Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: empanelment :: due date for vat payment :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: VAT RATES :: VAT Audit :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TDS :: articles on VAT and GST in India
« News Headlines »
 Govt to simplify income tax laws, sets up task force under taxman Arbind Modi to study overhaul
 Infosys to configure GST network for filing returns
 Save income tax through mutual fund investment. All you need to know
 Income tax returns (ITR): On sale of property, here is what you should know
 Section 35 of the Income-tax Act?
 Notification regarding extension of last date w.r.t submission of closing stock by dealer.
 Integrated Goods and Services Tax (IGST) Rules, 2017 (As on 15.11.2017)
 Central Goods and Services Tax (CGST) Rules,2017 (As on 15.11.2017)
  101st Constitution Amendment Act, 2016
 Pr. Commissioner Of Income Tax-6 Vs. Mccain Foods India Pvt. Ltd.
 Section 10 of the Income-tax Act, 1961

Taxmen smell moolah in rising Re, to check out beneficiaries books
August, 04th 2007


ITS not just the currency trader or the exporter who keeps a sharp eye on upward movement of the rupee. The taxman does it too. The income-tax department has asked its field formations to figure out if the favourable impact of rupee appreciation was being reflected in the bottom lines and tax payments of import-intensive and FMCG companies.

A stronger rupee means lower rupee prices for imported inputs. The lower costs can either be passed on to the consumer or used to increase profit margins. The income-tax departments view is that most companies seldom pass on the benefits to consumers. Since the rupee appreciation has been sharp and spread over a long period this time, it would certainly have pushed up profitability margins of the companies, feels the Central Board of Direct Taxes. It has sent a communiqu to the field formations in this regard.

ETs calculations bear out such reasoning. For example, with (import exports)/sales ratio of 10% and 9% appreciation in rupee, PBT margin for the companies should improve by 90 basis points (bps) and net margin by 50-60 bps. However, contrary to expectations, the aggregate margins for a set of 90 companies with (imports exports)/sales ratio of more than 10% in 2006-07 have shown an improvement in margin of only 0.1% as per the results of Q1, 2007-08.

Against this, the aggregate average margin for all manufacturing companies has gone up 0.6%, which means import-dependent companies have performed worse than the rest of the sector. While sales growth is nearly same for the two sets, profit growth stands at 19% and 24% respectively. The calculation excludes oil companies, which have to sell their products at the administered prices and, hence, have a fluctuating margin.

However, many FMCG players do not seem to rely much on imports. The companies ET spoke to have limited import dependence. Imports account for less than 2% of Hindustan Unilevers (HUL) Rs 12,000-crore turnover. Its imports include some variants Axe and Rexona deodorants. In skincare, HUL imports some SKUs of Ponds Age Miracle and Dove face wash, some variants of Dove and Sunsilk in haircare and one SKU in the Lakme range.

The Rs 1,200-crore Reckitt Benckiser locally manufactures all its products with the exception of automatic dish washing brand Finish. GlaxoSmithKline Consumer Healthcare doesnt import at all. Nestle India imports account for under 1% of its Rs 2,800-crore turnover. The Rs 1,200-crore Procter & Gamble Hygiene & Health Care imports 30% of its products sold in India. These include Head & Shoulders and Pantene shampoos, Olay skincare range and Pampers diapers. Under the acquired Gillette portfolio, P&G imports Mach 3, Duracell batteries and one variant of Oral-B Exceed toothbrush. However, the companys biggest brands Vicks and Whisper and its detergent range including Ariel and Tide are manufactured locally.

LOreal India, the maker of brands such as Garnier Fructis, Maybelline, Lancome, Nutrisse and Excellence, imports 10-15% of its products. Imported products include cosmetics brand Maybelline. However, its haircare and skincare products are manufactured at its plant in Pune.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Multimedia Presentations Multimedia Solutions 3D Solutions Corporate Presentations Business Presentations Multimedia Presentation India M

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions