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Falling exports likely to get a leg-up as CCEA clears Interest Equalisation Scheme on preand postshipment rupee export credit with effect from April 1 India's falling exports got a booster shot on Wednesday with the Cabinet Committee on Economic Affairs (CCEA) approving a scheme to provide cheaper credit to exporters for five years. Prime Minister Narendra Modi-headed CCEA approved the Interest Equalisation Scheme (earlier called Interest Subvention Scheme) on preand postshipment rupee export credit with effect from April 1, 2015, for five years. The scheme will be evaluated after three years. This is the third major announcement for exports in the last fortnight. On October 30, the government expanded support to various products under the Merchandise Exports from India Scheme (MEIS), followed by a revision of the duty drawback rates for exporters two days ago. “The rate of interest equalisation would be 3%. The scheme would be available to all exports of MSME and 416 tar

"The govt has held one preliminary meeting to explore terms of reference of such a conciliation" The government and Vodafone are getting closer to settling their eight- year tax spat over the 2007 Hutch- Vodafone crossborder deal. The British telecom major, which had sought arbitration under the Indo- UK bilateral investment protection treaty in June, has formally approached the finance ministry for conciliation. In a series of tweets on Wednesday, Revenue Secretary Hashmukh Adia said “ Vodafone has in a written communication expressed its desire to go for conciliation for its tax disputes with India” and the government held a preliminary meeting to explore theterms ofreferenceofsuchconciliation on October 10. He, however, was quick to add that more follow- up meetings would be held for finalisation of the terms. Sources familiar with the developments said in their meeting with Vodafone’s global chief executive Vittorio Colao last month, finance ministry officials had

The Cabinet on Wednesday cleared the sale of a 10 per cent stake in Coal India, restored interest subvention for merchandise exports, directed compensation for stalled road projects, empowered the ministry concerned to clear road projects up to a cap on costing and for the first time gave production subsidy directly to sugar farmers. The slew of measures would revive market sentiments, investments and economic growth. The government had also liberalised the foreign investment regime last week to boost the market. The Cabinet also gave a nod to a marketing margin of Rs.150- 200 per standard cubic metre charged by gas retailers like Reliance Industries and GAIL ( India) for urea and liquefied petroleum gas plants. This was based on recommendations of the Petroleum and Natural Gas Regulatory Board. The government is expected to mop up Rs.20,000 crore from the Coal India disinvestment, power minister Piyush Goyal said at a press briefing. At current prices, the 10 per cent stake sa

Updates Of the Day 1.DVAT has extended the last date of filing of online / hard copy of return for II Quarter ended 30.09.2015 for the FY 2015-2016, in Form DVAT-16, DVAT-17 and DVAT-48 to 20.11.2015. 2.High Court of Delhi confirms penalty on custom official for clearance of consignment without proper verification. [S.N. Ojha vs. Commisioner of Customs] 3.MCA has revised the versions of Annual Filing Forms, MGT - 7 (Form for filing annual return by a company) w.e.f 17th November, 2015. 4.Adjudicating Authority can reject transaction value if assessee fails to prove that relationship had not influenced price. [The CESTAT Chennai: Ansaldo STS Transportation Systems India Pvt. Ltd vs. Commissioner of Customs] 5.CBEC vide circular 187/6/2015-ST dated 10.11.2015 has issued a scheme for fast track sanctioning of refund of accumulated cenvat credit to Exporters of Service for payment of 80% (eighty percent) of the amount claimed as refund. 6.Depreciation is allowed while calculating ex

Tight liquidity situation in the system pushes rates higher raising concerns over impact on growth Short-term borrowing rates have risen despite the Reserve Bank of ndia's sharper-than-expected rate cut in September, thanks to the tight liquidity conditions, raising concerns that this could act as a speed breaker for growth. Short-term rates are about 35-45 basis points higher than the benchmark repo rate of 6.75%. These include the inter-bank call money market, collateralised borrow ng and lending and treasury bills. The dif erential was 15-25 bps just a few weeks ago.A basis point is 0.01 percentage point. “The efficacy of monetary policy transmission is facing a challenge due to sustained tight banking system liquidity ,“ said Soumyajit Niyogi, senior interest rate strategist at SBI DFHI Primary Deal ers. “Continuous elevated short-term rates are driv ing corporate borrowing costs higher and providing downward rigidity to bank ing rate specific instru ments...That would ne

Exporters are not impressed by the Centres' decision to increase duty drawback rates for merchandise exports of certain products. Terming the move a 'temporary measure', exporters have demanded the government should take more concrete measures to stem the fall in exports. Exports stood at $21.35 billion in October 2015 - a 17.53 per cent fall on a year-on-year basis. On Monday, the government had raised the duty drawback rates by two per cent for many sectors including engineering, marine and textiles. Besides, two weeks ago, the government had announced a revamped merchandise exports from India scheme (MEIS) for 110 additional products. Reacting to these developments, Ajay Sahai, director-general, Federation of Indian Exports Organisation, said more should have been done to lift exports. The drawback rates are reimbursement of certain customs and excise duties, and service tax on imports of input materials, which go into the manufacture of goods that are exported.

Taxman sends letters to new-age cos such as Foodpanda, Oyo Rooms and Airbnb to check if they are paying tax Aggregators such as Foodpanda, Oyo Rooms and Airbnb have been asked whether they are paying service tax. “Letters were sent to ascertain if these entities are registered with the department and paying due tax,“ said a department official. This seems to be part of a `friendlier' approach to alert service providers of their potential liability, in line with the Centre's desire for a non-adversarial tax regime that's more welcoming to investors. The official said most entities had registered them selves and some had sought fur ther clarifica tions on proceprocesses as the dures and processes as the provision dealing with this particular area is fairly new. While the rapidly expanding sharing economy offers vast potential for tax revenue, the task can be challenging as in some cases there is no brick-and-mortar presence for these firms. Foodpanda, which aggr