CA Terminal

Tuesday, 6 January 2015

Govt. releases chart indicating sector-specific FDI policy for industrial and other sectors

FDI/FEMA/ILT : Consolidated FDI policy Circular of 2014 – mapping of the sector specific FDI policy in terms of national industrial classification (NIC)-2008

Mango Treatment For Exports

Fruit flies were a major impediment for mango producing countries like Pakistan to market the ‘king of the fruits’ to developed countries. Mr A.Q. Khan Durrani, a researcher, is credited with saving and promoting Pakistan’s mango exports at a time when Indian mango exports to the European Union were banned.

Different countries have their own requirements for processing and treatment, but the most commonly used method in vogue is hot water treatment (HWT), radiation and vapour treatment.

Around 300 rejected mango consignments led to the imposition of a ban by the EU on the import of Indian mangoes at the start of the mango season on May 30, 2014 for two years.

But Pakistan — whose rejected consignments to the EU during 2013 stood at a lesser 234 — was warned that it will face a ban if five more of its shipments were rejected.

At this critical juncture, Mr Durrani — who has invested 27 invaluable years of his life on research for developing an indigenous HWT technology suited to Pakistani conditions— came to the exporters’ rescue, which helped the country earn $57m from mango exports in 2014.

Talking to this writer at his industry and research centre located opposite Baqai University on Super Highway, Mr Durrani said he has designed world’s three largest HWT plants, each with the capacity to process 12 tonnes of mangoes per hour.

Giving details about the technology, he said he had initiated the research work in 1983, but it took him 27 years to come up with a full solution to the fruit fly issue, in 2010.

According to international quarantine standards for HWT, the recommended temperature is 48 degrees Celsius, and the time for processing is 60 minutes. This results in producing pulp (mango) temperature at 46.6 degrees Celsius.

However, Mr Durrani said his research showed that under HWT, the temperature should be kept at 50 degrees, so that pulp’s temperature of 47.5 degree could be achieved. This is necessary to completely destroy or de-fertile fruit fly eggs.

Supporting his theory of keeping the temperature higher by two degrees over international standards, he said the mango produced in India and Pakistan has a very thin skin and the fruit fly thus easily manages to sting deeper into the fruit to lay eggs.

Yet, a number of issues crop up with the higher temperature, particularly the excessive opening up of mango pores and cells. In order to deal with this situation, a system has been developed where these pores and cells are semi-sealed by use of wax and shellac during the HWT process.

During a tour of these plants, Mr Durrani drew the writer’s attention toward a unit inside a small room and next to the HWT plant, which releases the wax and shellac, when needed.

After using ethylene process to fast ripen the fruit, another process is used to prolong the mango’s shelf life, he added. For this treatment, another plant developed by him rapidly cools the fruit to reverse the ageing process and also stops dehydration caused by HWT.

He explained that only the first step of HWT is needed for air shipments, whereas the two subsequent treatments (of sealing the pores and reversing the ageing and dehydration process) are done for sea shipments due to the time-taking journey.

Surprisingly, the world standard for the shelf life of fresh fruits and vegetables is not more than 7-8 days, but Pakistan has managed to develop an indigenous technology that has increased it to 35-40 days. Thus, they could still be labelled ‘fresh’ and not frozen, Mr Durrani claimed.

Meanwhile, radiation is Australia’s quarantine standard for treating mangoes. But when a team of experts carried out successive inspection and audits from 2010 to 2013, they approved HWT for mangoes.

Durrani added that Australia is also facing similar issues, and even after treating its mango shipments to China in 2012, they were rejected. However, Pakistani consignments were cleared even after it took them 23 days to reach there, against 12 days it took Australia’s shipments.

The approval and certification given by Australia to both Pakistan and India for HWT in 2013 benefited our exports because no Pakistani mango shipments were rejected by Australia, but India had to face a ban as all its three consignments were rejected.

However, when the mango export season started on June 5, Mr Durrani held video conference with EU officials for 26 days. During the discussions, the EU officials pointed out that they had initially rejected two Pakistani mango consignments, but there were no complaints after that.

Mr Durrani explained that the initial mango shipments were directly made from approved orchards, but were not processed under HWT. However, all the subsequent shipments were being treated under HWT. He regretted that even after having a technological edge, Pakistan exported only 4,700 tonnes of mangoes to the EU.

In fact, Pakistan’s mango export target of 9,000 tonnes per annum should have captured India’s share of around 7,000 tonnes exports to the EU.

A qualified mechanical engineer Mr Durrani focused on a single point agenda: that being an agricultural country, Pakistan could not progress without giving due importance to the farming sector.

He also came up with a solution for processing kinnow for the export market, and guided growers and exporters. Around 250 kinnow processing plants are operating on his technology today, and the country is earning around $124-147m from kinnow exports.

Source:dawn.com

Iran Ban, Iraq Duty Hike To Take A Toll On Rice Exporters

India's rice exporters may end the current fiscal on a damp note as Iraq has doubled the import duty to 40%, while Iran has clamped an outright ban at a time when price realisation has slipped 15-20% in overseas markets.

A senior official of All India Rice Exporters' Association (AIREA) told ET that traders are currently shipping only rice consignments with permits of last year to Iran. "We are hoping that Iran will lift the ban. We are planning to send a delegation to Iran in early February to sort out the issue," said the official, requesting not to be named.

The official added that the sudden increase in import duty by Iraq has come as a major blow and it is bound to impact exports to the country.

According to an estimate by exporters, basmati shipments are likely to come down to 35 lakh tonne from 37 lakh tonne in the previous year.

Iran has barred rice from other countries as its local crop is reported to be good this year and is set to arrive in the market there.The country imported over 12.5 lakh tonne of rice during April-July 2014, compared with 14.5 lakh tonnes in the year-ago period.

In the past two years, Iran has bought over 2.5 million tonne of basmati rice from India. The average price realisation has declined to $800-1,100 per tonne from $1,0001,300 per tonne last year.

Exports of basmati rice in the first seven months of the current fiscal declined over 8% to 19.36 lakh tonne from 21.13 lakh tonnes in the year-ago period. However, exports of non-basmati rice between April and October 2014 stayed almost the same as in the previous year, at about 4.2 lakh tonne.

The lacklustre export demand of basmati rice has pushed down prices in the domestic market as well, with farmers getting Rs 3,200 per quintal for Pusa 1121 crop, compared with Rs 4,100 last year.

Retail prices of basmati rice may fall further in the domestic market if exports slump, said Bal Krishna Mittal, managing director of Gurdaspur Overseas, which deals in basmati rice.

Output of basmati rice in the kharif, or summer, season in 2014 was robust at about 81 lakh tonnes, up from 66 lakh tonnes in the previous year.

Source:economictimes.indiatimes.com

India To Formulate ‘Long Term’ Gold Import Strategy To Benefit Exporters

The Indian government today announced its plans to devise a long term strategy for importing gold into the country in order to ensure smooth supply of the yellow metal to jewelry exporters. The government is working out on the new strategy which will also keep the current and trade account deficits under check.

The Union Commerce Secretary Rajeev Kher has scheduled a meeting on January 7th, which will be attended by representatives from country’s finance ministry, the Gems and Jewellery Export Promotion Council (GJEPC) and the Reserve Bank of India (RBI). According to reports, the government intends to extend the ‘Make in India’ campaign into gold sector.

According to traders, the supply of gold has eased considerably following the abolition of the 80:20 rule. Any rise in gold imports may unsettle the country’s trade balance data. To limit gold imports into the country, the government also plans to introduce quota system on gold imports.

Meantime GJEPC points out that a major portion of the exporters’ capital is being blocked to obtain bank guarantees for customs, since the duty on gold imports have sharply risen from 2% to 10% during the past two years. The Council Chairman Vipul Shah urged the government to allow exporters to provide legal undertaking to Customs in place of expensive bank guarantees. He also called upon the government to scale up the duty drawback rates to catch up with the prevailing high gold import rates.

The country’s trade deficit had climbed to 18-month high during November ’14, mainly on the back of surging gold imports. The imports of the yellow metal during the month had totaled 151.58 tonnes, rising sharply by 38% when compared with the previous month.

Source:metal.com

Mca Portal Clocks Over 5 Million Views In 8 Months

Indian steel mills set a new record by importing an all-time high of over 8 million tonne of key steel-making raw material in the 2014 calendar year.

Lack of stocks in the domestic market and falling prices in the overseas markets encouraged iron ore-starved steel mills to look out for imported material during the year. Major producers like Tata Steel and JSW Steel were the largest importers during the year. JSW Steel had announced its plans to import close to 10 million tonne during 2014-15.

Compared to the previous years, 2014 witnessed heavy imports. In 2013, import of iron ore stood at a mere 1.2 million tonne. CY 2012 had seen previous highest level of imports at 3.1 million tonne. CY 2011 on the other hand had witnessed just about 600,000 tonne, according to data compiled by Delhi-based Ore Team Research.

“Conditions have changed through the years and in the process of correcting the illegalities and regularising the mining industry the judiciary and state governments had to take hard decisions, which led to these circumstances today,” said Prakash Duvvuri, head of research at Ore Team Research.

As a result, India has turned out to be a net importer of iron ore as exports have dipped amidst the shrinking global prices. India exported barely 7.14 million tonne in CY 2014 against 8.12 million tonne of imports, he pointed out.

“We were the third largest exporter a few years ago. This year, India’s exports will come to zero level, unless the government takes some corrective steps and withdraws export duty. The government should at least withdraw duty on Goan ore, which is of low quality and there is no market for it within the country,” Basant Poddar, vice president, Federation of Indian Mineral Industries (FIMI) said.

Looking ahead at 2015, domestic production is likely to improve. Hence, India might see its dependency on imports come down slightly but not sharply.

Since the iron ore production would take time to come back on track and PSU mines would gradually increase their figures, the situation in the domestic market is set to improve in 2015 rather than turning further bullish, Duvvuri added.

However, imports will continue to be higher even in 2015 because the opening up of mines in Goa and Karnataka will take more time. “We can expect some more mines to open this year only by September,” Poddar said.

Source:business-standard.com

India Turns Net Importer Of Iron Ore In 2014

Indian steel mills set a new record by importing an all-time high of over 8 million tonne of key steel-making raw material in the 2014 calendar year.

Looking ahead at 2015, domestic production is likely to improve. Hence, India might see its dependency on imports come down slightly but not sharply.

Source:business-standard.com

Transformer was an accessory to manufacture fertilizer; entitled for concessional rate of tax

CST & VAT: U.P. VAT - Where assessee was engaged in manufacture of fertilizer and Assessing Authority had issued a recognition certificate to it for purchase of raw material, accessories and component parts at concessional rate of tax and it had purchased transformer at concessional rate of tax, transformer was accessories to manufacutre of fertilizer entitled for concessional rate of tax

Department couldn't come to a new conclusion to deny exemption if facts/circumstances of case remain

Excise & Customs : When there are no changes in circumstances, either factual or legal, it would not be open to department to upset apple-cart and come to a new conclusion; therefore, department cannot be permitted to take different stands, unless there are good and cogent reasons for a change in future

Exporters Seek Including Tirupur In Smart City Programme

Tirupur Exporters' Association (TEA) has requested the Centre to include the knitwear hub of Tirupur city in Smart City Programme as part of its programme to set up 100 Smart cities.

In the pre-budget memorandum submitted to Finance Minister Arun Jaitley, TEA said the textile industry, which provides employment next to agriculture, contribute about 13.25 per cent of India's total export basket and realized export earnings worth USD 41.57 billion in 2013-14.

This IT-driven programme will be helpful to faster decision making in the business and efficient communication apart from leading a quality life in Tirupur, with a populaton of nine lakh, and has recorded Rs.18,000 crores in Exports and Rs.9,000 crores in Domestic market in 2013-14, it said. The exports are marching ahead, with a new target of doubling to Rs.36,000 crore in the next three years, it said.

Despite the availability of resources for manufacturing textile and garment products in the country itself, the garment sector has not grown up to its expectations due to various adverse factors, TEA president A Shaktivel said in the memorandum.

He requested the minister to include the deduction of 15 per cent of value of new machinery acquired and installed in the year under provision of Sec.32 Ac, available to Corporate assessees, to the non-corporate sector also, by scaling down the ceiling of investment to Rs one crore from Rs.25 crore.

Under the Export Performance Certificate Scheme, the garment sector utilized only Rs.727 crore against Rs.2,712 crore for 3 per cent of FOB value of garment exports at Rs. 90,402 crore in 2013-14, he pointed out.

As the duty free import percentage has been increased to 5 per cent from July 10, the non-utilization value could be still on higher side and therefore, to utilize the given facility out of 5 per cent, a maximum of 3 per cent of the licence may be allowed for import of fabrics without keeping restriction of 1,000 metre, he said. The government should also expedite the signing of Free Trade Agreement with European Union and Canada.

As the cost was on higher side and also to encourage more number of exporters enter the garment field, Technology Upgradation Fund scheme subsidy for exporting units should be increased and interest subsidy should be increased from 5 to 8 per cent and Capital subsidy from 10 to 15 per cent, the memorandum said.

Source:economictimes.indiatimes.com

Depreciation at 15% and not 30% allowed on lorries used for captive transportation and not in busine

IT: Lorries let out by assessee under an arrangement to clay contractors to supply clay to assessee, would be entitled to depreciation at 15 per cent as applicable to lorries not used in business of hiring

Rupee Strengthens To 63.34 After Crude Prices Drop To 5 1/2-Year Low

The Indian rupee on Tuesday strengthened against the dollar after international crude oil prices fell to a five-and-a-half-year low, raising hopes among investors that it will help the government to achieve its fiscal deficit target of 4.1% of gross domestic product (GDP). Auction proceeds from coal mines and spectrum is also likely to help the government meet its deficit target.

The Indian currency opened the session at 63.37 per dollar compared with its previous close of 63.42. At 2pm, the rupee was trading at 63.34 a dollar, up 0.13%.

Brent crude oil suffered a 1.8% drop on Monday to $55.42 per barrel, a fresh low going back to April 2009. Since a recent peak in June, the price of the international benchmark has now fallen by 51.8%, due to concerns of slowing demand coupled with a glut of global supply, Reuters reported.

Prime Minister Narendra Modi on Monday chose the ordinance route to allow the auction of iron ore and other minerals, the eighth time the seven-month-old government used executive powers to push through a key decision, ignoring criticism that it is bypassing Parliament.

The cabinet also cleared the Telecom Commission’s recommendations on spectrum auction that is expected to begin next month, the government said in a statement.

The fiscal deficit as a percentage of budget estimates from April to November has already reached 99% of the full-year target, the highest since the Lehman crisis, due to weak revenue collections.

India’s benchmark equity index, S&P BSE Sensex, was trading at 27,307.57 points, down 2%.

Most of the Asian currencies were trading higher against the dollar. The South Korean won was up 1%, Japanese yen 0.42%, Philippines peso up 0.21%, China offshore spot 0.19%, Singapore dollar 0.15%, Thai baht 0.15% and China renminbi 0.11%. However, the Malaysian ringgit was down 0.62%, Indonesian rupiah 0.22% and Taiwan dollar 0.04%.

The yield on India’s 10-year benchmark bond stood at 7.889% compared with its Monday’s close of 7.892%. Bond yields and prices move in opposite directions.

In 2014, the rupee weakened 2% against the dollar, while foreign institutional investors bought $16.12 billion from local equity markets and $26.36 billion from the debt market.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 91.409, up 0.03% from its previous close of 91.378.

Source:livemint.com

Interest had to be deemed as unexplained if it had accrued on advances admitted as income during sea

IT : Addition could not be made at hands of assessee solely on single piece of evidence impounded during search as there was serious doubt regarding authenticity of evidence

Franchisee fee paid annually for using trademark 'Dominos' was allowable as revenue exp.

IT-I : Franchise fee paid annually at fixed percentage of sales turnover for using trademark belonging to payee company was to be allowed as revenue expenditure

Mere use of manpower to provide services doesn't make a service as ‘supply of manpower'

Service Tax : Mere use of manpower to provide services does, not render such service classifiable as 'supply of manpower

Monday, 5 January 2015

Assessee could ask for removal of wrong comparable before ITAT even after choosing it for its TP aud

IT/ILT : Companies engaged in software product development are functionally different and dis-similar to companies engaged in providing software development services

Assessee can choose most beneficial exemption if two unconditional exemptions are available to him

Excise & Customs : Where two exemption notifications are in force : one granting absolute unconditional exemption and other granting unconditional partial exemption, assessee may choose exemption most beneficial to it

ITAT dismissed appeal of assessee as neither any adjournment was sought by him nor anybody appeared

IT: Where none was present on behalf of assessee, neither any adjournment was sought, appeals filed by assessee was to be dismissed

No addition in block assessment on basis of material collected during post search period

IT : Addition cannot be made to value of property on basis of material collected during post search period and not during search itself

No rectification for re-computation of turnover as it didn’t confine to removing arithmetical errors

IT : Where assessee sought recomputation of turnover under section 154, but determination of same would not be confined to arithmetical or adding figures rather explanation and answers would be required, therefore said section could not be invoked

Allahabad HC upheld order for release of goods on payment of cash deposit of 20% of value of goods

CST & VAT: Uttar Pradesh VAT - Where Assistant Commissioner demanded cash security both under VAT Act and Entry tax Act for release of seized goods, cash security of 20 per cent of value of goods would be justified

No deduction of legal fee incurred by assessee to defend his criminal case on charges of custom duty

IT: Expenditure on legal fees to defend in custom duty evasion related criminal case, having no connection with carrying on of business of assessee should meet disallowance under section 37(1)

No MAT on income shown in current year when it had suffered tax in earlier assessment year

IT : Where once profit of assessee company had suffered tax, its inclusion in book profit was no basis to bring it under purview of tax once again under section 115J

TP addition to be deleted if AO had computed ALP without considering comparable data available at as

IT/ILT: Where Assessing Officer computed arm's length price using higher gross margin without considering updated data available at time of assessment proceedings, addition made was not justified

SC: Court can't admit complaint on dishonour of cheque before expiry of 15 days of service of notice

Negotiable Instrument Act : No offence can be said to have been committed unless and until period of 15 days, as prescribed under clause (c) of proviso to section 138, has in fact, elapsed and, therefore, a Court is barred in law from taking cognizance of such complaint

No denial of condonation plea due to non-filing of documentary evidence when department didn't objec

Service Tax : Merely because no documentary evidence is placed on record in support of reasons leading to delay, reason assigned cannot be brushed aside in totality in absence of their being any counter or objection raised by department; hence, if reasons appear to be bona fide, delay must be condoned

Father gets Sec. 54B relief for acquiring new land in son’s name even if original land was held join

IT : Where son of assessee was also joint owner of land which was sold and new land was purchased in name of son because of assessee's old age and other technical reason, assessee was entitled to deduction under section 54B

Oilmeal Exports Decline 45% In April-November

Faced with a steep 45% decline in exports between April-November, oilmeal exporters have urged the government to incentivise its shipment to abroad.

India’s oilmeal exports have been witnessing steady decline over the last three years. After a record 5.60 million tonnes of oilmeal exports in 2011-12, its shipment fell to 4.85 million tonnes in the following year and 4.33 million tonnes in 2013-14.

But, the year 2014-15 has been the slowest in many years with overall exports at 1.42 million tonnes between April – November period as against 2.6 million tonnes in the corresponding period last year.

Used as a bird feed and an animal feed, demand of oilmeals indicates global economic direction. With weak global economies, spends on bird feed and animal feed hit resulting into a slowdown in India’s oilmeal exports. Also, India’s perennial importers have diverted their orders to South American countries including Brazil and Argentina.

“Situation can only change with higher import duty imposed on edible oils which in turn can support the export of soybean meal. The government should also consider to give higher Vishesh Krishi Gram Upaj Yojana (VKYUG) on export of oil meals to provide some support to check the falling export,” said Pravin Lunkad, president of the Solvent Extractors’ Association (SEA).

While the government raised import duty by 5% all across, the industry termed the raise insufficient to make any significant change.

“It is practically impossible to recover the 45% decline of the first eight months in just remaining four months of the year. Even if we assume that a positive crushing parity to stimulate domestic oilmeal production and intermittent buying from China and Iran, Indian exporters may be able to recover not more than 15% of the fall. Still, oilmeal exports witness a decline of at least 30% this year,” said Anil Agrawal, managing Director of Sanwaria Agro Oils Ltd.

Sanction hit Iran has started purchasing oilmeals from Brazil and Argentina which works out to cheaper of upto $100 a tonne than import from India. Also, European countries have opted to purchase from these natural global suppliers.

While India’s oilmeal exports to Iran fell by a steep 70% at 242,291 tonnes between Apr – Nov 2014, that of European Union nosedived by a staggering 83% to a mere 65,304 tonnes in the first eight months of the current fiscal compared with 379,056 tonnes in the comparable period last year.

Exports to Taiwan and South Korea also fell by 29% and 19% to 54,584 tonnes and 568,275 tonnes respectively in the period under consideration.

“Owing to negative crushing parity, crushing mills have piled up seeds as they incur losses in oil which they try cover up through elevation in oilmeal prices. This makes Indian oilmeal costlier than other origins like Brazil and Argentina,” said Agrawal.Also, due to high price of soybean, India is totally out priced in the international market by $ 50-60 against other origins.

Source:- business-standard.com

Usda Sees Good Prospects For Almond Exports To India

The USDA has placed almonds on the top of the list in its recommendations for exporters in USA for entering the Indian market.

While saying that India remains a complex market to make inroads for food companies, USDA says that almond exports to India have been promising with an average growth of around 20% and a share of around 80% of India’s total almond imports in the last five years.

India is a small but growing market for exporters in USA thanks to globalisation of food and higher incomes in India. According to official estimates, India’s imports of consumer-oriented foods, led by tree nuts and fresh and dried fruits, have doubled to around $3.2 billion in the last five years, and USA is a top exporter of almonds to India.

According to India’s Ministry of Commerce, almonds imports from USA stood at around $380 million in FY2013-14. It was about 78% of total almond imports by India in the year and up around 140% from around $158 million worth almonds that India imported in FY2009-10.

Source – Ministry of Commerce, India

Higher income, an expanding retail industry, preference for healthy food, and changing tastes in India are reasons behind the growing demand for almonds in India.

Moreover, the boost to the food processing industry in India is expected to increase demand for food products such as almonds from USA in the coming years. Other export items with high potential include pistachios, fruits and fruit juices, sugar confectionery, sauces and beverages, says USDA.

However, there are challenges for USA exporters. “High tariffs (of around 30-40%) on the majority of food items along with effective bans on certain products continue to hinder the growth of food imports from the United States,” says USDA. It adds that it is preferable for US companies to partner with Indian importers to help address policy and regulatory obstacles. Exporters must also be prepared to meet the requirements of Indian importers such as mixed shipments and changes in product specifications to meet food laws in India, it adds.

Source:- thedollarbusiness.com

AO was directed to verify confirmation letters of creditors produced before ITAT for sec. 68 additio

IT : Where assessee could not produce confirmation letters from creditors in time before lower authorities but same was produced before Tribunal, matter was to be remanded back to verify genuineness of said letters

Penalty upheld as material issued against Form 18 was used to produce goods for sale to branches out

CST & VAT: Kerala VAT - Where assessee purchased carbon black and rubber chemicals against form 18 and utilized same for production of tyres, tubes and flaps transferred to other branch offices outside Kerala for sale, imposition of penalty under section 45A(g) was justified

Sum paid on testing of ultrasonic meter wasn't FTS as it didn't satisfy make available clause of Ind

IT/ILT : Payment made by assessee, engaged in business of manufacturing ultrasonic meters, to a US company towards calibration and testing of equipment, could not be treated as, fee for technical services' due to non-Compliance with make available cause

AO can’t make sec. 14A disallowance before discharging onus that exp. has been incurred on exempt in

IT : Where assessee had not claimed any expenditure in relation to exempt income, onus is on Assessing Officer to prove that out of expenditure incurred under various heads, some were related to earning of exempt income and not only this he has also to give basis of such calculation

Rupee Still Down By 8 Paise Vs Dollar

The rupee staged a mild recovery but was still trading lower by eight paise to 63.37 against the American currency in late morning trade on fresh dollar demand from banks and importers on the back of higher greenback in the overseas market.

The rupee resumed lower at 63.43 per dollar as against the last weekend's level of 63.29 at the Interbank Foreign Exchange and dropped further to 63.50 on initial dollar demand from banks and importers.

However, it recovered from its initial losses and was quoted at 63.37 per dollar at 1000 hours on selling of dollars by banks on hopes of more foreign capital inflows into equity market. It moved in a range of 63.36 to 63.50 per dollar during the morning trade.

In New York market, the US dollar ended higher against other currencies on last Friday on expectations that the Federal Reserve will raise interest rates while the European Central Bank and Bank of Japan continue to loosen monetary policy in the year ahead.

Meanwhile, the Indian benchmark Sensex was quoted higher by 103.83 points, or 0.37 per cent, to 27,991.73 at 1000 hours after crossing 28,000-mark in the early trade.

Source:dnaindia.com

'Gambier' isn't Kattha/Catechu, it is an unclassified item taxable at higher rate under UP VAT Act

CST & VAT : U.P. VAT - Where assessee was engaged in purchase and sale of Gambier and it claimed that said product was Kattha/Catechu falling under Entry No. 68 of Part A of Schedule II to U.P. VAT Act, product Gambier was an unclassified item

Income returned only in response to sec. 153A notice won't call for levy of concealment penalty

IT : Penalty under section 271(1)(c) could not be levied in respect of returned income which had been filed in response to notice under section 153A

No invocation of extended period when demand arose due to retro-amendments

Service Tax : No extended period, when demand arises due to retrospective amendments

Govt. notifies certain institutions and their eligible schemes for the purpose of deduction under Se

IT : Section 35AC, Read with Explanation (B) Thereto, of the Income-Tax Act, 1961 - Eligible Projects or Schemes, Expenditure on - Notified Eligible Projects or Schemes – SWA-Roopwardhinee, Maharashtra, Etc.

ITAT couldn't remand case to AO when it had enough material before it to decide issue of disallowanc

IT : Where there was enough material on record enabling Tribunal to decide issues raised in respect of allowance of service charges, matter was to be decided by Tribunal; it should not have remanded same to Assessing Officer

Dismissal of appeal by Tribunal without assigning any results would render its order as cryptic; to

Excise & Customs : Where Tribunal had not considered pleas raised by assessee and had brushed aside various grounds without any reasons, such Tribunal order, being cryptic, was liable to be set aside and remanded back for consideration afresh

Income declared in return couldn't be deemed as undisclosed if return was filed before the date of s

IT: Where income received by assessing was filed before search and same was on records of department before date of search, income could not be undisclosed in view of section 158BB

Sunday, 4 January 2015

ALP of interest-free loans given to foreign AE to be computed on basis of LIBOR and not at rate give

IT/ILT : Where no incriminating material was found by department during search indicating that assessee's working of TP was flawed or inconsistent in any manner, it would be wholly unjustified for TPO to review his own acceptance of assessee's TP report merely because a search was conducted in assessee's case

Exp. on verifying info of customers and their creditworthiness for issuance of credit cards is reven

IT : In credit card business credit investigation expenses would be revenue expenditure

[DGFT Notification] : Amendment in import policy conditions under ITC (HS) 4 digit code 3808.

To be published in the Gazette of India Extraordinary Part-II, Section -3, Sub Section (ii)

Government of India

Ministry of Commerce & Industry

Department of Commerce

Udyog Bhawan, New Delhi

Notification No. 106/(RE-2013)/2009-2014

Dated the 1 January, 2015

Subject: Amendment in import policy conditions under ITC (HS) 4 digit code 3808.

S.O. (E): In exercise of powers conferred by Section 3 of FT (D&R) Act, 1992, read with paragraph 1.3 and 2.1 of the Foreign Trade Policy, 2009-2014, the Central Government hereby inserts the following Policy condition as Policy Condition no. 3 under Chapter 38 of ITC (HS), 2012 – Schedule – 1 (Import Policy):

"3. Under Section [9] of the Insecticides Act, 1968 all chemicals intended to be used as insecticides, rodenticides, fungicides, herbicides etc. [referred to as ‘insecticides’ under the Act] require mandatory registration for import. In cases, where the ‘insecticide’ is imported for non-insecticidal purpose, an import permit is necessary from the Registration Committee under the Department of Agriculture and Cooperation. The Registration Committee while granting registration or a permit for import of an insecticide spells out the conditions for import which inter alia, may include reference to the source of import. No ‘insecticide’ can be imported from a source other than that specified on the certificate of registration or the permit, as the case may be. In addition, the Registration Committee may issue regulatory guidelines from time to time with respect to safety, efficacy, quality etc. which warrant full compliance from importers."

2. Effect of this Notification: The policy provisions under the Insecticides Act, 1968 for import of insecticides under EXIM code 3808 of Chapter 38 in ITC (HS), 2012 – Schedule – I (Import Policy) are being notified.

(Pravir Kumar)

Director General of Foreign Trade

E-mail: dgft@nic.in

(Issued from File No.01/53/162/Misc./AM-15/M-23/IC/PC-2-A)

[Indian Customs Tariff Notification] : Seeks to amend notification No.12/2012-Cus dated 17.3.2012 so as to extend zero customs duty on chickpeas(gram) upto 31st March, 2015

[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification No. 39 /2014-Customs

New Delhi, the 31st December, 2014

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 12/2012-Customs, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 185(E), dated the 17th March, 2012, namely:-

In the said notification, after the Table, in the proviso, in clause (ab), for the figures, letters and words "1st day of January, 2015", the figures, letters and words "1st day of April, 2015" shall be substituted.

[F.No. 354/15/2010-TRU]

(Pramod Kumar)

Under Secretary to the Government of India

Note: The principal notification No. 12/2012-Customs, dated the 17 th March, 2012 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 185(E), dated the 17 th March, 2012 and last amended vide notification No. 34/2014-Customs, dated the 24 th December, 2014, published vide number G.S.R. 915 (E), dated the 24 th December, 2014.

Gold Imports Rise 8.5% To 849 Tonne In 2014

Despite stringent controls like the 80:20 scheme on gold imports for most parts of 2014, imports of the precious metal are projected to have increased 8.5% to 849 tonne in the year compared to 2013.

From June onwards, the average monthly imports stood at 90 tonne while in November, when the curbs were relaxed, imports stood at 151 tonne or $5.6 billion.

The 80:20 scheme was introduced in second half of 2013 to control gold imports and it succeeded to an extent. However, in the second half of 2014 imports rose due to demand for the precious metal. “Imports rose due to demand of consumers, which was suppressed for several months,” said an industry observer, who also tracks imports.

The last quarter of 2014 saw a spike in imports at 296 tonne, the highest after the quarter ended June 2013.

While the import bill for 2014 at $30.8 billion is less than $39 billion in 2013, the spike in the import bill is visible if one compares the data on a financial year basis. During April-December 2013-14, the bill was $23.36 billion, which has increased to $25.45 billion in three quarters of 2014-15.

Overall imports remained high despite the sharp fall in December imports, which is pegged at less than 30 tonne or around $1 billion, a fall of almots 80% compared to the previous month. The data will also be the lowest in the last 15 months and lower than December 2013 too (37 tonne). Traders say there was virtually no demand in December and the high inventories due to previous imports were still in the market.

Going forward too, the import scene may not see a big improvement. “Demand is quite dull and we don’t see any significant improvement in demand for a couple of months as now expectation is that in the budget, government may cut import duty on gold, which will bring down gold price in India to the extent of duty,” said Prithviraj Kothari of Riddhi Siddhi bullion.

Interestingly, gold was trading at a discount in December at a marginal $1-2 premium per ounce to its cost of import in the Mumbai market.In Mumbai’s Zaveri Bazar, standard gold is trading at Rs 26,900 per 10 gram while silver at Rs 36,300 per kg.

Source:- business-standard.com

Reassessment justified as assessee failed to disclose that it had commenced business with assets of

IT : Whether where material information that assessee company commenced its business using asset of an erstwhile company was not furnished with return and same was disclosed in subsequent year, reassessment was proper

Medical Group Insurance is also eligible for input service credit

Cenvat Credit : Services by way of : (i) Medical Group Insurance; (ii) Consultancy Services in relation to tax compliances; (iii) Outdoor Catering Services; and (iv) Subscription for International Taxation, are eligible for input service credit

ITAT allows sec. 54B relief to father on purchase of land in son's name even if sold land was held j

IRDA lays down new guidelines in respect of group insurance policies for banks, NBFCs and Housing Fi

INSURANCE : Guidelines on Claim Processing for Group Life Insurance Policies under Lender Borrower Group Insurance Scheme

'IRDA' renamed as 'IRDA of India'

INSURANCE : Change of Name of IRDA to IRDA of India

High Local Ore Prices Prompt Steel Makers To Look Overseas

India will import nearly 15 million tonnes of iron ore in 2015 as higher domestic prices amid a supply shortage push top steel makers to import more, said industry executives.JSW Steel Ltd, with the largest domestic capacity for steel among private firms, will import maximum ore at nearly 9 million tonnes, while Tata Steel Ltd is expected to import roughly 2 million tonnes.

“By the end of the fiscal, JSW would have imported almost 9 million tonnes out of the total 15 million tonnes expected to be imported into the country, a marked shift from last year’s one million tonne total imports,” said Seshagiri Rao, joint managing director and group chief financial officer of JSW Group, adding a domestic supply shortage of almost 10 million tonnes has led to higher domestic prices.

“This is making imports of iron ore for coast-based steel plants much more viable although for plants in the interior of the country, it is still unviable to import. Still, companies are importing, as there is no uniform availability.”

Tata Steel did not respond to an email seeking clarity on its imports; but representatives of an industry association tracking such data said its imports would be close to 2 million tonnes.In a statement on 30 December, T.V. Narendran, managing director of Tata Steel, India & South East Asia, had confirmed that the company would be a net importer of iron ore.

Narendran said in an email that the company was impacted by issues related to mining lease renewals which led to intermittent stoppage of mining operations leading to disruption in the end-use operations.Goutam Chakraborty, analyst with brokerage Emkay Global Financial Services, said the current price of 62% Fe grade iron ore is about Rs.4,000 per tonne in India; the same grade is available internationally at around Rs.3,500 per tonne. He added that the cost of iron ore is even higher in India in case of lumps and is close to Rs.4,200-4,500 per tonne for a 62% Fe grade.

Rao from JSW Steel added that while international prices have fallen almost 40% since the beginning of the fiscal, in India, prices have actually risen.Bloomberg data says the price of 62% Fe grade iron ore fines imported into China has fallen from $110.1 per tonne as on 1 April 2014 to $66.4 per tonne as on 25 December 2014, a fall of almost 40% so far this fiscal.

In contrast, ore price at e-auctions in India has risen from Rs.2,700 per tonne in April to Rs.3,140 per tonne in November. State-owned miner NMDC Ltd cut prices in December for the first time in 2014, said Chakraborty of Emkay in a 2 January report. Data on the quantum of the price cut was not available.A senior NMDC executive said the price discovered via e-auction has not fallen, as there is demand at higher prices and buyers seem to have the capacity to absorb these prices. “Why should we fix a lower base price for iron ore when there is a demand even at a higher price?” asked the executive, who spoke on condition of anonymity.

He said NMDC’s pricing formula incorporates the international price benchmark, domestic demand and available domestic grades.

A mail sent to NMDC on Wednesday remained unanswered.Mining industry representatives, however, say that e-auctions are inflating prices way beyond international prices. They add that the quality and uniformity of iron ore are also not as per requirements.“This is leading to an added supply crunch, with several batches remaining unclaimed, while companies are resorting to imports,” said Basant Poddar, vice-president of Federation of Indian Mineral Industries (FIMI), India’s biggest trade body for minerals.

“There is no country in the world which runs its steel plant based on imported iron ore or iron ore available from e-auctions,” he added.

India is expected to produce up to 130 million tonnes per annum (mtpa) of iron ore as against a demand of 140 mtpa largely due to weaker output from Karnataka, Odisha and Jharkhand. Domestic output has fallen due to restrictions imposed by the Supreme Court to curb illegal mining.

Source:-livemint.com

Mere pleading of financial hardship without any documentary evidence won't lead to waiver of pre-dep

Service Tax : Pre-deposit cannot be waived on mere claim of financial hardship due to 'default by debtors and non-recovery' owing to global recession, sudden financial meltdown and financial crisis in US; assessee must file documentary evidence in support of its claim

Commerce Ministry Engages With Departments To Improve Ease Of Doing Business

The Commerce Ministry is intensely engaged with different departments, including revenue and shipping, to reduce paper work in a bid to cut transaction cost for exporters and improve ease of doing business.

The Directorate General of Foreign Trade (DGFT), under the Commerce Ministry has prepared a report suggesting various ways to improve India's ranking in the World Bank's report of ease of doing business, reduce transactions cost for exporters and boost outward shipments.

The ministry aims at reducing the number of mandatory documents from nine to three (bill of lading, invoice and shipping bill) for exports, and from ten to four for imports.

"DGFT is regularly meeting officials of different departments including revenue and shipping to achieve this goal. Reduction in paper work would improve ease of doing business, reducing transactions costs and time and also boost India's exports," an official said.

The report, Trade Across Borders, was circulated to all the departments concerned and they have expressed commitment to help achieving targets by March 31, the official said, adding Commerce Secretary Rajeev Kher has written to the departments to take actions on these recommendations.

According to exporters' body Federation of Indian Export Organisations (FIEO), these measures, if implemented, would push India's ranking within 100th from the current 126th position for doing trade across borders.

"As per our rough estimates, reduction in paper work and making all the ports EDI (Electronic Data Interchange) would help in reducing the transactions cost by about 3 per cent (about $20-25 billion) of the total $750 billion trade," FIEO Director General Ajay Sahai said.

Documents which could be dropped or merged for exports include statutory declaration form and terminal handling receipt while for imports product manual, inspection report and charter engineering certificate.

The government is aiming to improve India's overall ranking in ease of doing business index to 50th position in the next two years from the current 142nd.

The DGFT is also making several procedures online like taking Import-Export Code (IEC) and cargo release order.

Besides, other departments like the Department of Industrial Policy and Promotion (DIPP) too has taken series of steps to improve India's ranking.

During April-November, the country's imports were up 4.65 per cent to $316.37 billion, while exports were up 5.02 per cent to $215.75 billion. Trade deficit during this period stood at $100.61 billion as against $96.89 billion in the same period last fiscal.

Source:- economictimes.indiatimes.com

Defect of directing special audit without hearing assessee couldn't be cured by referring to unanswe

IT : In absence of an opportunity of being heard under section 142(2A), Assessing Officer cannot direct for special audit

Saturday, 3 January 2015

CBDT specifies class of assessees for Dispute Resolution Panels at Delhi, Mumbai and Bengaluru

IT/ILT : Section 144C of the Income-tax Act, 1961 - Dispute Resolution Panel (DRP) - Reference to – Reconstitution of DRPs at Delhi, Mumbai & Bengaluru – Supersession of earlier specified orders

AO couldn't pass rectification order to allow interest on refund for shorter period without intimati

IT : Assessing Officer having allowed interest on refund to assessee, could not pass a rectification order on ground that said interest was to be allowed for a short period of time without issuing notice to assessee

HC stays demand till disposal of appeal by CIT(A) as same issue was decided in assessee's favour in

IT : Where assessee filed an appeal against assessment order on a particular issue, in view of fact that identical issue had been decided in assessee's favour in earlier assessment year, demand raised for relevant year was to be stayed till disposal of appeal by Commissioner (Appeals)

Transactions emanating from common contract are closely linked; to be aggregated to compute ALP by T

IT/ILT : Where two or more transactions emanate from common source being an order or contract or an agreement or an arrangement, then such transactions could be said to be closely linked as nature, characteristic and terms of such transactions substantially flow from said common source; where number of transactions are closely linked transactions, then same can be aggregated and construed as a single transaction for purpose of determining ALP

No denial of registration to trust on non-commencement of charitable activities if its objects were

IT: Where assessee-trust was not engaged in any other activities apart from carrying out activities of distribution of free note books, registration of trust could not be denied on sole ground of non commencement of activity

No penalty due to estimated addition on understatement of sales if assessee had given complete detai

IT: Where addition in hands of assessee was made by estimating value of rice husk without any concrete evidence, levy of penalty on such addition was not sustainable

AO to consider dictum laid by SC in Shaduli Yusuff's case as he relied on vouchers recovered from th

CST & VAT : Where Assessing Officer reopened assessment relying on vouchers recovered from a third party and made addition to turnover, assessee was to be directed to produce account books and Assessing Officer should pass assessment order in accordance with dictum Supreme Court in State of Kerala v. K.T. Shaduli Yusuff [1977] 39 STC 478

No denial of depreciation when purchase bill wasn't in name of assessee if payment was made via cheq

IT : Assessee was held not required to deduct tax at source while paying commission to its Managing Director as part of its salary which was duly reflected in his taxable income

Advance on sale of land wasn't unexplained when sale agreement and bank certificate proved its genui

IT: Matter of claim for deduction under section 54 remanded where deduction was denied on ground of two other properties owned by assessee but there was no clear finding regarding ownership of said two properties

Betal Nut/Areca Nuts are importable against Duty Free Import Authorization; exempt from customs duty

Excise & Customs : Even if not listed in Entries 12(b)/12(c) of G-7 of SION, but in view of DGFT clarifications, Betel Nut/Areca Nuts is importable under DFIA and eligible for exemption under Notification No. 40/2006-Cus., dated 01.05.2006

Friday, 2 January 2015

Exp. incurred by dairy company on launching various schemes to increase milk procurement allowed as

IT : Where assessee being apex body in dairy activities incurred expenditure for procurement of milk and launched schemes to protect dairy farmers, said expenditure was to be allowed under section 37(1)

No sec. 194LA TDS when compulsory acquisition was made in lieu of development rights and not in mone

IT : Where land owners surrendered their land to assessee municipal corporation, for public purpose under scheme of development right certificates, permitting development rights to owners in form of additional floor area which was equal to one and half times of area of land surrendered, and there was no quantification of said certificates, therefore, section 194LA would not be applicable

Sum paid to NR for installation of plant which is inextricably linked to its sale couldn't be deemed

IT/ILT: Where payments were made by assessee to foreign parties not only for imports of plant, equipment and machinery but also for incidental services in connection with installation and commissioning of these machines, payments for incidental services was not liable to be taxed in India as fee for technical services and, accordingly, assessee was not required to deduct tax at source from these payments

[Indian Customs Tariff Notification] : Seeks to notify the basic customs duty rates [under notification No. 69/2011-Customs dated 29th July 2011 (India-Japan CEPA)] on tariff item 84082020 and tariff item 87084000 at 6.8% and 8.75%, respectively w.e.f. 01st January 2015.

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification

No. 36/ 2014 - Customs

New Delhi, dated the 29th December, 2014

G.S.R. ____ (E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.69/2011-Customs dated the 29th July, 2011, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 593 (E), dated the 29th July, 2011, namely:-

In the said notification, in the Table,-

(a) against S. No. 521, for the entry in column (4), the entry "6.8" shall be substituted;

(b) against S. No. 746, for the entry in column (4), the entry "8.75" shall be substituted.

2. This notification shall come into force with effect from the 1st day of January, 2015.

[F. No. 354/199/2009-TRU]

(Akshay Joshi)

Under Secretary to Government of India

Note.- The principal notification No. 69/2011-Customs, dated the 29th July, 2011, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 593 (E), dated the 29th July, 2011 and was last amended vide notification No. 09/2014-Customs, dated the 01st of April, 2014, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 255 (E), dated the 01st of April, 2014.

RBI relaxes ECB norms; expands lists of securities to create charge for securing ECBs

FEMA/ILT : Security for External Commercial Borrowings

Tribunal remands case as revenue didn't allow assessee to cross-examine prosecution witnesses

Excise & Customs : Where demand was confirmed without allowing cross-examination of prosecution witnesses and without taking on record statement of defence witnesses, Tribunal remanded matter back for consideration afresh

HC upheld addition on basis of uncontroverted admission made during search without scrutinizing rele

IT : Where assessee himself stated in sworn statement during search and seizure about his undisclosed income, same was to be levied tax on basis of admission without scrutinizing documents

Allotting additional shares to respondents without issuing notice to petitioner was oppressive

CL: Where board of directors had allotted additional shares to respondents unilaterally without notice to petitioners, it was gross misuse of fiduciary powers vested in board of directors and it amounted to act of oppression as defined in section 397

[Indian Customs Non-Tariff Notification] : Amends Notification No. 36/2001-Customs (N.T.), dated the 3rd August, 2001

[Indian Customs SG Notification] : Seeks to levy safeguard duty on imports of Sodium Citrate, for a period of three years

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

Government of India

Ministry of Finance

(Department of Revenue)

Notification

No. 04/2014-Customs (SG)

New Delhi, the 31st December, 2014

G.S.R. (E). – Whereas, in the matter of import of Sodium Citrate (hereinafter referred to as the subject goods), falling under tariff item 2918 15 20 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the Customs Tariff Act), the Director General (Safeguard), in his final findings, published vide number G.S.R. 663 (E), dated the 16th September, 2014, in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), has come to the conclusion that increased imports of Sodium Citrate into India has caused and threatened to cause further serious injury to the domestic producers of Sodium Citrate, necessitating the imposition of safeguard duty on imports of Sodium Citrate into India, and accordingly has recommended the imposition of safeguard duty on imports of the subject goods into India.

Now, therefore, in exercise of the powers conferred by sub-section (1) of section 8B of the Customs Tariff Act, read with rules 12, 14 and 17 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997, the Central Government after considering the aforesaid findings of the Director General (Safeguards), hereby imposes on Sodium Citrate falling under tariff item 2918 15 20 of the First Schedule to the Customs Tariff Act, when imported into India, a safeguard duty at the following rate, namely:-

(a) thirty per cent. ad valorem when imported during the period from 31st December, 2014 to 30th December, 2015 (both days inclusive);

(b) twenty per cent. ad valorem , when imported during the period from 31st December, 2015 to 30th December, 2016 (both days inclusive); and

(c) ten per cent. ad valorem , when imported during the period from 31st December, 2016 to 30th December, 2017 (both days inclusive).

2. Nothing contained in this notification shall apply to imports of Sodium Citrate from countries notified as developing countries under clause (a) of sub-section (6) of section 8B of the Customs Tariff Act, other than the People’s Republic of China.

[F.No.354/229/2014-TRU]

(Akshay Joshi)

Under Secretary to the Government of India

HC directs Tribunal to order similar treatment as to pre-deposit on same matters to avoid discrimina

Excise & Customs : Though principle of binding precedents does not apply to stay matters; however, for consistency of approach and to avoid discrimination respecting similar causes, all similar matters should receive similar treatment as to pre-deposit

A Co. couldn't be excluded from list of comparables merely on the ground that it was making losses

IT/ILT : Where a company failed in related party transaction filter and employee cost filter and outsourcing and amalgamation had changed business model of company, same could not be taken as comparable

Madras HC grants interim stay on notification levying sec. 234A interest on filing of return by exte

IT : Interim stay granted on paragraph 7 of Notification F. No. 153/53/2014-TPL (Pt. I) dated 26-9-2014

Contract manufacturing for overseas AE isn’t comparable to sale to unrelated party with marketing su

IT/ILT: Sales to an overseas AE without any cost being incurred on marketing and sales promotion are not comparable with sales to domestic independent enterprises with full responsibilities for marketing and sales promotion - Held, Yes - When profitability in two business situations are expected to be different due to significant differences in their FAR profiles, such transactions cease to be comparable transactions - Held, Yes

RBI revamps reporting system for representative offices of foreign banks in India

BANKING : Revised format of reporting - representative offices of foreign banks in India

AO is empowered to reopen assessment if there is understatement of sales consideration in terms of s

IT : Where understatement of sale consideration by assessee in terms of section 50C was prima facie established, Assessing Officer was empowered to reopen assessment

Free supply of diesel by service recipient isn't includible in value of services

Service Tax : Since rule 5(1) of Service Tax (Determination of Value) Rules, 2006 has already been struck down by Delhi High Court, hence, department cannot rely upon said rule to include cost of diesel supplied free by service recipient in value of services

No tax concession to assessee as it had initiated the project after cutoff date declared by Haryana

CST & VAT : Where State of Haryana issued an advertisement on 30-6-2000 that exemption from tax would be granted to 'units in pipeline' as on 30-4-2000 and thereupon assessee set up a unit in pipe line and filed an application under rule 28C on 26-7-2002 for grant of tax concession, since all formalities relating to setting up of unit were set into motion after cut off date of 30-4-2002, assessee could not be treated as a 'unit in pipeline' as on 30-4-2000

No denial of Sec. 11 relief to a trust on the basis that ITAT hadn't granted such relief on merits i

IT : Exemption claimed under section 11 by assessee was not to be denied by Assessing Officer merely on ground that in previous assessment year claim of assessee was allowed on technical grounds but not on merits

CBDT tweaks DRP Rules; brings down number of cities in which DRP can be constituted

IT/ILT : Income-tax (dispute resolution panel (first amendment) rules, 2014 – amendment in Rule 3

New year's gift for CMAs - Govt. cuts down threshold limit for cost audit and maintenance of cost re

COMPANIES ACT, 2013/INDIAN ACTS & RULES : Companies (cost records and audit) amendment Rules, 2014 – amendment in Rules 2, 3, 5 & 6; substitution of Rule 4, form CRA-1 & CRA-3 and omission of Rule 7

Hiring of expat employees of foreign group Cos under employment contract isn’t 'manpower supply serv

Service Tax : Hiring expatriate employees of foreign group companies under a contract of employment on payment of salaries and related provident fund contributions, etc., does not amount to 'manpower supply services'

Loss incurred by bank on transfer of securities from 'Available For Sale' category to 'HTM'/held as

IT : Loss incurred on account of transfer of securities held under category 'Available for Sale' to 'Held to Maturity' was to be allowed as business loss

CBDT revises constitution of income-tax authority for dispute resolution

IT/ILT : Section 118 of The Income-Tax Act, 1961 - Income-Tax Authorities - Control of - Notified Subordinate Officer – Supersession of Notification No. 21/2010/SO 718(E), DATED 31-3-2010

Govt. yet again hikes excise duty on petrol and diesel by Rs 2 a litre

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

License fee paid to use technology was revenue exp. as license was non-transferrable and fee was irr

IT : Where license fee paid for using technology being not transferable and irrecoverable, was to be treated as revenue expenditure

No reassessment to deny deduction under sec. 35D on GDR issue exp. if it was allowed in earlier year

IT : Where assessee-company amortized total expenditure on Euro issue over a period of 10 years and 1/10th of same had been claimed as deduction under section 35D and same had been allowed in earlier years, reopening of assessment to deny said claim for subsequent year was not proper

Thursday, 1 January 2015

Formula prescribed in rule 6(3A) uses the term 'total credit' and not 'common credit'

Cenvat Credit : Formula in rule 6(3A) of CENVAT Credit Rules, 2004 uses 'total credit taken' and not 'common credit'; hence, while making reversal, total credit (including that relating exclusively to taxable goods/services) will be used

Sale of cars used for test drive purposes couldn't be treated as used cars to get benefit of reduced

CST & VAT : Karnataka VAT - Where a manufacturer had sold units of car to assessee-dealer for demonstration and assessee-dealer used said cars for demonstration and after some time sold same to customers, demo cars sold by assessee could not be treated as used cars

Wednesday, 31 December 2014

SEBI gets discretionary powers to allow AMCs to launch two new schemes per year

SEBI/INDIAN ACTS & RULES : SEBI (Mutual Funds) (Second Amendment) Regulations, 2014 – Amendment In Regulation 21