CA Terminal

Tuesday, 2 December 2014

Govt. again hikes excise duty on petrol and diesel

EXCISE & CUSTOMS LAWS : Section 5A of The Central Excise Act, 1944 - Power to Grant Exemption from Duty of Excise - Exemption to Specified Excisable Goods - Amendment in Notification No.12/2012-c.e., Dated 17-3-2012

Interest paid for acquiring property other than self occupied one would be deductible without any li

IT: Where assessee had availed loan from bank for acquiring property other than self occupied one, whole of interest payable on borrowed capital would be allowable

SC dismissed SLP against HC's order upholding addition on assessee's failure to explain unaccounted

IT : Where assessee claimed that stock was taken on loan and returned in same year to sister concern but no proof regarding actual movement of stock was made available, nor was any bill for loan of cargo was raised, addition to closing stock was just and proper

Addition couldn't be made on presumptions if seized cheques weren't found in name of assessee

IT: Where seized materials did not reflect name of assessee, revenue was not justified in drawing presumption under section 132(4A)

Royalty paid to AE in pursuance of an agreement approved by RBI would be deemed to be at ALP, says I

IT/ILT: RBI approval of royalty rates itself implies that payments are at arm's length, hence, transactions made under royalty agreement approved by RBI are at arm's-length

No evasion penalty under service-tax if dept. had invoked sec. 80 to waive off penalty under sec. 76

Service Tax : When section 80 has been found to be invocable for waiving penalty under section 76, it is not possible to argue that same (i.e. section 80) will not be invocable mutatis mutandis for waiving penalty under section 78

SC : No complaint of cheque dishonour against directors of Co. if they weren't in charge of business

Negotiable Instruments Act : In absence of allegation against accused directors that they were incharge of and responsible for conduct of business of company, complaint under section 138 against accused was to be quashed

SEBI modifies 'offer for sale of shares' mechanism; allows retail investors to place their bid at cu

SEBI : Modification to offer for Sale (OFS) of Shares throughs Stock Exchange Mechanism

RBI notifies amendments in Money Laundering Rules; asks NBFCs to adhere to revised norms

NBFCs : Know Your Customer Guidelines /Anti-Money Laundering Standards / Obligation of NBFCs Under Prevention of Money Laundering Act , 2002 – Amendment to Prevention of Money-laundering (Maintenance of Records) Rules 2013.

CBEC directs officials to forward representations through proper channel

EXCISE & CUSTOMS LAWS : Instructions to CBEC Officers for Submission of their Representations through Proper Channel

'Acche din' for taxpayers as CBEC begins to make indirect tax admin non-adversarial and taxpayer fri

ST LAWS/EXCISE & CUSTOMS LAWS : Action Plan to Evolve non-adversarial Indirect tax Administration

Sale of SIM cards/recharge coupons at discounted rate to distributors isn't commission and not liabl

IT: Sale of SIM card involves sale of right to services. Therefore, the relationship between the assessee and the distributor would be that of principal and principal and not principal and agent. Moroever, where SIM card is sold at discounted price, there is no payment of commission or brokerage to distributor. Hence, TDS u/s 194H is not applicable on sale of SIM cards and prepaid recharge coupons by Telecom Company to distributors at discounted MRP.

No reassessment to disallow sec. 80-IB relief if detailed enquiry was made by AO at assessment stage

IT: Where Assessing Officer allowed assessee's claim for deduction under section 80-IB(10) after making detailed enquiries, he could not initiate reassessment proceedings taking a view that said claim was wrongly allowed

SC dismissed SLP against HC's order holding that reassessment not to be made after 4 years due to re

IT : Reassessment proceedings could not be initiated after expiry of four years from relevant assessment year merely on ground that in view of retrospective amendment to provisions of section 80-IA, assessee was not entitled to deduction granted under said section earlier

Provision for leave encashment to be allowed only when it was paid before due date of filing return

IT : Deduction on account of leave encashment could be allowed only if it is actually paid on due date for filing return of income

Principal manufacturer can claim credit of duty paid on intermediate goods if job-worker forget to c

Cenvat Credit : There is no condition that for availing facility of rule 4(5)(a) of CENVAT Credit Rules, 2004, job-worker should avail full duty exemption under Notification No. 214/86-C.E.; hence, where job-worker foregoes exemption, duty paid on intermediate goods is eligible for credit in hands of principal manufacturer.

ITAT denied sec. 80-IB relief to assessee as it ceases to be a Small Scale Industrial undertaking

IT: Commissioner (Appeals) has to give convincing reasoning while upholding order of Assessing Officer

Rental income from property equipped with specialized machinery is house property income and not bus

IT: Income derived by assessee from leasing out of its building simplicitor was because of ownership of building and not from personal exertion; hence it was an income from house property and not a business income

Sec. 10A: ITAT directs AO to consider set-off of loss of STP unit after considering recent circular

IT : Where assessee, a STP Unit, claimed set off of loss relying upon CBDT Circular No. 07, dated 16-7-2013, matter was to be remanded for reconsideration

Interest on FD was adjustable against cost of machinery if FD was required to get LC for import of m

IT: Where production had not yet been started and hence, assessee kept available funds in FDRs for obtaining letter of credit required to import machineries, interest income, was liable to be adjusted against pre-operative cost of plant and machinery

HC grants credit of entire fuel as electricity generated out of fuel was used in multiple units of s

Excise & Customs : Word "factory" includes "all units/premises at same place"; therefore, if steam/electricity generated out of fuel (furnace oil) is used for more than one units (DTA & EOU) in same "factory", entire fuel/furnace oil would be eligible for input credit

Investment by Alternate Investment Funds in foreign securities shall be subject to FEMA norms, says

FEMA/ILT/INDIAN ACTS & RULES : FEM (Transfr or Issue of Any Foreign Security) (Fifth Amendment) Regulations, 2014 -Amendment in Regulatiion 2 and Substitution of Regulation 26

'Anand Grover' appointed as special public prosecutor for money laundering proceedings of 2G spectru

MONEY LAUNDERING : Section 46 of the Prevention of Money-Laundering Act, 2002 – Application of Code of Criminal Procedure, 1973 to Proceedings before the Special Court - Appointment of Special Public Prosecutor for Conducting Prosecution, Appeals/revisions or Other Proceedings out of Cases under the Said Act Arising out of 2G Spectrum Cases – Notified Special Public Prosecutor

No writ to challenge sec. 148 notice as assessee could file appeal after completion of reassessment

IT: Writ jurisdiction under article 226 cannot be invoked to challenge correctness or otherwise of notices issued under section 148; proper remedy is to file an appeal after reassessment order under section 147

Turnover would include freight if it was paid in advance at the time of preparation of railway recei

CST & VAT: Where assessee, a society, purchased coal from colliery and after transportation distributed same amongst members, since assessee paid freight to railways in advance at time of preparation of railway receipt, freight had to be included in turnover of assessee

No abuse of dominance by parties as they weren't dominant in broadband equipment based on GPON techn

Competition Act : Where OPs were not dominant in relevant market for broadband technology based on GPON technology, no case of abuse of dominance by OPs was made out

Monday, 1 December 2014

A circular or an order or a direction issued by CBDT can’t mitigate sec. 127 powers of CCIT

IT : A circular or a direction or an order issued by the CBDT under section 119 of the Act cannot mitigate the powers of Principal Director General or Director General or Principal Chief Commissioner or CCIT or CIT under section 127 of the Act.

No addition as AO had valued stock by giving lesser discount and there had been tampering in invento

IT : Where stock was estimated by tampering inventory sheets, etc. and allowing lesser deduction which resulted in excessively high GP rate, addition was to be deleted

Sec. 158BD notice held valid as accommodation entry for sale of jewellery was found in books of asse

IT : Notice under section 158BD to assessee was justified where accommodation entry was found in books of a firm regarding sale of jewellery and fact that assessee did not sell jewellery was undisputed

Appeal can be filed on next working day if office of appellate authority is closed on last day of fi

Excise & Customs : Where last day of filing of appeal being 15-11-2013 (Friday) was holiday and 16th and 17th were also holidays being Saturday and Sunday, appeal filed on 18-11-2013 (Monday) was within prescribed period

Assessment held null and void as revenue couldn't demonstrative validity of sec. 143(2) notice: Mumb

IT: Assessment made on basis of invalid notice could not be treated to be valid assessment

CBDT springs surprise with sharp hike in fee for obtaining advance ruling; raises fee up to Rs.10 la

IT/ILT/INDIAN ACTS & RULES : Income-Tax (Twelfth Amendment) Rules, 2014 – Amendment in Rule 44E and Insertion of Form No.34DA

Delay in filing appeal due to filing it before wrong forum was condonable

Service Tax : Where appeal was filed before wrong forum within stipulated time leading to delay in filing appeal before proper forum, said delay must be condoned

Appellant has to make timely disclosure to stock exchange even on receipt of shares on amalgamation

SEBI: Where as a result of amalgamation, appellant acquired shares of a listed company and thus, shareholding of appellant exceeded prescribed limits but he failed to make disclosure of same to relevant stock exchanges, imposition of penalty was justified

Forex loss incurred on purchase of raw material from AE is includible in computing operating mark-up

IT/ILT : Where assessee purchased material from its AE and pricing was done in foreign currency, in such a case, foreign exchange loss suffered due to currency fluctuation was to be included while computing operating mark up earned by assessee

RBI notifies 100% FDI in certain areas of Railway infrastructure

FEMA/ILT/INDIAN ACTS & RULES : FEM (Transfer or Issue of Security by a Person Resident Outside India) (Fourteenth Amendment) Regulations, 2014 – Amendment in Schedule 1

RBI notifies 49% FDI limit in Defence under Governmental route

FEMA/ILT/INDIAN ACTS & RULES : FEM (Transfer or Issue of Security by a Person Resident Outside India) (Thirteenth Amendment) Regulations, 2014 – Amendment in Regulation 14 and Schedule 1

Act of assessee of arranging foreign re-insures for Indian Insurance Cos wouldn't amount to export o

Service Tax : Where assessee used to identify re-insurer located abroad for Indian insurance companies and received commission/brokerage in Indian currency from Indian companies, said activity did not prima facie amount to export, as performance was in India and consideration was not in convertible foreign exchange

Entire cost of 'distribution right' re-sold in same year shall be allowed as deduction under Rule 9B

IT: Where assessee had purchased and sold 'distribution rights', they would include and consist of acquisition and transfer of rights to exhibit, broadcast and satellite rights, rule 9B(2)(a) would be applicable

Kerala HC imposed penalty on assessee for not disclosing correct income of abolished HUF in his hand

IT : Penalty to be leviable where if department had not taken up for scrutiny, additional income of assessee from HUF would have gone unnoticed and would have escaped from tax

Principal manufacturer can take credit of duty paid by job-worker on intermediate goods

Cenvat Credit : Since Notification No. 214/86-C.E. is conditional and non-mandatory, job-worker may forego said exemption and pay duty on intermediate goods; and in that case, principal manufacturer can take credit of duty so paid

Exp. on purchase of application software meant for enhancing productivity was revenue in nature

IT-I : While computing deduction under section 80HHE, 90 per cent of net interest income had to be reduced from profits of business and not gross interest income

Appeal can be filed on text working day if office of appellate authority is closed on last day of fi

Self trade of buying shares at higher price and selling them at lower price amounted to unfair tradi

SEBI : Self trades executed by appellant broker by buying shares at higher price and selling same at lower price were not normal trades and were violative of regulations 3 and 4 of PFUTP Regulations

Sunday, 30 November 2014

No denial of sec. 80P relief to assessee if it was credit co-operative bank and not credit co-operat

IT : Where assessee was not a credit co-operative bank but a credit co-operative society, its claim for deduction under section 80P(2)(a)(i) could not be rejected by invoking exclusion clause of sub-section (4) of section 80P

AO should have a cogent reasons for rejecting books of account prepared on basis of bank entries

IT: Once books of account of assessee have been prepared based mainly on bank entries and other details, same should be rejected only by cogent reasoning

No benefit of input tax when dealer didn't disclose actual taxable turnover in return and didn't pay

CST & VAT : Kerala - Benefit of input tax will not be available if dealer does not disclose actual taxable turnover in return and does not pay tax

Addition affirmed on reduced G.P. rate on unaccounted sales as no perversity was pointed out in appr

IT: Where Assessing Officer had rejected books of account of assessee under section 145(3), estimation of gross profits for both years at 20 per cent by Tribunal as against 40 per cent made by Assessing Officer on unaccounted sales was justified as there was no perversity pointed out in approach adopted by Tribunal

ITAT directs TPO to make TP adjustment by excluding comparables with related party transaction excee

IT/ILT : While making computation of ALP under section 92C bench mark of related party transactions is to be adopted at 25 per cent

Mere non-observance of procedure doesn't lead to denial of adjustment of excess service tax paid by

Service Tax : Where assessee had paid excess service tax owing to estimation of its tax liability of operations spread across remote areas as well, such bona fide excess payment may be adjusted against service tax liability of subsequent period even if procedure has not been followed

Saturday, 29 November 2014

SEBI prescribes registration guidelines for 'Research Analysts'; provides instructions for filling r

SEBI/INDIAN ACTS & RULES : How to get registered as a research analyst and instructions for filling in Form A

RBI lays down detailed guidelines on computation of 'Liquidity Coverage Ratio'

BANKING : Basel III framework on liquidity standards – Liquidity Coverage Ratio (LCR), liquidity risk monitoring tools and LCR disclosure standards

Banks are no longer required to submit additional information along with their 'Annual Branch Expans

BANKING : Branch Authorisation Policy – Information to be submitted by banks along with Annual Branch Expansion Plan (ABEP)

IRDA asks insurance brokers to compute their net worth as per the method prescribed by Companies Act

INSURANCE : Calculation of NET Worth

IRDA advises insurance brokers to appoint statutory auditors for maximum duration of 5 years

INSURANCE : Appointment of Auditors by Insurance Brokers

NR can make remittance of inherited assets only after payment of applicable taxes in India

FEMA/ILT/INDIAN ACTS & RULES : FEM (Remittance of Assets) (Amendment) Regulations, 2014 – Amendment in Regulations 4 and 7

Haryana Govt. can dispense with the condition of previous notice for amending VAT schedules and Rule

CST & VAT/INDIAN ACTS & RULES : Haryana Value Added Tax (Third Amendment) Ordinance, 2014 – Amendment in Sections 59 & 60 of the Haryana Value Added Tax Act, 2003

Supreme Court admits SLP against HC's ruling holding hiring of cabs on km basis as rent-a-cab servic

Service Tax : Where High Court held that : (a) hiring of cabs on per Km. basis is also liable to service tax under rent-a-cab services; but (b) extended period was not invocable, as assessee held bona fide belief as to non-taxability, Supreme Court admitted cross Special Leave Petitions filed by assessee and revenue

I-T department designed a new functionality for generating MIS of auditable cases under Secs 143(3),

IT : Section 143, read with Sections 144 and 147 of The Income-tax Act, 1961 - Assessment – Functionality for CSIT(Co) for Generation of Mis of Auditable Cases

Forex dealing couldn't be deemed as speculative if it was incidental to the main business of assesse

IT : Once main business of assessee is identified, if some incidental activities or transactions or dealing in foreign exchange is undertaken but that is also related to some extent to main business activity, then, it could not be said that assessee is in speculative business

Machinery installed at premises of other Co. was depreciable as it was used by assessee for its busi

IT : Where machinery purchased by assessee, a pharmaceutical company, was used by other company to manufacture plastic bottles for products of assessee, for business of assessee, it was entitled to depreciation

Transportation cost upto buyer's place is eligible for credit if ownership is transferred at buyer's

Cenvat Credit : Where, as per tenders, price is inclusive of FOR destination delivery at cost of assessee and ownership is transferred only at place of buyer, 'place of removal' would be place of buyer and transportation upto that place would be input service

TPA wasn't liable to withhold taxes on sums remitted to hospitals on settlement of medical insurance

IT: TPA collected amount of medical expenses billed by hospitals on insured persons from insurance companies and remitted same to hospitals, has no TDS liability not under section 194J

No TP adjustments if assessee was benefitted in reciprocal arrangements with its foreign AEs for cou

IT/ILT: TP adjustments had not be made if assessee was actually benefitted from reciprocal arrangements with its foreign AEs + The Assessee demonstrated that it actually benefitted in the arrangement where it delivered inbound packets in India as courier in lieu of delivery of outbound packets by AEs as couriers in their respective country.

Bombay High Court directs DRP to follow ratio of Vodafone’s case on TP issue of undervaluation of sh

IT/ILT: The Bombay High Court followed the case of Vodafone India Services (P.) Ltd. v. Union of India [2014] 50 taxmann.com 300 (Bombay) and held that shortfall received on issue of equity shares (when benchmarked with ALP) to non-resident AE could not be characterized as income from international transaction. Thus, the DRP was directed to follow the verdict of Vodafone (supra) to settle the dispute.

CBDT extends due date of furnishing of returns and audit reports to March 31, 2015 for taxpayers in

IT : Section 119 of The Income-tax Act, 1961 - Income-tax Authorities - Instructions to Subordinate Authorities – Further Extension of Due Date for Furnishing of Return of Income in Cases of Assessees in State of Jammu and Kashmir

Resident undertaking transactions of Rs 100 crores can apply before AAR to determine his tax liabili

IT/ILT : Section 245N(b)(iia) of The Income-tax Act, 1961 - Tax Liability of a Resident Applicant Determined by Authority for Advance Rulings – Specified Resident

One time exp. incurred on club membership fees and ISO certification allowable as revenue expenditur

IT : One time expenditure incurred by assessee for club membership fee is allowable as business expenditure

In case of provisional assessment, refund claim can be filed in 1 year of finalization of provisiona

Excise & Customs : Where assessments are on provisional basis and are yet to be finalized, question of limitation would not arise; hence, period of one year for filing refund claim of Special Additional Duty (SAD) of customs would be counted from date of finalization of provisional assessment

Issue of fraud couldn't be raised as preliminary objection to dismiss petition for rectification of

CL: Disputed questions of fact relating to fraud and fabrication of documents cannot be raised as a preliminary objection at threshold to dismiss petition under section 111/111A

Friday, 28 November 2014

Additions affirmed for loans given to parties with dubious identity and credit worthiness

IT : Where assessee-company had given loans to parties whose identity had not been proved, their creditworthiness not established and genuineness of transactions not demonstrated, addition made was justified

RBI removes restriction on gold import; withdraws 20:80 scheme

FEMA/ILT : Import of Gold (Under 20: 80 Scheme) by Nominated Banks / Agencies / Entities

Compensation received by assessee for surrendering rights of an industrial plot is capital receipt

IT : Where assessee had acquired an industrial shed for running a manufacturing business but said sale was set aside by Supreme Court, since assessee was clearly deprived of making future profits by surrendering its profit making structure compensation received against such surrender was to be treated as capital receipt

Airtime charges and license fee charged separately from subscribers of pager wouldn't form part of s

CST & VAT (Maharashtra) : Where assessee was importer and reseller of hardware in general and radio pagers in particular, airtime charges and license fees charged by assessee from subscribers under contract of selling activated pager did not form part of sale price within meaning of section 2(29) of Bombay Sales Tax Act

No penalty if AO didn't give independent opinion that old asset was acquired mainly to claim higher

IT : Where AO failed to give independent finding that there was a deliberate design on part of assessee to inflate cost of acquisition so as to claim higher depreciation, penalty could not be imposed

Co. dealing with software products isn't functionally comparable with a co. which is software servic

IT/ILT: A company being into software products is functionally different as it owns its own intangibles, has huge software product revenues, brand, etc. and cannot be considered as a comparable to a mere software service provider

One-time premium paid to lessor for transfer of interest in immovable property isn't liable to ST

Service Tax : All leases of immovable property would be covered for service tax whether lease is short-term or long-term or lease perpetuity; however, "premium" or "salami" paid by lessee to lessor for transfer of interest in property from lessor to lessee is not liable to service tax, as same is not for continued enjoyment of property leased

Liquidator couldn't direct creditor to refund excess payment when his claim was disbursed after due

CL: Where in winding-up of company, claim of appellant creditor had been disbursed after scrutiny and examination of relevant records, appellant creditor could not be harassed unreasonably by re-examining its claim and demanding any refund of excess payment made to him

India: Stainless Steel Mills Demand Protection Against Cheap Imports From China

The operating capacity of India’s stainless steel (SS) mills has declined to a low of 55 per cent, says the industry, due to cheap imports from China and other free trade agreement (FTA) countries, amid weak demand. The capacity utilisation was 65-70 per cent a year before.

Speaking on the sidelines of the announcement of Indinox 2015, a two-day SS industry event, scheduled to be held between January 24 and 27, 2015, at Gandhinagar, N C Mathur, president of the Indian Stainless Steel Development Association (ISSDA), said: “The SS mills have steadily invested $5 billion since its peak days of 2006-07, to create an overall installed capacity of around five million tonnes. Against that, we estimate a total production at 2.6-2.7 mt in 2014-15.”

This is because of dumping of Chinese goods into India, with some of these of substandard quality, he alleged.

Imports from China, Taiwan and Korea are estimated to have risen 150 per cent in about seven months. ISSDA says imports have gone up to around 40 per cent of annual consumption. In 2013-14, total import from all countries was 100,000 tonnes. However, says the body, imports from China alone have been 250,000 tonnes in the first half of the current financial year.

“The biggest problem Indian SS mills face is high electricity and logistics cost, unbearable rate of interest on working capital and continuous investment on pollution control equipment. Raw material exports from China attract a high duty of up to 40 per cent, to discourage shipment of inputs like SS scrap or ferro nickel. Over and above, the Chinese government is incentivising up to 13 per cent on export of SS, apart from low interest rates on working capital loans and cheap power. The industry will be protected only with a minimum differential duty of 7.5 per cent, which currently exists at five per cent,” said Hiten Bhalaria, managing director of Bhalaria Meal Craft, an SS utensil manufacturer and exporter.

Jindal Stainless has invested around Rs 12,000 crore in its 1-mt project in Odisha, currently at 30 per cent of its operating capacity. Its Hisar facility is currently operating at 60-70 per cent capacity.

“When Prime Minister Narendra Modi is emphasising on ‘Make in India’, here is an industry which is bleeding due to imports, despite having enough production capacity. We certainly need protection in terms of anti-dumping duty. The difference between raw material and finished product imports is currently five per cent in India as against 10 per cent in China,” said Mathur.

The industry also wants a relook at FTAs. The industry says import from countries with which we have signed such agreements are rising significantly, without any jump in our exports. India is the third largest global producer and second largest consumer of SS. The market for 2013-14 was at 2.5 mt, of which flat products accounted for about two mt. With a low per capita consumption of 2.1 kg (as against the world average of about five kg), there is a lot of potential for future growth. However, a slowing in the infrastructure sectors has been a major obstacle.\

Souce:hellenicshippingnews.com

Kakinada Anchorage Port To Become Rice Export Hub

The Anchorage Port in Kakinada has the potential to become rice export zone, provided the government focuses on developing infrastructure and facilities in the port, besides relaxing some norms pertaining to the exports.

As the East and West Godavari districts are known for paddy procurement and record yields every year, the surplus paddy is being exported to foreign countries through the anchorage port. Following the lifting of ban on rice exports in September 2011, there is a steady increase in rice exports and the exporters are focusing more on the African countries.

In 2012-13, 26.73 lakh metric tonnes of rice had been exported from the port. However, the year 2013-14 witnessed a drop in the export activity due to Samaikyandhra movement that lasted for over three months. The exports were to the tune of 22.67 lakh metric tonnes during the year.

Now, the government has changed the levy policy, providing an opportunity to improve the exports. Till the last crop season, the rice millers used to allocate 75 per cent of the rice purchased to the government towards the levy and sell the remaining 25 per cent in the open market that includes the exporters.

As per the revised policy, the levy is only 25 per cent and the remaining 75 per cent of the stocks can be sold in the open market. “This policy is going to be a boon for rice exports over a period of time. Moreover, it is going to be a win-win for both the farmer and the miller,” observes B.V. Krishna Rao, managing director of Pattabhi Agro Foods, one of the largest exporters of non-Basmathi rice from southern India.

East Godavari district alone produces 20-25 lakh metric tonnes of paddy every year and the West Godavari contributes more or less an equal quantum. Till now, the farmers are used to cultivate levy-oriented varieties such as ‘Common’ and ‘Grade A’ and the millers too encouraged the same, as they can clear a major chunk of stocks towards the levy. “Now, the farmers can focus on cultivating superfine variety of rice, which has a greater demand in the European market. By opting for these varieties, the farmers can earn more without increasing the investment and the millers and exporters too can get their margins,” explains Mr. Krishna Rao.

Echoing similar opinion, progressive farmer Kovvuri Trinadh Reddy says the government should come out with a clear policy on the levy and create awareness among farmers about the new cultivable varieties. “The farmer will get benefited only when the government ensures hassle-free export of rice,” he says.

Source:- thehindu.com

India To Reduce Export Documents From Nine To Three By April 1, 2015

The Indian government has fast-tracked efforts to reduce export barriers and improve Ease of Doing Business to boost manufacturing and revive exports.

India’s exports slipped into the negative list in October 2014 y/y for the first time since April 2014. Exports have declined due to several factors such as dipping global commodity prices, strengthening rupee against the USD, and a slowdown in Europe. Experts say that the uncertainty over the release of the new Foreign Trade Policy isn’t helping exporters and the government must take immediate steps to address the decline in exports.

Earlier this month, M Rafeeque Ahmed, President, FIEO, had said that the new Foreign Trade Policy (FTP 2014-19) must be announced soon or the previous one allowed to continue until March 31, 2015, to remove ambiguity among exporters. The new FTP should focus on Marketing, Branding, e-Commerce, Services exports, Project exports, High technology exports and improve Ease of Doing Business, the FIEO chief had said.

India is placed at the 142nd position among the 189 countries in the World Bank’s ease of 2015 Doing Business rankings. In the “Trading Across Borders” sub-index, India has slipped four points to the 126th rank this year.

In response, the Commerce Ministry has announced a slew of measures in the last few days to address the situation. It said that the government will reduce the number of documents required for exports from the current nine to three by April 2015. This will put India on par with other nations such as Singapore which top the list in both “Ease of Doing Business” and “Trading Across Borders” sub-index.

The government has also assured that the Goods and Service Tax (GST) Bill will be introduced in the ongoing Winter Session of the Parliament. GST is expected to play a major role in making Indian companies and goods competitive in the global markets and encourage investments in the manufacturing sector.

The government is also planning a single window clearance system for businessmen to set up projects in India and make use of technology to help get online approvals from various ministries. According to official sources, eight states have already implemented online registration of MSME companies, and talks are on with other states as well.

Approvals regarding labour procedures are expected to become easier with the launch of a labour portal which will help businesses get clearance of 16 labour laws at one place. Six states have also joined portal, according to official sources.

source:- thedollarbusiness.com

'Vijaya Bank' couldn't be treated as an assessee-in-default on non-submission of Form 15G/H before C

IT : Where assessee-bank had declaration of payees in prescribed form i.e., Forms 15G and 15H with it at time of payment of interest, but it could not deposit said Forms with Commissioner, assessee could not be held liable to deduct tax therefrom under section 194A as it was only a technical breach

In case of FOR sales, transportation upto customer's premises is eligible for credit

Cenvat Credit : If sales are on FOR basis, with risk being borne by manufacturer till delivery to customer and composite value of sales includes value of freight involved in delivery at customer's premises, place of removal would be at customer's premises and transport upto customer's premises would be eligible for credit

Fiscal Relief For India As Opec Maintains Output

Crude oil prices are set to decline further, with the Organization of the Petroleum Exporting Countries (Opec) deciding to maintain output at 30 million barrels per day, resisting calls from Venezuela that the group stem the slide in prices.

Minutes after the announcement, Brent crude slipped by $3 to $74.75 a barrel. Analysts now expect prices to inch closer to $65 a barrel. The Opec move is good news for emerging economies, such as India, which have seen deficits spiral with their oil import bills ballooning over the past few years.

India, which has been battling high inflation for several years, is heading for happier times from a macroeconomic point of view, as the inflation target set by the Reserve Bank of India can now be easily met. The central bank was earlier factoring in oil at around $100 a barrel. The 21 per cent decline in price from that level would help lower inflation. For every $10 a barrel fall in crude oil prices, the current account deficit can narrow by 40-50 basis points.

Barclays India economist Siddhartha Sanyal says: "Given that petrol and diesel prices are now determined by market, the fall in import costs will have an immediate impact on inflation. We are looking at retail inflation averaging around six per cent in 2015; that is significantly lower than the long-term average of 7.3 per cent. This is also true for the wholesale inflation rate, which can in 2015 average about 100 basis points lower than the long-term average. For the current account deficit, our estimate is $32 billion, or about 1.6 per cent of gross domestic product."

Others said India's import bill could meaningfully decline, helping Finance Minister Arun Jaitley meet his fiscal deficit target of 4.1 per cent of GDP. In fact, economists believe the fiscal deficit could contract to 3.9 per cent of GDP after Thursday's Opec decision.

Indranil Sen Gupta, India economist at Bank of America Merrill Lynch, says: "Lower crude oil prices obviously improve India's macro conditions. A five per cent decline in petrol and diesel prices bring Consumer Price Index-based inflation down by 45 basis points." He estimates fiscal deficit at 4.1 per cent of GDP in 2014-15 and 3.6 per cent the next year. Bank of America Merrill Lynch expects crude oil prices to average $96 a barrel in 2014-15 and $91 a barrel in 2015-16.

But weak oil prices are not so positive for upstream oil companies like Cairn India. Oil producers realisations will come under pressure if global crude oil prices continue to weaken. Chirag Dhifule of LKP Securities says any upside in crude oil prices would be positive for Cairn India and ONGC. Given that the production has not been lowered, it is a positive for state-run oil marketing companies. The subsidy burden would not return, given that both petrol and diesel prices do not factor in any subsidy at current prices.

For this reason, the fall in inflation will be sharper in coming months, as imported inflation has significantly moderated with oil prices declining and rupee remaining stable despite the unwinding of the quantitative easing programme of the US Federal Reserve. The outlook for India continues to improve with this latest move of Opec.

Source:- business-standard.com

Rupee Falls To 62/Dollar Tracking Broad Dollar Gains

The rupee fell to a low of 62 against the dollar compared with Thursday's 61.8750/8850 close. Month-end dollar demand from importers is likely to hurt the Indian unit.

Gains in shares and resulting capital inflows may limit a very sharp upside to the pair.

Indian shares rise to record highs ahead of GDP data, RBI policy.

Almost all Asian currencies are weaker compared against the dollar.

Index of the dollar against six major currencies trading up 0.5 per cent.

USD/INR pair is seen in a 61.70 to 62.10 range on Friday.

GDP data, due post market hours, and the RBI policy review on Tuesday are in focus.

Source:- ndtv.com

No penalty on incorrect imposition of interest when addition of interest was set-aside by appellate

IT : Penalty under section 271AAA can't be levied on account of incorrect imposition of interest which got deleted

Possession of assets taken over by secured creditor on default in repayment of loan couldn't be trea

IT: Where secured creditor took over possession and control of assets of assessee due to default committed in repayment of loan, it did not amount to transfer of assets within meaning of section 2(47)

Stay granted on condition that assessee couldn't seek adjournment won't be vacated on adjournment of

IT : Where assessee was granted stay of demand by Tribunal on condition that assessee would not seek adjournment of appeal but later on, Tribunal itself adjourned appeal, stay order did not stand vacated

Sludge and pulper waste emerged during manufacturing weren't liable to excise duty even if they were

Excise & Customs : Sludge and pulper waste emerges during course of manufacture of paper and paper board is : (i) not a manufactured product; hence, same is not liable to duty even if it is marketable; and (ii) not classifiable under tariff item 47 07 90 00

ITAT quashed sec. 148 notice as AO had taken approval of CIT instead of joint CIT for issuing notice

IT : Where Assessing Officer who was below rank of Joint Commissioner, reopened assessment in case of assessee by issuing notice under section 148 after taking permission from Commissioner instead of Joint Commissioner, it was to be regarded as invalid notice under section 151(2)

Banks can extend loans to individual investors against long-term bonds issued to them to finance inf

Banking : Issue of Long term Bonds by Banks – Financing of Infrastructure and Affordable Housing

Govt. tweaks norms for listing of securities on stock exchange

SEBI/INDIAN ACTS & RULES : Securities Contracts (Regulation) third Amendment Rules, 2014 – Amendment in Rules 19 and 19A

Sec. 148 notice quashed as it was issued after 6 yrs even when assessee didn't have any asset locate

IT : Where assessee did not have any asset outside India and, therefore, there was no question of having any income in relation to such an asset, in such a case, notice issued under section 148 after expiry of six years from end of relevant year relying upon provisions of section 149(1)(c) was not sustainable

HC directed Commissioner to decide rate of tax on aluminum conductor afresh as he hadn't passed spea

CST & VAT : Assam - Where order of Commissioner determining rate of tax on aluminium conductor, didn't contain any reason for coming to conclusion, matter was required to be remanded back

HC ordered refund of amount paid by bibber as seller had failed to deliver possession of auctioned a

CL: Petitioner was entitled to refund of amount paid by him pursuant to his successful bid, as seller had failed to deliver possession of auctioned assets

Thursday, 27 November 2014

Payments made by Delhi Race Club for live telecast of horse races weren't covered within the ambit o

IT : Payment made by a race club for live telecast of horse races is not covered under section 9(1)(vi) and said amount, as such not being royalty, TDS was not required to be deducted

Interest earned by Co-operative society on surplus funds deposited in FD wasn't eligible for sec. 80

IT : Where assessee, a co-operative society, engaged in providing credit facilities to its members, deposited surplus funds in fixed deposits and earned interest thereon, said interest would be assessable as 'income from other sources' and, thus, not eligible for deduction under section 80P(2)(a)(i)