How to View Income tax Demand / Arrears Payable Online

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Taxpayers can view the details of their Arrear Demand in ‘My Account’ as communicated by their jurisdictional Assessing Officers to CPC.

Steps to View Income tax Demand / Arrears  Payable Online

1. Login on https://incometaxindiaefiling.gov.in/portal/index.do

2.  Go to ‘My Account’  and Click on ‘Current Status of Arrear Demand’ as depicted in picture below :-

3. A New window will appear as shown below on click of  ‘Current Status of Arrear Demand’

4. Click on Submit button and a new window will open which will show the Outstanding Arrear Demand as communicated by your jurisdictional Assessing Officers to CPC.

GUAR: Going to seed

Going to seed

Once, guar was so cheap that farmers in Rajasthan fed it to the cattle. Then shale gas extractors worldwide discovered they needed it. Guar exports have skyrocketed since 2008 - until this year. What is the story? Is there any magic left in this bean?

Devjyot Ghoshal / New Delhi Sep 15, 2012, 00:37 IST

There is a legend about Mehrangarh, the massive fortress with wide battlements and delicately decorated palaces that rises atop a desert hill in Jodhpur, Rajasthan. When Rao Jodha of Marwar began building this citadel in 1459, it is said, a hermit found himself displaced. In his anger the hermit cursed Rao Jodha’s kingdom to suffer drought.
That ancient curse seemed to have lifted when the global oil and gas industry discovered guar (Cyamopsis tetragonoloba), a leguminous plant also called the cluster bean, that is grown by Marwar’s farmers. Afraid that there was not enough guar to go around, buyers from abroad descended on Jodhpur, the price shot up (from Rs 134 a kg in July 2011 to Rs 1,100 in March 2012), and the number of mills to process guar near doubled in those few months.

Still, uncertainty stalks the guar farmers and processing mills around Jodhpur. At Bara Ghurd, a village 70 km north of Jodhpur, an ageing farmer named Nimbaram and his farming brethren know that much is at stake. After selling the last pod of the previous harvest, they bought seed for as much as Rs 300 per kg — a price 10 times what it was last year. The acreage, too, has ballooned, from 100,000-130,000 hectares last year to over 200,000 hectares this year, and the rains have been favourable. When the crop is harvested in about a month’s time, the output may be of record size. In the absence of a government-administered support price, this could mean lower realisation for farmers like Nimbaram, unless demand rises in tandem.
And that’s the reason for the worry lines across Nimbaram’s weather-beaten face. The shale gas industry has emerged as the foremost consumer of guar. To get at gas buried underground in shale deposits requires the hydraulic fracturing, or “fracking”, of the gas-bearing rock. Here guar gum, or processed guar mixed with water, is very useful.
But the demand for guar for fracking is not easy to predict. When Halliburton, the world’s largest provider of hydraulic-fracturing services, said in June that its operating profit margin dropped because the company had purchased too much guar gum too early and at high prices, the tremors were felt in Jodhpur — India grows about 80 per cent of the world’s total guar crop. If buyers like Halliburton are already sitting on substantial guar gum inventories, they are not likely to buy more — and certainly not large amounts. P K Hissaria, president of the Indian Guar Gum Manufacturers Association, reckons that demand will probably shrink 25-30 per cent this year. “That’s mostly because companies stocked up earlier, so few will come back to the market now and buy large quantities.” Millers say guar gum prices have slumped from the high of Rs 1,1010 a kg in May to Rs 280 now.
Nimbaram is sitting on his haunches in the middle of the 35 bighas that he owns. “We usually just grew guar to feed our cattle, and nothing else,” he says. “That was mostly because the prices were always so low. All I know is that when the prices started going up, we sold the few quintals of guar that we had stocked up at home.” After the thrill of a once-in-a-generation boom, now there is trepidation.

* * *

Guar is popular in the sandbowl of Jodhpur because it is hardy. “[The guar seed] stays for many, many years, sometimes even 10-12 years. It doesn’t spoil or attract insects. Since, every three or four years, there is a drought in Marwar, every house here would always store some guar for the bad times,” explains Nimbaram.
An unusual chain of events transformed this cheap bovine breakfast into India’s most valuable agricultural export in less than 12 months. Last year, India sold 706,966 tonnes of guar gum for Rs 16,356 crore in the international market. That was nearly 20 per cent of the country’s total farm exports by value. Guar trounced more illustrious, and usually more expensive, crops like basmati rice. The year before, guar gum was only 7 per cent of India’s total farm exports and in 2007-2008 a mere 1.4 per cent. Everything was scooped up by eager buyers. Today, little of the legume is available in the houses of Bara Ghurd or, for that matter, in villages across much of guar-growing Rajasthan.
The madness had a single obvious trigger: demand from the shale gas industry, primarily in the United States. Having discovered commercial viability halfway through the last decade, shale gas production in the US has risen to about 23 per cent of the country’s total dry gas production. (Dry gas is natural gas that occurs in the absence of condensate or liquid hydrocarbons.) With growing gas production came a rising demand for guar gum, which continues to be the preferred hydrocolloid, a substance that forms a gel when mixed with water, for the shale gas industry. For most farmers, this boom did not change life. Few had foreseen the price surge. A feeble monsoon last year meant that the guar crop was weaker than usual and only a handful of rich farmers had the courage to hold their stock till prices began spiralling upwards. So there are no opulent houses, shiny new SUVs or satellite television dishes here.
In a carpeted, air-conditioned room, with a flaking ceiling that sends down occasional showers of plaster, Ram Gopal Sharma, deputy director of the department of agriculture in Jodhpur, categorically denies that guar farmers within his jurisdiction of 1.2 million hectares of farmland saw unprecedented profits when the prices spiked. “By the time the prices went up to Rs 70 per kg around December, 98 per cent of the farmers here had sold their crop and exited the market,” he says with authority. “Very few farmers would have made more money than that.”
It is not as if Sharma is unhappy with what has happened. “Anything above Rs 40 is profitable for them,” he explains. “Even though seed prices have gone up, if the market remains tight at least my farmers will get something.” There is, however, a distinct sense of anxiety that cannot be ignored. “Earlier, guar was never planted in irrigated areas. For the first time, it has happened this year, even though seed prices can be as high as Rs 320 per kg,” Sharma says. He has been approached by government departments from Karnataka to help with guar cultivation. Could there be a glut in the market? Nimbaram may not fully comprehend the dynamics of the market, but he knows that all is not well.

* * *

Om Prakash Soni wears a slick, black, ceramic Rado watch, has a massive world map on the wall bearing the name of Maersk Sealand, a major global shipping firm, and sits under a panoramic photograph of New York’s Brooklyn Bridge. They are symbols of his prosperity and of the nature of his business, but Soni, CEO of Shree Ram Industries, one of Jodhpur’s biggest guar gum manufacturers, fears that many of his American buyers have left the once-roaring market for the time being.
“I saw so much madness for the first time in my life,” says Soni, “An atmosphere was created where people were made to believe that there was a supply glut, so demand suddenly rose. But prices have dropped and I wouldn’t be surprised if they went down further.”
The scramble for guar, Soni says, was fuelled by speculation. “After April [this year], the companies suddenly found out that there was no crisis, so the prices crashed. Before that, I had an American coming to my factory every second day asking for all my guar gum.”
The Associated Chambers of Commerce and Industry of India, or Assocham, in a scathing press release on March 28, asserted that only manipulation could have been the reason why “the prices of guar have gone up 120 per cent in the past one month, 700 per cent in the past four months, 875 per cent in the past 12 months and 1,300 per cent in the past 18 months”. “The price manipulation is unbelievable,” says S K Jindal, the chairman of Assocham’s investments committee. “The normal price of guar bean in the season is Rs 10 per kg, while guar seed is traded at Rs 25 per kg and guar gum at Rs 50 per kg. Unfortunately, due to a fraud being played by a few rogue traders, the prices were increased to Rs 291 per kg for guar seed and Rs 959 per kg for guar gum on March 21.” The Forward Markets Commission banned futures trading in guar in March; it has not lifted the ban yet, though prices have softened. The scourge of rogue traders is yet to be overcome.
It is in Basni, a sprawling, pot-holed and partially waterlogged industrial complex on the outskirts of Jodhpur, and a handful of adjoining areas, that nearly 40 per cent of the world’s guar gum supply is processed and from where it is exported. But now the wide streets are bare of trucks, industrial units stand shuttered, tea stalls look deserted, and T C Baid, partner in Vimal Guar Gum Mills, sits in a nearly deserted factory, occasionally checking commodity prices on his desktop computer.
“Nearly 90 per cent of units here are closed now because there’s just no stock,” says Baid, also president of the Rajasthan Guar Dall Manufacturers Association. “Everything that was available has been processed and passed on. So, we are sitting here and waiting for the produce to come in.” Since guar has a good shelf life and there’s no local consumption, mills would usually have some amount of it coming in throughout the year, explains Baid. “But this year, the prices went so high that everyone sold everything that they had.”
That’s not the only reason for the strange silence in Basni, though. The short-lived boom in an unregulated commodity attracted large amounts of money rather swiftly. “A lot of industry has now come in here,” adds Baid, “That is bound to lead to some saturation.”
The numbers tell the same story. In 2011-12, according to officials from the Rajasthan State Industrial Development & Investment Corporation, the state agency that develops land for industrial units in the state, about 30 new guar processing units were established around Jodhpur. Given that the number of existing facilities is between 70 and 80, that is a significant increase in competition. “We have a lot of players now in a market where one doesn’t quite know what’s going to happen,” says Soni of Shree Ram Industries, referring to the uncertainty over the demand from the shale gas industry. “When the demand came, I got caught in the excitement and doubled my capacity. From six production lines, I made it 12. Right now, demand is so poor that I have only one or two lines working.”
Has the curse of the displaced hermit come back into force?

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Understanding growth cycles

ASHIMA GOYAL

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While volatility of growth has increased after the reforms, the basic character of business cycles, post-Independence, has not changed.

September 13, 2012:  

It is said that he who does not remember the past is condemned to repeat it.

Commentaries on India’s current growth slowdown are very similar to those that appeared after the slowdown of the late nineties.

Then too, it was said India was incapable of growing at a higher rate; the slowdown had basically reverted growth to its ‘true’ lower trend.

Now, it is being said the higher growth that followed from 2003 to 2010 was an unsustainable aberration caused by the global boom and excess liquidity flows to emerging economies. The critics of this view, in turn, hold that the current slowdown being experienced by India has to do with internal problems, and not any global shocks.

Either way, they show the infeasibility of higher growth!

HISTORICAL CYCLES

But the fact is even in a slowdown, the growth rates in India today exceed the earlier so-called Hindu rate of growth of 3.5 per cent or so. While the volatility of growth has, no doubt, increased after the reforms, post-Independence growth cycles still have similarities. Understanding these is educative.

India’s slowdowns have been triggered mainly by supply shocks. In the early years, these were largely on account of monsoon failures, which used to lead to large government spending. Since the Reserve Bank of India was then obliged to automatically finance government deficits, this spending used to be accommodated. But that would usually be followed by a severe tightening, thereby hitting industry just as input prices tended to rise.

Something similar happened as oil price shocks became important, from the 1970s onwards. Since the increases in global oil price were not immediately passed through to consumers, government deficits would rise and these would be monetised. At the same time, private spending would be squeezed, while the period of monetary tightening that followed would also be used for some pass-through of oil prices.

So, costs would rise for industry, just when demand fell.

What these types of supply shocks did was raise costs at all levels of production, even though firms continued or may have continued to have excess capacity.

The supply shocks, in other words, would shift up or to the left an elastic supply curve, rather than shift to the left an inelastic supply curve.

POST-REFORM CYCLES

Economic liberalisation and reforms stopped automatic monetisation, forcing the Government to borrow at market rates. Investment, too, was now largely a private sector activity, as growing deficits, poor returns from past investments, and pre-emption of expenditures by subsidies and other recurrent spending reduced public investment. Simultaneously, the growing share of retail and housing loans increased the sensitivity of consumption to interest rates. As a result, growth and investment became doubly sensitive to these rates.

Interest rates were gradually freed, but in thin money markets, proved to be volatile. In the late nineties, as capital flowed out after the East Asian currency crisis, a liquidity squeeze, aggravated by sharp increases in policy rates, resulted in high and sticky loan rates.

The investment cycle collapsed and took five years to recover, the impetus for which came from softening global interest rates and an effective public road building programme.

At the same time, since overcapacities tend to get built up during booms, it makes private investment inherently volatile. In the latest boom phase, loan rate volatility was somewhat reduced because of improved articulation of market segments. Also, maturing of institutions such as the liquidity adjustment facility allowed more policy fine-tuning in response to shocks.

But volatility in interest rates still came from large corrections in policy rates due to the unprecedented shocks associated with the global financial crisis of 2008. The same crisis was also preceded by a sharp rise in world food and oil prices — canonical supply shocks in the Indian context.

The Government responded to the 2008 crisis by reversing fiscal consolidation to create a fiscal stimulus after global export and domestic private demand fell.

But government-supported expenditures also raised the demand for food, whose prices were already high, even as restrictions of various types on farm trade prevented an appropriate supply response.

Also, increased risk aversion on the part of overseas investors from the euro crisis led to forex outflows, putting pressure on the rupee and raising the price of imports. The cumulative impact of all this was that demand fell for industry as rates rose, just as input costs rose. This, plus the excess capacity built in the previous boom, inhibited fresh investments. Problems in land acquisition and in the allocation of other natural resources only compounded the situation, affecting investments in infrastructure and adding to the supply bottlenecks in the economy.

Thus, we have all the components of pre-reform growth slowdowns in the current episode — high food and oil prices, large fiscal deficits, and demand squeeze on industry. The difference is that the demand squeeze has come now predominantly through interest rates.

It is regarded as a puzzle that despite low industrial growth and excess capacity for a year, core inflation remains above 5 per cent. But costs are high and mark-ups on costs are often countercyclical — these being raised to spread fixed costs when capacity utilisation is low.

POLICY FINE-TUNING

It is possible to target policy properly to match the structure of the slowdown. The administrative hurdles that restrict investment, especially in areas where there are shortages, must be lifted. The composition of Government expenditure, too, must change from creating demand in sectors where increase in supply is disabled, to releasing supply bottlenecks.

Critical and focused action in these directions is the type of countercyclical policy that is feasible and could be effective. As costs and inflation come down, falling interest rates would provide further boost to recovery.

India’s potential rate of growth has risen, but the correct policy combination required for stabilisation of business cycles has not been implemented.

(The author is Professor of Economics. IGIDR, Mumbai. 

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RPT-India may see bumper guar crop as rains restore farmers' optimism

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Halliburton Co

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Thu Sep 13, 2012 8:58pm IST

By Meenakshi Sharma

(Reuters) - India could turn in a bumper crop of guar this year as a revival in the monsoon is likely to help yields and more farmers plant the seed, lured by the high prices it fetched early this year on strong demand from the global shale oil and gas industry.

Industrial guar gum is used in drilling and in hydraulic fracturing or fracking, to extract gas from shale, which has transformed energy supplies notably in the United States.

India is the world's largest producer and exporter of guar gum, meeting 80 percent of global demand.

"Farmers who never heard of guar have also planted it this time. The area sown has increased significantly across the country and output would also be much higher," said Shikharchand Dugar, a trader from Jodhpur, a key market in Rajasthan.

Besides the top producing states Rajasthan and Haryana, farmers in Maharashtra, Gujarat, Uttar Pradesh and Madhya Pradesh have also grown small quantities of guar, which is usually sown in June and July and harvested in October and November.

Traditionally, guar used to be grown in desert regions spread across Punjab, Haryana, Rajasthan and Gujarat as it requires well-drained soil.

"After attending a seminar (on guar) in my area, I decided to cultivate guar. Prices were very attractive and monsoon forecast was also weak, so all conditions were favourable," said Kailash Bajaj, a 48-year-old farmer from Amravati district in Maharashtra, who has sown guar for the first time.

Bajaj has sown guar seed on more than 7 hectares of land, replacing soybean, and hopes to expand the area next year if he gets good returns.

In late March, local commodity exchanges had halted trading in guar futures amid a regulatory inquiry after prices soared more than ten-fold.

By early August, the market regulator had still not taken any decision on the re-launch of guar futures.

BETTER YIELD ON RAINS

A pickup in September rains is expected to improve the yield of the crop, which is now close to maturity. But excessive rainfall in some areas could, on the other hand, hit the standing crop, traders said.

"Production is now seen higher than last year because of recent rainfall activity. The area under the crop could not be extended but yields would improve," said Purshotam Hissaria, president of the Indian Guar Gum Manufacturers Association.

A lull phase of the monsoon rains during the initial sowing period had restricted the acreage covered.

India's monsoon rains were 21 percent above average in the week to Sept. 12, the weather office said on Thursday, the third straight week of heavier than normal rains, abating the threat of a widespread drought in the south Asian country.

Farmers in Rajasthan had planned to plant a third more guar to take advantage of soaring global prices spurred by oil industry demand.

But sowing was curbed by a lack of seeds after farmers sold so much last year they kept less back for replanting.

To counter this, a few exporters and traders distributed free seeds, although with certain conditions, to farmers to ensure supplies, while in some areas farmers paid hefty premiums to buy high-yielding-quality seeds.

Farmers in the top producing Rajasthan state have so far sown guar on 3 million hectares as compared with 2.76 million hectares a year ago, data on the state farm department's website showed. Last year total acreage under guar in Rajasthan was 3.09 million hectares and output was 1.84 million tonnes.

Traders expect delayed rainfall could push back supplies in the spot market by a fortnight to late October.

At Jodhpur, a key market in Rajasthan, guar seed prices dropped to 7,000-7,500 rupees per 100 kg from a high of 30,000 rupees reached in March, but remain well above a year ago.

Concerns overdone for ITC

Concerns overdone for ITC

Relatively inelastic cigarettes business with strong pricing power will help drive growth

Priya Kansara Pandya / Mumbai Sep 12, 2012, 00:53 IST

Among the two fast-moving consumer goods (FMCG) heavyweights, ITC Ltd has underperformed Hindustan Unilever Ltd (HUL) over the last one year on bourses, gaining only 35 per cent. Concerns over a steep hike in taxes imposed on cigarettes and the likelihood of plain packaging norms getting implemented in India (thereby impacting cigarette volume and hence growth rates), have restricted ITC’s stock performance in the current quarter. Against 18 per cent gains for HUL and seven per cent for BSE FMCG Index, ITC is up only two per cent.
But, the higher valuation of HUL (31 times FY14 estimated earnings) after a stupendous jump of 60 per cent in its share price in one year makes ITC’s stock at 24 times attractive, say analysts. Analysts also say ITC’s cigarette business has been relatively inelastic in the past and the fast growing non-cigarette FMCG business is expected to breakeven soon.
Some analysts also believe the recent concerns regarding packaging norms are not likely to materialise and issues pertaining to hike in value-added tax rates (VAT) will get sorted once goods and services tax (GST) is implemented. Though ITC’s hotels business is impacted due to domestic issues, it is relatively very small in size (about three per cent of revenues and profits). For the remaining businesses (paper and agri), profit growth and return ratios have been good. In this backdrop, the risk-reward equation is favourable for the ITC stock.


Resilient growth
In the past, ITC’s volumes have been affected (read flat to marginal decline) when it has taken steep price hikes to pass on increases in taxes. The company, however, has maintained earnings before interest and tax (Ebit) margin in a range of 26-31 per cent in last five years. “ITC’s cigarette Ebit growth annually has been exceptionally stable in a tight band of 15-20 per cent over FY03-12, with the exception of FY04,” note Arnab Mitra and Akshay Saxena, Credit Suisse analysts, in their report last month. This trend is likely to sustain even in FY13, believe analysts.
Despite a 20 per cent hike in excise duty in the Union Budget 2012-13 and sharp VAT increases by various state governments, cigarette volumes were largely flat (but in the positive territory) in the June quarter, while Ebit margins improved over 140 basis points. Credit Suisse analysts say: “The near-absolute pricing power of ITC in cigarettes enables it to pass on price hikes without a risk of market share loss. We expect stability in cigarette Ebit growth to continue and drive consistent earnings growth for ITC.” Another analyst at a domestic brokerage says: “ITC is better-placed because of the nature of its business since 80 per cent of profitability comes from cigarettes where ITC has 75-80 per cent market share. However, other FMCG players get impacted if competition becomes aggressive.”

STEADY SHOW
In Rs crore	FY12	FY13E	FY14E
Net sales	25,174	29,702	34,356
% change y-o-y	17.3	18.0	15.7
Operating profit	8,849	10,398	12,199
% change y-o-y	19.4	17.5	17.3
Net profit	6,162	7,293	8,613
% change y-o-y	23.5	18.4	18.1
EPS (Rs)	7.9	9.3	11.0
P/E (x)	33.8	28.6	24.2
Standalone financials Source: Company, Analysts Estimates

There are other potential gains for companies like ITC. A latest finding of Global Adult Tobacco Survey on tobacco usage in India says women consumers could be a potential new market for cigarette companies as tobacco usage is on the rise based on either daily usage or age of taking up smoking. It also says Indian smokers have low quit ratio (less than 20 per cent), compared with countries like the UK, the US and Brazil. Adds Abneesh Roy, an analyst at Edelweiss Securities: “Switch from non-cigarettes to cigarettes (15 per cent of total tobacco usage) on account of ban on gutka in many states (Maharashtra, Rajasthan, Kerala, Bihar, Madhya Pradesh and Himachal Pradesh) will also aid ITC.”
Meanwhile, ITC’s other (non-cigarette) FMCG business is also expected to break even soon as packaged foods (60 per cent of segment revenues) is already profitable and personal care’s losses will come down further with increasing scale. Ebit loss margin of the division has come down drastically from 16.9 per cent in FY06 to 3.5 per cent in FY12 and further to 2.63 per cent in the June quarter.
Some hurdles though
Globally, regulatory concerns are escalating and many countries like Australia (plain packaging norm expected to be implemented on December 1), the UK (hike in taxes by two times historical average), Canada (stricter health warnings) and Russia (40 per cent annual tax hike till 2015) have started taking stringent action on smoking. In India, too, the tax environment for cigarettes is increasingly getting disruptive, leading to uncertainties. The number of states hiking VAT rates has only risen over past few years with average VAT (for ITC) rising from 12.5 per cent in FY09 to an estimated 18-20 per cent in FY13.
However, Credit Suisse analysts expect the uncertainly (increases in VAT rates) to remain until GST comes into force, which would fix the VAT rate nationally. The other recent concern stems from the possibility of India, too, implementing plain packaging norms like Australia. Says Nikhil Vora, co-head of research, IDFC Securities, in his report dated August 13: “Plain packaging would significantly dilute the branding power of cigarette players, hurt volumes and, we believe, prompt a de-rating of tobacco majors across the globe.”
However, Mitra and Saxena aren’t perturbed. They note: “We see very low probability of this move in India. Even if plain packaging were to come through, the impact on ITC would be minimal given that over 70 per cent volumes are sold in loose sticks.”

philosophy of value investing

Earning high returns is something that every investor wants. After all, that is what investing boils down to. But as we have stressed over and over again, it is the philosophy you adopt that matters the most. In this regard it is always interesting to read on the philosophies and investment approaches adopted by gurus. These are, after all, people who have amassed big fortunes in their long years of investing. One such individual is Mr Howard Marks, the founder of Oaktree Capital Management.

In his book, "The most important thing" he has outlined his key learnings from over 40 years of successful investing. Rather than giving formulae and numbers, the book uses examples to describe his most important learning in the world of investing. The most important thing in the book is the importance of value investing over growth investing. Mr Marks states that "consistency trumps over drama". Using the philosophy of value investing, one can identify stocks with strong fundamentals that deliver superior returns over a long period of time.

Having identified such a stock, the next thing that an investor wonders is when to buy and when to sell. The book talks about the cyclicality in stock markets which present opportunities for doing exactly this. This cyclicality is caused by human behaviour which tends to magnify itself both during good times as well as during bad. The returns so earned have to be understood in conjunction with the risk. Here Mr Marks defines risk as the potential loss of capital and most importantly the permanent loss of capital. Understanding, recognizing and controlling risk is perhaps as important as identifying the stock itself.

Following the philosophy of value investing, understanding the risks of investing is not really something everyone can do. But those who manage to do so earn superior returns over the long term.