CBEC nominates link officers to grant leave to officers in various zones of services tax

EXCISE & CUSTOMS LAWS : Approval of Chain of Nomination (Link Officer) – Partial Modification of Order No. 220/2012, Dated 23-11-2012

Mrls Have Larger Impact On Tea Trade, Feels Fao

At a time when the residue level in Indian teas is being debated, the FAO (Food and Agriculture Organization of the United Nations) Inter-governmental Group on tea has found that, in general, food safety standards might have a deterring effect on trade if exporters fail to comply with regulations.

The implications of MRLs (maximum residue levels) on tea trade were discussed by the Inter-governmental Group at its recent meeting in Indonesia. It is a forum for inter-governmental consultation and exchange on trends in production, consumption, trade and price of tea.

The FAO felt that the MRL standards had a much larger effect on trade than import tariffs, and any cost-related disruption in supply could increase prices, leading to price volatility.

As one of the food safety standards, MRLs set the maximum level of pesticide residue that can be traced in food and food products to ensure food safety.

MRL regulations vary across countries, and there is no international agreement on harmonisation of regulations. The European Union has increased the number of pesticides regulated for tea. The number is now 45.

The FAO study found that China’s export to major European partners decreased significantly after 2000, most likely due to the regulations. The FAO also noted that if the importing country was large enough, prices would rise in that particular import market following the supply-disruption It might also have a negative impact for employment and gender, especially in developing countries.

India recently came under attack from Greenpeace which alleged that Indian teas were laced with banned pesticides.

The Tea Board of India maintains that Indian tea is subject to some of the most stringent standards globally, and 37 Plant Protection Codes (PCC) (chemicals) have been identified as permissible for use in Indian tea growth. MRLs are also in place.

The PPC is a comprehensive document, which lays down the manner in which chemicals are going to be used safely in tea cultivation.

Source: thehindu.com

Mere grant of sec. 12A registration won’t be sufficient to allow registration under sec. 80G as well

IT : Section 80G and section 12A are exclusive and, therefore, in order to get recognition under section 80G, mere registration under section 12A is not sufficient

PVC and HDPE tubes or pipes used in effluent treatment plant are eligible for capital goods Cenvat C

Cenvat Credit : Expression "tubes and pipes" in rule 2(a)(A)(vi) of CENVAT Credit Rules, 2004 covers all pipes and tubes whether of iron and steel or of PVC or HDPE; hence, PVC/HDPE/MS pipes or tubes used in effluent treatment plant are eligible for capital goods credit

Trust promoting India-Japan relationship and not extending its benefits to Japan, eligible for regis

IT: Where assessee-society had been formed to promote relationship between India and Japan without any element of profit and fees collected was utilized only for promotion of its aims and objects, it was entitled to registration under section 12AA

Merchandise Exports Fall As Trade Deficit Widens To $13.3 Bn In October

India’s merchandise exports contracted in October—the first time this fiscal year—exerting pressure on the country’s trade deficit even as gold imports surged, forcing the government and the Reserve Bank of India (RBI) to consider further curbs on imports of the precious metal.

The government and the central bank are in talks to increase curbs on gold imports that almost quadrupled in October, Reuters reported on Monday, quoting RBI deputy governor S.S. Mundra.

“With the surge in gold imports which has been witnessed, it warranted a relook,” Mundra said. Last year, the government increased import duty on gold to 10% and made it mandatory for 20% of all gold imports to be held for exports of jewellery as part of its efforts to reduce the import of the yellow metal and consequently narrow the current account deficit that was spiralling. Some of these curbs were relaxed in May.

Although import growth was subdued, trade deficit widened to $13.3 billion in October from $10.6 billion a year ago, according to data released by the commerce ministry on Monday.

During the month, merchandise exports contracted 5% to $26 billion, mainly on account of sectors such as engineering goods, pharmaceuticals and cotton yarn exports. Imports grew 3.6% to $39 billion, with the growth moderation mainly on account of lower oil imports even as gold imports surged.

Gold imports rose 280% to $4.17 billion from $1.09 billion in the year-ago period. Gold imports have surged in the last two months, mainly on account of the festive season as well as the low prices globally.

Oil imports, however, came in 19% lower at $12 billion, compared with $15.2 billion a year ago as international oil prices fell.

The international crude oil price of the Indian basket has fallen to less than $80 per barrel, giving the government some respite in containing the trade deficit.

Non-oil, non-gold imports were up by 6% to $22.9 billion, mainly on account of iron and steel, electronic goods and vegetable oils.

In the April-October period, trade deficit was at $83.7 billion, as against $87.3 billion in the year-earlier period. A slowing global economy could remain a key risk factor for export growth, analysts say.

“Exports growth in the remainder of 2014-15 is likely to be muted, given sluggish growth in key export markets such as Europe and Japan as well as lower prices of commodity intensive exports,” said Aditi Nayar, senior economist at rating agency ICRA.

“As gold imports normalize post the festive season, we expect the trade deficit to ease materially from the levels seen in September-October 2014, benefiting from lower commodity prices,” Nayar said. “However, low growth of exports remains a key risk.”

Source: livemint.com

India Iron Ore Imports Surge To Record Levels In April-October

India iron ore imports have witnessed a record surge during April-October touching 5 million tonnes as steel makers bought raw material from overseas markets due to domestic supply crunch.

According to industry consultancy SteelMint, India imported 5.06 million tonnes of iron ore in the first seven months of the fiscal year ending in October.

Mining restrictions due to court action against illegal mining have reduced iron ore supply in India. That, along with falling global prices, has prompted rising imports, which topped 2 million tonnes in October alone, said SteelMint, predicting the total for the full year to March could reach up to 11 million tonnes.

India holds vast reserves of iron ore and was once the world’s no. 3 supplier. Global iron ore prices have fallen below $76 a tonne, losing 44 percent of their value this year amid a deep supply glut.

Meanwhile, India’s steel consumption growth during April – October 2014. As per the latest data from the Joint Plant Committee under the Ministry of Steel, the consumption stood at 43.112 million tonnes signalling a slump of 0.5 per cent.

The usage of steel during the corresponding period last year stood at 42.9 million tonnes. In October India consumed 6.53 million tonnes of steel, a drop of 1.3 per cent over the same month last year.

Source: hellenicshippingnews.com

India Said To Take Imminent Steps To Curb Surging Gold Imports

India is likely to announce measures to curb gold imports as early as Tuesday, a senior finance ministry source said, as a surge in inbound shipments threatens to worsen the country’s trade deficit.

“We are working on it. The measures to slow gold imports are almost ready and may be announced today (Tuesday) or tomorrow (Wednesday),” said the source, who declined to be named because of the sensitivity of the matter.

Gold imports into India, the world’s second largest gold consumer behind China, surged nearly fourfold in October to $4.18 billion from a year ago, data showed on Monday.

Although India’s trade deficit has so far been kept in check by lower oil imports, analysts warn that is unlikely to last if inbound gold shipments continue to surge.

Struggling with high current account and trade deficits, India last year raised the import duty on gold to a record 10% and imposed other import restrictions, some of which it relaxed in May.

Imports of the precious metal have risen steadily since August, boosted by jewellery demand for the wedding season, raising concerns among policymakers.

Last Thursday, officials from the Reserve Bank of India (RBI) and the finance ministry met to review the country’s gold import policy, but no decision was taken. Reuters.

Source: livemint.com

Rupee Ends Marginally Lower Against Dollar

The local unit opened at 61.63 per dollar and touched a high and a low of 61.63 and 61.79, respectively. The currency ended at 61.74, down 0.03% from previous close of 61.72, while India’s equity benchmark Sensex closed at 28,177.88 points on BSE, up 0.17%.

“With the local markets performing well, all the cues for therupee were positive. But through the day we saw consistent dollar demand from importers. There might be slight import cover happening and even some commodity hedging,” said Harihar Krishnamoorthy, treasurer, FirstRand Bank.

India’s trade deficit in October narrowed to $13.4 billion as compared to $14.25 billion in September, government data showed on Monday. Merchandise imports up nearly 3.62% year-on-year to $39.50 billion mainly on account of lower oil imports even as gold imports surged. Exports, meanwhile, fell 5.04% on year to $26.1 billion.

Most of the Asian currencies ended higher. South Korean won was up 0.63%, Philippines peso 0.1%, Japanese yen rose 0.08%, Indonesian rupiah up 0.07%, China offshore 0.06%, Singapore dollar 0.05%.

Bond yields fell after both the CPI and WPI inflation fell which boosted the speculations that the Reserve Bank of India may cut the rates in its 2 December policy.

The yield on India’s 10-year benchmark bond ended at 8.183%, compared with its Friday’s close of 8.217%. Bond yields and prices move in opposite directions.

Data released on Friday showed the wholesale price index (WPI)-based inflation for the month of October was at 1.77%, the slowest pace since September 2009. A Bloomberg poll of 37 analysts had estimated that WPI inflation at 2.1% for October.

Data on Wednesday showed India’s index of industrial production (IIP) expanded by 2.5% in September after anaemic growth in the preceding two months and retail inflation moderated to 5.52% in October, compared with 6.46% in September, mainly on account of easing vegetable and fuel prices. A Bloomberg poll estimated consumer price index (CPI) at 5.67%.

Since the beginning of this year, the rupee has gained 0.12%, while foreign institutional investors have bought $15.20 billion during the period from local equity markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 87.647, up 0.14% from the previous close of 87.525.

Source: livemint.com

Loss on assignment of debt wasn’t deductible as assessee was giving loan to affiliate when it was in

IT: Where assessee having assigned amount recoverable from sister concern to another company, claimed deduction of loss incurred on assignment of debt, in view of fact that assessee kept giving loan to sister concern even when it was continuously making loss, Tribunal rightly concluded that transaction of assignment of debt was not entered into normal course of business and, thus, assessee's claim was to be rejected

No ST refund on services used for export unless assessee correlates services with export/import code

Service Tax : In order to claim refund of service tax paid on services used for export goods, it is incumbent upon assessee to produce necessary documents before adjudicating authority alongwith invoices indicating IEC number so that activities of export could be correlated with documents and notifications

'CII' had to be taken of the year in which capital asset was converted into stock-in-trade to comput

IT : To determine capital gains cost inflation index as stood in year of conversion of asset into stock-in-trade has to be applied and not cost inflation index as stood in year of sale taxation

Sales incentives to employees establish LO promotional activities in India; treated as PE of foreign

IT/ILT: Foreign Company established a LO in India - Performance of employees of LO was determined by number of direct orders received by them - Employees were also entitled to sales incentives for these orders - Such incentive plans established that LO was not engaged merely in preparatory or auxiliary activities - Its activities extended to marketing activities as well - Therefore, it would be treated as PE of foreign company and the income attributable to LO activities would be taxable in Indi

AO couldn’t adopt DVO’s report making valuation at CPWD if it exceeds market rate

IT: Where DVO valued construction at CPWD rates which were 30 per cent higher than market rate, no addition could be made over valuation of approved valuer as adopted by assessee

Tribunal can't extend stay beyond 365 days yet HC can extend stay beyond that period by exercising w

Excise & Customs : After insertion of third proviso to section 35C(2A) by Finance Act, 2013, Tribunal may extend stay for period upto 365 days and not thereafter; however, High Court may, in exercise of its writ jurisdiction, pass a protective order provided delay in disposal of appeal is not attributable to conduct of assessee

Profits from sale of shares were business receipts as holding period of half of transactions were of

IT: Where there was huge frequency of share transactions and in most of cases holding period was only upto 7 days and assessee carried out repetitive transactions, income therefrom was business income

No addition due to non-inclusion of excise duty in closing stock as duty was payable on removal of g

IT : Excise duty being payable at time of removal of goods and not at time of manufacture, an addition to income of assessee-company on account of non-inclusion of excise duty in closing stock of finished products was not justified

Credit available on input tax even on generation of exempted by-product during manufacture of produc

CST & VAT : Where assessee was engaged in manufacture of refined sunflower oil from sunflower oil cake by employing solvent extraction process and in extraction process it also obtained de-oiled cake, which was exempted from tax, assessee was entitled to full deduction of input tax paid on purchases of sunflower oil cake

Chief Judicial Magistrate has no role to play in securing assets of secured creditors under SARFAESI

SARFAESI ACT: Secured creditors can approach Chief Metropolitan Magistrate in Metropolitan areas and District Magistrate in Non-Metropolitan areas for seeking assistance to secure their assets; Chief Judicial Magistrate has no jurisdiction in such cases

Remuneration payments to consultant-doctors would attract TDS under sec. 194J and not TDS under sec.

IT: Where appointment of doctors was contract for service classifiable as professional service, assessee had correctly deducted tax at source from payment to doctors under section 194J