Interest paid to related concern as per resolution passed by committee of assessee-society wasn't un

IT : Payment of interest at rate of 18 per cent to creditors on basis of resolutions passed by executive committee of assessee-society was found reasonable

Tool-open jaw spanner taxable at 4%

CST & VAT : Maharashtra VAT - Tool-open jaw spanner would fall under Entry No. 6(ix) of Schedule B of Bombay Sales Tax Act/item No. (ix) of clause (iv) of section 14 of Central Sales Tax Act and liable to be taxed at rate of 4 per cent

HC deletes disallowance as statement recorded in survey was retracted and revenue didn't have any ot

IT : Where statement recorded under section 132(4) had been retracted and revenue did not press into service any other supporting material, assessee was entitled for deduction towards commission and brokerage

HC directs Govt. to order investigation into Co's affairs as it didn't furnish info to CA appointed

CL: Where respondent-company had not furnished information in respect of its affairs, to Chartered Accountants appointed by Court which it was reasonably expected to furnish, Central Government was to be directed to order investigation into affairs of respondent-company

Deptt. couldn't demand more penalties from assessee when it had wrongly paid ST and penalty on exemp

Service Tax : Where assessee does not challenge right to collect service tax and pays service tax with interest and penalty, though not payable, on exempted service, he cannot be saddled with additional penalty not charged/paid earlier

Discount offered by air travel agent to lure customers couldn't be held as commission; not liable fo

IT: Where air travel agent, while issuing tickets to customers, offered discount to increase volume of business, same could not be treated as commission to customers liable to TDS under section 194H

Wto Members Ask India To Remove Export Sops To Textiles

WTO member countries including the US, Turkey and Japan, have asked India to phase out export subsidies on textiles and the apparel sectors, Parliament was informed today.



As per the WTO data for 2006 and 2007, India has crossed the threshold limit (exports reaching 3.25 per cent threshold of the world trade) consecutively for two years in these sectors, Commerce and Industry Minister Nirmala Sitharaman said in a written reply to the Lok Sabha.



"In the WTO subsidies committee meetings, the WTO member countries, in particular the US supported by European Union, Turkey, Japan and others have urged phasing out of export subsidies by India for the textiles and the apparel sectors," she said.



Sitharaman added the government has not taken any decision on the phasing out of subsidies as the new Foreign Trade Policy is "still under consideration".



Replying to a separate question on buffalo meat exports, she said that the exports have increased to 13.71 per cent in quantity terms during April-October 2014.



In value terms, it has increased by 14.35 per cent during the period.



"The increase in the exports of buffalo meat during April to October 2013-14 was on account of increase of business in Vietnam, Egypt, Malaysia, Thailand and Saudi Arabia," the minister added.



She said that Indian bovine meat are not allowed into the Chinese market on ground of prevalence of 'food and mouth diseases' in India.



"On persistent efforts from India, China and India entered into an MoU for export of buffalo meat directly to China in May 2013," she added.

Source;- outlookindia.com

Gold Import Curbs May Have Led To Rise In Smuggling Activity

Import restrictions on gold may have led to increase in smuggling of the precious metal in recent years, Parliament was informed today."From the increase in number and value of gold seizure cases, it appears that the spurt in gold smuggling activity in recent years may be partly due to curbs imposed on gold imports," Minister of State for Finance Jayant Sinha said in a written reply to Lok Sabha.



Gold worth Rs 931.55 crore has been seized by customs authorities and Directorate of Revenue Intelligence during the April-January 2015 period of this fiscal.



In 2013-14, 2012-13 and 2011-12, the authorities had seized gold worth Rs 686.99 crore, Rs 104.62 crore and Rs 43.87 crore, respectively.



Number of cases of gold seizure by authorities has increased to 3,412 during April-January period of the current fiscal as against 2,450 in the full 2013-14 fiscal.



In 2012-13 and 2011-12, the number of such cases registered were 900 and 503, respectively.India's gold imports reached an all-time high level of USD 56.5 billion and USD 53.8 billion during 2011-12 and 2012-13.



The government has increased import duty on gold to 10 per cent to discourage imports and contain widening current account deficit.



In a separate reply, Sinha said during April-December period, India has exported gold worth Rs 9,434.5 crore while imports stood at Rs 1.56 lakh crore.



During the period, India has imported as much as 3,86,313 kg gold from Switzerland, followed by the US (59,692 kg), South Africa (32,570 kg) and Australia (30,644 kg).



Replying to another question on gold, the Minister said that as per the DRI, one case of misuse amounting to duty evasion of Rs 72.36 lakh has been booked by them.Further, he informed Lok Sabha that in Gold Monetisation Scheme, the owner will earn income on deposited gold.

Source:- economictimes.indiatimes.com

Rent-a-cab and outdoor catering services used for business purposes are eligible for credit

Cenvat Credit : Rent-a-cab services, outdoor catering services for factory canteen and repair/maintenance of vehicles used for business purposes is eligible for credit as 'input services'; however, no credit is available upto extent of amount recovered from employees

Instruments for physically handicapped patients would be eligible for exemption even if they aren't

Excise & Customs : Where exemption is available to 'Instruments and implants for severely physically handicapped patients', same would be available to would be available to 'instruments' and 'implants' separately and therefore, 'instruments' meant for said purpose would be eligible for exemption even if they are not 'implanted'

Penalty couldn't be imposed if assessment order didn't make evident about initiation of penalty proc

IT : Where intention or satisfaction to initiate penalty proceedings under section 271(1)(c) was not evident from order of assessment, penalty proceedings could not be initiated

FAQs released on maintenance of Cost Accounting Records and Cost audit

COMPANIES ACT, 2013/AAA : Section 148 Of The Companies Act, 2013 - Central Government To Specify Audit Of Items Of Cost In Respect Of Certain Companies - FAQ-1 On Maintenance Of Cost Accounting Records And Cost Audit

Sale of honeycomb partition frames used for partition of rail coaches are liable to VAT at 5%

CST & VAT: Karnataka VAT - Where assessee manufactured honeycomb partition frames as per specifications provided by railways, who used same for partition of rail coaches, frames were parts of rail coaches falling under Entry No. 76 of Third Schedule and were liable to be taxed at rate of 5 per cent

AO can't make reassessment on basis of objections raised by audit party without recording his satisf

IT : Assessing Officer could not reopen assessment regarding allowance of repairs on spare parts as revenue expenditure by simply following objections raised by audit party without recording his independent satisfaction

No need to create charge on issue of debentures by Govt. Co. if it is backed by guarantee given by G

COMPANIES ACT, 2013/INDIAN ACTS & RULES : Companies (Share Capital and Debentures) Amendment Rules, 2015 – Amendment in Rules 5, 6, 12, 13, 18 & 19 and Substitution of Rule 3, Form SH-13 and Form SH-14

MCA encourages ease of doing business; relaxes norms relating to board's approval

COMPANIES ACT, 2013/INDIAN ACTS & RULES : Companies (Meetings of Board and Its Powers) Amendment Rules, 2015 – Amendment in Rules 8 and 10

MCA amends norms for e-voting facility at general meetings; distinguishes between e-voting and remot

COMPANIES ACT, 2013/INDIAN ACTS & RULES : Companies (Management and Administration) Amendment Rules, 2015 – Substitution of Rule 20

FEMA: Tribunal rejected condonation plea of applicant as he failed to give cogent reasons for filing

FEMA : Where appellant failed to give any acceptable and cogent reasons for delay in filing appeal against adjudication order, application for condonation of delay as well as appeal were to be dismissed

Sum paid for acquiring right to use technical know-how was revenue exp. as IP rights remained with f

IT : Where assessee, engaged in manufacturing and selling of motorcycles, made payment of royalty to a foreign company for merely acquiring right to use technical know how whereas ownership and intellectual property rights in know how remained with foreign company, payment in question was to be allowed as business expenditure

Income declared before SetCom can't be revised; payment of tax on revised income would abate proceed

IT : It is not permissible for assessee to revise application made by it under section 245C(1); tax paid as per revised disclosure would be non compliance of section 245D(2D) leading to abatement of application before Settlement Commission

Penalty couldn't imposed if assessment order didn't make evident about initiation of penalty proceed

IT : Where intention or satisfaction to initiate penalty proceedings under section 271(1)(c) was not evident from order of assessment, penalty proceedings could not be initiated

ITAT grants stay on tax demand arising out of TP adjustment as assessee had prima case in its favour

IT/ILT : Where for computing of AMP expenses, Assessing Officer had included free samples to distributors, additional discount to distributors and buyers, assessee had good prima facie case for grant of stay on demand arising out of T.P. adjustment

Non-refundable membership fees received by a club has to be taxed by spreading it over membership pe

IT: Leasehold rights in property brought in by partner as its share would form part of assets of firm and on termination of lease compromise amount paid by firm was allowable as deduction in firm's hands

Tribunal can't adjudicate appeal on merits when issue relates to pre-deposit

CST & VAT : Gujarat VAT - Where Deputy Commissioner did not accept assessee's prayer for pre deposit of 10 per cent of disputed demand and dismissed appeal on issue of pre deposit, Tribunal was not right in adjudicating appeal on merits, instead of restricting itself to issue of pre deposit

Provisions of Sec. 167B providing taxability at maximum marginal rate isn't applicable to a society

IT : Provisions of section 167B have no application to Society registered under Societies Act 1860 or any other society formed in accordance on similar lines

CLB isn't conferred with jurisdiction under Cos Act to adjudicate upon validity of allotment of shar

CL: Section 111A only deals with transfer and transmission of share cases and, therefore, CLB does not have jurisdiction under section 111A to decide validity of allotment of shares

Effect of forex fluctuation not to be considered for computing operating margins of comparable

IT/ILT : When assessee is an established company for purpose of comparison, turnover would be relevant only to ensure that comparable selected is also an established player capable of executing all types of work relating to software development

Margin earned by assessee in high seas sale couldn't be regarded as 'commission' for levying service

Service tax : Where assessee had imported coal and supplied same to Indian buyer, margin termed as 'administrative charge' retained by assessee cannot be regarded as 'commission' and cannot be charged to service tax

In order to set aside sale of liquidating-Co's assets, liquidator was left with only remedy to appro

CL: Where official liquidator sought to challenge sale held by bank under section 13 (4) of SARFAESI Act, during pendency of winding up proceedings without reference to winding up court, only remedy available to official liquidator was to approach Debts Recovery Tribunal under section 17 of SARFAESI Act

5 months delay in issuing sec. 158BD notice after recording of satisfaction by AO wasn't fatal to bl

IT : Where notice under section 158BD was issued to assessee after expiry of five months from satisfaction recorded by Assessing Officer of person searched, it could not be concluded that there was unreasonable delay in issuing said notice and same was fatal to block assessment proceedings

Number Of Ports For Import Of New Vehicles Increased To 14

Government has increased the number of ports from 12 to 14 through which new vehicles can be imported -- a move which would help in reducing pressure on ports and transactions cost of companies.

"Two new customs ports - Kattupalli Port and APM Terminals, Pipavav Port - are being added to the list of 12 existing ports/ICDs (inland container depot), thereby taking the total number of ports/ICDs to 14, for importing new vehicles," Directorate General of Foreign Trade (DGFT) has said in a notification.

New vehicles are imported through eight seaports, three airports -- Mumbai Air Cargo Complex, Delhi Air Cargo, Chennai Airport -- and three ICDs -- Telegaon Pune, Tughlakabad and Faridabad.

The eight seaports include Nhava Sheva, Mumbai, Kolkata, Chennai, Ennore, Cochin and Kattupalli.India, a major hub of automobile manufacturing in the world, mainly imports high-end vehicles and parts.

The number of commercial and passenger vehicles imported into the country is small in number.According to a media report, during the April-November period, 1,210 trucks and buses were imported into India.

Source:business-standard.com

No confiscation of excess/short stocks and no penalty under rule 25, if charge of evasion not invoke

Excise & Customs : Rule 25 can be invoked subject to provisions of section 11AC; hence, if, in show-cause notice, there is no allegation of intention to evade duty, rule 25 cannot be invoked to confiscate excess/short stocks and levy penalty

Demand couldn't be confirmed just because assessee had mentioned wrong description of goods mistaken

Excise & Customs : Where departmental verification report found goods to be 'LDPE powder coated interlining fabrics' and not 'Buckram' and said report was not challenged; hence, just because during June, 2003, assessee described goods in ER-1 return as Buckram, by mistake, goods cannot be classified as 'Buckram'

Textiles Ministry Worried Over Jute Import From Bangladesh

Rising jute import from Bangladesh is a matter of concern and the issue has been taken up with Commerce Ministry, Textiles Minister Santosh Gangwar said in Lok Sabha today.

"Jute from Bangladesh is coming. We can stop it. We have taken up the matter with Commerce Ministry. The import is rising every year and it is a matter of concern," he said replying to questions.

Gangwar said jute sector plays an important role in India's economy, especially in the eastern parts, and supports the livelihood of around 40 lakh families.

The exports are to the tune of Rs 1800 cr annually. He said his ministry is also in talks with Agriculture Ministry to give more incentives to farmers producing and using quality seeds.

Gangwar lamented that he has not received any positive reply from West Bengal Chief Minister Mamata Banerjee over his ministry's suggestions for encouraging the industry in the state, which produces over 80 percent of jute.

Three out of six mills in the state are closed and the Centre also needs cooperation from the state to remove encroachment from there.

Source:economictimes.indiatimes.com

Lg May Hike Prices Of New Imported Mobile Handsets

South Korean major LG Electronics is contemplating hiking the prices of new handset models it will import into India due to the revised duty structure announced in the recent budget that has swung in favour of component imports compared to finished product imports for mobile devices.

Since the company currently imports finished handsets, it will be paying higher duty than earlier while other manufacturers like Karbonn, Micromax, Lava, Samsung and others, who import components, accessories and assemble them in India, have been offered a duty rebate.

Amit Gujral, marketing head, LG Mobile India, said they were evaluation the impact of the duty on their mobile handsets and would soon take a call on it.

"As of date, we have not increased it (prices of mobile handsets) but since we import all our devices from our headquarters in South Korea we will get impacted by the new duty structure. New (mobile handset) models that will come in, depending on the segmentation we will share its load (higher cost) with consumers or we might absorb it," he said.

In a bid to promote its Make In India programme and local manufacturing of mobile devices like cell phones and tablets, the government in the last month's union budget, revised the excise duty structure for mobiles handsets to 1% without CENVAT credit or 12.5% with CENVAT credit. The duty structure for mobiles was 6% with CENVAT credit earlier. This will give impetus to local mobile manufacturers.

Gujral said the company may look at starting local manufacturing if the economies of scales would permit. The South Korean behemoth currently has one plant each in Pune and Greater Noida for manufacturing white goods products.

"For us to talk about local manufacturing is different from other players because we don't have to look at setting up a new plant. We already have two giant plants for which goods and we can start mobile handset manufacturing there. For us it that will happen when there is economies of scale. It will be a mix of export and local consumption. So, we have to work out the feasibility of the same. We are not saying no but we are not even prepared to say yes," he said.

Its South Korean rival Samsung is already producing 90% of the mobile handsets sold in the country at its plants in Noida and Tamil Nadu, and is reportedly looking to set up a third one in Uttar Pradesh.

Finnish telecom major Nokia had to shut down mobile handset plant in Tamil Nadu as it is embroiled in a tax dispute with the state government, which has slapped a Rs 2,400-crore notice on it for evading tax on mobile handsets sold in the domestic market.

Simultaneously, it is involved in a legal tangle, where the apex court has ordered it to produce a Rs 3,500-crore guarantee before transferring its plant to Microsoft, which recently acquired its handset division. Other major players like Micromax, Karbonn, Lava, Intex and others are also producing their handsets in local market.

Source:dnaindia.com

Edible Oil Imports To Cross 1.25 Cr Tonnes In Marketing Year ’14-15

With edible oil imports increasing by 22.7 per cent in the first four months of the current oil marketing year, India’s total edible oil imports are expected to be around 1.25 crore tonnes due to lower production estimates, an expert said here on Thursday.

Edible oil imports in the first four months of the current oil marketing year, from November 2014 to February 2015, rose by 22.7 per cent from 34.2 lakh tonnes to 41.9 lakh tonnes, data from the Solvent Extractors’ Association of India (SEAI) shows.

Production of nine oilseeds during 2014-15 is estimated at 2.98 crore tonnes according to the second advance estimates of the Government of India. This shows a drop of around 9.7 per cent compared to 3.27 crore tonnes of production during 2013-14, according to final official estimates. These oilseeds include groundnut, castorseed, sesamum, nigerseed, rapeseed, linseed, safflower, sunflower, and soybean.

Raju Choksi, Vice-President (Agri Commodities), Anil Nutrients Ltd, a part of the Anil Group of companies, said the production estimates of nine oilseeds were lower as compared to first advance estimates due to untimely rains in a few growing regions as well as lower yields due to scarce rainfall in some other parts. The import volume is likely to grow by more than 7 per cent due to a significant rise in imports of soyabean and sunflower oils.

He said imports are growing despite a shrinking edible oil import basket. “India has completely stopped imports of cottonseed oil since the last five years due to abundant cotton supply. Import of other edible oils such as safflower and coconut oil has also fallen to nil since the last couple of years.

Despite lower production estimates, domestic prices of edible oils, excluding groundnut, have fallen drastically in the last few months owing to a drop in the price of these oils in the global market. “International prices of these oils have fallen as there is abundant supply from markets such as Brazil, Argentina, the US, Indonesia and Malaysia,” he added.

Source:thehindubusinessline.com

India To Import Iraqi Oil To Fill Strategic Reserves

India is set to import 8 million barrels of Iraqi oil to fill its first strategic petroleum reserve (SPR), taking advantage of cheap prices and lending some support to a market suffering from oversupply.

India's SPR purchases could temporarily help offset the impact of an expected pause in China's strategic stocks build and the start of spring maintenance at Asian refiners.

India's oil ministry on Tuesday instructed state refiners Indian Oil Corp and Hindustan Petroleum Corp Ltd to each seek two very large crude carriers (VLCC) of Basra oil for arrival in May-June, totalling 8 million barrels, two sources familiar with the matter said.

The tenders are to be issued this month and plans call for the federal cabinet to approve issuing tenders at its meeting next week, said one of the sources, who declined to be identified.

A committee of directors suggested Basra oil as it suits refineries on India's east coast, the source said, adding this will be a one-off purchase for the SPR as the stocks will be used only in case of supply disruptions.

India's finance ministry has provided 24 billion rupees (about $383 million) from revised budget estimates for the current fiscal year to fill the first SPR.

"In Asia we are trading May cargoes and demand from India for Basra will tighten the prompt market and will make contango in the Asia and Dubai markets narrower," said Ehsan Ul Haq, senior consultant at UK-based consultant KBC Energy Economics.

Benchmark Brent futures have climbed off a six-year low hit in January but are still down more than 50 percent from last June at $53 per barrel. "It could weaken the price of Brent-linked crudes as traders were expecting India to buy sweet oil for its SPR.

"On the other hand it would be good news for Iraq, which has been struggling to find buyers because of the deteriorating quality of Basra," Haq said.

The world's fourth biggest oil consumer, India last month built its first underground SPR in Andhra Pradesh with a capacity to hold 9.75 million barrels of oil.

The Vizag facility has two compartments of 7.55 million barrels and 2.20 million barrels. The smaller compartment will be used by HPCL for its 166,000 barrel-per-day Vizag refinery.

A total of three SPRs in the south will hold more than 36 million barrels of oil, enough to cover about 13 days' supply for India in case of a supply disruption or extreme price volatility.

The two other SPRs, at Padur and Mangalore in southern Karnataka state, will have a capacity of 29.3 million barrels and are expected to be ready by October.

In addition to HPCL's Vizag refinery, the IOC's 150,000 bpd Haldia refinery and a 210,000 bpd refinery owned by Chennai Petroleum Corp. , a subsidiary of IOC, can process Basra oil.

Source:business-standard.com

Sec. 11 relief could be denied only to extent of investment made in contravention of sec. 11(5)

IT : Exemption under section 11 can be denied only to extent of investment contravening provisions of section 11(5) read with section 13(1)(d) and not on entire income

Tribunal may extend stay even beyond 365 days after assigning its reasons

Excise & Customs : Tribunal in appropriate cases may extend stay even beyond 365 days from date of initial grant of stay, after recording proper reasons; but, if stay is extended without assigning reasons, Department may move a rectification application

Rupee Gains 34 Paise Against Dollar In Early Trade

The rupee appreciated by 34 paise to two-week high of 62.35 against the dollar in early trade on Thursday at the Interbank Foreign Exchange after the American currency weakened overseas amidst sustained selling of the Greenback by exporters and banks.

Forex dealers said besides selling of the American currency by exporters and banks, the tumbling of the dollar against euro and yen following a surprisingly dovish forecast for growth and interest rates by the US Federal Reserve, supported the rupee.

Further, a higher opening of the domestic equity market influenced the uptrend in the rupee, they added. The rupee had closed almost flat against the dollar on Wednesday.

Meanwhile, the benchmark BSE Sensex rose sharply by 246.16 points, or 0.86%, to 28,868.28 in early trade on Thursday.

Source:hindustantimes.com

No evasion penalty when service-tax payable under reverse charge was otherwise available as credit

Service-tax : Where service tax not paid under reverse charge was otherwise available as credit, there was no intent to evade service tax and, accordingly, extended period and evasion penalty could not have been invoked

No need to furnish bank guarantee for filing appeal when return was filed before 20-3-2009 under Har

CST & VAT: Haryana VAT - Where provisions of section 33(5) relating to entertainment of appeal were amended with effect from 20-3-2009 and for assessment year 2005-06 assessee filed return before 20-3-2009 and Assessing Authority passed assessment order on 26-3-2009 and against assessment order assessee filed appeal, unamended provisions of section 33(5) would be applicable to instant case

Transmission charges paid to GAIL pursuant to agreement for supply of gas couldn't be held as techni

IT: Where transmission charges paid to oil company for supply of gas pursuant to a sale and purchase agreement, could not be termed to be an agreement for providing technical services; hence, provisions of sections 194C and 194J would not be applicable

Reassessment upheld as assessee failed to show that change in depreciation policy was in conformity

IT : Where assessment in case of assess-company was completed under section 143(3) read with section 115JB accepting returned loss, in view of fact that assessee had not produced requisite record to show that changes made in depreciation policy was in conformity with accounting standards as required under provisions of Companies Act, Assessing Officer was justified in initiating reassessment proceedings

Conduct of confederation of Real Estate Developers Association of India is not anti-competitive

Competition Act : Where no evidence was found to corroborate that Confederation of Real Estate Developers Association of India (CREDAI) had provided any platform, directly or indirectly to its members for indulging in any anti-competitive practice, there was no contravention of section 3

HC denied option to pay redemption fine for releasing confiscated goods to carries as he wasn't owne

Excise & Customs : Option to pay redemption fine in lieu of confiscation of goods cannot be granted to carrier of goods, when there is no record of proceedings against owner and owner has not come forward to claim goods

Swimming pool of hotel couldn't be treated as plant and machinery for depreciation purposes

IT: A hotel is not entitled to depreciation on swimming pool at rate of 33.33 per cent by treating it as plant and machinery

Findings in adjudication which weren't disturbed in revision continued to be final and binding on de

Service Tax : Where a finding in adjudication that services are exempt, is not disturbed/challenged in revision, same continues to be final and binding on department and no demand can be raised contrary to said finding

Sec. 54F: Original cap gain to be taxed in year of sale of new asset (investment) and not in year of

IT: Where investment was made by way of purchasing a plot to avail exemption under section 54F, but after a year said property was sold, capital gain tax would be levied in year of sale of said property and not in original year of capital gain

Act of ICSI of prohibiting associate members from contesting elections of regional council isn't arb

Company Secretaries Act: Action of ICSI in barring 'Associate Members' from contesting and getting elected to Regional Councils is not arbitrary, illegal and violative of article 14 of Constitution

Deeming fiction of sec. 50C won't apply in case of transfer of leasehold rights in land or building

IT : Provisions of section 50C do not apply in case of transfer of leasehold rights in land or building

VAT penalty could be levied for non-maintenance of books even when Rules in this regard have not yet

CST & VAT : Delhi VAT - Where Assessing Authority had imposed penalty upon assessee under section 86(14) for violation of section 59 and Tribunal observed that since rules under section 59(2) had not yet been framed, penalty action was not justified, in terms of language of section 59, Tribunal's observation was not correct

HC bailed out applicant accused of cheating as it wasn't a scheduled offence under PMLA when complai

PMLA : Where complaint under PMLA after investigation had already been filed before offence punishable under section 420 of IPC was included in Part-A of Schedule, provisions curtailing discretion of Court in matter of grant of bail, as found in section 45 would not be applicable

Payment for pre-clinical research was FTS as payer had right over patents and gained knowledge in re

IT/ILT: Where assessee had entered into agreement with a UK company and a Netherlands company for conducting pre-clinical research studies, since it had rights over patents, secret knowledge etc., attained during course of conducting research, services received by assessee fulfilled definition for 'technical services' as per provisions of section 9(1)(vii) and also definition for these technical services as per relevant DTAA with UK and Netherlands

High Court couldn't deny sec. 10(23C) relief by quoting faulty reasoning of AO from Supreme Court's

IT : Supreme Court sets aside High Court judgment denying exemption u/s 10(23C) by quoting non-existing passage from Supreme Court judgment

RBI directs bank to submit data of NR deposits in XBRL platform; discontinues old format

FEMA/ILT : Non-Resident Deposits - Discontinuation of Submission of Stat 5 and Stat 8 Returns

India Optimistic About Boosting Poultry Exports To Japan

Japanese companies are reported to be exploring the potential of joint ventures with Indian businesses for the processing and importation of poultry products.



India exports poultry products mostly to Oman, Germany, Indonesia, Saudi Arabia and Afghanistan, according to Economic Times of India. It also ships small quantities of egg powder to countries such as Japan.



Japan imports 880,000 tonnes a year, or more than one-third of its poultry product consumption of 2.21 million tonnes, mostly from China, Brazil, the US, Thailand and the Philippines.



India's poultry sector that currently reports insignificant exports is hoping for major orders from Japan, one of the world's largest importers of poultry products.



India is the world's second-largest egg producer, with 65 billion eggs a year, and the third largest broiler chicken producer, with 3.8 million tonnes of poultry meat with a total market size of about INR90 billion. In the fiscal year ended 31 March 2014, it earned exports worth INR5.65 billion.



A delegation of Japanese companies, led by Mayekawa Manufacturing, visited India in February and expressed interest in exploring joint ventures with local partners for processing poultry products and importing them, given the cost advantages in the subcontinent.



During the visit, Mayekawa Chairman Yoshiro Tanaka told Andhra Pradesh Chief Minister N.Chandrababu Naidu that his group has alliances with 24 Japanese companies looking to invest some US$9 billion (INR563 billion) in India's food processing sector. Mayewaka makes cooling and freezing systems as well as compressors for refrigerators and heat pumps.



The Indian poultry sector has been reporting a healthy growth of 12 to 15 per cent a year on the back of a rapidly growing middle class and rising incomes. Exports have been low owing to cost disadvantages and global concerns over the quality of Indian poultry products following frequent bird-flu outbreaks.



An unnamed senior executive at a large poultry company told Economic Times: "Thanks to mushrooming global quick-service restaurants like KFC and McDonald's, apart from local QSR brands, the Indian poultry industry had-over the last decade or so begun adopting global quality standards."



Some of India's poultry players that have made large investments in world-class processing technologies include Venky's, Suguna, Godrej, Amrit and Sneha Farms.



National Egg Coordination Committee coordinator, K.V.S. Subba Raju expressed regret that Indian poultry product exports suffered on account of concerns that were blown out of proportion on bird-flu spread and subsequent quality issues, falling to less than INR6 billion last year from a high of over INR15 billion a few years ago.



Sneha Farms Managing Director, D.D. Ram Reddy, who controls more than one-fifth of the market share in Andhra Pradesh and Telangana with over INR14 billion in annual sales, is excited over the fresh business opportunity from Japan.



He said: "We are currently setting up a modern chicken-processing unit near Hyderabad at a cost of INR750 million. We will now explore options on joint ventures with the Japanese importers who have shown interest in Indian poultry products."



According to K. Ravindran, COO of Kolkata-based Amrit group, India will have proximity advantage - which means lower logistics cost - over Brazil in Japan's poultry market. The Amrit group is currently setting up its largest export-oriented processing unit near Kolkata, he said.



Acknowledging the feed stock advantages that Brazil has, being one of the world's largest producers of maize and soybeans, NECC's Subba Raju told Economic Times that India's poultry players have the potential to give tough competition to Brazil if the input costs were contained.

Source:- thepoultrysite.com

Biased Import Policy Of Some Countries Towards Indian Exporters

Government monitors the measures/actions being taken by countries including the WTO member countries which Government considers as inconsistent with the existing agreement or otherwise, and take up the matter in the appropriate forum in case the measure impacts India's exports.

India has taken up such issues either at the bilateral level or multilateral level (under WTO Committee meetings or the WTO Dispute Settlement System). In the recent past, India had taken up such matters with the importing countries and had been successful in such matters to a large extent. A few of them are:-



(i) Successful negotiation leading to replacement of the inconsistent EU Regulation 1383/2003 by EU Regulation 608/2013 on the issue related to seizure of Indian drugs in transit.



(ii) Result oriented outcome in trade remedial actions such as the withdrawal of safeguard duty by Turkey on cotton yarn, safeguard duty by Egypt on cotton fabric and cotton yarn etc. Amongst the major success in recent times, one of them of significant interest is the WTO ruling in India's favour is related to a WTO Dispute filed by India against the exorbitant inconsistent Countervailing Duty (CVD) measures imposed by the United States on certain steel products.



The Government has also initiated and taken measures under Trade remedies discipline on account of unfair trade, if any, by the exporting country, within the ambit of WTO agreement.



This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today..

Source:- business-standard.com

Government Foregoes Rs 28K Cr Revenue To Boost Exports From Sezs

The government has foregone Rs 27,956 crore revenue during the last three financial years to boost exports from special economic zones (SEZs), Parliament was informed today.



The tax foregone - customs duty and central excise duty including rebate - under the SEZ scheme was Rs 10,440 crore in 2013-14.

It was Rs 9,363 crore in 2012-13 and Rs 8,153 crore in 2011-12, Commerce and Industry Minister Nirmala Sitharaman said in a written reply to the Rajya Sabha.



As per the SEZ Act and the rules, SEZ units and developers are eligible for customs, central excise and service tax exemption on procurement of raw materials for manufacture of finished goods meant for exports as also duty free procurement of capital goods.



The minister also informed that the government has provided incentives under - Vishesh Krishi and Gram Udyog Yojna, Focus Product Scheme, Focus Market Scheme and Served from India Scheme - to boost overall exports.



Under these schemes, it has provided incentives worth Rs 15,537 crore, Rs 11,865 crore and Rs 8,610 crore in 2013-14, 2012-13 and 2011-12 respectively.



Similarly, Rs 21,799 crore were disbursed in the last financial year under the duty drawback scheme. It was Rs 17,422 crore and Rs 12,331 crore in 2012-13 and 2011-12 respectively.



"The benefits provided under various schemes have facilitated the exports from India and made them more competitive," Sitharaman said.



In 2013-14, India's exports stood at $314.4 billion as compared to $300.4 billion in 2012-13 and $306 billion in 2011-12.She also said that a monitoring system is in place to ensure proper utilisation of the said rebate and incentives.



Replying to a separate question on SEZ, the minister said that as on February 28, 37 zones have been de-notified by the commerce ministry.



"Reasons given by developers for seeking de-notification include economic meltdown, poor market response, non- availability of skilled labour force, lack of demand for space, changes in fiscal concessions regime for SEZs," she added.



So far approval has been given to 436 proposals for setting up such zones, out of which 347 have been notified as on date. Presently, a total of 199 SEZs are operational.

Source:- economictimes.indiatimes.com

India's Exports Up 0.88 Per Cent In April-February

India's exports grew marginally by 0.88 per cent to USD 286.58 billion during the April- February period of the current fiscal, government said today.



India's merchandise exports was USD 284.07 billion in the same period in the previous year and "there has been a marginal increase of 0.88 per cent in exports during April- February. ... The downward trend is muted," Minister of State for Commerce and Industry Nirmala Sitharaman said during the Question Hour in Rajya Sabha.



Replying to a supplementary, she said the government was taking several steps to raise the export kitty further.



India's imports during April-February also went up by 0.70 per cent to USD 411.80 billion, Sitharaman said.



The export of main commodities or sectors that have registered a decline during the April-February period of 2014-15 as compared to the same period last year were petroleum products, gems and jewellery, electronic goods, spices, iron ore, tobacco and tea among others.



The Minister said primary reasons for decline in exports are muted global demand, stagnation and deflation problem in the European Union and fall in the prices of crude oil.



The fall in global demand was due to the slowing down of world trade, while the fall in global crude oil prices had led to a decline in exports of petro products which contribute around 19 per cent of India's total exports.



"EU countries, which account for nearly 16 per cent of India's exports are facing problems of stagnation and deflation. The appreciation of Rupee against the Euro has also adversely impacted India's export to EU countries.

Source:- economictimes.indiatimes.com

Rupee Gains Against Dollar On Sustained Of Selling Of Usd

The rupee strengthened by three paise to 62.67 against the US dollar at the Interbank Foreign Exchange in early trade today on sustained selling of the Greenback by exporters.



Besides, early gains in domestic equity markets and the dollar's weakness against other major currencies overseas also helped the rupee to log gains, forex dealers said.



The rupee had closed 11 paise higher against the American currency to 62.70 yesterday amid a good show by stocks and on selling of dollars by banks and exporters.Meanwhile, the benchmark BSE Sensex rose by 70.59 points, or 0.24 per cent, to 28,806.97 in early trade today.

Source;- economictimes.indiatimes.com

Transportation of earth is, prima facie, a part of 'Site Formation related services' and not GTA ser

Service Tax : Transport of earth, which is carried out during 'excavation and loading, levelling and compaction' work, is, prima facie, a part of 'Site Formation related services' and not Goods Transport Agency's Services

No denial of sec. 80-IA relief just because project wasn't awarded soley to assessee but to its join

IT : Assessee would be entitled to deduction under section 80-IA, even if project was not awarded solely to assessee but to joint venture with assessee

CLB can't decide validity of transfer of property without impleading the party concerned

CL: CLB has power to decide even question as to whether a transferee of a right, title and interest in an immovable property, is a bona fide transferee for a valuable consideration, without notice or not, however, it should not have decided same without impleading party concerned

Exp. incurred on issuance of convertible debentures is in nature of capital expenditure

IT : Expenditure on issue of convertible debentures is directly related to expansion of capital base of company and is a capital expenditure

Tribunal rightly directed Commissioner to accept assessee's request for composition of offence: HC

CST & VAT : Delhi VAT - Where Commissioner had rejected assessee's application made under section 54 for composition of offence punishable under section 50(1)(a) and (j) on plea that adequate composition amount had not been offered and Tribunal had allowed assessee's request for composition on modified terms and remitted matter to Commissioner issuing directions that he may consider for composition of offence, Commissioner was bound by said mandate

No reassessment to disallow sec. 33AC relief due to change of opinion that shipping wasn't main busi

IT : Where Assessing Officer allowed assessee's claim for deduction under section 33AC while completing assessment under section 143(3), he could not subsequently initiate reassessment proceedings merely on basis of change of opinion that assessee's main business was not operation of ships and, thus, deduction was wrongly allowed

IRDA stipulates maximum penalty of 1 crore on insurer for agent's default; issues norms on appointme

INSURANCE : Guidelines on Appointment of Insurance Agents, 2015

Registration fee paid to SEBI was allowable as revenue exp., rules Gujarat High Court

IT : Amount of registration fee paid to SEBI was allowable as revenue expenditure under section 37(1)

Grounds finally disposed of in first round of litigation couldn't be raised by department in second

Excise & Customs : Where, in first round, Commissioner (Appeals) had disposed of all grounds of revenue and remanded matter for verification and no appeal was filed thereagainst by revenue, then, in appeal against order passed in pursuance of said remand, department cannot raised same grounds as were earlier disposed of.

Appellate authority is empowered to allow additional, bona-fide, ground raised by assessee

IT: Additional grounds claiming market development/advertisement expenses raised by assessee before appellate fora being bona fide required to be considered on merit

India inks DTAA with Croatia; to be effective from 1st April 2016

IT/ILT : Section 90 of the Income-Tax Act, 1961 - Double Taxation Agreement - Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with Foreign Countries - Croatia

Non-appearance of assessee due to demise of counsel's father is condonable

Service Tax : Where assessee could not appear in hearing of stay application due to demise of father of assessee's counsel, said non-appearance was due to genuine reason and hence, matter was remanded back to Tribunal for hearing afresh

Capital introduced by partners in the firm couldn't be deemed as loan to invoke provisions of sec. 2

IT : Provisions of section 269SS would not be violated when money is exchanged inter-se between partners and partnership firm in spite of fact that partnership firm and individual partners are separate assessees

Rebate on export of service is allowable even if declaration is filed after the export

Service-tax : Rebate on export of services cannot be denied merely because declaration under para 3.1 of Notification 12/2005-ST was filed after export and not prior to export; filing of declaration is a procedural formality and contents of declaration can be verified even after export from records maintained

SAT: Penalty imposed on applicant for not making timely disclosure under takeover code and Insider t

SEBI : Where appellant made delay in making disclosures as required under regulation 29 of SAST Regulations and regulation 13 of PIT Regulations, penalty was to be imposed upon appellant

No TDS on export commission paid to NR agent for rendering services abroad in absence of his PE in I

IT/ILT : No TDS on export commission paid to NR agent for rendering services abroad in absence of his PE in India

No clubbing of interest-free loan given by ‘Shahrukh Khan’ to his wife from whom she had purchased a

IT : 'Shahrukh Khan' gave interest-free loan to his wife, Gauri Khan, who in turn, purchased a residential house and jewellery from said loan amount. The department clubbed the value of loan amount in the net wealth of 'Sharukh Khan'. Extending cash loan, to wife does not come within the definition of asset as provided under Section 2(ea) of the wealth tax Act, thus, it could not be said that there was a transfer of asset; the impugned loan amount was not includible in net wealth of assessee

ITAT invokes MFN clause to import make available clause from India-Portugese DTAA into the India-Swe

IT/ILT : Swedish company can claim Fee for Technical Services ('FTS') received from its Indian subsidiaries as tax-exempt if 'make available' condition is not satisfied on the basis of Indo-Portugese DTAA even though Indo-Sweden DTAA makes no reference to 'make available' condition. In view of the Most Favoured Nation clause ("MFN clause") in the protocol to the Indo-Sweden DTAA, a Swedish company can claim beneficial provisions for FTS contained in a later treaty such as Indo-Portugal treaty

Direct Grape Imports From India

So far the European market has responded well to Thompson Seedless as there is a small window between South African and Egypt. The season for Indian Grapes normally starts from November and then ends mostly end of March beginning of April, depending on the arrival of winter and other weather conditions. Thompson Seedless normally starts at the mid or end of January and lasts till end of March, beginning of April.

The grapes have been strong in demand, particularly in Germany, Holland, Poland and in Sweden. Outside the European Union, Russia is a really good market for Indian Grapes. At this moment Don-Limon is shipping Indian Grapes directly to Russia with regular interval. Indian grapes are normally packed either in 4,5 Kg loose, 9 x 500 grams per carton or in punnets for the super markets 10 x 500 grams and 5 kgs per carton. They are packed in well designed, Don-Limon boxes.

The State of Maharashtra is the main area for Indian Grape production, where fluctuations in weather condition and temporary heavy rainfall are the main challenges of Indian Grapes. The Indian Thompson Seedless grape producers involved have Global Gap certificates, while laboratory analysis is supervised by the Indian Government by means of its laboratory and spraying list. This creates the needed trust to build new partnerships Europe. On top of that, the standard screening for residues of pesticides (LCMS/MS and GCMS) upon arrival further secures the safety of the fruit.

The situation was bad in 2010 when Indian Grapes were banned as there were residues of unregistered pesticides in it. The problem lay not as much in the level of residue as in the fact that the particular agent wasn’t registered and approved by the EU. Since then the India and German governments have worked together and registered and approved the product so that European sales could be retaken from 2012. Since then Indian grapes have regained a really good position of trust.

Source:freshplaza.com

200% Rise In Mmf Fabric Export From Surat To Pakistan

The export of man-made fibre (MMF) fabrics from Surat to Pakistan has seen an increase of 200 per cent since 2011-12, a welcome development considering the strained relations between the two countries.

Surti traders, mostly Muslims and Sindhi and Punjabi Hindus, exported dress materials, saris, fabrics worth Rs 1,300 crore to Karachi, Peshawar and Lahore via Mumbai, Delhi, Dubai and Bangladesh from April 2014 to January 2015-an increase of 30 per cent over previous year.

The total export from India to Pakistan from April 2014 to January 2015 witnessed 20 per cent increase at Rs 2,400 crore compared to the same period in previous year, according to Synthetic and Rayon Textile Export Promotion Council (SRTEPC). The fabric export to Pakistan is predicted to touch Rs 3,000 crore by the end of this financial year.

While the export of fabric to the USA and UAE has remained unchanged at $500 million and $400 million per annum respectively, to Pakistan it has witnessed a phenomenal growth from $169 million in 2012-13 to $400 million in 2014-15. Interestingly, 60 per cent of it was exported from country's biggest man-made fibre industry in Surat.

SRTEPC assistant director Tejal Mewar told TOI, "After the USA and UAE, Pakistan is an important destination for MMF export from India. As Surat happens to be the largest MMF hub, the export of fabrics has witnessed a tremendous growth here over the last few years. Four years ago, the export to Pakistan was just below $100 million, but now it is likely to cross $450 million by March 2015."

Mewar added, "The direct export from Surat to Pakistan would be in the range of Rs 400 to Rs 500 crore per annum. A huge quantity of Surti fabric is exported via Dubai and Bangladesh. However, there is no record available with the council for such exports."

Official sources said export of MMF fabric increased after trade was allowed from Wagha border in October 2013. Still Pakistan has kept around 78 textile items, mostly manufactured in Surat, in the negative list.

Devkishan Manghani, chairman of textile committee of Southern Gujarat Chamber of Commerce and Industry, said, "Pakistan's textile industry is cotton based. Thus, it depends heavily on China and India for MMF imports. Surti fabrics are in huge demand in Pakistan as they are used for value-addition in burqas, sherwanis, suits, salwars etc."

Source:timesofindia.indiatimes.com

While exercising appellate powers High Court cannot review factual findings of lower authorities

Excise & Customs : High Court, exercising its appellate power, cannot review factual findings based on evidence considered by lower authorities; it can only correct an order if it is based on irrelevant or manifestly incorrect construction of facts or if based on mis-appreciation of law or on non-application of mind

Prior to 1-4-1997, banks could recognize sticky loans on cash basis while accounting on mercantile b

IT : Prior to amendment to section 145 with effect from 1-4-1997, there was nothing wrong in accounting sticky loans on cash basis while following mercantile system of accounting generally

No denial of set-off losses of amalgamating Co. against book profit of assessee due to change of opi

IT: Where Assessing Officer allowed assessee's claim for set off of loss of company amalgamated with it against its book profits while determining MAT liability, he could not initiate reassessment proceedings subsequently merely on basis of change of opinion that aforesaid loss was wrongly set off

Sugar Mills Owe Rs 16,334 Cr To Cane Farmers As Of Feb-End

Sugar mills owed Rs 16,364 crore to sugarcane farmers till February of the current marketing year, starting October 2014, due to low prices of sweetener in retail markets.

"The outstanding sugarcane dues are mainly on account of low realisation from sale of sugar," Food Minister Ram Vilas Paswan said in a written reply to Lok Sabha.

Out of the total sugarcane arrears, Uttar Pradesh-based sugar mills owed maximum at Rs 7,870.57 crore, followed by Maharashtra at Rs 2,532.49 crore. Cane arrears in Karnataka stood at Rs 2,154.97 crore as on February 28 of 2014-15 marketing year (October-September).

Bihar millers owed Rs 581 crore, while mills in Tamil Nadu, Haryana and Punjab had an outstanding cane price payment to the tune of Rs 521.9 crore, Rs 516.11 crore and Rs 507.24 crore, respectively. Uttarakhand millers owe Rs 473.37 crore to sugarcane farmers.

In order to facilitate clearance of cane price arrears, Paswan said the government had recently approved subsidy of Rs 4,000 per tonne on export up to 1.4 million tonnes of raw sugar in the ongoing 2014-15 marketing year.

"There have been some budgetary constraints in disbursement of export incentive for the export of raw sugar undertaken under the scheme during the sugar season 2013-14. "However, corrective measures have been taken to remove such constraints to facilitate early disbursal," Paswan said.

Sugar production of India, the world's second-largest producer, is estimated at 26.5 million tonnes in the 2014-15 marketing year as compared to 24.55 million tonnes in the previous year, according to government data.

In first six months of 2014-15 marketing year, production has increased by over 14 per cent to 22.18 million tonnes, according to industry body ISMA. The domestic demand is pegged at 24.8 million tonnes in the current marketing year, ending September.

Source: business-standard.com

India: Mining Halt Fuels Iron Ore Imports

There has been a sudden spurt in import of iron ore in Odisha this year apparently due to shortage of raw material from local sources due to slowdown in mining activities.

According to recent written reply submitted by steel and mines minister Prafulla Mallik in the assembly, various companies imported 9.49 lakh million tonne of ore in 2014-15 compared to no import in 2013-14 and 1,404 MT in 2012-13. There was no iron ore import in 2011-12, 2010-11, 2009-10. Similarly, 1.32 lakh MT iron ore pellets were imported in the year compared to just 296 MT in 2013-14.

Mallik said the import depends on number of factors such as prices of raw material, demand of end-products, marketability and market price of end products.

Operational steel mills such as Tata Steel and Visa Steel were among the largest importers of iron ores while Jindal Steel and Power Limited and Simec Indus Resources are importing pellets.

Official sources said the situation has arisen because mining has stopped in several big mines thanks to expiry of statutory clearances.

Sources said during 2013-14, 77.84 MT of iron ore was produced in the state. However, only 16.925 MT were consumed domestically. The domestic consumption of iron ore was less than 30 per cent of total iron ore production during the last three financial years. In a separate written reply, the minister said of the 200 mining lease holders involved in excess mining, 140 lease holders had approached the re-visional authority.

Of them, 44 mining lease holders got interim stay. He said the case pertaining to excess mining was sub-judice in the Supreme Court. The government would take next course of action after the SC verdict.

The minister said after the recent MMDR ordinance the state government has started accessing the minerals for e-auction in tune with the central government norms.

The government is taking help of the Geological Survey of India, Mineral Exploration Corporation, Orissa Mining Corporation and directorate of geology for estimating the minerals, he added.

Source:hellenicshippingnews.com

Indian Refineries Step Up Oil Imports From Newer Geographies Like Mexico, Iraq

Indian refineries have consistently reduced imports from traditional markets like Saudi Arabia and Iran and have stepped up purchases from other geographies such as Mexico, Iraq and Venezuela while building inventories, as crude prices remain weak due to lower demand.

Availability of cheaper crude variants and softening of shipping cost have encouraged Indian companies to look at different sources to buy crude oil for refining, and has therefore helped them achieve a more diversified portfolio. India has also significantly cut imports from Iran, which stood at its lowest in almost 18 months in February, to keep it within the limits allowed as per the deal aimed at curtailing the latter's nuclear programme.

"Indian companies are increasingly importing from Mexico and Venezuela. The cost of transporting from these countries is higher than from the Middle East, but they are able to buy cheaper heavy crude," said Nitin Tiwari, vice president - institutional research, Religare Capital Markets.

The change in imports by Indian companies is helping the country move closer to its long pending target of diversifying its energy sources. Industry officials said while the share of imports from the Middle East would change, given the higher imports from other countries, the volume imported from OPEC may not fall drastically.

"It has been India's ambition to have a prudent mix of energy sources but the success of it depends on price dynamics and the diversification strategy.

Now with the transport costs coming down and other countries, some of which are facing slowdown internally, offering certain and steady prices, it is possible for companies to buy from them," said Anil Razdan, energy expert and former additional secretary of Ministry of Petroleum & Natural Gas.

While the companies do not share their import data, Thomson Reuter's data, which is based on tanker arrivals, revealed a significant drop in imports from Iran which is facing sanctions.

According to Thomson Reuter's data, India bought 102,200 barrels per day (bpd) of crude and condensate from Iran in February, down 63% from January and 62% from a year ago. Essar Oil, which was the biggest importer of oil from Iran, shipped in 38.5% lower in January and is expected to reduce it further.

"Reliance Industries is buying more heavy crude from Latin America as it comes out $7-10 per barrel cheaper than the Middle Eastern oil. Their high complexity refinery can run very well even with the cheaper heavy crude," said Dhaval Joshi, research analyst, Emkay Global Financial Services.

According to Platts, India's imports from Saudi Arabia in January this year dropped 8.85% to 3.19 million metric tonnes. While imports from Iraq have seen a sharp increase in January, rising 56% to 2.48 million tonnes. Industry data suggests that Reliance Industries has been consistently increasing imports from Latin America, and in January alone, its imports grew 30% year-on-year.

Source:economictimes.indiatimes.com

Rbi Further Restricts Gold Imports

The Reserve Bank of India yesterday late evening asked the banks not to sell gold imported on consignment basis to jewellers on outright basis. The clarification is expected to tighten gold imports.

On 18th February the central bank allowed banks to import gold on consignment basis and also allowed them to provide gold metal loans to jewellers. However, banks were found importing gold on consignment basis and selling that to jewellers against full payment. This has increased imports as jewellers were buying gold virtually off the shelf. Banks were also considering gold imported on consignment basis to provide gold metal loans to jewellers.

Now RBI has said that gold imported on consignment basis, where payment is to be made after realisation of money after sale, can be used only for providing gold metal loans to jewellers. The loan is for a tenure of 180 days. Prithviraj Kothari of RiddhiSiddhi Bullion said, "The move could tighten supply of gold as jewellers will have to place order for import with importing agency and wait for delivery."

Open market premium, which fell to $2-3 per ounce, may also inch up. However, an industry veteran said that banks will now try to increase gold metal loans by importing gold on consignment basis.

Imports in March have been rising after import duty cut on gold didn't materialise in budget and jewellers were out of stock and was expected to touch 90 tonnes. The latest clarification by the RBI through an email sent to importing banks would restrict import flow, said a jeweller. Import of gold in February was estimated at 52 tonnes on gross basis.

Sudheesh Nambiath, Senior Analyst- Precious Metals, GFMS Thomson Reuters said: "In February 2015 India imported 52.59 tonnes of gold compared to 32.75 tonnes in February last year. Duty- free imports for the purpose of exporting jewellery, medallions and coins were at 12.67 tonnes. Switzerland continued to retain its dominance by exporting 10.59 tonnes to India in February."

Meanwhile gold market has remained under pressure because of a possibility of an end to zero interest rate policy by the US as its Federal Reserve is slated to meet later today.

Source:business-standard.com

Indian Rupee Opens Marginally Higher At 62.77 Per Dollar

The rupee has been a relative outperformer moving in 62.50-63.00/dollar range. We expect the rupee to continue trading in this range with a weakish bias, says Ashutosh Raina of HDFC Bank.

The Indian rupee opened marginally higher at 62.77 per dollar on Tuesday versus 62.81 Monday.

The dollar fell across the board, as investors worry that the greenback's rapid rise could prompt the Federal Reserve to be a little more cautious about raising interest rates this year.

The dollar is up 24 percent against a basket of currencies since May and it could become a key issue at this week's Fed monetary policy meeting.

Ashutosh Raina of HDFC Bank said, "The dollar continues to remain the theme with the dollar index hovering around the 100 mark. The rupee has been a relative outperformer moving in 62.50-63.00/dollar range. We expect the rupee to continue trading in this range with a weakish bias."

Source:moneycontrol.com

Director couldn't be prosecuted for violating CIS norms as he had resigned from Co. before CIS norms

SEBI : Where petitioner was not a Director of accused company during relevant time in year 1999, when Regulation came into force, prosecution of petitioner in a complaint filed against company for violation of CIS Regulations was not sustainable

Revenue couldn't demand Sec. 220 interest without showing any reason for not initiating any action f

IT : Where revenue had not placed any material to show that as to why no action was initiated for 27 years and genuine hardship to assessee was also not considered, demand of interest under section 220(2) was not justified

Credit on capital goods can be availed of even before their installation

Cenvat Credit : Credit on capital goods is allowed in financial year of receipt and balance in subsequent financial year(s), there is no requirement that capital goods must have been installed; hence, credit availed and utilised before installation of capital goods is valid

HC upheld disallowance as assessee failed to give reason for increase in conversion charges paid to

IT : Where assessee could not give satisfactory reason for increase in conversion charges paid to its sister concern, part of such conversion charges was disallowed under section 40A(2)

Payment of entire ST with interest before issuance of show cause notice saves assessee from clutches

Service-tax : Since service tax law itself permits filing of belated return and payment of tax belatedly, every delay in payment cannot attract penalties; section 73(3) regarding non-issuance of notice if entire tax and interest is paid before notice, cannot be rendered redundant

At the time of Sec. 80G approval object of trust needs to be examined without considering applicatio

IT: At time of granting approval under section 80G, only object of trust is required to be examined

HC accepts cash method of accounting in respect of money retained by customers for fulfilment of war

IT : Where assessee was consistently following system of accounting of crediting money retained by customers from sale proceeds as and when received and Assessing Officer accepted such method in earlier years, there was no need to disturb method of accounting followed by assessee

No working capital adjustment in TP proceedings if assessee neither pay any interest nor bear workin

IT/ILT : Where assessee did not pay interest on working capital loans and did not bear any working capital risk, revenue authorities were not justified in making negative working capital adjustment in course of transfer pricing proceedings

Proceedings quashed against bank officials for violating FERA as ED had already dropped allegation a

FEMA: Where Enforcement Directorate had dropped allegations of consent and connivance on part of appellant - bank officials in show cause notice alleging contravention of sections 6 and 49 of FERA, complaint levelling allegations of consent and connivance by appellants was to be quashed

No reversal on inputs issued from section to be used in manufacture of final product

Cenvat Credit : Inputs issued from store section to be used in manufacture of final product, have to be treated as inputs used in manufacture and no Cenvat credit reversal is required even if WIP is destroyed by fire; however, loss by fire of inputs lying in store as such is ineligible for credit

Indian Refiners Restock With West African Oil Ahead Of Strategic Reserve Launch

India has nearly doubled the amount of West African oil it will import in the first half of April, traders said, in a buying spree aimed at refiners building stocks ahead of purchases to fill the country's new strategic petroleum reserve (SPR).

The world's fourth-largest energy consumer has stepped up purchases of the Nigerian and Angolan crude for March and April, sparking interest from a market that is watching for stockpiling after oil prices crashed by more than 60 per cent between last June and January 2015.

Traders said Indian state-backed refiners, led by Indian Oil Corp, booked roughly 15 million barrels of West African oil to arrive in the first part of April - double what they usually import.

The stream of bookings has continued; in the past week, state-controlled oil refiners have booked a further 5 supertankers as part of a fleet of vessels that will load in West Africa in early April.

"We have heard many things - filling storage, buying less Iranian and coming out of (refinery) maintenance during April," one trader said. "IOC has done the bulk of the buying."

Indian refinery sources said they were forced into the current buying frenzy due to stock drawdowns at the end of the financial year. While these are normal moves, state refiners this year, caught out by the plunge in crude prices, have lost at least Rs 30,000 crore ($4.76 billion) on oil inventories.

"We are buying oil for our own use and not for SPR," said IOC's head of finance A.K. Sharma. State-controlled refiners Bharat Petroleum and Hindustan Petroleum have also been buying West African crudes, booking several vessels over the past few weeks.

Sources at the refineries said their lifting plans for March and April were as per schedule. A drive to virtually eliminate Iranian imports in March also made West African grades more attractive.

India is building SPRs at three locations that together can hold more than 36 million barrels of crude to help protect the energy import-reliant economy from supply disruptions and price volatility.

While the first underground storage cavern at Vizag on the east coast, with space for 9.75 million barrels of oil, is ready to be filled, sources said none of the barrels booked now will end up there. The other two SPR facilities will be ready by October.

India has provided about $388 million (Rs 2,400 crore) to buy crude for the reserve in this budget year, enough to purchase approximately 6.5 million barrels at current prices, but the buying has not yet begun. The International Energy Agency in its monthly report on Friday said that cheaper oil with help encourage India, as well as China and South Korea, to beef up strategic storage.

Any effort to fill India's strategic reserves, which will amount to roughly one-third of daily global oil demand, would absorb some of the global glut of oil and could help shore up benchmark prices. Already, the spring purchases have boosted West African crude oil differentials versus the benchmark dated Brent price.

Grades popular among Indian refineries, such as Bonny Light and Qua Iboe, have seen their differentials rise to their highest level since the oil price started its near 60 percent slide in June last year.

Source:thehindubusinessline.com