IT/ILT : Advertisement revenue could not be taxed in assessee-parent company's hands, holding its subsidiary, which undertook sale of advertisement airtime in India to be a conduit
Sunday, 9 June 2013
Fees for due diligence of target entities to assist in their main stream businesses is allowable as
IT : Where assessee in course of providing support services to its foreign based parent company engaged in hotel business, availed services of a Singapore based company for carrying out due diligence and risk analysis of target hotels, payments made in respect of said services was to be allowed as business expenditure
Rupee Hits All-Time Low Of 57.54 Against Dollar
The rupee breached its all-time low of 57.32 against dollar in early trade on Monday. It traded at 57.52 against Friday's close of 57.06/07 as of 09.28 a.m. The Indian currency had earlier hit a low of 57.54 against the greenback.
The rupee has been falling sharply since the start of May on concerns that the U.S. Fed may withdraw its monetary stimulus and the Reserve Bank of India may not cut rates as much as previously anticipated.
The rupee has been falling for five straight weeks, taking its losses since the start of May to 5.71 percent, to make it among the worst performing currencies in Asia during this period. (Read: Why the rupee is sliding against the dollar)
Stock markets opened with strong gains, with the Sensex rising over 150 points. However, the sharp fall in the rupee weighed on sentiments.
Deven Choksey, managing director of KR Choksey said given the negative trend on rupee and crude oil, equities too will have negative bias. In such a situation, the Nifty may trend down to 5,750-5,700 levels, he added.
"The depreciation in the rupee is counterproductive for markets. It affects current account deficit and all the consequential issues that follow including the RBI policy. It lead to higher cost of production, higher commodity prices, high inflation and is suicidal for the economy," Mr Choksey added. (Read: How a weak rupee impacts you)
The Sensex traded 72 points higher at 19,501, while the Nifty traded at 5,905, up 24 points as of 09.29 a.m.
Bearish bets on the rupee have increased to their largest since late June 2012 as continuing worries about the country's current account deficit weighed on sentiment and as the unit came under pressure from importers' dollar demand.
Traders said foreign banks were seen adding long dollar positions based on their non-deliverable forward-related bets on Friday. There was also continued dollar buying from oil refiners, the largest buyers of dollars in the domestic currency market.
Source:-profit.ndtv.com
Service Production Index Likely To Be Delayed
New Delhi: The wait for a comprehensive index of service production is expected to get longer, till the long-overdue goods and services tax (GST) system overhauls data collection by tax authorities.
The services production index, analogous to the Index of Industrial Production (IIP) and to be brought out by the statistics ministry, requires tax data to be classified by entity.
This needs the Central Board of Excise and Customs (CBEC) to modify its information systems. Officials said this will happen only after GST is rolled out.
The services sector contributes about 60% to national income, but there is no survey tracking trends in service sectors such as trade, hotels, communications, and banking and finance.
Recently, the ministry of statistics and programme implementation developed a mechanism to service industries, the feasibility of which is being tested through pilots, said T.C.A. Anant, chief statistician of India.
“Given the importance of the sector, its diverse nature and lack of data on an annual basis, the need for compiling the index of service production with an appropriate periodicity was felt for a long time,” the ministry says in a note on its website.
But data for a comprehensive index covering the diverse sector will be available only when the much-awaited GST is in place, which is now likely to happen only from 2015-16 because of persisting differences between the Union and state governments.
The GST system aims to create a unified national market for goods and services by removing all barriers to their movement across states. Prime Minister Manmohan Singh, during a recent trip to Japan said GST may not be launched during the current term of this government, scheduled to end in May next year.
“For railways, postal services, air travel and banking, we have been able to come out with service production indices, but there are other areas such as trading, health, hospitality and private freight transportation where it can’t be done without a system to collect data on output,” said an official in the statistics ministry, who did not want to be identified.
“We have been discussing this with the CBEC for some time for them to collect this output data classified by entities,” said the official.
“The CBEC has informed them (the statistics ministry) that the classification of services is possible only once GST is rolled out,” said a finance ministry official, also speaking on condition of anonymity. “Once GST comes in, we can have a classification of services as well, as we have for goods now. Under it, there will be a common tariff for both goods and services.”
Anant said the current approach to the index of service production is sectoral and not entities-based, which leaves out sectors where private providers of services dominate.
An experimental index of services production has been brought out since 2005-06 for railways, air transport, banking and postal services following the recommendations of a technical advisory committee under Jawaharlal Nehru University professor C.P. Chandrashekhar.
Source:-www.livemint.com
Gujarat Has Over 50% Of Ppp Projects In Ports Sector: Report
8-Jun-2013
AHMEDABAD: Gujarat accounts for the lion's share of over 50 per cent in value terms of the total number of completed projects in the ports sector under the public-private partnership (PPP) model, industry body Associated Chambers of Commerce and Industry of India ( Assocham) said on Friday.
Of the total 31 PPP port projects worth over Rs 24,700 crore under operation in India as of April 30, 2013, Gujarat accounts for 12 completed PPP projects worth over Rs 12,400 crore, according to the study titled 'Port Developments in India'.
Besides, Gujarat ranks sixth with four PPP-based port projects worth over Rs 1,650 crore under construction. With a share of over 53 per cent, Gujarat also tops the list of nine maritime states as it could create almost double the capacity at the minor ports than was envisaged in the 11th plan.
Minor ports in Gujarat had a capacity of 182 million tonnes as on March 31, 2007, and the state was expected to add about 56 million tonnes capacity during 2007-12, while the state had realized capacity addition to about 283.6 million tonnes up to March 31, 2011.
Out of the total 881 PPP projects worth over Rs 5.4 lakh crore taken up under the PPP model across India, 62 projects in the port sector worth over Rs 82,000 crore are in different stages of implementation.
Odisha ranks second with a share of about 17 per cent followed by Maharashtra where five projects worth over Rs 3,700 crore are under operation. Andhra Pradesh and Tamil Nadu each with three projects under operation and have garnered a share between 5-6 per cent followed by Kerala at 2.8 per cent.
Source:-articles.timesofindia.indiatimes.com
Smart things to know about funding students abroad
1) The students who go abroad for studies are treated as non-resident Indians (NRIs) from the day they leave the country. All the provisions that apply to NRIs under the Foreign Exchange Management Act ( FEMA) are also valid for them.
2) The limitation for remittance of fee is $100,000 per year, or the actual fee, based on documentary proof from the institution where the student is enrolled, whichever is higher.
3) The remittance for living expenses up to $2,00,000 can be sent through a bank, after executing a self-declaration form by close relatives.
4) The bank may ask for a CA certificate or income tax returns, depending on the length of the client's relationship with it, as well as its internal processes and due diligence.
5) The foreign exchange that can be carried by such students while travelling abroad is not subject to limits, but declaration at the Immigration and Customs counters for amount exceeding $10,000 is mandatory.
The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre and Arti Bhargava.
Bank loans and EMIs may not be the correct way to build assets
Shravan Sharma is 35 years old with two children and a wife, who is a homemaker. He is currently paying EMIs for his car, home and personal loans. However, he is not too worried because he earns a good salary and is confident of being gainfully employed given his professional qualification. He thinks that the funding from banks is a good way to increase his asset base. He also believes that EMIs result in compulsory savings and that he may not do so if he did not have a loan. What precautions should Sharma take given his penchant for loans?
To begin with, Shravan Sharma needs to understand that his portfolio may run the risk of being too skewed, with a high proportion in property. If a large chunk of the income is used to pay the EMIs for a home loan, he will be left with little to build any other asset and might be compromising his need for liquidity. He should ensure that at least 30% of his investments are in other assets that are liquid, easy to access, and flexible. He should build them as a priority.
Second, Sharma runs the risk of default if his EMIs comprise more than 50% of his income. In a household with young children, the mandatory needs are likely to go up as the fees for private schools, coaching, extra-curricular activities, cost of outings and travel are likely to increase. Sharma should enhance his savings to provide for these needs, and to do so, he needs a higher monthly surplus. The existing EMIs will hurt this objective.
Third, loans will always have come for a higher cost than the return from the assets, except in the case of property, which may appreciate at a higher rate. However, a self-occupied home is not an earning asset, while those like a car depreciate in value. Therefore, Sharma's logic about using loans to build assets may be flawed. He may be substituting his inability to save regularly with costly loans, which reduce his wealth and flexibility to build assets.
The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre and Arti Bhargava.
'High Import Duty May Spur Gold Smuggling'
KOCHI: Gold merchants' association in the state is of the view that the recent increase in the import duty of gold from 2% to 8% will spur smuggling activities.
"We are of the opinion that most of the non-banking financial companies and commercial banks are responsible for the sizeable chunk of bulk imports," said B Girirajan, president of All Kerala Gold and Silver Merchants Association (AKGSMA).
According to him, traditional jewellers buy back the ornaments, coins and bars sold by them, but the banks and agencies don't follow that. "A direct result of this is that every time, these agencies will have to resort to fresh imports of the precious metal to replenish their stocks," he noted.
Studies conducted by AKGSMA showed that the demand for jewellery remained stable or even declined over the last few years. However, our country has become one of the largest exporters of handcrafted gold jewellery over the years and this export requirement is fully met by imports, Girirajan said.
"Any restriction on imports will adversely impact our jewellery exports. This is the third such hike in the last two years. This is a clear indication that the earlier hikes have not yielded the desired results," he added.Sour
Source:-timesofindia.indiatimes.com
Export Of Soybean Meal Continues To Fall
8-Jun-2013
It may not sound well for the Soya growers in the country, particular in Madhya Pradesh, which is a major contributing state on the front in the country. The export during May 2013 was 0.97 lac ton as compared to 1.39 lac ton in the same period of previous year showing a decrease of 29.74%. Overall demand of soybean meal is poor all across the world. This information was given by the spokesperson & coordinator of Soybean Processors Association of India (SOPA), Rajesh Agrawal.SOPA's office is located in Indore.
On a financial year basis, the export during April 2013 to May 2013 has been 1.98 lac ton as compared to 4.75 lac ton in the same period of previous year showing a decrease of 58.33%, added he.
During current oil year, (October-September), total exports during October 2012 to May, 2013 are 27.95 lac ton as against 32.61 lac ton last year, showing a decrease by 14.29%.
If one has a look on the country-wise/port-wise export of soybean meal during the period under observation, then also the same findings will come. The data has been collected and compiled by Soybean Processors Association of India (SOPA), based on the information received from the members, Port authorities and other agencies. However, the data does not include exports to Pakistan, Nepal and Bangladesh by rail or even by road.
Source:-timesofindia.indiatimes.com
Saturday, 8 June 2013
Vehicle registration services rendered by motor car dealer to its buyers aren’t ‘Business Support Se
ST : Rendering of assistance by a motorcar dealer to its buyers in getting motor vehicle registration done cannot, prima facie, be regarded as 'Business Support Services'
LIBOR is acceptable for benchmarking of loans given by Indian Co. to their foreign AEs
IT : Since for purpose of determination of Arm's Length Price, tested party is always assessee and not its Associate Enterprise (AE), LIBOR is acceptable for benchmarking loans given by Indian company to its foreign AEs, instead of interest rates prevailing in India
No concealment penalty for unintentional mistakes and for shifting of income from one head to anothe
IT : Where assessee by mistake claimed interest received on Government of India Capital Index Bonds as interest received on tax free bonds, levy of penalty under section 271(1)(c) upon assessee was not justified
ITAT allowed sec. 54F benefit when assessee proved capital gain flown from a genuine transaction of
IT: Where purchase of shares as well as sales thereof by assessee is established, surplus therefrom would be capital gain, investment of which would be entitled to section 54F exemption
Receipts of commission and incentives from Airlines for booking of cargo space is liable to ST
ST : Utilising Cenvat credit in excess of limit fixed under rule 6 of CENVAT Credit Rules, 2004 would attract only interest liability; entire credit itself cannot be denied to assessee
Reassessment after sec. 143(1) intimation can’t be deemed as a change of opinion as intimation isn’t
IT : Since intimation under section 143(1) does not amount to assessment, question of change of opinion does not arise, and therefore, reopening of assessment based on sufficient material, forming reason to believe that income has escaped assessment, is valid
To facilitate payment of Government welfare scheme, CG notifies basic saving account under PO Saving
IT : Post office Savings Account (Amendment) Rules, 2013 - Substitution of Rule 4A & Omission of Rule 4B
RBI amends FEMA Regulations on transfer or issue of security by person resident outside India
FEMA/ILT : Fem (Transfer or Issue of Security by A Person Resident Outside India) (Sixth Amendment) Regulations, 2013 - Amendment in Schedule 1
Friday, 7 June 2013
Ignorance of law followed by misguidance by consultants are enough to quash penalty under sctions 76
ST : Ignorance of law is enough to set-aside penalty under Sections 76, 77 & 78, hence, penalties for not filing return and not paying service tax were set aside
ITAT can recall its order for reconsideration if it didn’t consider the SC’s decision on similar iss
IT : Where at time of disposing of issue relating to bad debts, Tribunal inadvertently failed to consider applicability of order passed by Supreme Court on similar issue to assessee's case, it was justified in recalling its earlier order for limited purpose of reconsideration of said aspect of case
Winding up petition against Co. to be dismissed if debts claim against respondent Co. is in dispute
CL : Where debt claimed by petitioner could not be said to be undisputed and petitioner failed to make a prima facie case under section 433, winding up petition against respondent-company was to be dismissed
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