No ST on movable fixtures under renting of immovable property services even if they were let out alo

Service Tax : Where assessee had provided 'movable' fixtures/assets to tenants for using in facility along with renting of immovable property, service tax cannot be demanded under 'renting of immovable property' in respect of movable assets

No disallowance of interest even if borrowed sum was re-invested at lower rate

IT : While considering assessee's case under section 57(iii), competent authority cannot split transaction in more than one part and select any particular part so as to say that such part is illegal or illegitimate or impermissible and deny to extend benefit in respect of same

Deptt couldn't allege suppression for non-disclosure of info which wasn't required to be disclosed i

Service Tax : In absence of any requirement in ST-3 returns to declare services on 'accrual basis', there was no suppression on part of assessee and, accordingly, extended period of limitation was not invocable

Provision made for obsolete inventory was deductible as such treatment was in accordance with AS-2

IT : Where assessee did not reduce value of obsolete items from value of inventory and instead made provision for obsolescence, such accounting treatment was in compliance with AS-2 and said provision was an allowable deduction

Issue involving classification of 'water filters' isn't maintainable before High Court Sakthi Indust

Excise & Customs : Issue whether water filters are classifiable under 7323.10 as 'tableware and kitchenware' (as claimed by assessee) or under 8421.10 as 'filtering or purifying machinery or apparatus' (as claimed by revenue), is not appealable before High Court, as said issue has relation to 'rate of duty'

ITAT affirms inclusion of co. with related party transactions of upto 15% in list of comparable enti

IT/ILT : While determining ALP of software development services rendered by assessee to its AE located abroad, comparable companies having RPT upto 15 per cent of total revenues alone could be included

Agri-Commodity Exports To Fall Over 10% Due To Slump In Global Food Prices

With global food prices slumping to six-year lows in March due to bumper production and high inventory levels, Indian agri-exports are likely to face a setback. Most agri-commodities are currently trading below Indian minimum support price (MSP) in the global markets.

“Most commodities in global markets are trading below the prevailing MSP in India. This will translate to at least 10% lower exports of agri commodities from India in 2015-16 from the current estimated level of $32 billion including agri commodities and plantation products,” said Ajay Sahai, Director General, Federation of Indian Export Organisation (FIEO).

While India’s agri commodity exports would be lower, import bill for commodities like vegetable oil and pulses will also be subdued.

Data compiled by the Food and Agriculture Organisation (FAO) of the United Nations showed the world food price index continued to drop in March, down 18.7% (40 points) below its level a year ago. It is also a 1% dip over February 2015. Overall, except for a pause in October 2014, global food prices have been falling steadily since April 2014, on account of large supplies.

“Fall in global prices will impact prices of agri commodities in India to the extent they are traded with global markets. Commodities like chana, wheat and rice are determined largely by domestic factors as they are less connected to global markets. Sugar, pulses and edible oils, however, will be affected. Commodities like maize will also get impacted as India exports huge quantity of maize,” said Madan Sabnavis, Chief Economist, Care Ratings.

Agri commodity prices have declined by up to 34% in the last one year. Wheat prices in global markets have plunged 34.4% to trade at $181.18 a tonne. Cotton and maize prices have also fallen by 33.24% and 31.32% to end the financial year 2014-15 at $1376.34 a tonne and $175.89 a tonne respectively. RBD palmolein and sugar posted a decline of 28.99% and 24.59% to trade at $612.50 a tonne and $357.60 a tonne respectively.

“Despite government’s assistance of Rs 4,000 a tonne on raw sugar exports, Indian mills are unable to ink purchase contracts with global buyers due to steep fall in raw sugar prices in the benchmark New York Mercantile Exchange. Sugar prices have hit seven-year lows due to over production in global markets and falling Brazilian real which makes export from Brazil more remunerative,” said Abinash Verma, Director General Indian Sugar Mills Association (ISMA).

Meanwhile, FAO has raised production and carryover stocks of cereals in March from its earlier forecast in February. Since last month, FAO has raised its 2014 world cereal production forecast by 2 million tonne to 2,544 million tonne, mainly accounting for a larger than anticipated maize harvest in the EU. At this level, global cereal output in 2014 would outstrip the 2013 record by 1%.

Source:hellenicshippingnews.com

Strategy Paper To Boost Dairy Exports On Anvil

Concerned over a sharp drop in dairy exports due to quality issues, the government has initiated an exercise to boost shipments of dairy products like milk powder and asked the sector to prepare strategy paper in this regard.

The Commerce Ministry had recently convened a meeting of dairy industry representatives including Amul and discussed problems being faced by domestic companies and exporters to major markets including Europe, Japan and Russia.

"Huge scope is there in Europe and Russia for dairy exports. But they are facing phyto-sanitary (quality) issues. Exporters raised the issue of non-tariff barriers in these countries. The industry is expected to submit the paper very soon," the official said.

The Ministry "would take appropriate steps" to encourage export of dairy products after deliberating recommendations of the paper, the official added. The move assumes significance as India is the world's largest producer of milk and has huge potential for exports.

The country's export of dairy, meat and poultry products has declined by 32 per cent to USD 302 million year-on-year in February this year.

The official further said the government would take up the issues faced by domestic companies at bilateral level besides helping the industry to improve quality and standard in order to comply with global norms.

India has already discussed the sector's issues with Russia, where a huge export potential exists in view of sanctions imposed by western countries.

A team from Russia's phyto-sanitary watchdog, Rosselkhoznadzor, had visited India to inspect several cheese and dairy product units.

As per estimates, Russia's annual dairy product import requirement is about 5,000 million tonnes. The country is facing problem in meeting this demand due to trade sanctions.

Source:economictimes.indiatimes.com

Cheaper Cousins Pull Down Sunflower Oil

If you love fried food, you can rejoice in the fact that the price of cooking oil has been slipping since mid-2013. The price of refined sunflower oil (Source: Solvent Extractors Association of India), a popular cooking medium, ruled at ?63,000 a tonne in end-March 2015.

This was 10 per cent lower than the same month last year. Prices have reversed trend in the last two years. Between March 2009 and August 2013, prices of refined sunflower oil soared, rising 87 per cent from ?45,000 levels to ?84,000 a tonne. They have since corrected by 25 per cent.

Global prices of sunflower oil have corrected much more steeply than domestic prices. They have been on a relentless downward trajectory since mid-2011. Global prices have tanked from $1,700 per tonne in June 2011, to under $900 by March 2015, with the fall punctuated by hardly any intermittent rally.

Global prices of sunflower oil have responded both to rising production of sunflower seed and to bearish trends in other vegetable oils. Statistics from Oil World and USDA show that between 2010-11 and 2013-14 (October to September), world crushing volumes of sunflower seed rose from 30 million tonnes to 38 million tonnes, boosting sunoil production from 4.8 million tonnes to 8.1 million tonnes.

Sharply higher sunflower output in Ukraine and Russia (the world’s largest producers) and European Union contributed much of this spike. But with consumption failing to keep pace, global inventories have mounted and pressured prices.

At the same time, sharp price increases in the output of competing cooking oils such as palm oil and soyabean oil have also added to the downward pressure on sunoil too. Globally, some consumers use sunflower oil, soyabean oil and palm oil interchangeably to meet their cooking needs.

They dynamically shift between them based on the price differentials between palm oil (the cheapest oil) and other soft oils such as sunflower and soyabean. In the last year or so, a record US harvest of soyabean has triggered a meltdown in soyabean oil prices. This has had its impact on the entire oil complex, including sunflower oil.

The meltdown in global crude oil prices has had an indirect impact on cooking oils too. What is the link? With cooking oils such as palm oil used in bio-ethanol production, the fall in crude oil prices has led to lower diversion of food crops to bio-ethanol. This has contributed to excess supplies in the market.

Going forward, fundamental factors point to tighter sunflower oil supplies in the crop year 2014-15 (ending September 2015).

Output estimates for the year have been progressively trimmed due to a lower crop expected in Ukraine and Russia, and crushing volumes are expected to fall by about 4 per cent for the season after many seasons of gains. But prices are yet to respond to these trends because alternative cooking oils such as soyabean and palm oil continue to trade cheap.

In contrast to the global situation, oilseed production in India has consistently failed to keep pace with burgeoning demand. Therefore, Indian imports of cooking oils have shot through the roof in the last five years.

Between 2010-11 and 2013-14, total imports shot up from about 84 lakh tonnes to 116 lakh tonnes, registering a 40 per cent jump. In the current oil year (November 2014 to February 2015), domestic shortages have sparked a 23 per cent jump in cooking oil imports by volume.

But with soyabean and sunflower oil turning cheaper in global markets, the import mix has changed significantly.

While palm oil made up three-fourths of the total imports in the some months last year, this year soft oils such as soyabean and sunflower have been in greater demand, accounting for a third of all imports.

With sunflower acreage down sharply both in the kharif and rabi seasons this year, the forecast for domestic prices would normally be bullish. But with imports flooding in and rival oils such as soyabean and palm oil trading cheaper, Indian consumer can probably look forward to a few more months of benign sunflower oil prices.

Source:thehindubusinessline.com

Rising Thermal Coal Imports Set To Propel India To Top Spot

India may soon become the world’s largest importer of thermal coal, nudging the current top-ranking China to second position. India’s thermal coal imports have begun to attract global attention as volumes steadily grow and China begins to slow.

Although India has been among the top destination markets for thermal coal over the last ten years or so, the expectation of increased demand in the coming years – on account of economic growth prospects, growing power demand and government policies – is driving traders to keep a close watch on developments here.

Over the last decade, India’s thermal coal demand has grown robustly, estimated at around 25 per cent CAGR. Currently, at 150 million tonnes (mt) import, the country accounts for about 16 per cent of the seaborne trade of 915 mt. Although a large coal producer, Indian coal quality is sub-standard with a high ash content of over 30 per cent. So, many power plants routinely blend indigenous coal with imported ones to derive productivity benefits.

Starting at a modest 25 mt in the year 2000, thermal coal imports expanded to 50 mt in 2009 and to 100 mt in 2012 and further to 150 mt in 2014. Projections for the next three years are placed at 165 mt, 180 mt and 190 mt until 2017.

At the same time, domestic thermal coal production is expected to increase by approximately 30 mt per annum from 510 mt in 2014.

For years, coal-fired power capacity additions have exceeded other forms of power generation while domestic feedstock production growth has trailed demand growth. By 2018, India is poised to overtake China as imports potentially reach 200 mt accounting for a fifth of the world seaborne thermal coal trade. According to the Ministry of Coal, although India has adequate coal reserves (over 300 billion tonnes of which 125 billion tonnes are in the ‘proved’ category), actual production falls short of consumption demand and the gap is met through imports.

“The domestic production of coal has been constrained due to problems in expanding the capacity arising from difficulties in land acquisition, geo-mining conditions, environment and forest clearance issues. Inadequate infrastructure is another constraining factor,” the government has said.

For coal exporters such as Indonesia, South Africa and Australia, India is some kind of a saviour even as Chinese coal imports are slowing and may not anymore be the buyer of last resort. It is generally known that China’s metals and mining sector is not in a good financial shape.

Source:thehindubusinessline.com

Rupee Opens Stronger Against Dollar As Us Job Data Disappoints

The rupee had ended 18 paise higher at 62.49 against the American currency on Tuesday on selling of dollars by banks and exporters on expectation of resumption of foreign capital inflows into equity market.

The rupee appreciated by 37 paise to 62.12 against the dollar in early trade today at the Interbank Foreign Exchange after the American currency weakened overseas amid a higher opening in the domestic equity market.

Forex dealers said that besides selling of the American currency by exporters and banks, weakness in the dollar against other currencies on disappointing jobs data supported the rupee.

Source:dnaindia.com

ITAT affirms inclusion of co. with related party transactions of more that 15% in list of comparable

IT/ILT : While determining ALP of software development services rendered by assessee to its AE located abroad, comparable companies having RPT upto 15 per cent of total revenues alone could be included

Commissioner(A) can't condone delay beyond 30 days even if delay is occurred due to perusal of wrong

Excise & Customs : Section 14(2) of Limitation Act providing for 'exclusion of time spent in pursuing wrong remedy bona fide' cannot be used by Commissioner (Appeals) to condone delay/exclude period beyond his maximum period of condonation, as section 14(2) ibid cannot override section 128(1) of Customs Act

No denial of sec. 10B benefit if transaction with AE wasn't made for shifting profits to assessee

IT: Where finding of Assessing Officer that related parties had sold granite to assessee at lesser price thereby shifting their profit to assessee, and that such amount of profit was to be reduced from business profits of assessee while computing deduction under section 10B, was berefit of details and based on incomplete investigation, disallowance made under section 10B was to be deleted

No denial of exemption to a trust if trustees were paid for their services in proportion to growth o

IT : When there was substantial growth in trust on account of services rendered by trustees, to trustes payment made to trustees for such services was not in violation of section 13 and benefit under section 11 was available

RBI asks banks to provide details of tax collections from April 1 to 3, 2015

IT/E&C/BANKING : Scheme for Collection of Dues of (I) Central Board of Direct Taxes (II) Central Board of Excise and Customs (III) Departmentalised Ministries Account – Furnishing of Statement of Residual Transactions - Financial Year 2014-15

NBFCs to have net owned funds of 2 crores to commence business of non-banking financial institution

NBFCs/INDIAN ACTS & RULES : Revised Regulatory Framework for NBFCs

Trust registration cancelled as it was formed to pass on concessional land and profits of hospital t

IT : Where society formed for providing concessional/free treatment EWS category people was allotted land at very concessional rate but its hospital was given out to Max group of companies to exploit same commercially, society was merely a "special purpose vehicle" to take advantage of concessional land and to pass off profit; its registration was to be cancelled

Cash award received by editor for excellence in journalism is tax-free as it is a capital receipt

IT : Rs. 1 lakh received by the appellant- assessee as an award from B.D. Goenka Trust for Excellence in Journalism would be a capital receipt and hence not income taxable under the Act, i.e. Income Tax Act, 1961

Income of spouse who owns independent source of income couldn't be clubbed with income of husband

IT : Assessee's claim for agricultural income was allowable where land was cultivable, irrigated and had high yielding fruit bearing trees and potentional to earn income

Using expression ‘inclusive of all taxes’ in a contract doesn’t mean that service tax was collected

Service Tax : Expression 'inclusive of taxes' only means that there would be no further rise in value of contracts in case any demands stands raised against service provider; it does not mean that 'service tax' stands collected from service recipient so as to be payable under section 73A, despite fact that services are eligible for exemption

Authority to pass speaking order for deciding the fate of stay applications

IT : When a stay application is to be considered and decided, it would be required for concerned authority to record reasons and then to reach to ultimate conclusion as to whether stay should be granted or not and if yes on what condition

Consideration received on sale of prospectus/admission forms can't be subjected to service tax

Service Tax : Prima facie, sale of prospectus and admission forms cannot be considered as commercial training and coaching services because prospectus are sold for consideration to many students out of which : (a) some may not apply for admission; and (b) some other may not get admission due to limited number of seats

Loss incurred in currency swap isn't speculative; set-off allowed with other heads of income

IT : Provisions of section 43(5) do not apply to currencies and, therefore, loss incurred by assessee in currency swap contract cannot be denied to be set off against other heads of income taking it as speculative loss

No penalty on NR for wrongly claiming exemption u/s 10(8A) for technical services under bona-fide be

IT : Where assessee received certain amount from Asian Development Bank for rendering engineering consultancy services, in view of fact that assessee was under a bona fide belief that said amount was exempt from tax in terms of agreement between parties and having regard to obligation of Government to bear tax on behalf of assessee, AO could not pass penalty order under section 271(1)(c) taking a view that amount in question was taxable in assessee's hands

Govt. announces setting-up of two additional benches of AAR at NCR and Mumbai

IT/ILT : Section 245-O of the Income-Tax Act, 1961 – Authority for Advance Rulings – Creation of Two Additional Benches of Authority for Advance Rulings (Income Tax) at Specified Places

Merely making a claim under wrong provision doesn’t lead to levy of concealment penalty

IT: Incorrect claim of expenditure would not amount to giving inaccurate particulars of income and thus, concealment penalty was not called for

Composite SCN is valid but duty liability in that case has to determined for each party separately

Excise & Customs : Mere issuance of show cause notice in a composite manner to two parties alleging clandestine removal, would not vitiate proceedings; but adjudicating authority cannot apportion liability based upon past figures, he must determine duty payable correctly by each party

Institute providing coaching to students appearing for competitive exams is eligible for sec. 10(23C

IT: A coaching institute giving coaching to students for various competitive examinations is eligible for exemption under section 10(23C)(iiiad)

HC affirms disallowance of resale-exemption claim as assessee held trade mark in respect of goods so

CST & VAT: Maharashtra VAT - Where assessee, a manufacturer of motor vehicles, sold a chassis to its dealer and later it purchased said chassis from dealer and thereafter it sold chassis on hire purchase basis to a customer, Tribunal was justified in disallowing re-sale claim of assessee on ground that it held trade mark in respect of chassis sold to customer and further amount of hire purchase premium would form part of sale price

Personal dispute among creditor and co. couldn't be a ground to stall an undisputed scheme of arrang

CL: A private dispute between an objector and company could not be used to stall a scheme which was otherwise not opposed to public interest

Entity engaged in high skill IT services couldn't be a comparable to routine IT service provider

IT/ILT : A company indulged in high skill IT services is non-comparable to routine IT Enabled service provider

CBEC allows e-payment of service tax till midnight of March 31, 2015

ST LAWS : Extension of e-payment Deadline and of Banking Hours

Govt Mulls Anti-Dumping Duty On China Steel Imports

The government is considering imposing anti-dumping duty on steel imports from China to check the galloping rise in supply from the neighbouring country, a move aimed at safeguarding the interests of domestic firms such as SAIL, Tata Steel and JSW.

Domestic primary steelmakers are worried about a potential surge in imports which have turned cheaper in recent months. The price differential between domestic and imported hot rolled coil, for instance, is Rs 3,000-4,000/tonne or around 10% at present. “The domestic steel industry is under stress due to rising imports from China.

Steel producers as well as the government are concerned about this trend. We have written to the finance ministry seeking a rise in import tariff,” mines minister Narendra Singh Tomar said on Wednesday. A decision to impose anti-dumping duty has to be made by the designated directorate, with quasi judicial powers. Such duties are imposed if the directorate finds that the imports inflict injury to domestic producers.

Domestic companies have been, for quite some time now, clamouring for hiking import duty, which ranges between 5 % and 7.5% for different products. Paying heed to their plea, Tomar had written to his finance counterpart Arun Jaitley ahead of the Budget.

Jaitley in the Budget provisioned for raising the tariff rate on steel to 15% from 10% now at a later date if needed. However, no hike has been effected in the last one month. Indian steelmakers have already started urging the government to implement the budgetary provision.

Steel imports to India are most likely to hit a record high of over 9 million tonne in 2014-15 from 5.45 million tonne in the previous fiscal.

Industry sources said steel producers have curtailed production due to competition from rising imports from China, which produces more than what the rest of the world does collectively. In the face of a glut on the back of subdued domestic demand, exports let Chinese steelmakers stay afloat.

Steel is also coming in large quantities into the Indian market from Japan and Korea, taking advantage of the respective bilateral free trade pacts. Along with China, these two countries account for nearly 70% of India’s imports. “Large-scale Chinese imports are taking place particularly in areas of wire and coils.

This is happening because these items are being made available here at Rs 3,000-Rs 4,000/tonne cheaper. They are docking products at their manufacturing costs benefiting from export sops by the government.

The last four-five months have been particularly worse for us. There is an urgent need to raise customs duty by 5%. Otherwise, it will be difficult for Indian firms to even survive,” said an official of a public sector steel firm.

Meanwhile, Tomar said the Centre would send the draft rules for mines’ auction to states for vetting in a week’s time and after getting their inputs, final rules will be framed for allocation of mines containing minerals such as iron ore and bauxite. States would be given sufficient time to respond.

The recently-passed Mines and Minerals (Development and Regulation) Act mandates the Centre to lay out the norms for auctions, for which it has taken consultancy from SBI Capital Markets, the investment banking arm of the country’s largest lender.

Source:financialexpress.com

Global Expansion Planned, Coal Giant Eyes Three Nations

State-owned coal mining giant Singareni Collieries Company Limited is eyeing overseas coal mines and will soon announce an EoI (Expression of Interest) for exploration in South Africa, Australia and Indonesia.

“We are looking for greenfield mines and the mining in these countries can yield 5 MTPA coal; the EoI is likely to be published in the second week of April,” said N. Sridhar, chairman and managing director of SCCL.

“We formed a task force which gave an initial report and accordingly we are publishing the EoI. We may acquire 100 per cent of coal mines there or may go jointly with the local companies or even tie up with Coal India, NMDC etc.,” he said at a press conference here on Thursday.

SCCL is also aiming to import 1 million tonne of coal initially to reduce the demand-supply gap and meet small and high value customer requirements.

With capital expenditures of Rs 2,390 crore, the company has tasked itself to produce 56 million tonnes of coal this financial year and is targeting to produce 75 million tonne in the next five-year period.

The company has also started surveying Bayyaram mandal of Khammam district for iron ore in collaboration with Geological Survey of India, and the state geology and mines department. It will give its report in another 45 days stating the quality of iron ore, Mr Sridhar said.

Explaining that the SCCL had got Tadicherla and Naini coalfields as well, Mr Sridhar expressed hope that the company would meet the requirements of the new power projects of TS on the anvil.

Admitting poor performance as pointed out by Comptroller and Auditor General, he blamed lack of application of new technologies as the main reason. He added that the company had clocked a net profit of Rs 418 crore.

Soruce:deccanchronicle.com

India’S Platinum Demand To Rise 25% This Year

Business Standard reported that demand for platinum in India is likely to rise twenty five per cent this year, attributed to growing consumers’ interest in bridal jewellery and other innovative collections.

"In its latest quarterly analysis, London-based World Platinum Investment Council (WPIC) has pegged India’s platinum demand at 125,000 ounce (oz) in 2015, compared with 100,000 oz in 2014.

Platinum demand is steadily rising in India with the introduction of innovative designs of jewellery and wedding sets. The Gem & Jewellery Export Promotion Council (GJEPC) estimates India’s platinum import during April-October 2014 at $11.99 million against $6.81 million imported in the year-ago period.

Source:metal.com

Foreign Trade Policy: Textile Exporters Cry Foul, Say They Are Ignored

Textile exporters are feeling let down by the new foreign trade policy (FTP), which they said has ignored the cotton yarn sector. The Commerce Ministry announced the much-awaited FTP on Wednesday.

Texprocil Chairman R K Dalmia, in a statement, said the FTP outlines the vision, goals and objectives for the country's export-import sector for 2015-20, but wondered if the high export targets set by the government are going to be achieved by promoting exports of handloom and coir products.

The government has also set the goalpost of $900 billion by 2019-20 from the current level of $465.9 billion in 2013-14. While lauding the macro aspects of the policy, he regretted that a sector like textile and clothing, the second-largest employment provider in the country, has not got its due in the FTP.

The textile sector has been granted duty scrips of 2 per cent only for mainstream cotton textile products at a time when it's facing challenges in the form of high tariffs and barriers due to preferential tariff arrangements.

In contrast, higher rates have been given for handlooms, carpets, coir products under the Merchandise Exports from India Scheme (MEIS).

"Sectors like cotton yarn have been totally ignored, especially at a time when exports of these products have declined sharply and face high logistics cost when exported to markets like Latin America," he said.

Source:firstpost.com

Agri-Commodity Exports To Fall Over 10% Due To Slump In Global Food Prices

With global food prices slumping to six-year lows in March due to bumper production and high inventory levels, Indian agri-exports are likely to face a setback. Most agri-commodities are currently trading below Indian minimum support price (MSP) in the global markets.

“Most commodities in global markets are trading below the prevailing MSP in India. This will translate to at least 10% lower exports of agri commodities from India in 2015-16 from the current estimated level of $32 billion including agri commodities and plantation products,” said Ajay Sahai, Director General, Federation of Indian Export Organisation (FIEO).

While India’s agri commodity exports would be lower, import bill for commodities like vegetable oil and pulses will also be subdued.

Data compiled by the Food and Agriculture Organisation (FAO) of the United Nations showed the world food price index continued to drop in March, down 18.7% (40 points) below its level a year ago. It is also a 1% dip over February 2015. Overall, except for a pause in October 2014, global food prices have been falling steadily since April 2014, on account of large supplies.

“Fall in global prices will impact prices of agri commodities in India to the extent they are traded with global markets. Commodities like chana, wheat and rice are determined largely by domestic factors as they are less connected to global markets. Sugar, pulses and edible oils, however, will be affected. Commodities like maize will also get impacted as India exports huge quantity of maize,” said Madan Sabnavis, Chief Economist, Care Ratings.

Agri commodity prices have declined by up to 34% in the last one year. Wheat prices in global markets have plunged 34.4% to trade at $181.18 a tonne. Cotton and maize prices have also fallen by 33.24% and 31.32% to end the financial year 2014-15 at $1376.34 a tonne and $175.89 a tonne respectively. RBD palmolein and sugar posted a decline of 28.99% and 24.59% to trade at $612.50 a tonne and $357.60 a tonne respectively.

“Despite government’s assistance of Rs 4,000 a tonne on raw sugar exports, Indian mills are unable to ink purchase contracts with global buyers due to steep fall in raw sugar prices in the benchmark New York Mercantile Exchange. Sugar prices have hit seven-year lows due to over production in global markets and falling Brazilian real which makes export from Brazil more remunerative,” said Abinash Verma, Director General Indian Sugar Mills Association (ISMA).

Meanwhile, FAO has raised production and carryover stocks of cereals in March from its earlier forecast in February. Since last month, FAO has raised its 2014 world cereal production forecast by 2 million tonne to 2,544 million tonne, mainly accounting for a larger than anticipated maize harvest in the EU. At this level, global cereal output in 2014 would outstrip the 2013 record by 1%.

FAO's forecast for world cereal utilisation in 2014-15 has been raised by nearly 17 million tonne to 2,493 million tonne, and now stands at 2.6% (63 million tonnes) above the previous season's revised estimate. Thus, world cereal stocks, by the close of crop seasons ending in 2015, have been revised up sharply and now stand at 645 million tonne, 6.2% or 38 million tonne above the 2014 level.

Source:business-standard.com

India: Credai To Import Chinese Cement

Following the Telangana government's decision to impose a road tax on trucks from Andhra Pradesh and the spiralling hike of cement prices facing builders, the Confederation of Real Estate Developers' Association of India (CREDAI) is planning to import cement, particularly from China.

With truck owners suspending their operations in protest of the new tax, cement shortages have been reported. "At present, the cost of a premium cement bag is INR365 in the retail market, and it is set to increase steeply, as transportation costs will shoot up with the TS government's decision to impose road tax on trucks from AP," said CREDAI Vijayawada chapter president C. Sudhakar.

"In all probability, the cost of a cement bag imported from China will be around INR300. In addition to the availability of quality cement, the price pattern will help in reducing the input cost considerably. It will definitely impact the local industries in Telangana," Mr. Sudhakar said.

Source:cemnet.com

India, China Cut Crude Oil Imports From Nigeria

India, which recently replaced the United States as Nigeria’s biggest oil market, cut its import of the country’s crude by 38 per cent in December, while China did not import a barrel from the country in the period, data obtained from the Nigerian National Petroleum Corporation revealed.

India’s import of Nigerian crude tumbled to 5.2 million barrels in December, from 13.7 million in October and 12.4 million in November 2014.

China, which bought 1.9 million barrels of Nigerian crude in October, reduced its import from the country by 50.3 per cent to 946,913 barrels in November.

With the decline in imports from India and China, the share of the Asian region in Nigeria’s crude oil export dropped to 20 per cent in December from 30 per cent in October and 27 per cent in November.

The Asian region, which is the major target market for many oil exporters, is a key market for Nigeria.

Total export from Nigeria in the month of October stood at 65.9 million, down from 67.1 million barrels in September and 70 million barrels in August, according to the NNPC data.

“Four regions namely, Europe, Asia and Far East, South America and Africa remain the major destinations of Nigerian crude and condensate export,” the NNPC said.

Europe continued to be the largest regional importer of Nigerian oil as its imported 31.4 million barrels in December, up from 23.6 million barrels in October.

The Head of Energy Research, Ecobank Capital, Mr. Dolapo Oni, told our correspondent that the decline in imports from the country’s top importers – India and China – was expected, adding that it became cheaper to buy oil from several other countries, especially from Central and South America.

“There was a lot of substitution between cargoes from West Africa and from these regions. Furthermore, Saudi Arabia raised oil output from 9.6 million barrels per day to 10 million bpd within the last quarter of 2014 to compensate for the fall in Libya’s oil output.

“The proximity to Asia means the extra barrels were pushed into Asia at lower prices. Saudi Arabia cut its official selling price to Asia in October and November but raised it slightly in December.”

Not only has the United States drastically reduced its import of Nigerian crude as a result of its increasing shale oil production, the country is gearing up to export its crude oil, with Asia being a key target destination.

After months of pressure over the ban on exports of most domestic crude in the US, the President Barack Obama administration in January took steps that were expected to unleash a wave of ultra-light shale oil known as condensate onto global markets.

The US imports of Nigerian crude oil tumbled by 75 per cent last year to 21.51 million barrels, the lowest since the country started importing from Nigeria, the US Energy Information Administration said.

The country, which traditionally had been the largest importer of Nigerian oil until the last few years, changed to the 10th largest in 2014. In July last year, the US imports of Nigerian crude fell to zero for the first time on record, according to data from the EIA.

Analysts at Ecobank had recently raised concerns that the continued oversupply in the global oil market and the weak global economic picture could constrain oil demand.

“Thus, Nigeria could see a major reduction in oil revenues in 2015 compared to 2014 due to the much lower average oil price anticipated in the year. The country already faces considerable difficulties in selling its crude oil cargoes with a persistent overhang for its crude oil cargoes since December 2014,” they said.

The Ecobank analysts said the NNPC had offered further discounts to push sales but increasingly faced lower price differentials.

They noted, “This is expected to redirect government attention to other revenue sources as it seeks to fill the gap in its revenue profile. Receipts from crude oil sales have traditionally provided over 67 per cent of government revenue.

“The lower oil price environment could also sustain the downward trend in the country’s foreign reserves and exchange rate, which are dependent on the foreign currency earned by crude oil sales.” Crude oil exports account for over 90 per cent of the country’s exports and remain the key source of foreign currency.

Source:hellenicshippingnews.com

No TDS on commission paid to NR agent for rendering services outside India if he didn't have any PE

IT/ILT: If services, for which payment had been made to non-resident was wholly rendered outside India, no TDS liability would arise

Services rendered at principal's place for which remuneration is paid as per work Isn't manpower sup

Service Tax : Where assessee carries out certain activity at premises of their principals and remuneration towards their services are to be paid as per work executed and as not per labour supplied, then, said services cannot amount to 'manpower supply services'

HC approves arrangement scheme for rescheduling secured debentures as Co. had enough assets to disch

CL: Scheme of arrangement proposed by petitioner a shareholder of company, between company and its debenture holders was to be sanctioned as debenture holders had agreed to scheme of arrangement and there were substantial assets to discharge claims of debenture holders

No denial of sec. 10(26) relief to member of Schedule Tribe merely because he doesn't belong to spec

IT : Any member of a Scheduled Tribe declared to be so under article 342 of Constitution, even though he does not belong to specified area, would be entitled to benefit of section 10(26) when posted at a station in specified area and residing therewith in connection with his employment

IRDA grants 3 months extension to insurers for filing 'Board Approved Policy' for appointment of age

INSURANCE : Guidelines on Appointment of Insurance Agents 2015 – Instructions to Insurers

Merely making a claim under wrong provision doesn’t lead to levy of concealment penalty

IT: Incorrect claim of expenditure would not amount to giving inaccurate particulars of income and thus, concealment penalty was not called for

No goodwill arises if retiring partners weren't paid in excess of balance in capital a/c; dep. claim

IT : Where assessee claimed depreciation contending that retiring partners were paid their share of goodwill at time of retirement, in view of fact that no tangible or intangible asset was acquired on retirement of partners as nothing was paid in excess of amount due to partners in their capital account, assessee's claim was to be rejected

Service-tax law doesn't empower CAG to audit non-government cos. who aren't receiving aid from any G

Service Tax : There is no provision in service tax law or central excise law or CAG Act which empowers CAG to audit accounts of a non-government company, not in receipt of aid or assistance from any Government or Government entity

Merely making a claim under wrong provision does lead to levy of concealment penalty

IT: Incorrect claim of expenditure would not amount to giving inaccurate particulars of income and thus, concealment penalty was not called for

Tribunal had rightly set aside penalty on 'IndusInd Bank' as there was no concealment of particulars

IT : Where revenue authorities passed penalty order taking a view that assessee had raised a false claim of depreciation, in view of fact that assessee brought all relevant particulars on record in support of its claim, impugned penalty order deserved to be set aside.

Marker and highlighter are 'pen' and exempt from sales tax; eraser and carbon paper are stationery a

CST & VAT: Marker and highlighter are 'pen' and exempt from sales tax; eraser and carbon paper are stationery and taxable

Exp. incurred by developer on sponsorship and brand building was a selling exp; it couldn't be capit

IT : Where assessee was in construction business, advertisement, sponsorship and brand-building expenses which were only in nature of selling costs of construction business, would not be capitalized

No denial of sec. 10(26) relief to member of Schedule Trib merely because he doesn't belong to speci

IT : Any member of a Scheduled Tribe declared to be so under article 342 of Constitution, even though he does not belong to specified area, would be entitled to benefit of section 10(26) when posted at a station in specified area and residing therewith in connection with his employment

Interest rate of Sukanaya Scheme and 5 Year Senior Citizen Saving Scheme increased by 0.1% w.e.f. Ap

BANKING : Small Savings Schemes – Revision of Interest Rates For

Industrial margarine or bakery margarine to be taxable at 12.5% under Kerala VAT

CST & VAT : Kerala VAT - Industrial margarine or bakery margarine dealt in by assessee would fall under Entry No. 64(8) of S.R.O. No. 82 of 2006 and was exigible to tax at rate of 12.5 per cent

Majority shareholders can't go against Court's directions to buy shares of minority citing default c

CL: Proceedings under sections 397 and 398 are filed to remove deadlock which has occured in mangement of company and it is always majority shareholders who buy shares of minority shareholders as they are in control and management of company and it is against them that oppression and mismangement is alleged

A hospitality co. isn't comparable with a co. engaged in research and development for TP study

IT/ILT: A hospitality company cannot be considered as a comparable for determining ALP of international transaction of a research and development company

RBI unveils scheme for setting-up of IFSC banking units by Indian banks or foreign banks having pres

BANKING : Setting up of IFSC Banking Units (IBUs)

RBI prescribes uniform provisioning norms pertaining to fraud accounts

BANKING : Provisioning Pertaining to Fraud Accounts

Regional Directors gets power to direct inspection of documents of company

COMPANIES ACT, 2013 : Section 458, Read with Section 94, of the Companies Act, 2013 - Delegation by Central Government of Its Powers and Functions – Delegation of Powers to Specified Regional Directors under Section 94(5)

RBI removes ceiling of USD 20 million on buyer's credit for project exports

FEMA/ILT : Liberalization of Procedure in Respect of Export of Goods and Services – Project Exports

Transactions between financial institutions set-up in IFSC and residents shall be subject to FEMA, R

FEMA/ILT : Operational Guidelines on International Financial Services Centre (IFSC)

HC upheld sec. 69C additions as certain purchases were made from a person running a dummy business

IT: Where assessee-firm, engaged in business of zips for shoes etc, showed certain purchases made from 'G' Enterprises, in view of fact that proprietor of 'G' Enterprises admitted that he was running a dummy business, Assessing Officer was justified in making addition under section 69C in respect of bogus purchases

CBEC declares head of departments pursuant to cadre restructuring

E&C/MISCELLANEOUS : Implementation of Cadre Restructuring Scheme - Declaration of Head of Department Consequent upon Re-Organization of Field Formations under Cbec

CBDT asks Pr. CCIT to recommend suitable building and budget for setting-up of new Aayakar Sewa Kend

IT : Aaykar Sewa Kendras – Providing Taxpayer Services i.e. Setting up of Aaykar Sewa Kendras during Financial Year 2015-16

Provision for warranty is an allowable exp. if made on scientific and reasonable basis

IT : Where assessee-company deputed software engineer abroad, who had to do testing, installations and monitoring of computer software supplied to clients outside India, expenditure in foreign currency would not be excluded in computing export turnover under section 80HHE

No surcharge in block assessments for period prior to 1-6-2002; SC's judgment in Vatika Township fol

IT : Where pursuant to search proceeding, assessee filed return for block period declaring certain undisclosed income, following order passed by Supreme Court in case of CIT v. Vatika Township (P.) Ltd. [2014] 367 ITR 466/227 Taxman 121/49 taxmann.com 249, Tribunal was justified in deleting surcharge levied by Assessing Officer under provision of Finance Acts, 1999 and 2000

ITAT not justified in deleting additions if assessee failed to prove identity of supplier for certai

IT : Where Assessing Officer made addition to assessee's income under section 69C in respect of bogus purchases, in view of failure of assessee to even prove existence of suppliers, Tribunal could not delete impugned addition and direct Assessing Officer to assess income at net profit rate of 6 per cent

Service recipient may claim refund of wrongly paid service tax without any time-bar

Service Tax : Where service recipient had wrongly paid service tax to builders, though not actually leviable, service recipient could claim refund of said tax without time-bar, as section 11B cannot apply to refund of such tax

AO is bound to follow order of CIT(A) unless it is set-aside or modified by higher authorities

IT : Order of lower judicial authority merges with that of appellate authorities and lower authority is bound to give effect to order of higher/appellate authority unless it has been set aside or modified, as case may be, by higher/highest Court to said appellate authority

ITAT not justified in deleting additions if assessee failed to prove identify of supplier for certai

IT : Where Assessing Officer made addition to assessee's income under section 69C in respect of bogus purchases, in view of failure of assessee to even prove existence of suppliers, Tribunal could not delete impugned addition and direct Assessing Officer to assess income at net profit rate of 6 per cent

Pre-April 2014 application money won't be held as deposits if Co either allot shares or returns mone

COMPANIES ACT, 2013/INDIAN ACTS & RULES :Companies (Acceptance of Deposits) Amendment Rules, 2015 – Amendment in Rules 2, 3 & 5 And Substitution of Form DPT-3

RBI eases norms for participation of residents in exchange traded Forex derivatives

FEMA/ILT : Risk Management and Inter-Bank Dealings – Revised Guidelines Relating to Participation of Residents in Exchange Traded Currency Derivatives (ETCD) Market

IRDA lays guidelines on fees for granting acknowledgement of receipt of notice of transfer of policy

INSURANCE : Guidelines on Fee for Granting Written Acknowledgement of Receipt of Notice of Assignment or Transfer of a Policy of Insurance

IRDA unveils guidelines for charging fees for cancellation of policy or change of nomination by poli

INSURANCE : Guidelines for Charging Fee from Holder of a Policy of Life Insurance for Registering Cancellation or Change of Nomination

Fee paid by 'Bajaj Allianz' to NR surveyors wasn't FTS as they didn't make available technical know-

IT/ILT : Where assessee-company engaged in business of general insurance, appointed non-resident surveyors who carried out surveys outside India, since said surveyors did not make any technical know-how available to assessee, payments made to them was not taxable in India as 'fee for technical services'

Surcharge and Cess is to be computed after deducting MAT credit from tax liability

IT : 'Tax payable' is to be arrived at by deducting credit under section 115JAA from 'gross tax payable' and on this amount of 'tax payable' surcharge and cess are to be computed

IRDA revises premium rates for Third Party Insurance Covers for Financial Year 2015-16

INSURANCE : Order of Irda on Premium Rates for Motor Third Party Liability Insurance Covers for Year 2015-16

High Court : Additional ground raised first time which is beneficial to assessee should be considere

IT : Tribunal should consider additional ground if same is beneficial to assessee

Sec. 234B interest was leviable due to increase in income even when no interest was charged in asses

IT : Interest under section 234B can be charged when income of assessee is modified under section 154 even if no interest had been so charged at time of framing regular assessment on nil income

ST couldn't be demanded from assessee due to acceptance of ST liability on basis of wrong understand

Service Tax : Merely because, in statements, assessee, based on their wrong understanding, agreed that service is taxable, same cannot be basis for demand; demand has to be made in accordance with law, taking into account contracts entered into by assessee with various parties involved in transaction

Interest earned on FD before its maturity couldn't be taxed if assessee was maintaining books on cas

IT: Where assessee had followed cash system of accounting and interest earned on fixed deposit was not received in relevant year, same would not be added in income of relevant year

Non-furnishing of PAN by NR doesn't attract higher TDS rate of 20% u/s 206AA if tax rate under DTAA

IT/ILT : TDS on payments to non-residents who do not furnish PAN shall deducted at DTAA rate if such rate less than 20%

Interest rate of Sukanaya Scheme and 5 Year Senior Citizen Saving Scheme increased by 0.1% w.e.f. Ap

IT : Small Savings Schemes – Interest Rate on – Revised Rates of Interest Applicable on Specified Small Savings Scheme Effective from 1-4-2015

HC dismissed winding-up plea as Co. was solvent and giving livelihood to more than 6,000 employees

CL: Petition filed by petitioner, being a trustee of bond-holders, for winding up respondent-company could not be admitted as respondent-company was working and giving direct source of livelihood to more than 6,000 employees and its assets were more than its liability and even if debt was admitted, bona fide of respondent-company to revive same and pay of debts could not be doubted

Assessee couldn't claim cost against revisional order passed by CIT, even though such order was unsu

IT : An assessee is entitled to depreciation on assets entire amount of which has been claimed as deduction on account of application for charitable purposes

Penalty imposed under VAT Act without assigning any reasons was liable to be set aside

CST & VAT : Assam VAT - Where Assessing Authority had imposed penalty upon assessee under section 90 and no reasons had been assigned as to why penalty had been imposed, penalty order was liable to be set aside

Now banks can use 50% of counter-cyclical provisioning buffer held as on Dec 31, 2014 for making pro

BANKING : Utilisation of Floating Provisions/Counter Cyclical Provisioning Buffer

CBDT opens window for roll back requests for another 3 months for existing APAs or pending applicati

IT/ILT : Section 92cc of The Income-Tax Act, 1961 - Advance Pricing Agreement (Apa) – Clarification On Applications And Agreements Filed Or Entered Into Prior To 1-1-2015

I-T Dept. issues list of 18 tax defaulters who are either not traceable or have no assets; total arr

IT/ILT : List of Defaulters of Income /Corporate Tax

Only software sold via internet is liable to service tax and software sold on a media doesn't attrac

Service Tax : Software sold electronically through internet is liable to service tax; but, software sold after loading same on physical media is 'goods' and not liable to service tax

SC: Profit derived from business of captive generation of power was deductible from book profits for

IT: Where assessee was mainly engaged in manufacture and sale of urea and was additionally engaged in captive power generation, profits derived from captive power plants were to be reduced from book profits for determining tax payable for purposes of section 115JA

AO to determine unexplained income on basis of highest peak of debit/credit on seized dairy, directs

IT : Where Assessing Officer did not consider explanation tendered by assessee regarding transactions recorded in seized diary and also overlooked working of peak credit given by assessee, income was directed to be determined on basis of highest peak of unexplained receipts and payments

HC directs AO to pass order on merits as assessment order was passed without giving hearing chance t

CST & VAT: Tamil Nadu VAT - Where Assessing Authority passed assessment orders under section 27 without affording opportunity to assessee, Assessing Authority was to be directed to pass orders on merits after providing opportunity of personal hearing to assessee

AO couldn’t treat exp. on launching of brand as deferred revenue exp. if it was in nature of revenue

IT : Where assessee follows mercantile system of accountancy, expenses due and payable are to be allowed, as an expenditure is not confined only to money actually paid towards a liability, but also covers a liability accrued, although discharge could be at a future date

Assessee was allowed to cross-examine witness who had certified serving of notice by affixing it on

Excise & Customs : Where department claims that notice/order was served by pasting on premises of assessee under a mahazar and assessee challenges that witnesses affixing their signatures on mahazar were not residents of that area, then, assessee may be granted an opportunity to cross-examine witnesses

Financial hardship need not be considered in stay application if case was against revenue as per Sup

IT : Where assessee raised plea that it being an agent of State Government its income was not taxable in view of article 289 of Constitution, unconditional stay would be granted pending disposal of appeal before Commissioner (Appeals)

No penalty on taking wrong credit under bona-fide belief which was formed due to interpretation of H

Cenvat credit : Even if assessee has taken credit wrongly in contravention of statutory provision but if same was with a bonafide reason or belief by interpretation of a judgment of a High Court, same does not amount to intention to evade and, therefore, penalty under rule 15(2) of CENVAT Credit Rules, 2004 cannot be levied

Market interest rate applicable to currency in which loan is repayable to AE has to be used to compu

IT/ILT : The arm's length interest rate for loan to overseas subsidiary should be computed based on the market determined interest rate applicable to the currency concerned in which the loan has to be repaid. Interest rates should not be computed on the basis of interest payable on the currency or legal tender or the place or country of residence of either party. There is no justification or cogent reason for applying PLR which is applicable to loans in Indian rupee for outbond loan from Indian

Special Courts can try all offences under IPC and Companies Act based on same transactions or facts

IT/ILT : The arm's length interest rate for loan to overseas subsidiary should be computed based on the market determined interest rate applicable to the currency concerned in which the loan has to be repaid. Interest rates should not be computed on the basis of interest payable on the currency or legal tender or the place or country of residence of either party. There is no justification or cogent reason for applying PLR which is applicable to loans in Indian rupee for outbond loan from Indian