Toll charges collected by assessee under a scheme of ‘Built Operate and Transfer’ couldn’t be charge

ST : Construction of roads for NHAI/Government on Build, Operate and Transfer (BOT) basis and receiving consideration therefor by collection of toll charges for a fixed tenure cannot be charged under Business Auxiliary Services or any other category of service

RBI//2012-13/554 A.P. (DIR Series) Circular No.121 dated 26-06-2013

Reserve bank of India

A.P. (DIR Series) Circular No.121

June 26, 2013

To

All Authorised Dealer Category - I Banks

Madam / Sir,

Risk Management and Inter Bank Dealings

Attention of Authorized Dealers Category – I (AD Category - I) banks is invited to section C of the Annex to A.P.(DIR Series) Circular No. 32 dated December 28, 2010 on Comprehensive Guidelines on ‘Over the Counter (OTC) Foreign Exchange Derivatives and Overseas Hedging of Commodity Price and Freight Risks’ in terms of which FIIs have been permitted to hedge the currency risk on the market value of their entire investment in equity and/or debt in India.

2. Under the provisions of the said section, AD Category I banks are required to verify on a periodical basis that the forward cover outstanding is supported by underlying exposures. In this context, it is clarified that in case an FII intends to hedge the exposure of one of its sub-account holders, (cf paragraph 4 of schedule 2 to Notification No. FEMA 20 /2000-RB dated 3^rd May 2000 ) it will be required to produce a clear mandate from the sub-account holder in respect of the latter’s intention to enter into the derivative transaction. Further, the AD Category I banks shall have to verify the mandate as well as the eligibility of the contract vis-a-vis the market value of the securities held in the concerned sub-account.


3. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned.


4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act 1999 (42 of 1999) and are without prejudice to permissions /approvals, if any required under any other law.

Yours faithfully

(Rudra Narayan Kar)

Chief General Manager in-Charge

RBI//2012-13/554

CIT can’t reject application for sec. 264 revision merely because assessee has an alternative remedy

IT : Where Commissioner passed a non-speaking order rejecting assessee's application for revision under section 264 on ground that assessee had an alternative remedy of filing appeal, said order was to be set aside and matter was to be remanded back for disposal on merits

RBI/2012-13/548 A.P. (DIR Series) Circular No. 118 dated 26-06-2013

Reserve bank of India

A.P. (DIR Series) Circular No.118

June 26, 2013

To

All Authorised Dealer Category - I Banks

Madam / Sir,

Export of Goods and Services – Project Exports

Attention of Authorized Dealers is invited to Para B.7 (i) and C.5 (i) of Memorandum of Instructions on Project and Service Exports (PEM), enclosed to A.P.(DIR Series) Circular No.32 dated October 28, 2003 , in terms of which an exporter undertaking Project Exports and Service contracts abroad should submit form DPX1, PEX-1 and TCS-1 to the Approving Authority (AA) i.e. AD Bank/ Exim Bank/ Working Group, within 15 days of entering into contract for grant of post-award approval.

2. On a review, it has been decided to increase the time limit and henceforth the exporter undertaking Project Exports and Service contracts abroad should submit form DPX1, PEX-1 and TCS-1 to the Approving Authority (AA) i. e. AD Bank / Exim Bank / Working Group, within 30 days of entering into contract for grant of post-award approval.


3. All other instructions issued in terms of PEM, notified vide A. P. (DIR Series) Circular No. 32 dated October 28, 2003 , shall remain unchanged.


4. Authorized Dealers may bring the contents of this circular to the notice of their exporter constituents and customers concerned.


5. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(C. D. Srinivasan)

Chief General Manager

RBI/2012-13/548

RBI/2012-13/552 A.P. (DIR Series) Circular No.119 dated 26-06-2013

Reserve bank of India

A.P. (DIR Series) Circular No.119

June 26, 2013

To

All Authorised Dealer Category - I Banks

Madam / Sir,

External Commercial Borrowings (ECB) Policy – Import of Services, Technical know-how and License Fees

Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000, notified vide Notification No. FEMA 3/2000-RB dated May 3, 2000 and the A.P. (DIR Series) Circular No. 5 dated August 1, 2005 relating to the External Commercial Borrowings (ECB), as amended from time to time.

2. As per the extant guidelines, eligible borrowers can raise ECB for investment such as import of capital goods (as classified by DGFT in the Foreign Trade Policy), new projects, modernization / expansion of existing production units in the real sector – industrial sector including small and medium enterprises (SME), infrastructure sector as defined under the ECB policy and entities in service sector viz. hotels, hospitals and software companies.


3. On a review, it has been decided to include import of services, technical know-how and payment of license fees as part of import of capital goods by the companies for the use in the manufacturing and infrastructure sectors as permissible end uses of ECB under the automatic / approval route as the case may be subject to:
   
   
   
   1. there should be a duly signed agreement between the service provider and the borrower company;
   
   
   2. the original invoice raised by the service provider as per the payment schedule in the agreement should be duly certified by the borrower company;
   
   
   3. declaration by the importer that the entire expenditure on import of services will be capitalised;
   
   
   4. declaration by the importer that entire expenditure on import of services forms part of project cost; and
   
   
   5. AD category – I bank has to ensure the bonafides of the transaction.
   
   
   
   


4. The above modifications to the ECB guidelines will come into force with immediate effect. All other aspects of the ECB policy, such as eligible borrower, recognized lender, end-use, all-in-cost ceiling, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements etc. shall remain unchanged.


5. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers.


6. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully

(Rudra Narayan Kar)

Chief General Manager in-Charge

RBI/2012-13/552

Customs Notification No. 13/2013-Customs (ADD) dated 25-06-2013

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification No. 13/2013-Customs (ADD)

New Delhi, dated the 25^th June, 2013

G.S.R. (E). -Whereas, the designated authority vide notification No. 15/19/2012-DGAD, dated the 25^th April, 2013, published in Part I, Section 1 of the Gazette of India, Extraordinary, dated the 25^th April, 2013, had initiated review, in terms of sub-section (5) of section 9A of the Customs Tariff Act, 1975 (51 of 1975) and in pursuance of rule 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the said rules), in the matter of continuation of anti-dumping duty on ‘Pentaerythritol’, falling under heading 2905 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), originating in, or exported from, Chinese Taipei imposed vide notification of the Government of India, in the Ministry of Finance (Department of Revenue),No. 74/2011-Customs, dated the 12^th August, 2011 , published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 623 (E), dated the 12^th August, 2011, and has requested for extension of anti-dumping duty upto one more year, in terms of sub-section (5) of Section 9A of the said Customs Tariff Act;

Now, therefore, in exercise of the powers conferred by sub-sections (1) and (5) of section 9A of the said Act and in pursuance of rule 23 of the said rules, the Central Government hereby makes the following amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 74/2011-Customs, dated the 12^th August, 2011 , published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 623 (E), dated the 12^th August, 2011, namely: -

In the said notification, in paragraph 2, for the words and figures “27^th April, 2013”, the words and figures “27^th day of April, 2014, unless revoked earlier” shall be substituted.

F.No.354/29/2002-TRU (Pt-II)
(Akshay Joshi)

Under Secretary to the Government of India

Note: The principal notification No. 74/2011-Customs, dated the 12 ^th August, 2011 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 623 (E), dated the 12^th August, 2011.

Penalty order set-aside, as AO didn't come to a finding on the reason for leviability of penalty

IT : Where Assessing Officer in order of penalty did not come to a clear finding regarding penalty being imposed on concealment of income or on furnishing inaccurate particulars of income, Tribunal was justified in setting aside impugned penalty order

Customs Notification No.12 /2013-Customs (ADD) dated 25-06-2013

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification No.12 /2013-Customs (ADD)

New Delhi, dated the 25^th June, 2013

G.S.R. (E). -Whereas, the designated authority vide notification No. 15/30/2013-DGAD, dated the 6^th June, 2013, published in Part I, Section 1 of the Gazette of India, Extraordinary, dated the 6^th June, 2013, had initiated review, in terms of sub-section (5) of section 9A of the Customs Tariff Act, 1975 (51 of 1975) and in pursuance of rule 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the said rules), in the matter of continuation of anti-dumping duty on ‘Acetone’, falling under heading 2914 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), originating in, or exported from, Korea RP imposed vide notification of the Government of India, in the Ministry of Finance (Department of Revenue),No. 75/2008-Customs, dated the 10^th June, 2008 , published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 447 (E), dated the 10^th June, 2008, and has requested for extension of anti-dumping duty upto one more year, in terms of sub-section (5) of section 9A of the said Customs Tariff Act;

Now, therefore, in exercise of the powers conferred by sub-sections (1) and (5) of section 9A of the said Act and in pursuance of rule 23 of the said rules, the Central Government hereby makes the following amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 75/2008-Customs, dated the 10^th June, 2008 , published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.447 (E), dated the 10^th June, 2008, namely: -

In the said notification, after paragraph 2, the following paragraph shall be inserted, namely: -

“3. Notwithstanding anything contained in this notification, the anti-dumping duty imposed herein shall remain in force up to and inclusive of the 9^th day of June, 2014, unless revoked earlier.”

F.No.354/10/2008-TRU (Pt-I)
(Akshay Joshi)

Under Secretary to the Government of India

Note: The principal notification No. 75/2008-Customs, dated the 10^th June, 2008 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 447 (E), dated the 10^th June, 2008.

Evasion penalty under sec. 78 to be levied if charges of suppression are accepted by assessee

ST : Where assessee accepts adjudication order confirming demand on ground of 'suppression with an intention to evade payment of service tax', he is also liable to evasion penalty under section 78

Home-workers are employees of manufacturer and not of contractor; no TDS under sec. 194C

IT : Home-workers in bidi manufacturing industry are employees of manufacturer, and not contractors; there is no requirement of deducting tax at source under section 194C on payments to contractors

ITAT upholds TP adjustments for commission on corporate guarantee given for term loan availed by AE

IT : A financial loan guarantee commitment entered into by the assessee company with a third party lender of its Associated Enterprises which obliges the assessee company to cover the risk of default by its Associated Enterprise involves risk of default for which "price" has to be charged. Even the OECD Transfer Pricing Guidelines 2010 supports this view where it is explained that where higher credit rating of Associated Enterprise is due to a guarantee by another group member, such association

Order to retain the amount seized without giving an opportunity to assessee to explain was quashed

IT: Order passed for retaining entire amount seized, without giving opportunity of hearing to assessee is not sustainable

In de novo assessment additions can be made as long as matter is same; banking transactions aren’t s

IT : Where in original assessment Assessing Officer had added new cash credits which on verification in set aside assessment were found to be more and accordingly Assessing Officer made addition, it could not be said to be a case of enhancement of income by Assessing Officer in set aside assessment

Refund claim filed with ST department instead of excise department is valid

ST : Where assessee had filed refund claim of services used by it for SEZ before service tax department in time and such claim was returned on premise that it was to be filed with Central Excise department, such refund claim was to be treated as filed within time

Issue of post-dated cheques is deemed acknowledgement of liability, rules HC

CL: Where respondent-company issued post dated cheques (PDCs) in favour of petitioner but same were dishonoured, issuance of PDCs constituted acknowledgement of liability by respondent and, therefore, winding up petition against it was to be admitted

Sec. 50C to be invoked even on transfer of long term leasehold rights in respect of a plot and a bui

IT : Where assessee had taken plot of land in question on lease for 95 years and later on transferred rights in part of said plot as well as rights in building standing on said plot, provisions of section 50C were attracted

Govt Likely To Announce Export Incentives For Smes

To further boost exports from country, the government is expected to soon announce new incentives for small and medium enterprise (MSME) exporters, reports media.



The government is considering several initiatives, including increasing the rate of interest subsidy from two percent at present and providing financial assistance for product designing and skill development, a senior Commerce Ministry official told agency.



"A committee headed by Finance Secretary R S Gujral would soon submit its report on the matter. The committee was formed to suggest ways to enhance exports from MSME sector," the official said.



The share of MSMEs in the country's total exports was about 40 percent.



However, the official said a mechanism needed to be worked to prevent misuse of the high interest subsidy provision by the MSME players.



"Such differential reward system creates problem. A non- MSME firm can take benefit from this," he added.



India's exports entered the negative zone after a gap of four months, recording a contraction of 1.1 percent in May and leading to a trade deficit of USD 20.1 billion, highest in the last seven months.



In 2011-12, the country's shipments declined by 1.76 percent to USD 300.5 billion. Trade deficit touched an all time high of USD 191 billion during the period.



Increasing exports is necessary for bridging the CAD which has been estimated at 5 percent of the GDP in 2012-13 as against the RBI's comfort level of 2.5 percent.



High CAD puts pressure on the domestic currency and can expose the economy to balance of payments problem.



It also impacts the country's foreign exchange reserves. CAD had touched a record high of 6.7 percent in the October - December quarter. CAD occurs when country's total imports and transfers are higher than its total exports and transfers, it added.

Source:-www.smetimes.in

Govt Likely To Announce Incentives For Msme Exporters

26-Jun-2013

Worried over widening current account deficit (CAD), the government is expected to soon announce incentives for exporters in small and medium enterprises sector to further boost the shipments.



The government is considering several initiatives, including increasing the rate of interest subsidy from 2% at present and providing financial assistance for product designing and skill development, a senior Commerce Ministry official told PTI.



"A committee headed by Finance Secretary R S Gujral would soon submit its report on the matter. The committee was formed to suggest ways to enhance exports from MSME sector," the official said.



The share of MSMEs in the country's total exports was about 40%.



However, the official said a mechanism needed to be worked to prevent misuse of the high interest subsidy provision by the MSME players.



"Such differential reward system creates problem. A non- MSME firm can take benefit from this," he added.



India's exports entered the negative zone after a gap of four months, recording a contraction of 1.1% in May and leading to a trade deficit of $20.1 billion, highest in the last seven months.



In 2011-12, the country's shipments declined by 1.76% to $300.5 billion. Trade deficit touched an all time high of $191 billion during the period.



Increasing exports is necessary for bridging the CAD which has been estimated at 5% of the GDP in 2012-13 as against the RBI's comfort level of 2.5%.



High CAD puts pressure on the domestic currency and can expose the economy to balance of payments problem.



It also impacts the country's foreign exchange reserves.CAD had touched a record high of 6.7% in the October - December quarter. CAD occurs when country's total imports and transfers are higher than its total exports and transfers.



Federation of Indian Micro and Small & Medium Enterprises (FISME) President V K Agarwal has suggested the committee to announce ways to increase product competitiveness of the MSME products in the world market.



"There is need to reduce various impediments which is the sector is facing. There should be a grievance redressal cell. They should announce a set of reforms to boost exports from MSMEs," Agarwal said.

Source:-www.business-standard.com

Turmeric Up 0.5% On Export Demand

26-Jun-2013

Turmeric prices rose by Rs 34 to Rs 6,026 per quintal in futures trade today as speculators created fresh positions, driven by a rise in export demand in the spot market against decline in supplies.



However, good progress of sowing due to sufficient rainfall in producing ares capped the gains.



At the National Commodity and Derivatives Exchange, turmeric for delivery in July rose by Rs 34, or 0.57% to Rs 6,026 per quintal with an open interest of 18,460 lots.



Similarly, turmeric for delivery in August edged up by Rs 26, or 0.43% to Rs 6,106 per quintal in 16,685 lots.



Market analysts said speculators created fresh positions on the back of export demand in the spot market amid decline in supplies from producing region helped turmeric prices to trade higher at futures trade.

Source:-www.business-standard.com

Rupee Off Record Low In Early Trade, Opens At 60.45/$

Indian rupee came off its record low in early trade Thursday. It opened at 60.45 per dollar, up 26 paise compared to previous day's closing of 60.71.



On Wednesday, the rupee touched its all-time low of 60.76 per dollar due to defence and crude oil related demands.



Sonal Varma of Nomura said, "Our bias to remain short rupee, even after spot broke the 60/USD mark, remains intact."



"Despite net portfolio outflows of nearly USD 7 billion from May 22 to June 24, foreign positioning in India remains high," she said.

Source:-www.moneycontrol.com