Withdrawal Of Mrp Based Assessment Necessary For Manufacturers As Well As Consumers

Economic uncertainties in the past year have exposed India Inc. to financial and economic vulnerabilities. The year 2011 witnessed Inflationary pressures and rupee devaluation that have affected IT spending across consumers and the corporate sector. The Union Budget 2012-13 brings with itself a hope of a better tomorrow.

Recovering from the past downturns, 2011 was a relatively stable year for the IT industry. For India Inc. to be able to rise and flourish, it is important that the Budget, as a statement of intent, expresses the long-term proposal for the economic stability of the country. To ensure continued development and growth, a few reforms are majorly expected out of this year’s Union Budget.

Firstly with the GST that is likely to find a mention in this year's budget and would probably be implemented from April, withdrawal of MRP based assessment for IT products is absolutely necessary as this will not only benefit manufacturers and IT channel partners but also ensure reduced prices of products for the end consumer. The implementation of the biggest direct tax reform – GST is a critical growth lever for the IT industry and we are hopeful that it will find a mention in this year's budget. This would phase out other major taxes like excise duty, VAT, service tax and will be instrumental in unifying the markets in term of local taxation, which in turn, will bring down overall cost of goods and services in the country. GST would also assist IT manufacturers to maintain uniform prices across the length and breadth of the country.Distribution of products would also be majorly benefitted by the implementation of GST.

Foreign Direct Investment (FDI) in retail is another important economic reform that the IT industry in India looks forward to with great hope. FDI would help strengthen India’s supply chain and also benefit end consumer in terms of ensuring lower product price. Finally, we need radical reforms in the taxation and duties space, which the industry today yearns for. At present, certain areas still attract duties close to 10% which inflate costs and lead to either price hikes for consumer or reduction in profit margins for the manufacturer and channel partner.

Belkin India, since its inception in early 2009 has successfully been able to cement its position as a leading solution provider across its wide range of products. Present across seven major categories including Networking, Mobility and structured cabling Belkin India has been witness to large scale overall economic growth and development in the IT industry. GST is an important driver of Belkin’s future plans in India.

As the Budget day comes closer, everybody starting from India’s common man to the big business houses await maximum fiscal benefit. Everyone expects an action-orientated and policy-setting scheme that would help India Inc. rise and strengthen its economic base. With forward looking policy announcements & structural corrections, the 2012 budget could be a great opportunity window to inject both sentiments & substance to growth renewal.

Source: businessworld.in
 

Palm Oil Prices To Jump On Higher China Import

Palm oil prices have hit an eight-month high due to higher imports by China, forcing Indian companies to raise retail prices for the third time in four months.

Palm oil is India's most popular oil, with a 45% share of the edible oil market.

"Soya oil and refined palm oil prices have increased by $40-70 a tonne in the last one month. An immediate price increase of Rs 1-2 a litre on consumer packs will take place," said Angshu Mallick, chief operating officer, Adani Wilmar, which owns India's largest selling cooking oil brand Fortune.

The company crushes a million tonne of soyabean annually and exports 1-1.2 million tonne soya meal, apart from handling 8-10 lakh tonne of refined palm oil. Since November, edible oil companies have raised retail prices by Rs 4-5 a litre owing to the weakening of the rupee. Currently, edible oil consumer pack prices range from Rs 60 to Rs 70 a litre.

"We might see prices remaining at the same level with a likely upward trend," said Cargill India chairman Siraj Chaudhry. In India, Cargill owns edible oil brands NatureFresh, Gemini and Sweekar.

Most edible oil companies expect the volatility in edible oil prices to continue till Holi. "Prices will stabilize in India after Holi as the new mustard crop's availability will peak. Also, the just-cropped palm oil production will begin in May-June in Malaysia and Indonesia which might ease pressure on prices," said an official from Ruchi Soya.

The company, the third largest player in the refined oil business, will be increasing the price of Nutrela Soyumm (soyabean oil) consumer packs by Rs 2 a litre and the Ruchi Gold (palmolein oil ) consumer packs by Rs 1 a litre.

However, the industry is waiting for the new mustard/rapeseed crop production figures. According to second advance estimates, the oil seeds crop for 2011-12 is projected to drop by 6% to 30.53 million tonne owing to uneven rains in the kharif season and low pre-winter rains in the northern region. Analysts expect mustard production to be at 65 lakh tonne compared to 70 lakh tonne in 2011.

"Since 2008, there has been a lot of volatility in the edible oil business, which might continue due to challenges in the supplies of raw material. Even as the country had a bumper soyabean crop, a fall in the US crop size and an expected smaller crop in South America due to drought have impacted Indian edible oil manufacturers," said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil consultancy firm.

According to traders, palm oil prices are supported by the tight supplies and increasing global demand, particularly from China. On Tuesday, crude palm oil futures for delivery in March were firm by 0.35 % to Rs 547.50 per 10 kg on the Multi Commodity Exchange.

Source: economictimes.indiatimes.com

Pmo Move On Vallarpadam May Free Sezs Of Regulations

The customs department may lose its jurisdiction over the Vallarpadam special economic zone (V-SEZ) and the entry of the directorate of revenue intelligence (DRI) will be restricted after the Prime Minister’s Office (PMO) intervened to resolve a dispute between the ministries of commerce and finance on authority over it.

The decision may set a precedent for other SEZs. The customs department and the DRI are part of the Central Board of Excise and Customs, which functions under the ministry of finance. SEZs come under the purview of the ministry of commerce. The PMO decision will take SEZs further out of regulatory reach. Such zones already enjoy significant autonomy. A PMO spokesperson said the “matter is sub judice and facts are being ascertained”, but declined to provide more details. The case dates back to 2011, when the promoter of the zone moved the Kerala high court seeking the removal of the customs officials from the zone.

The documents reviewed by Mint show that finance secretary R.S. Gujral considered V-SEZ to be in violation of the SEZ Act. They also show that he tried to bring the matter before the cabinet committee on economic affairs, which had created V-SEZ by bestowing SEZ status on the International Container Transshipment Terminal (ICTT) developed by DP World.

A finance ministry official, who did not want to be named, said his ministry was asked to depute customs officials who would work under the current administration of V-SEZ.

“The meeting of various stakeholders in PMO decided that DRI will be issued passes by the development commissioner (of the zone) for entry,” added a government official, who did not want to be named.

The finance ministry official claimed that the decision could apply to all SEZs. “You cannot have one rule for Vallarpadam,” he said. He raised the possibility of irregularities and warned that the ability of agencies to detect “fraud will be seriously undermined”.

ICTT will soon start handling all container cargo currently passing through the Rajiv Gandhi terminal in Cochin port in keeping with an agreement between Cochin Port Trust and India Gateway Terminal Pvt. Ltd, a subsidiary of DP World. When that happens, the customs department will no longer have jurisdiction over the container cargo.

DP World did not respond to an email sent last Tuesday and could not be reached on the phone. Its CEO didn’t respond to a text message seeking comment.

In November, the DRI and the Central Bureau of Investigation were denied entry into V-SEZ by its development commissioner when they were attempting to intercept the alleged smuggling of red sanders wood, cultivated across India and used as a colouring agent. The felling of the tree is controlled by the forest department. This revived a year-long turf war between the commerce and finance ministries over the jurisdiction of the customs department.

Commerce secretary Rahul Khullar wrote to Gujral on 3 January expressing concern over the “dual jurisdiction and the presence of regular customs authorities in an institutionalized manner within the SEZ”. He suggested that port guidelines be revised and SEZ officials be allowed to discharge the functions of customs officials as well. The finance ministry responded saying that these guidelines had no “provision indicating that any activity, other than the assessment and clearance of SEZ cargo, is to be done by the SEZ officers as per the provisions of the SEZ Act/rules”. Gujral said in a letter on 24 January to Khullar that “restricting the law enforcing agencies posed a grave security threat”.

The PMO intervened to resolve the issue.

“The issues have been resolved by PMO and the decision taken supersedes all other issues,” said Khullar.

In the course of the spat between the ministries, the finance ministry also claimed V-SEZ didn’t conform to rules on SEZs.

ICTT was inaugurated by Prime Minister Manmohan Singh in February 2011. It was accorded SEZ status in 2006. Gujral wrote in his letter to Khullar that “the approval of the cabinet committee was accorded for the project before the enactment of the SEZ Act, 2005. It had to be ensured that the project being developed...is in accordance with the provisions of the existing SEZ law and whether the fact of non-conformity of this SEZ with SEZ laws was ever brought to the notice of the cabinet committee”.

The finance ministry’s position is that V-SEZ isn’t an SEZ. “Even under the erstwhile SEZ provisions, the port was treated as infrastructure,” the finance ministry contended, according to the documents cited above. “In terms of these guidelines, it was also laid down under the criteria for approval of SEZ that at least 25% area of the SEZ shall be used for developing industrial area for setting up of units. Thus, this SEZ was not even eligible for approval in terms of conditions prescribed earlier also.”

Khullar brushed aside questions raised by the finance secretary about the non-conformity of V-SEZ with the SEZ Act. “SEZs fall within the jurisdiction of the commerce ministry,” he said.

Source: livemint.com

Government May Permit More Sugar Exports If Output Tops Estimates

The government may allow sugar exports over and above the permitted 2 million tonnes if the domestic output surpasses the estimate of 25.3 million tonnes this year, says a report by Rabobank International.

"Depending on final harvest results, the empowered group of ministers (EGoM) may issue additional tranches of sugar exports under open general licence, especially if domestic production surprises to the upside," the report said.

The government has permitted export of one million tonne each in two tranches in 2011-12 marketing year (October-September). The second tranche of sugar export is yet to be notified. Of the first tranche, about 400,000 tonne have already been shipped.

Rabobank expects India's sugar production to be 25.3 million tonnes in the ongoing marketing year, 4 per cent higher than the last year's.

"Our projection for sugar output in India in 2011-12 remains at 25.3 million tonne, with a downward revision for output in Maharashtra being offset by increased expectations for production in Uttar Pradesh," it said.

Rabobank's forecast is higher than the government's estimate of 24.5 million tonnes, but lower than the industry body ISMA's projection of 26 million tonnes. Last year, sugar output stood at 24.2 million tonnes.

Maharashtra's total output may come down by over five per cent year-on-year following reductions in cane yields reported from some districts, it said.

Nevertheless, it added that the state will continue to be the largest sugar producing state again in 2011-12 with an estimated share of 35 per cent of domestic sugar output.

Uttar Pradesh will remain the second largest sugar producing state this year, it said.

Source: economictimes.indiatimes.com

Govt Rules Out Rollback Of Transport Subsidy

Setting speculations at rest , Commerce, Industry and Textile Minister, Anand Sharma ruled out the possibility of rolling back Transport Subsidy Scheme (TSS) though he hinted at the possibility of reviewing the negative list. The coke industry is likely to include in the negative list.

A crucial meeting convened by the Commerce, Industry and Textile saw the North Eastern States opposing the move to dilute the North East Industrial Investment and Promotion Policy 2007. Assam and Meghalaya supported the proposal to put coke industry innegative list in the face of opposition by Nagaland and Mizoram. Meghalaya Chief Minister, Dr Mukul Sangma was the one Chief Minister, who attended the meet.

The North Eastern States (NES) called for maintaining status quo on TSS and opposed the move to shift the railway head from Siliguri to Guwahati, Tinsukia and Dimapur.

The Commerce and Industry Minister spelled out his Ministry’s strategy to develop trade and commerce. He mentioned about developing infrastructure facilities to promote border trade and improving road connectivity. He proposed to hold a special session on North Eastern States during the ensuing ASEAN heads of state meet at the special ASEAN-India Commemorative Summit scheduled later this year.

The Prime Minister and Sharma are separately travelling to Myanmar later this year and the focus would be on the Look East Policy and the trade with the North Eastern States.

When asked Anand Sharma told this newspaper that there was no question of discontinuing the TSS to the NES. The region is industrially backward. But the idea is to review thenegative list, he said.

But there are some issues that need to be looked into, he said, adding that he would not like to say that there was rampant corruption though there were reports of some misuse.

“I believe that the time has now come to give a focused and integrated thrust to the development of North Eastern Region. While provision of subsidy will remain an important element in catalyzing industrial development, equally important will be a thrust on infrastructure development within the region and linkages with the rest of the country.” he said.

Later an official spokesman said, “We are now in the process of revamping the scheme and in doing so, we had undertaken a detailed study of the operation of the scheme over the last several years and the matter will be referred to the Cabinet, incorporating all your suggestions, for a final view.”

The meeting discussed the proposed definition of ‘Manufacturing’, amendment to the negative list of TSS, expansion of existing list of designated railheads. The views of states were also obtained on the issues of cap on value of transported goods, linkages between transport subsidy and employment generation. The meeting also explored the ways of incentivizing transportation of raw material and finished goods by inland water transport and Additional incentives to MSME sector.

Source: assamtribune.com/

[DGFT Notification] : Amendment in Chapter 10 of Schedule 2 of ITC(HS) Classification of Export and Import Items relating to export of Basmati Rice

[Central Excise Circular] : Clarification regarding admissibility of exemption under area-based Notifications No. 49/2003-CE and 50/2003-CE, both dated 10.06.2003 in specific situations

Circular No. 960/03/2012-CX

F. No. 110/03 /2011-CX-3

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

New Delhi, the   17^th February, 2012

To

All Chief Commissioners of Central Excise & Customs,

All Chief Commissioners of Central Excise,

All Directors Generals

Sir/Madam,

Sub : Clarification regarding admissibility of exemption under area-based Notifications No. 49/2003-CE and 50/2003-CE, both dated 10.06.2003 in specific situations – reg.

            Your kind attention is invited to Notifications No. 49/2003-CE and 50/2003-CE, both dated 10.06.2003 which provide full exemption from excise duties to specified goods cleared from industrial units in the states of Uttaranchal and Himachal Pradesh for a period of ten years from the date of commencement of commercial production.  The exemption is available to new units set up or existing units which have undergone substantial expansion in terms of the said Notifications and commence commercial production before the cut-off date, that is, on or before 31.3.2010

2.         References have been received from field formations as well as from trade and industry seeking clarification regarding admissibility of benefit under area-based exemption Notifications No. 49/2003-CE and 50/2003-CE, both dated 10.06.2003,  in the following situations:

• When there is a change in the ownership of a Unit already availing of the benefit of an area-based exemption Notification;
• When a Unit availing of the exemption physically shifts to a new location within the areas specified in the exemption Notification; and
• When a Unit availing of the exemption under an area-based Notification expands by acquiring a plot of land adjacent to its existing premises and installing new plant/machinery on such land.

3.         The above issues have been examined by the Board.  As the exemption is extended to a ‘Unit’, any change in its ownership would not jeopardize the admissibility of exemption for the remaining part of the ten year exemption period subject to the condition that the new owner exercises his option in writing to avail of the benefit of the exemption Notification before effecting the first clearance.

4.         So far as the case of an eligible unit physically shifting to a new location is concerned, it is clarified that the exemption in such cases should be available for the residual period of exemption.  However, the cases of relocated units should be examined on a case – to- case basis and the exemption should be allowed to continue subject to certain safeguards like establishing through proper inventorisation and certification by a Chartered Engineer that the unit has relocated its plant, machinery, equipment, manpower etc. and relocation to areas specified in the relevant Notification only and not across States and/or Notifications. 

5.         In the context of expansion of a Unit by acquiring an adjacent plot of land and installing new plant and machinery on such land, attention is invited to  Board’s Circular No. 939/29/2010-CX dated 22.12.2010 wherein it was, interalia, clarified that any growth in the production/output of a unit by installing fresh plant and machinery would be eligible for exemption under these area-based Notifications.  The situation of expansion of an eligible unit by acquiring an adjacent plot of land and installing new plant and machinery on such land, is akin to expansion by way of installing new plant and machinery inside the existing plot/premises. It is, therefore, clarified that in such cases, the exemption should continue to be available for the residual period of exemption.

6.         Trade, industry and field formations may be suitably informed.

7.         Hindi version will follow.

Yours faithfully,

(Madan Mohan)

Under Secretary (CX-3)

[Indian Custom Circular] : Clarification regarding adoption of uniform Customs Procedure for calculating the contents of Iron Ore

CIRCULAR NO. 04/2012-Cus

F. No. 450/93/2011-Cus.IV

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

Customs-IV Section

**********

New Delhi, 17^th February, 2012

To

All Chief Commissioners of Customs,

All Chief Commissioners of Central Excise,

All Director Generals/Chief Departmental Representatives (CESTAT),

All Commissioners of Customs,

All Commissioners of Central Excise and

All Commissioners of Central Excise & Customs

Sir/Madam,

Subject:  Adoption of uniform Customs Procedure for calculating the contents of Iron Ore – clarification regarding.

**********

Several references have been received in the Board highlighting divergent practices for calculation of iron contents from Iron Ore being followed at different Ports for charging Export duty. In this regard two types of calculation methods are being followed i.e. on the basis of Wet Metric Ton (WMT) and other on the basis of Dry Metric Ton (DMT).

2.   Hon’ble Supreme Court in the matter of Civil Appeal No. 7539 of 1995 in case of Union of India Vs Gangadhar Narsingdas Aggarwal [1997(89) ELT 19(SC)] in order to arrive at the Iron (Fe) contents out of Iron Ore, had held that-

‘that is because the duty is relatable to weight and therefore, once the iron content is determined keeping in mind the total weight, the percentage can be determined separating the iron contents from the rest of the impurities inclusive of moisture and thereafter ascertain in which category the lumpy iron would fall for the purpose of charging duty….’

3.   In light of the observation by the Apex Court that export duty is chargeable according to Fe contents, and to maintain uniformity all over the custom houses, it is clarified that for the purpose of charging of export duty the assessment of Iron ore for determination of Fe contents shall be made on Wet Metric Ton (WMT) basis which in other words mean deducting the weight of impurities (inclusive of moisture) out of the total weight/Gross Weight to arrive at Net Fe contents.

4.   In case of any difficulty in arriving at the net Fe content, assessment may be based on test result which directly determines the Fe contents.

5.   Pending assessments on the issue, if any, should be finalized accordingly.

6.   Difficulties, if any, faced in the implementation of this circular, may be immediately brought to the notice of the Board.

Yours faithfully,

(A.K.Goel)

Senior Technical Officer

Tariff Unit

[DGFT Public Notice] : Corrections in Public Notice No.80/(RE2010)/2009-14 dated 13.10.2011 and Public Notice No.83/(RE2010)/2009-14 dated 31.10.2011.

[Indian Custom Non-Tariff Notification] : Amends Notification No. 36/2001-Customs(N.T) dated 3rd August 2001 [Hindi version of 11/2012-Cus(NT)]

[TO BE PUBLISHED IN PART-II, SECTION-3, SUB-SECTION (ii) OF THE GAZETTE OF INDIA, EXTRAORDINARY]

Government of India

Ministry of Finance

(Department of Revenue)

(Central Board of Excise and Customs)

Notification No. 11/2012 - Customs (N. T.)

New Delhi, 15^th February, 2012

26 Magha, 1933 (SAKA)

            S.O.    (E).– In exercise of the powers conferred by sub-section (2) of section 14 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise & Customs, being satisfied that it is necessary and expedient so to do, hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 36/2001-Customs (N.T.) dated, the 3^rd August, 2001, published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii) vide number S. O. 748 (E), dated the 3^rd August, 2001, namely:-

            In the said notification, for TABLE-1 and TABLE-2, the following Tables shall be substituted namely:-

“TABLE-1

TABLE-2

 [F. No. 467/01/2012-Cus.V]

(Abhinav Gupta)

Under Secretary to the Government of India

Note: - The principal notification was published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii) vide Notification No. 36/2001–Customs (N.T.) dated, the 3^rd August, 2001, vide number S. O. 748 (E), dated, the 3^rd August, 2001 and was last amended vide Notification No. 10/2012-Customs (N.T.) dated, the 31^st  January, 2012, published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii), vide number      S. O. ________ (E) dated, the 31^st  January, 2012.