsidy account to partner's capital account for accounting purpose, it would not permit revenue to examine taxability of such receipt in assessment year 2004-05 by reassessment proceedings

Failure to produce docs in respect of grounds of appeal entails CIT(A) to pass ex-parte order

IT : Where assessee inspite of large number of adjournments granted by Commissioner (Appeals) did not produce any document in respect of grounds of appeal, nor made written or oral submissions, Commissioner (Appeals) was justified in proceeding ex parte against assessee

One year time-limit isn't applicable for claiming refund of duty paid under protest

Excise & Customs : Where duty has been paid under protest and said fact is not challenged, time-limit of 1 year for claiming refund will not be applicable

Odisha Mining Corp. wasn't abusing its dominance in chrome ore market as it charges fair prices from

Competition Law: Odisha mining Corporation Ltd. enjoyed dominant position in chrome ore market

Statutes allows only one TP method, CPM once adopted can't be switched to TNMM subsequently

IT/ILT : Cost plus method (CPM) is most appropriate method in case of contract manufacturers but that would be subject to satisfaction of parameters laid down in Rules 10C

Issue as to whether works contract could be vivisected to tax services prior to 1-6-2007, referred t

Service Tax : Issue whether a works contract would be vivisected and part of it subjected to service tax even prior to introduction of works contract services w.e.f. 1-6-2007, stands referred to larger bench of 5-members of Tribunal

Advertising agency isn’t taxable on its advertisement receipts till it appears before public; ITAT r

IT : Where assessee-company, who was in publication of advertisement in directory, did not recognise advance as business receipts till directories were complete, published and put to public circulation, its stand was in consonance of AS-9

New objection Form ‘DVAT 38’ notified; contains details on rectification of 2A/2B mis-match after as

GST/Indian Acts & Rules : Delhi Value Added Tax (Amendment) Rules, 2014 - Amendment in Rule 67 and Form DVAT 38, Form DVAT-16, Form DVAT-17 and DVAT-31 and Omission of Form DVAT-51

Delhi Govt. notifies new forms for reconciliation returns and cancellation and amendment of CST regi

GST/Indian Acts & Rules : Central Sales Tax (Delhi) (Amendment) Rules, 2014 - Amendment in Rule 4 & CST Form-1 and Insertion of Rule 10A, Form-9, Form-10 & Form-11

Anyone Can Export Onions Again After Four Decades

For close to four decades, export of onion could take place only through the agencies designated by the government. Now anyone can export onions, as the Central government freed export of the bulb by removing this condition last week.

Onion export was canalised in 1974. National Agricultural Cooperative Marketing Federation (Nafed) was the only canalising agency till 1999. Subsequently, 12 State Trading Enterprises (STEs) along with Nafed were designated as the canalising agencies for export of onion. The exporter had to pay 1% commission to these agencies in order to get the no-objection certificate for exports.

As the country is expecting an all-time-high onion crop in 2014-15, the government about to face the electorate, removed the minimum export price (MEP) restrictions, which were imposed during winter season as retail prices touched Rs 100/kg.

Last week, the director general of foreign trade (DGFT) issued a notification to free onion exports. There was a strong demand from growers and exporter to remove canalisation as it did not serve any purpose.

"The canalising agencies did not use the money collected from the exporters to better the condition of farmers," claimed Ajit Shah, president, Onion Exporters Association.

The 13 canalising agencies include NAFED, Maharashtra State Agricultural Marketing Board (MSAMB), Spices Trading Corporation, AP State Trading Corporation. "Only five to six of the STEs were actually functioning," said Nafed Director HB Holkar.

MSAMB, which was a leading agency issuing no objection certificates to onion exporters has welcomed the decision. "Freeing up of onion exports will help boost onion exports. We never looked at the commission charged for the certificates as a source of revenue for us," said MSAMB Managing Director Milind Akre.

Exports would be crucial to avoid a crash in onion prices as the rabi harvest gathers pace from April. The current unseasonal rainfall, though has damaged the standing onion crop, will not affect the overall onion availability due to record area under the rabi crop. Despite the arrival of rain-damaged crop in the market, domestic prices have remained firm at Rs 6/kg to Rs 8/kg as the good quality bulb is getting a good price.

Source:- economictimes.indiatimes.com

ITAT upheld TP adjustment as assessee wasn't charging fee for providing guarantee to bank for its su

IT/ILT : Where assessee paid guarantee fee to bank for providing working capital facilities to its wholly owned subsidiary, transfer pricing adjustment with regard to evaluation of such services on basis of comparables given by assessee was rightly made

Sum paid to eliminate competition entailing advantage for specified time was capital in nature, says

IT : Prior to introduction of section 35DDA, payment in relation to VRS to employees working at a plant which was on selling block is allowable as revenue expenditure

RBI permits Assets Reconstruction Cos. to use funds raised from QIBs for restructuring their financi

NBFCs/SARFAESI : Restructuring Support Finance- Participation by Investors

Corporates On Their Toes As Rupee Appreciation Hits Exports

Since it hit a low of 68.83 against the dollar in August, the rupee has appreciated about 11 per cent to 61.21 a dollar, hitting a large number of exporters hard. However, the recent appreciation has not deterred companies such as electric goods maker Havells from ramping up their base in India.

About a year and a half ago, the company set up a manufacturing plant for 16-inch table, pedestal and wall fans in India. The plant, in Uttarakhand, was set up because Chinese manufacturers had increased prices, citing rising labour costs. Besides, the yuan (the Chinese currency) and the rupee have been moving in opposite directions against the dollar, giving an obvious advantage to Indian exporters. While the yuan has appreciated 9.35 per cent since March 31, 2009, to 6.2/dollar, the rupee has depreciated 20.6 per cent to 61.21/dollar during this period.

“The advantage certainly gets marginalised when the rupee is stronger…If it comes close to 55-56 against the dollar, the advantage will be neutralised,” said Sunil Sikka, president, Havells India.

In 2007, Havells acquired Frankfurt-headquartered Sylvania for $300 million to cater to developed markets in Europe. After the financial crisis of 2008, the company shut two of its five manufacturing plants in Europe and set up a joint-venture manufacturing plant in China to supply light-emitting diode products to Sylvania.

About a year ago, the company set up a manufacturing plant for lighting fixtures in Neemrana (Rajasthan) to supply to Sylvania. Earlier, the company sourced lighting fixtures from Costa Rica and France. Now, India is the new sourcing hub for the company’s European operations.

The garments sector, too, isn’t perturbed by the recent appreciation in the rupee. The sector has been gearing up to avail of the advantages of cheap labour and a favourable currency compared to China. Raymond, best known for selling branded textile for men’s suits, plans to increase exports fourfold in the next five years, as the domestic market faces a relative slowdown. According to the company’s estimates, India exports $40 billion (about Rs 2 lakh crore) of textiles a year. In 2012-13, Raymond’s export revenue was about Rs 250 crore. The company plans to invest about Rs 1,000 crore through the next five years, primarily to augment capacities.

“Some amount of the appreciation was already factored in,” says M Shivkumar, chief financial officer, Raymond. “We also expect softening of interest rates as inflation comes down; that will cover the loss due to the rupee’s appreciation,” he said.

However, these success stories could be limited. In February, India’s merchandise exports fell 3.67 per cent to $25.68 billion, against $26.68 billion in the year-ago period. This dashed hopes the $325-billion export target for this financial year would be met, as the outlook for export growth was weak, given the rupee’s recent gains against the dollar.

“Indian exporters have a cost disadvantage of 14-15 per cent against their Chinese counterparts,” says Sanay Budhia, chairman, national committee on import and exports, Confederation of Indian Industries.

About a year ago, the government withdrew the duty entitlement pass book (DEPB) scheme. DEPB was expected to neutralise the impact of import duty on inputs. “India cannot remain complacent, as importers are also looking at countries such as Vietnam and The Philippines to beat rising costs in China,” Budhia said.

Still, China has an advantage in that it manufactures low-engineering, high-volume products due to economies of scale. But India has an obvious advantage in exporting smaller-volume products that require engineering inputs. Traditionally, India’s forging and automobile component sector has come under this segment and benefited from the export market.

Source:- business-standard.com

Assets Reconstruction Cos. allowed to acquire NPA via auction from their sponsor banks

NBFCs/SARFAESI : Buyback of Assets from SC/RCS by The Defaulters and Acquisition of Assets by SC/RCS from Sponsor Banks

SEBI eases KYC norms for investors; intermediaries should verify client’s info from KRA system

SEBI/Indian Acts & Rules : SEBI {KYC (Know Your Client) Registration Agency} (Amendment) Regulations, 2014 - Amendment in Regulation 16

Penalty under FEMA waived off as it could have caused undue hardship to appellant

FEMA : For waiver of pre-deposit of penalty in an appeal before Tribunal, appellant has to establish a prima facie case and also that deposit of penalty would cause undue hardship to appellant

India Should Stop Exporting Sugar: Hsbc Survey

India should stop exporting sugar as in the long term, production is likely to match domestic demand and its output cost is already higher compared to other countries, an HSBC survey has said.

Titled ‘Global Agricultural Commodities’, the survey has said that Brazil is the lowest cost producer of sugar at $17 per pound and the cost in India is almost 40% higher than that. As a result, Brazilian exports of sugar have soared in the last two decades.

“In the long term, India should stop exporting. In our long term projections, we believe India’s internal sugar consumption will be equal to its production capacity,” the survey said. Historically, sugar production in India had been the determining factor for global sugar prices, which is not the case now, it said.

The survey added: “When prices go up, farmers would plant sugarcane and India would switch from a net importer to a net exporter. A collapse in sugar prices, caused by the switch to exports, would pressure the margins of millers and eventually delay payments to farmers. The farmers in turn would switch to other crops forcing India to switch back to being an importer of sugar.”

It pointed out that there will be a further fall the sugar production in the country, as several mills have been operating with very low to negative margins, and the levels of arrears to farmers is reaching historic highs.

Source:- livemint.com

India May Suspend Wheat Exports Mid-Way

India might suspend exports of wheat even without achieving thescheduled target of 2 million tonnes due to fears of crop damage from therecent hailstorms across the country.

"The decision is underway. While the Ministry of Food has alreadytaken final decision in this regards, it will communicate to the public sectorgrain procurement agency the Food Corporation of India (FCI) soon," an informed source said.

India has already accepted bids for 1.40 million tonnes of wheat exports so far this year out of the 2 million tonnes target set by the FoodMinistry in August last year. The target was set to be achieved by June 2014 to earn Rs 3,400 crore from wheat exports at an average price of $300 a tonne, similar to last year's realisation. India's wheat export was recorded at over 4million tonnes last year.

But, because of price fall in global markets, the tenders including PEC and MMTC received poor response. Consequently, importers negotiated bidprice upto $260 a tonne for some lots. FCI is a facilitator of wheat supply tothese public sector grain trading agencies.

Sources said that proper assessment of the crop damage is yet to bedone. Hence, the government decided to suspend wheat exports temporarily. Incase of insignificant crop damage, exports can be opened to meet the target, he added. Wheat, a 100 per cent rabi crop, is sown in India between October and December for harvesting between March and May.

Before hailstorms, Karnal (Punjab) -based Wheat Research Instituteforecast India's wheat output at 95.6 million tonnes this year compared to 92.46 million tonnes in the previous year. Wheat prices in global markets jumped by $27 to trade currently at $273 a tonne due to fears of supply disruptions from Ukraine, one of the world's largest suppliers on the country's stand-off with Russia.

Source:- business-standard.com

Rupee Drops Most In A Week As Fed Signals Rate Increase

India’s rupee fell the most in a week after the US cut stimulus further and signalled interest rates will be raised, potentially damping fund flows into emerging markets.

The Federal Reserve reduced its bond-buying programme by $10 billion on Wednesday to $55 billion. The purchases will finish by year-end with a borrowing-cost increase to follow in around six months, chair Janet Yellen indicated. The rupee’s losses will probably be limited because its 12.6% rebound from a record low in August, the best performance among 24 developing-nation currencies, is helping attract overseas investors, according to FirstRand Ltd.

“If the Fed announcement had come six months ago the rupee’s drop would have been much steeper,” said Paresh Nayar, head of currency and money markets at FirstRand in Mumbai. Sentiment has turned. The Fed statement was discounted to a large extent and we even saw some inflows today.

The rupee weakened 0.3% to 61.165 per dollar as of 10:41 am in Mumbai, the biggest drop since 12 March, according to prices from local banks compiled by Bloomberg. It fell as low as 61.385 earlier. Nayar sees the currency trading mostly between 61 and 61.40 on Thursday.

The Federal Open Market Committee said yesterday it will no longer link borrowing costs to a specific unemployment rate, and will consider a broad range of indicators on the labour market, inflation and financial markets instead. Separately, the Fed released forecasts showing more officials predicting the benchmark rate, now close to zero, will rise at least to 1% at the end of 2015 and 2.25% by the end of the following year, higher than previously forecast.

Capital inflows

The rupee declined less today than the currencies of Indonesia, Thailand, South Korea and Malaysia. The rupiah slid 1% and the baht 0.7%, while the won and the ringgit lost 0.5% each. Global funds bought a net $1.6 billion of Indian stocks and $6.2 billion of rupee-denominated debt this year, exchange data show, as inflation eases and the government forecasts narrower deficits.

The current-account shortfall will be kept below $40 billion in the year through 31 March, finance minister P. Chidambaram said in a 7 March briefing in New Delhi, compared with a record $88 billion in the previous 12 months. The budget gap will narrow to 4.6% of gross domestic product, the least since 2007-2008, from 4.9%, he estimated in February.

One-month implied volatility in the rupee, a gauge of expected moves in the exchange rate used to price options, rose 35 basis points, or 0.35 percentage point, today to 9.14%. The measure has dropped 106 basis points in 2014.

The rupee’s three-month offshore non-deliverable forwards fell 0.4% to 62.40 per dollar. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.

Source;-livemint.com

HC reduces pre-deposit requirements as freight forwarders aren't prima facie liable to service tax

Service Tax : Freight forwarders are not, prima facie, liable to service tax and even otherwise, case is arguable one; therefore, pre-deposit was reduced

HC hadn't to interfere if ITAT allowed assessee to furnish additional evidence before AO in support

IT : Where Tribunal while remanding matter back relating to disposal of assessee's claim for deduction of staff welfare expenditure and administrative expenditure, allowed assessee to lead additional evidence and further directed Assessing Officer to consider entire evidence brought on record, said order of Tribunal being justified did not require any interferencec

Plea of irreparable loss can’t be sole consideration while dealing with request for stay of demand,

IT : The question of irreparable loss not the only consideration while dealing with application for stay of demand . If this were so, every assessee with the means of deposit would be denied a right to seek stay of demand irrespective of the merits of his case. This is insupportable either on principle or on authority

SC raps HC for affirming ITAT's order on taxability under sec. 9 without considering question of law

IT/ILT : Where regarding question of taxability procurement service, under section 9 High Court had merely quoted judgment of Tribunal in extenso without deciding substantial questions of law raised, matter was to be readjudicated

In a prima facie case of oppression CLB granted ad interim relief to protect stakeholder against irr

CL: Where petitioner had succeeded in making out prima facie case of oppression and mismanagement, irreparable loss should be caused if ad interim reliefs were not granted to safeguard interest of stakeholders

Sec. 80-IB deduction allowable to card box manufacturer on income arising from sale of scrap

IT : Assessee, engaged in manufacturing card boxes, was entitled to deduction under section 80-IB in respect of income arising from sale of scrap

'IPOL Cylinder Oil 1200' is not lubricating oil; not liable to Karnataka Entry Tax

CST & VAT : 'IPOL Cylinder Oil 1200' is base oil and not lubricating oil and cannot, therefore, be charged to Karnataka Entry Tax; classification of said goods as 'lubricating oil' under Central Excise not relevant for entry tax purposes

HC grants stay on demand as it required an enquiry into assertion of assessee that it was exempt fro

IT : Where plea raised by assessee that it was an agent of State Government and, thus, income earned in said capacity was not chargeable to tax, required detailed investigation and, moreover, by way of adjusting refund for other assessment years, department had already recovered 23 per cent of total tax demand, in interest of justice, demand for balance amount was to be stayed

Assessee-co. couldn’t set-off loss from share trading business with other business income

IT : Where assessee, a stock broker having transactions in different segments on its own account as well as in clients' account, claimed set off of loss in share trading business against other business income, in absence of any material on record showing that assessee was doing an integrated business giving rise to different classes of income, its claim for set off being in contravention of Explanation to section 73, was to be rejected

Remission application rejected as no reasonable cause was shown by dealer for not taking VAT Registr

CST & VAT : Where dealer had not taken registration despite being liable to do so and explanation offered by him was not reasonable/sufficient, assessee's application to claim remission from tax/penalty was rightly rejected

Commission paid rationally by a distributor to its sub-distributor was an allowable business expense

IT: Where assessee, who was carrying on business of distribution of cement, appointed sub-distributors, claim of deduction of commission paid to them was to be allowed

Matter remanded as addition was made by AO without verifying details of sum incurred on construction

IT : Where Assessing Officer without verifying details of expenditure incurred by assessee on building during previous year, considered it as unexplained investments, matter required fresh adjudication

Condonation of delay on ground of unawareness not allowed as assessee was involved in several ongoin

Excise & Customs : Failure to specifically challenge orders is a legal flaw and difficulty and writ petition can be challenged on that ground.

BIFR's direction to wind-up sick co. ended rehabilitation process, yet recovery proceeding could be

CL : Where BIFR after due inquiry had came to a conclusion that a suitable scheme under section 18 of SICA was not feasible and it was just and equitable to wound up sick company, process to rehabilitate a sick company under SICA had been conclusively abandoned

Business income can’t be taxed in India if there is no PE in India or if no income is attributable t

IT/ILT: Assessee having no PE at all, or having PE but no income attributable to PE will not be liable to tax in India

India Allows More Banks To Import Gold In Easing Of Curbs

India has allowed five domestic private sector banks to import gold, in what industry officials say could be a significant step towards easing of tough curbs on the metal imposed last year to cut the country's trade deficit.

The move could boost gold supplies and bring down premiums for the metal in the world's second-biggest consumer after China.

The Reserve Bank of India (RBI) has allowed gold imports by HDFC Bank (HDBK.NS), Axis Bank (AXBK.NS), Kotak Mahindra Bank (KTKM.NS), IndusInd Bank (INBK.NS) and Yes Bank (YESB.NS), officials at the respective banks told Reuters.

Two industry sources confirmed the names of the banks. They and the bank officials did not want to be named as they are not authorised to speak to media.

India enforced the so-called 80/20 rule in July, making it mandatory to export a fifth of all gold imports. Under that rule, only six banks and three state-run trading agencies that had facilitated export of gold or jewellery in the past three years were allowed to import. The six banks were mostly state-run lenders.

The RBI has now permitted gold imports within prescribed limits by the private banks even though they had not facilitated any exports of metal or jewellery in the past three years.

"They have decided upon limits on quantities depending upon the number of (current) customers you have for exports," said Shekhar Bhandari, executive vice-president of Kotak Mahindra Bank.

The RBI did not immediately respond to a request for comment.

The move to allow more banks to import gold may raise shipments to about 40 tonnes per month from more than 20 in February, industry officials said. India used to ship in as much 70 tonnes per month, the biggest import after oil that had pushed the current account deficit (CAD) to a record high in the year ended March 2013.

"Supplies will be smooth from now and I think premiums will come down," said Haresh Soni, chairman of the All India Gems and Jewellery Trade Federation. "This looks like just a beginning to the further easing of 80/20 rule."

NEW GOVERNMENT, NEW RULES

India used to be the No. 1 buyer of gold before the levy of a record 10 percent import tax in stages and other restrictions led to a sharp cut. Premiums hit a record of $160 an ounce in December, triggering smuggling and forcing industry officials to call for a repeal of the curbs.

Further major relaxations of the curbs are likely only after a new government is formed around June, officials involved with policymaking said.

Finance Minister P. Chidambaram said earlier this month the gold import duty could be revisited only after the final CAD numbers are out.

The CAD, final figures for which are expected to come in the first week of June, is likely to fall to less than $40 billion for the fiscal year ending March 31 from its record $88 billion in the previous year.

By that time it will also be clear who will form the government, after India's general elections that start in April. The main opposition Bharatiya Janata Party - the favourite to win the polls - has already spoken against the gold import restrictions.

Its prime ministerial candidate Narendra Modi has said that any action on gold should look at the interests of the public and traders, not just economics and policy.

A senior policy official aware of the deliberations said the government and the central bank wanted to gradually remove the curbs as falling gold prices are expected to cut the CAD by $10-$12 billion.

"We don't believe in artificial kind of compression of current account deficit," the official said. "Since it was an extraordinary kind of situation and it was a policy option available, we tried that."The official estimates India's gold imports this fiscal year to be around 800-850 tonnes, lower than last year's 950 tonnes.

Source:- in.reuters.com

Prima facie case in favour of assessee doesn't justify 100% stay as it would require other reasons a

CST & VAT : Mere prima facie case in favour of appellant would not mean that revenue has no case and, therefore, assessee is entitled to stay of entire disputed amount bereft of all other relevant factors; 100% waiver requires strong reasons and factors and absence of any prima facie case in favour of revenue

Russian Grain Export Forecast Seen Higher

Russian analytical firm SovEcon has raised its 2013/14 grain export forecast thanks to a weaker local currency and concern over Ukraine, it said on Monday. Turmoil in Ukraine, one of the world's key grain exporters via the Black Sea together with Russia, is supporting global commodities prices.

"The rouble's decline, higher global prices and possibly weaker competition from Ukraine cause strong support for (Russian grain) exports during the spring," SovEcon said. It has raised Russia's grain exports forecast to between 24.0 million tonnes and 24.4 million tonnes during the 2013/14 marketing season, which lasts until June 30. Previously SovEcon expected grain exports at 23.1 million tonnes.

Its wheat exports forecast was increased to 17.4-17.8 million tonnes from 16.5 million tonnes, while the maize (corn) exports estimate was raised by 300,000 tonnes to 3.8 million tonnes. The forecast for barley exports remained unchanged at 2.2 million tonnes. It said it expected Russia to export 1.5 million tonnes of grains per month in March and April, up from 1.3 million tonnes in February. SovEcon's estimate includes pulses and flour. The increase in global wheat prices has made Russian wheat more competitive on its traditional markets during recent weeks.

"This (factor) will allow Russian wheat exporters to continue to dominate the markets of Egypt and Turkey, the key for Russian wheat, and get into the markets of Western Africa (Nigeria, Senegal) and Morocco," SovEcon said. Additional demand from traders who are concerned over possible disruptions to supplies from Ukraine is also expected to support Russian wheat and maize exports.

It expects March maize exports to remain high at between 400,000 tonnes and 450,000 tonnes. The country has exported a record 2.3 million tonnes of maize since the start of October and by the end of February following a record harvest. Barley exports fell sharply in January and will remain at s low level until the end of the season as export resources in Russia's southern regions are dwindling.

Source:- brecorder.com

Push Exports To China To Reduce Trade Deficit: Montek

Deputy Chairman of the Planning Commission Montek Singh Ahluwalia Tuesday raised its concerns to China over 'unsustainable' trade deficit of $ 35 billion per year and viewed that it needs to be brought down by increasing India's exports to the country.

"I must, at this stage, mention the growing imbalance in our trade which is a cause of concern in India," Singh said in Beijing, addressing the third Strategic Economic Dialogue forum.

"Trade is an important indicator of economic cooperation and we are happy at the remarkable expansion that has taken place," he added, expressing hope that bilateral trade would reach the official target of $100 billion by 2015.

"We recognise that trade does not have to be balanced between each pair of countries.

"However, India's trade deficit over the last three successive years has been in excess of $35 billion per annum which is not sustainable," he said.

It needs to be reduced to sustainable levels by more exports from India to China, and also by China building manufacturing capacities in India for goods it currently export, Ahluwalia said.

Under Railways, India and China Tuesday agreed to pursue specific collaboration arrangements in heavy haul, station redevelopment and raising speed of existing trains in India.

Nodal agencies have been designated to work out implementation of modalities in this regard, a press release issued at the end of the talks on Tuesday said.

Highlighting India's competitive advantage in niche engineering products, IT-enabled services, cotton textiles and home furnishings, and pharmaceuticals, Ahluwalia said the two governments have a large role to play in pushing it up.

"I hope the Chinese government will help to provide our exports greater access to the market so that the target of $100 billion can be achieved in a more balanced manner," he said.

The bilateral trade touched $65.47 billion, a slight dip of 1.5 per cent year-on-year. The bilateral trade declined to $ 66.7 billion 2012 from around $74 billion in 2011.

Source:- smetimes.in

Plea not raised before ITAT that CIT(A) wrongly admitted additional evidence couldn't be raised befo

IT: Where in course of appellate proceedings, revenue raised a plea that Commissioner (Appeals) wrongly considered additional evidence without following procedure laid down under Rule 46A of Income-tax rules, 1962, in view of fact that such an objection was not raised before Tribunal, it could not be entertained for first time before High Court

Variation in electricity consumption doesn't show involvement of any unexplained exp.

IT: Where assessee's books had been prepared on basis of bills and vouchers and there was no allegation that either purchase of raw-material or production was found unrecorded, mere fact that there was some variation during few months in electricity consumption could not be a basis for making addition on account of unaccounted production and gross profit on unaccounted sales

HC won't interfere against a tender floated by PSU unless its terms were discriminatory to evade an

CL : Where a State or a Public Sector Undertaking invited tenders with clauses and eligibility criteria concerning their requirements, Court could interfere only when there were clauses which were discriminatory, arbitrary or if same had been made to avoid level playing field

Sum paid in cash of smaller denomination in lieu of currency of higher denomination is out of ambit

IT : Where amount was paid by assessee-company to its managing director for conversion of currency from small denomination into currency of higher denomination, there was no element of expenditure involved and, thus, provisions of section 40A(3) were not applicable

If assessee repays for cenvat credit utilized wrongly, he may take back original credit suo motu

Cenvat Credit : Where assessee had utilized some credit wrongly and same is paid back in cash, assessee may take back original credit suo motu

HC denied to admit writ filed by Rajasthan Cricket Association as matter was in dispute before ITAT

IT : HC denied to admit writ filed by Rajasthan Cricket Association as matter was in dispute before ITAT on ground that Tribunal was not functioning for want of quorum

CCI nods to combination of Essar Steel and Inox Air as it won’t affect competition in India adversel

Competition Law : Where proposed combination relating to transfer of gas plant of Essar Steel on slump sale basis to informant was not likely to have appreciable adverse effect on competition in India, same was to be approved

HC directs CIT to examine assessee’s claim for setting off of interest income with interest payment

IT: Where Tribunal had directed Assessing Officer to grant set off of interest earned by assessee towards interest paid and thereupon Assessing Officer passed order granting benefit of netting of interest, High Court accepting plea of revenue directed Commissioner to examine whether assessee was entitled for setting off of interest earned towards interest paid

HC raps ITAT for bypassing TPO when he was dissatisfied with selection of comparables

IT/ILT: Where Tribunal is of opinion that a particular company selected by assessee is not comparable, he should remand matter to TPO and not give his own opinion on matter

India’S Iron Ore Export Slump: Not Necessarily A Bad Thing?

India’s iron ore exports saw a 27.6 percent slump at 12.6 million tons (MT) during the April-February period of the current fiscal year, and much of the drop is being attributed to the export duty.

The Federation of Indian Mineral Industries (FIMI), a mineral industries body, has said India, once the third largest exporter of iron ore, had exported 17.35 MT of the mineral in the corresponding period of the last fiscal year.

FIMI Secretary General R. K. Sharma was quoted in The Hindu as saying this was a “disturbing trend” since for some years now, India has been slipping in iron ore exports because of the contentious export duty. Agencies such as FIMI have been consistently asking the Indian government to withdraw the export duty on iron ore as well as on iron ore pellets.

FREE Download: 7 Metal Buying Strategies for 2014 (Base Metals, HRC, CRC)

Indian iron ore exports have also been hit due to mining bans in the Indian states of Goa and Karnataka, leading to a drastic fall in domestic production. The export duty had been increased to 30 percent on both types of iron ore, lumps and fines, in December 2012.

China has been the traditional export market for Indian iron ore, though the quantity has declined by 31 percent to 10.44 MT in April-February. China is followed by Japan, according to FIMI data.

With the poor response in the international markets and prices remaining weak, Goa has decided to halt the third phase of its iron ore e-auction launched last month.

FIMI has even forecast that this year’s iron ore exports would come down by over 20 percent to about 13.5-14 MT from 18.37 MT of 2012-13.

Silver Iron Ore Lining?

However, there could be a silver lining to the slump story of Indian iron ore exports. Experts here believe the country’s exports could have supplied seven years of domestic steel demand.

MetalMiner had reported on a research report by Credit Analysis and Research Limited (CARE) that had warned that India’s reserves were likely to last only 28 years if exports continued at the current rate.

Overall, India would have iron ore reserves that could last for about 38 years if exports are curtailed, according to CARE, but the continued export of fines could bring the reserve down by as much as a decade.

Iron ore mines on average produce about 35 percent of their overall production in the form of lumps (high-grade ore), while the rest is by way of fines (low-grade ore), which have fewer buyers in the Indian market.

Besides, the ore from Goa is very low-grade ore. Presently, along with this tourist state, low-grade iron ore (or fines) are being exported from states like Odisha, Jharkhand, Rajasthan and Madhya Pradesh.In the last two months, the Goa government has already auctioned over a million tons of iron ore, mined before the ban.

Source:- agmetalminer.com

'Prolonged Crisis In Ukraine May Hit India's Pharma Exports'

A prolonged Russia-Ukraine crisis will affect Indian pharma companies based in Ukraine, the Federation of Indian Chambers of Commerce and Industry (Ficci) said Tuesday

"If the situation continues, then it could have a bearing on the country’s (Ukraine) exchange rate that would make the landed cost of Indian pharmaceuticals higher," Ficci said here after it surveyed representatives of leading Indian pharmaceutical companies based in Ukraine.

While recent developments in Ukraine have had no immediate impact on the businesses of Indian pharmaceutical companies, there have been reasons for concern mainly due to a recent devaluation of the Ukrainian currency - Hryvnia - against the US dollar, Ficci said.

An exchange rate of 8.20 Hryvnia to the US dollar in mid-December had dropped to 9.86 Hryvnia by the beginning of March, signalling a devaluation of 20 percent.

Ukraine is India’s second largest trading partner in the Commonwealth of Independent States (CIS) after Russia. Exports of pharmaceuticals from India in 2012-13 were worth USD 154 million, which is about 30 percent of India's total exports to Ukraine.

In 2012-13, India’s total trade with Ukraine was USD 3.18 billion.

Among Indian companies, Dr Reddy’s is a significant exporter to the region, with about 20 percent of the company's revenues during fiscal 2013 coming from Russia and the CIS.

Source:- smetimes.in

Banks To Remain Open On Weekend To Facilitate Tax Collection

Bank branches will remain open for full day on March 29, 30 and 31 to facilitate tax collection.While March 29 is a Saturday, March 30 is Sunday and March 31 is the last year of financial year and is a public holiday in some parts of the country.

"The Chairperson, Central Board of Excise and Customs ( CBEC) has requested the Secretary Financial Services to issue instructions to have the banks open for full day on 29th, 30th and 31st March 2014 so that the efforts made for collections of revenue are reflected appropriately," an office memorandum said.

Bulk of the revenue is received at the end of the month, it said, adding banks need to facilitate electronic tax payment by assessees.

In the 2014 interim budget, the government has lowered the indirect tax collection target for the current fiscal by Rs 45,483 crore to over Rs 5.19 lakh crore.

Of this, over Rs 1.75 lakh crore and Rs 1.79 lakh crore is to be mobilised from customs and excise duty collection and about Rs 1.65 lakh crore from service tax.

Source:- economictimes.indiatimes.com

Explicit religious trust won't get registration; Madarsa with dual purpose of charity and religious

IT: A trust carrying on its objectives with dual purposes, i.e., charitable and religious purposes would not be denied registration under section 12AA by virtue of exception provided under the provisions of section 13(1)(b)unless its activities are exclusively meant for a particular religious community.

Show cause notice proposing finalization of provisional assessment cannot be challenged in writ

Excise & Customs : Notice proposing finalization of provisional assessment and proposing consequential recovery of duty cannot be held invalid on ground that 'recovery' precedes 'finalization of provisional assessment'

Interest earned on Govt. grant not taxable if it formed part of grant to be released in totality

IT: Interest earned on Central Government grant which had so far released, would not be treated as a taxable income of assessee if conditions stipulated that interest so earned would form part of Central grant

Concealment penalty set aside as particular disclosed by assessee were found bonafide

IT: If assessee had disclosed facts before department/authority and established his bona fides on legal interpretation put forward for making his claim, penalty under section 271(1)(c) could not be imposed

Review application shall be filed in writing; oral prayer not maintainable

CST & VAT : An ' application' for review has to be filed in writing stating grounds of review and in absence thereof, so-called oral prayer for review cannot be entertained

Case remanded to AO as explanations for docs found during survey were made for first time before CIT

IT: Where survey was conducted in case of assessee, he was required to explain entries written on loose papers at time of survey itself and, therefore, where he explained said entries in appellate proceedings and obtained some relief, Tribunal was justified in remanding matter back to Assessing Officer for disposal afresh

AO couldn’t pass order to give effect to revisionary order of CIT even after quashing of such order

IT: When revisional order passed by Commissioner was set aside by Tribunal, Assessing Officer thereafter could not proceed to pass a consequential order in order to carry out directions contained in such revisional order

Haldia Port Facing Severe Crisis

The Haldia Dock Complex (HDC) under Kolkata Port Trust (KoPT) seems to be fighting a losing battle against the forces of nature as well as government apathy. Senior officials feel that unless corrective measures are taken immediately, the port facility - Bengal's only one that can handle vessels of a respectable size - may be beyond salvage by the time it turns 40 in 2017. The KoPT management in Kolkata, however, doesn't agree.

"Port users are facing infrastructural bottlenecks at every stage. Previously, importers could bring in ships after unloading 35% of their cargo at other ports. It was still economical for them to unload 65% cargo at HDC. Now, they are only able to bring in 35% of the cargo after unloading 65% in ports like Dhamra and Paradip. The economics of bringing in cargo has been completely destroyed," a senior official said.

Statistics reveal that the draught in the channel outside HDC has fallen by 0.4 metres in a year. This has had devastating results on the carrying capacity of ships. A drop in draught by 10cm results in a 50-tonne fall in the carrying capacity.

"A drop of 0.4 metres (40cm) has led to a fall of 2,000 tonnes per ship. HDC handles nearly 2,000 ships a year. A drop of 40cm has thereby led to a drop in overall cargo by nearly 4 million tonnes per year. Panamax vessels would earlier enter HDC with nearly 35,000 tonnes of cargo. Today, they can't carry more than 22,000-25,000 tonnes. This makes it extremely expensive for the importer. Industry is now considering unloading import cargo from Cape-size vessels at Dhamra. By bringing in cargo in such large vessels, the importers are saving between US$ 5-6 per tonne," the officer added.

Cape-size ships or even Panamax vessels with full loads can't enter HDC. The better-draughted Eden Channel was thrown open with much fanfare a few years ago but its utilization has been restricted. Little work has been done for the improvement of Jellingham, which is a governing bar for the channel outside HDC.

"The ministry of shipping also seems to be dragging its feet on the transloading plans. Though KoPT has extended its limits, transloading is still not possible at Kanika Sands.

Even NTPC has started moving its coal cargo for Farakka and Kahalgaon in barges without touching HDC. Dhamra is a deep-draughted facility and Paradip is also working towards increasing its draught.

It will be very difficult for HDC to survive unless immediate steps are taken. We started with a 9-10% growth in cargo volume in this financial year. Now, this has come down to 1-1.5%," another official said.

KoPT chairman RPS Kahlon denied that there has been any 'recorded' cut in draught. "The draught has remained what it was and cargo volumes will not be hit. In fact, the Indian Ports Association has forecast a growth in cargo. As far as transloading is concerned, we have written to the secretary, ministry of shipping, to expedite the matter as the Odisha government hasn't yet submitted its affidavit in court," he said.

Source:- timesofindia.indiatimes.com

Liberalised Trade With India: Concessions Must Be Offered On Reciprocal Basis: Ptea

Liberalised trade regime with India will help to boost the economy but the concessions offered should be on reciprocal basis with meaningful market access and level playing field for Pakistani's exports to India, said Sheikh Ilyas Mahmood, Chairman Pakistan Textile Exporters Association (PTEA).

Talking to news persons after a meeting with Minister of Commerce Engr Khurram Dastgir Khan, he said improved trade relations between India and Pakistan will trigger pace of development and will affect positively on the whole SAARC region. "Pakistan and India have tremendous potential of trade but no serious attempt has ever been made to develop and strengthen a framework of terms and conditions of formal bilateral trade between both the countries," he said.

Bilateral formal trade valued at USD 1,705.7 million during 2008. This level proved to be a peak level in last five years as trade between both the countries kept on decreasing and reached USD 1,586 million in 2012. Pakistan's exports to India have remained much lower than its imports from India. Pakistan's exports have been increased from US $263 million in 2008 to US $333 million. On the other hand, Pakistan's imports from India were worth of US $1,443 million in 2008 that have been declined to US $1,253 million in 2012.

In case of textiles, which are our main exporting sector, Pakistan exported only US $45 million worth of textiles products to India whereas India exported US $566 million worth of textiles product in the calendar year 2010. India has kept high duties on most textile products which are barrier to Pakistan's exports as there is multilayered tariff system in India, he said. Indian customs authorities have also levied other special duties on imports in the presence of which there is very less export potential to tap Indian domestic market.

Source:- brecorder.com

India Calls For China Investments To Offset Huge Trade Deficit

Calling for major Chinese investments in India to offset the ballooning trade deficit which now averaged over USD 35 billion in the last three years, New Delhi today sought Beijing's financial and technical collaboration to upgrade its ageing railway network.

"I must, at his stage, mention the growing imbalance in our trade which is a cause of concern in India," Deputy Chief of the Planning Commission Montek Singh Ahluwalia said addressing the third meeting of the high level India-China Strategic Economic Dialogue (SED) here today.

"Trade is an important indicator of economic cooperation and we are happy at the remarkable expansion that has taken place," he said expressing hope that bilateral trade would reach the official target of USD 100 billion by 2015.

"We recognise that trade does not have to be balanced between each pair of countries. However, India's trade deficit over the last three successive years has been in excess of USD 35 billion per annum which is not sustainable.

"It needs to be reduced to sustainable levels by more exports from India to China, and also by Chinese building manufacturing capacities from India for goods it currently export," he said.

On the declining trend, India-China bilateral trade totalled to USD 66.5 billion last year as Indian exports continued to fall due various reasons including rupee depreciation and reduced iron ore exports.

Indian officials say that the deficit reached such levels that it virtually amounted to India borrowing from abroad to finance the imbalance with China and Chinese recognise that.

Chinese investment in India at present is less than USD 1 billion.

One way to reduce the imbalance is to open up Chinese markets to IT-enabled services, cotton textiles and home furnishings and also in pharmaceuticals, Ahluwalia said adding that China should step up investments in India specially in the industrial parks to offset Indian losses.

"I hope the Chinese government will help to provide our exports greater access to the market so that the target of USD 100 billion can be achieved in a more balanced manner," he said.

Describing today's meeting attended by a host of officials from both sides representing five working groups, as good, he said they moved beyond statements of possible areas of cooperation to statements which are more precise.

Source:- business-standard.com

European Union Threatens To Ban Import Of Indian Fruit, Vegetables

After Australia issued a serious advisory to Indian exporters over deteriorating quality of milk and its derivatives a few weeks ago, the European Union (EU) has now warned India over the poor quality of its fresh fruits and vegetables. Late last year, Saudi Arabia had threatened to ban Indian fresh fruits and vegetables, following which Indian exporters had adopted quality norms prevailing in the global market.

As recently as March 14, export promotion body, the Agricultural Produce Export Development Authority (Apeda), had issued an advisory to Indian fresh fruit and vegetable exporters to adhere to global quality norms. “The EU has raised serious concerns regarding the interception of harmful organisms in fresh fruits and vegetables exported to the European region. The EU has also threatened to take stern action (including a ban) unless the situation improves. We have assured the EU that India is fully committed to providing safe and pest-free exports of fresh fruits and vegetables to the EU and all necessary steps are begin taken in this direction,” said B K Boyal, director of Apeda in its advisory.

India has steadily increased its fresh fruit and vegetable exports to the EU in the past three years. From the level of Rs 1.29 billion worth of shipments in 2010-11, India’s exports of fresh fruits and vegetables shot up sharply to Rs 1.65 billion in the financial year 2012-13. But, India is estimated to surpass Rs 2 million during the current financial year in terms of fresh fruit and vegetable exports.

The warning from the EU has come at a time when India is looking to increase its exports all-round to raise foreign currency income and reduce the current account deficit. “India has committed that effective April 1, 2014, all exports of fresh fruits and vegetables to the EU would be routed through Apeda approved pack houses wherein inspections, examinations/testing of export consignments will be conducted under the supervision of plant quarantine personnel,” Boyal said.

Apeda, according to an official, has already conducted extensive sensitisation programmes to apprise the trade about the impending scenario. The authority has, therefore, warned that exports of fresh fruits and vegetables to the EU would be routed only through the pack houses recognised by it. “Though the quantity of exports is not big enough to worry, the threat will percolate to other markets, which would have a negative impact on India’s overall agri exports,” said the official.

Source:- freshplaza.com

Smuggled Gold In Flower Pots Defying India Import Limits

A pedestrian walks past an advertisement for Riddisiddhi Bullions Ltd. (RSBL) in the Zaveri Bazaar area of Mumbai. Strong physical demand for gold in Asia helped spur a rebound in prices in 2014, after a 28 percent plunge last year that was the biggest drop since 1981.

Returning home to the southern Indian state of Kerala from Dubai last month, 27-year-old welder Mohammed Ahmed Jaffer was arrested after customs agents said they discovered gold in the lining of his brass flower pot.

Jaffer allegedly was offered 30,000 rupees ($491) from an importer seeking to bring in 1 kilogram of bullion valued at about $50,000 without paying the 10 percent customs tax, case documents made available to Bloomberg show. Such stories have become commonplace in India, where the government raised duties on gold three times last year and illegal imports almost doubled to about 200 metric tons, the World Gold Council estimates.

“Smuggling is like cancer,” said T.S. Kalyanaraman, the billionaire chairman of Thrissur, India-based Kalyan Jewellers Ltd., which sells everything from necklaces to pendants at 55 stores in India and the United Arab Emirates. “It will spoil the country’s economy. If they continue this arrangement, it will be a heavy loss for the country.”

While Prime Minister Manmohan Singh’s increase in gold levies was intended to help fix India’s record current-account deficit, the move is also fostering the black market for smuggled metal to a country that was the world’s largest buyer in 2012. Based on last year’s average price, the value of illegally imported gold in 2013 totaled about $9 billion, or more than twice the annual revenue of Signet Jewelers Ltd., the largest U.S. jewelry chain.

Gifting Gold

Demand remains robust in India, where gold is considered a good omen when given as a gift for weddings and festivals, and citizens have “no social security other than gold,” said Haresh Soni, chairman of the Mumbai-based All India Gems & Jewellery Trade Federation, which represents about 300,000 jewelers and bullion dealers. “Consumption will not go down.”

Strong physical demand for gold in Asia helped spur a rebound in prices in 2014, after a 28 percent plunge last year that was the biggest drop since 1981. Gold for immediate delivery increased 13 percent this year in London compared with a 1.5 percent advance for the Standard & Poor’s GSCI Spot Index (SPGSCI) of 24 raw materials.

Gold smuggling has a long history in India. With a virtual ban on official imports for domestic use until 1990, demand was met by illegal supplies, according to Y.V. Reddy, a former Reserve Bank of India Governor. From 1968 to 1995, smuggling mostly ranged from 10 tons to 217 tons a year, he said. Smugglers were common villains in Bollywood films of the 1970s, with some portrayed as gang leaders. Matinee idol Amitabh Bachchan played one such role in a 1975 hit, Deewaar, based on a real-life Mumbai gangster.

Singapore, Dubai

Gold costs about 20 percent more in India than in the metal’s major regional trading hubs of Dubai or Singapore, reflecting the import tax and a premium to secure supplies. That’s a big financial incentive for smugglers looking to exploit demand in India, according to K.N. Raghavan, commissioner at the Customs House Cochin in Kochi.

Since restrictions were imposed last year, the biggest bust at Cochin International Airport occurred in September. Two women wearing burqas, the full-length body garments worn by some Muslim women, were found to be carrying 20 kilograms of gold when they walked through the customs area, said Raghavan. One was pregnant and the other was carrying a child.

“We used to see sporadic instances of smuggling in the last 10 years,” said Raghavan. “Since August, the frequency of such incidences jumped. Carriers used to hail from the poorer socio-economic strata. Now we’re seeing people who are respectably employed, smuggling in gold as margins are good.”

Bear Market

Prime Minister Singh, 81, targeted gold for higher duties as part of a government attempt to tame a widening current-account deficit, accelerating inflation and a weakening rupee. The Reserve Bank of India estimates bullion contributed to almost 80 percent of a record $87.8 billion deficit in the year ended March 31, when the nation imported 845 tons of gold.

The trigger for import restrictions occurred in April, when gold prices plunged into a bear market, down as much as 26 percent from the previous year’s high, as global investors lost faith in the metal as a store of value and equities rallied. The cheaper metal sparked a demand surge in India. In the two months through May, jewelry buyers and investors imported 304 tons, or 37 percent of the total for all of 2013, based on WGC data.

Finance Minister Palaniappan Chidambaram responded by boosting the import tax three times. The central bank barred jewelers from buying gold on credit from banks and required evidence that 20 percent of the purchases were being used to make items that were exported rather than sold at home.

Retail Sales

The restrictions worked. Gold shipments slumped 57 percent to 205 tons in the six months through December from a year earlier and premiums paid by jewelers rose to a record $160 an ounce over the London cash price, which traded at $1,358.23 today. Sales fell at retailers including Gitanjali Gems Ltd. (GITG), Titan Co. Ltd. and Tribhovandas Bhimji Zaveri Ltd. (TBZL) in the quarter ended December.

The current-account deficit, the broadest measure of trade, tracking goods, services and investment income, shrank in the fourth quarter to the smallest in at least four years to $4.2 billion. The gap for fiscal 2013-2014 will be contained below $40 billion, Chidambaram said on March 7, less than the $70 billion targeted by the government. The rupee rallied about 11 percent through March 14 from a record low in August.

As the government’s measures cut demand for ornaments and bars, India was overtaken by China in 2013 as the world’s biggest gold consumer, WGC data show.

‘Beyond Expectations’

With the deficit shrinking more than anticipated and smuggling on the increase, the government may soon ease the import curbs, said Dharmakirti Joshi, the chief economist in Mumbai at Crisil Ltd., the Indian unit of Standard & Poor’s.

“You are leaning on unofficial channels for getting gold into the country,” said Joshi. “This creates the case for easing restrictions because you have tried to correct one distortion, but created another.”

Robin Bhar, the London-based head of metals research at Societe Generale SA, also expects policy makers may reduce the import tax and change the rule on re-exports. Keeping limits as they are will hurt the domestic industry, he said in an e-mail.

For now, there are no plans to ease the duties. The government will review the curbs when this year’s current-account data can be calculated and analyzed, Chidambaram said at a press briefing with the central bank Governor Raghuram Rajan in New Delhi on March 7.

As sales in India slow, smuggling is expanding. Cochin Airport reported 79 cases from April to January and seized more than 27.4 kilograms of gold, according to customs data. That’s up from 18 cases and 2.39 kilograms in the previous year.

Bizarre Methods

Air travelers are resorting to innovative ways to conceal gold to escape detection, said Raghavan, the customs commissioner. Smugglers have tried to sneak in gold in the form of trolley wheels or beading on handbags, or stashed in mobile phones and body cavities, according to customs.

“All of them are very bizarre,” he said.

About 24 kilograms of bars were found by cleaners in the toilet of an aircraft in Kolkata about two months ago, said Gaurav Sinha, additional customs commissioner. Most of those arrested for smuggling are carriers who have no stake in the consignment, he said by telephone on March 12.

Deterrent Undermined

While the punishment for convicted smugglers is three to seven years in prison, the deterrent is undermined by lax bail rules and drawn-out trials, said Ravi Hirani, a lawyer with the Mumbai High Court. Offenders can get bail from courts for a surety of as little as 50,000 rupees, and trials can be delayed by a year or two, he said.

“The government should make gold smuggling a non-bailable offence,” if it is serious about stopping the practice, said Hirani. “Currently, an offender can pay a bail and get away without being taken into police custody. If you smuggle in drugs, the sentence is 10 years to life imprisonment.”

Jaffer, the welder arrested in Cochin, was released after his family posted bail, mostly because the value of the gold was less than 10 million rupees, customs records show. His case may be delayed for months because of the court’s crowded agenda, according to customs.

“We have been seeing different modus operandi for getting gold in the country,” said Raghavan. “As long as the restrictions stay in place, we can expect smuggling to continue.”

Source:- bloomberg.com

India Raises Import Tariff On Gold, Lowers Import Tariff On Silver

The Government of India has hiked the import tariff value on gold from $433 per 10 ‎gram to $445 per 10 grams, Times of India reports. The import tariff value on silver, ‎previously at $699 per kg, was reduced to $694 per kg. ‎

A notification in this regard has been issued by the Central Board of Excise and ‎Customs (CBEC). The tariff value is revised every fortnight after analyzing the global ‎price trend.‎

For India, gold is the second largest import item after petroleum, and the government ‎has already taken several measures to curb gold shipments in order to address the ‎high current account deficit. Total gold import is not expected to exceed 550 tons this ‎financial year, down from 845 tons in 2013.

Source:- israelidiamond.co.il

MCA notifies rules on remuneration and service terms of CCI bench with retro effect from July 1, 201

Competition Act/Indian Acts & Rules : Competition Commission of India (Salary, Allowance and Other Terms and Conditions of Service of Chairperson and Other Members) Amendment Rules, 2014 - Amendment in Rule 3

Rupee Opens Higher At 61.07 Per Dollar

The Indian rupee on Wednesday opened higher on expectations of continued dollar inflows from foreign institutional investors in the local stock markets.

Such expectations have increase due to hopes of a stable government at the Centre and improvement in the country’s macroeconomic situation.

The domestic currency opened the session at 61.07 per dollar, up 0.23% from its Tuesday’s close of 61.205.

Since the beginning of this year, the rupee has gained 1.21%, while foreign institutional investors have bought $1.59 billion from local equity markets.

The yield on India’s 10-year benchmark bond was trading at 8.795%, compared with its Tuesday’s close of 8.806%. Bond yields and prices move in opposite directions.

At 9.09am, the rupee was trading at 61.07, while India’s benchmark Sensex was trading at 21,872.68 points on BSE, up 0.18%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 79.4, down 0.02% from its previous close of 79.414.

Source:- livemint.com

Fuel used in generation of electricity, in turn, used for manufacturing is 'indirect usage for manuf

CST & VAT : Fuel and lubricant used for generation of electricity, which, in turn, is used for manufacturing is to be regarded as 'raw material used in process of manufacture' and eligible for concessional sales/purchase-tax rate

CCI in view of approved combination of Etihad and Jet allows further acquisition of shares by Etihad

Competition Law: Where Etihad and Jet were frequent flyer partners and Commission had approved their earlier combination, proposed combination for Etihad's acquisition of 50.1 per cent stake in JPPL (Jet's wholly owned subsidiary) was to be approved

Rates of corporate bond can't be applied to make TP adjustment for interest on loan as LIBOR was app

IT/ILT : Where assessee, engaged in manufacture and sale of pharmaceutical products, provided loans to AEs, interest on said loans had to be charged on basis of LIBOR plus specific percentage points, as approved by RBI

MCA notifies rules on remuneration and services terms of CCI bench with retro effect from July 1, 20

Competition Act/Indian Acts & Rules : Competition Commission of India (Salary, Allowance and Other Terms and Conditions of Service of Chairperson and Other Members) Amendment Rules, 2014 - Amendment in Rule 3

HC slams AO for denying sec. 10(23C) relief to assessee prior to withdrawal of approval by CBDT

IT : Where on subject to certain conditions CBDT accorded approval to assessee-society for purpose of exemption under section 10(23C)(vi) and for assessment years 1999-2000 and 2001-02 it claimed exemption under section 10(23C)(vi) and Assessing Officer declined to grant exemption, only after withdrawal of approval granted by CBDT, Assessing Officer could have passed an order denying exemption on ground of non-compliance of conditions

Time-limit for issue of show-cause notice applies to recovery of interest as well

Excise & Customs : Time-limit of section 11A of Central Excise Act for recovery of duty is applicable to interest thereon as well; therefore, if there is no suppression of facts, interest cannot be recovered beyond 1 year

Mere filing of appeal won’t entitle assessee to plead for stay of tax demand, unless it has valid re

IT: Where mere filing of appeal against assessment order, would not entitle petition to stay demand; it should be done on valid reason in view of liquidity of assessee

Co’s bonafide omission to provide info about sale of units in AGM’s notice wasn’t oppression

CL : Where petitioner had failed to substantiate that act complained off was designed to secure pecuniary advantage to detriment of R1 Company, mere failure to comply with requirements of section 173 did not amount to an act of oppression

HC upheld sec. 69C addition as assessee failed to prove that stamp duty was includible in price of p

IT : Where assessee purchased a property, in absence of any document on record showing that stamp duty and corporation tax were inclusive of selling price of property, Assessing Officer was justified in adding said amounts to assessee's taxable income by invoking provisions of section 69C

SC upholds right of deductor to claim interest on excess TDS deposited to and refunded by revenue su

IT/ILT : The object behind insertion of section 244A is that an assessee is entitled to payment of interest for money remaining with the Government which would be refunded. There is no reason to restrict the same to an assessee only without extending the similar benefit to a resident/ deductor who has erroneously deducted tax at source /deducted excess TDS and deposited the same before remitting the amount payable to a non-resident/ foreign company.

Input service credit available as abatement notification bars only credit of input and capital goods

Service Tax : Where abatement notification bars credit of input and capital goods, no demand can be raised against assessee if he avails of credit of input services along with availment of abatement

HC slams revenue for making addition for unexplained credit even after rejection of assessee’s books

IT : Where books of account are rejected in their entirety, Assessing Officer cannot rely upon any entry in those books of account for making an addition to assessee's taxable income under section 68

Matter remanded as TPO adopted TNMM to determine ALP at entity level instead of at transaction level

IT/ILT : Where assessee, engaged in freight forwarding services, adopted Profit Split Method for cost collection received and cost collections paid in order to determine ALP of international transactions with its AEs without doing bench making with reliable external market data and, at same time, TPO also adopted TNMM incorrectly at entity level in order to make some adjustment to assessee's ALP, impugned adjustment was to be set aside and, matter was to be remanded back for disposal afresh

CCI approved combination of Mutual Funds of Morgan Stanley and HDFC as it won’t affect competition

Competition Law : Where proposed combination providing for transfer of MS Mutual Fund from MS Entities to acquirers was not likely to have appreciable adverse effect on competition in India, same was to be approved

IT instruction dealing with stay of coercive tax recovery isn’t applicable to search proceedings

IT : Instruction No. 96/F dated 21-8-1969, dealing with stay of coercive recovery of penalty amount, does not cover cases where concealed income is unearthed because of search or other similar proceedings

Department acting on a circular held as non est by HC would be contempt of court

Excise & Customs : Where departmental authorities had acted as per circular and deliberately ignored judgment of High Court holding such circular to be non est, such officers were liable for contempt action