Excise Notifications

Dear Professional Colleague,

Mystery of Confusing Notifications on applicability of Excise Duty on Textiles, Mobile phone, Note books, Spectacles, Calculators, Water filters, Sauces and ketchups, Bicycles, etc.

The Central Board of Excise and Customs ("the CBEC" or "the Board") has issued three Central Excise Notifications apparently to clarify when manufacturers can avail exemption or concessional rates of CE duty.

·         Notification No.34/2015-Central Excise, Dated: July 17, 2015, amending Notification 30/2004-CE, which provides for an exemption for certain textile articles

·         Notification No.35/2015-Central Excise, Dated: July 17, 2015, amending Notification 1/2011-CE, which prescribes an effective rate of 2% duty on certain goods

·         Notification No.36/2015-Central Excise, Dated: July 17, 2015, amending Notification 12/2012-CE:

-         Condition 16: Exemption for certain goods either wholly or partly – steel, Aluminium, Tablet Computer, Mobile handsets

-          Condition 20 Clause (a): Exemption for certain goods – Copper

-          Condition 25: Exemption for certain goods – fertilisers, goldsmith wares

-          Condition 52A: Exemption for certain goods – bunker fuels, solar water heater

Objective of these amendments are that the Manufacturer seeking to claim Nil rate of duty or 2% duty or any other Concessional rate of duty under the amended notifications:  

·         Procure Inputs/capital goods which are used for manufacture of excisable goods, on which "appropriate duty has been paid", be it Central Excise duty or the Additional duty of Customs;

·         Input services which are utilized for manufacture of excisable goods on which "appropriate service tax has been paid".

·         Manufacturers claiming the exemption should not avail CENVAT credit of duty/tax paid on inputs, capital goods, input services.

Issues arise because of these amendments: Whether the Manufacturer cannot claim Nil rate of duty or 2% duty or any other Concessional rate of duty under the amended notifications if:

·         Inputs/ capital goods is not liable to excise duty or where excise duty is nil, i.e. No excise duty is paid on Inputs/ capital goods which are used for manufacture of excisable goods.

·         Input Services is not liable to service tax or where service tax is exempted.

Because of the said amendments, there is hue and cry among the diverse section of manufacturers, manufacturing – Readymade garments, Mobile phone, Note books, Spectacles, Calculators, Water filters, Sauces and ketchups, Bicycles, etc.

Mystery resolved by the Board:

Now, the Board has issued three Notifications No. 37/2015-CE, 38/2015-CE, 39/2015-CE, dated July 21, 2015, to correct the mystery created by the Notification Nos. 34/2015-CE, 35/2015-CE and 36/2015-CE dated July 17, 2015 and issued a Circular No. 1005/12/2015-CX dated July 21, 2015, clarifying apprehensions have been raised about the use of the phrase of "appropriate duty". In this regard, an Explanation has been inserted in the  Notifications No. 30/2004-CE dated July 9, 2004, Notification No.1/2011-CE dated March 1, 2011 and Notification No. 12/2012-CE dated March 17, 2012 so as to clarify that the appropriate duty or appropriate additional duty or appropriate service tax for the purposes of the said notifications/entries includes NIL duty/ tax or Concessional duty/tax, whether or not read with any relevant exemption notification for the time being in force.

Hence, the domestically manufactured goods covered under these Notifications/Entries continue to be exempt from Excise duty or subject to Concessional rate of excise duty, as the case may be as they were prior to July 17, 2015.

Hope the information will assist you in your Professional endeavours. In case of any query/ information, please do not hesitate to write back to us.

Thanks & Best Regards.

Bimal Jain

FCA, FCS, LLB, B.Com (Hons)

Electronic Records-DSC

Dear All,

 The CBEC has issued Notification for maintenance of electronic records and issuing invoices with Digital Signature.

Rule 10

The assessee can now maintain the records on daily basis in respect of goods produced or manufactured, opening balance, quantity removed etc. In the electronic format and can also be preserved in electronic format provided every page of the records maintained has digital signature.

Rule 11(8)

Invoice issued under this rule may be authenticated by means of digital signature provided the duplicate copy of the invoice meant for transporter is digitally signed and a hard copy of such transporter copy of the invoice duly self attested by the manufacturer is used for transport of goods.

100 things of TAX for common man.!!

Dear All

100 things of TAX for common man.!!

Income Tax:

1)      Detailed information of Income Tax is available on www.incometaxindia.gov.in
2)      As per Income Tax Act, Income is taxable under five heads- Salary, House Property, Business or Profession, Capital Gain and Other Sources.
3)      Salaried person must obtain Form 16 from his Employer Every Year.
4)      Income Tax Return should be filed by considering Form 16 and other Income.
5)      Transport Allowance is exempt up to Rs. 1,600 per month.
6)      30% Standard deduction is available on Income from House Property.
7)      Income to be considered as deemed let out on second House property.
8)      For self-occupied house property, deduction of Interest on Housing Loan is allowed up to Rs. 200,000/- and for other house property actual expenditure of Interest on Housing Loan is allowed.
9)      Repayment of Principal amount of Housing Loan is deductible u/s 80C up to Rs. 150,000/-.
10)  Tax Audit is compulsory if sales turnover exceeds Rs. 1 crore in case of business.
11)  Tax Audit is compulsory if the Gross Receipts of Professionals exceeds Rs.25 lakhs.
12)  If sales turnover is below Rs. 1 crore, then net profit of 8% or higher is to be taken as business income otherwise tax audit is required.
13)  The Due Date for Tax Audit and income Tax Return is 30th September.
14)  Assessee other than Company and those eligible for Tax Audit are required to file Income Tax Return before 31st of July. Extended date is 31st Aug for F.Y. 14-15.
15)  Accurate Stock Valuation should be done on 31st of March.
16)  Cash payment should not be made to a person in single day exceeding Rs.20, 000.
17)  Cash Payment limit for Transporters is Rs. 35,000/-.
18)  Loans, deposits and Immovable Properties transactions should not be carried out above Rs. 20,000 in cash.
19)  Business loss can be carried forward to Next 8 Years.
20)  Tax Audit applicable assesses should deduct TDS on particular transactions.
21)  TDS should be made on the date of Credit or Payment basis of whichever is earlier.
22)  TDS payment should be made on or before 7th day of Next Month.
23)  TDS Returns are to be filed Quarterly.
24)  TDS returns can be revised any number of times.
25)  TDS should be deducted and paid if applicable.
26)  If TDS is not deducted then deduction of 30% of Expenditure is not allowed.
27)  Late filling of TDS return attracts late filing fees of Rs. 200 per day.
28)  Long Term Capital Gain will arise if transfer of specified Capital Assets is made after 3 years.
29)  Generally Long Term Capital Gains is taxable @ 20%
30)  STT paid Long Term Capital Gain on Shares,etc is exempt from Tax.
31)  Short Term Capital Gain is Taxable @ 15% if STT is paid.
32)  Capital Gain on Immovable Properties is chargeable at Stamp Duty Value or Selling Price whichever is higher.
33)  Dividend received from domestic company is exempt from Tax.
34)  Agricultural Income is exempt from Tax.
35)  Gifts received form stranger of an Amount exceeding Rs. 50,000 is taxable.
36)  Income Tax is not chargeable on Gifts received at the time of Marriage, Will, and in case of Succession and from specified relatives.
37)  Maximum deduction limit u/s 80C, 80CCC and 80 CCD is Rs.1, 50,000.
38)  Deduction of Medical Insurance Premium is available up to Rs. 25,000.
39)   Deduction of Medical Insurance Premium paid for Parents is available up to Rs. 20,000.
40)  Deduction limit of Interest earned on Saving Account is up to Rs.10, 000.
41)  Income earned by a Minor child is clubbed in the hands of Parents.
42)  Every Taxpayer should verify his Form 26AS.
43)  Form 26AS provides the Information regarding the TDS, Advance Tax paid and details of refund.
44)   Notice may be sent to the Taxpayer if the Income mentioned in Form 26AS and the Income Tax Return filed is having difference.
45)  Basic Exemption Limit for individuals for F. Y. 2015-16 is Rs. 2,50, 000.
46)  Basic Exemption Limit for Senior Citizen i.e. above 60 years age is Rs. 3,00, 000.
47)  Basic Exemption Limit for Super Senior Citizen i.e. above 80 years age is Rs. 5,00,000.
48)  Advance Tax is to be paid if Tax Liability during the year exceeds Rs. 10,000.
49)  12% of Surcharge is applicable if Income Exceeds Rs. 1Crore.
50)  Income Tax Return should be filed if Income exceeds Basic Exemption Limit.
51)  30% of Tax applicable on Income of Partnership Firm, Company, LLP etc.
52)  For Companies – Minimum Alternate Tax and for other Assesses – Alternate Minimum Tax rate is 18.5%.
53)  Details of all Bank Accounts have to be given in Income Tax return.
54)  Passport number is required to be given in Income Tax return.
55)  Detail of Fixed Assets held in Foreign Country is required to be given in Income Tax return.
56)  If taxable income of Individual is less than Rs. 5 Lakhs then relief of Rs. 2,000/- is available in Tax.
57)  Aadhar Card No. is required to be mentioned in Income Tax return.
58)  E-filling of return is compulsory if income exceeds Rs. 5 lakhs.
59)  In Income Tax, E-filling of return can be done for Previous 2 Years only.
60)  PAN Card is essential for Taxpayer and it should not be used as Id Proof.
61)  From FY 2014-15 Depreciation is to be calculated as per New Companies Act.
62)  Domestic Transfer Pricing is applicable on transaction exceeding an Amount Rs. 20 Crores.

Now some points about MVAT:

63)  VAT registration is compulsory if Gross Turnover exceeds Rs. 10 lakhs.
64)  VAT rate is 1%, 5%, 12.5%, and 20% and CST rate is 2% on respective commodities.
65)  Return Periodicity should be verified every year from the Departments site www.mahavat.gov.in
66)  Periodicities of Returns are Monthly, Quarterly and Half yearly.
67)  Vat payment and return should be filed within 21st of next Quarter, Month or Half Year.
68)  Late payment of VAT will attract Interest @ 1.25% p.m.
69)  A late fee of Rs. 1000 is to be paid if late return is filed.
70)   Late fee of Rs. 5000 is charged if Return filed after 30 days.
71)  Full set off can be taken on Plant and Machinery and Electrical Fitting.
72)  3% of retention is to be taken on Office Equipment’s and Computer.
73)  Setoff of Software, Building and passenger car is not available.
74)   AnnexureJ1 mentioning TIN of sellers has to be filed with Vat return.
75)  AnnexureJ2 mentioning TIN of buyers has to be filed with Vat return.
76)  Vat Setoff cannot be carried forward to next year if it exceeds Rs. 5 lakhs.
77)  VAT Audit is compulsory if Gross Turnover exceeds Rs. 1 Crore.
78)  Due date for filling VAT Audit report is 15th January.
79)  Dealer can verify the details of return filed and Registration from the “Dealer information System.”
80)  Mis-match report of Annexure J1 and J2 should be verified and should be reconciled.
81)  Composition Scheme is available for Retailers having Gross turnover less than Rs. 50 Lakhs.
82)  WCT is to be deducted if Works Contract exceeds Rs. 5 lakhs.
83)  5% of WCT is to be deducted for non-registered dealers instead of 2%.
84)  TDS deductor has to file return before 30th June after end of financial year.

Profession Tax:

85)  Profession Tax is required to be paid for Employer and Employee.
86)  Every Businessmen and Professional assesse has to pay his Professional Tax before 30th June.
87)  Employer has to pay Profession Tax of employees by deducting from the salary.
88)  If Professional Tax Liability exceeds Rs. 50,000 then monthly Return have to be filed otherwise annually.
89)  A late fee of Rs. 1000 is to be paid if Profession Tax return in not filed before due date.
90)  Profession Tax is not Applicable to Men if salary does not exceed Rs. 7, 500.
91)  Profession Tax is not Applicable to Women if salary does not exceed Rs. 10,000.

Service Tax:

92)  Service Tax is applicable if Taxable Service Provided exceeds Rs. 10 lakhs.
93)  14% of service Tax is applicable w.e.f 1st June, 2015.
94)  Company Assesse has to pay Service Tax monthly.
95)  Individual, Partnership Firm, LLP assesse has to pay Service Tax Quarterly.
96)  Service Tax is payable on the 6th after end of Month or Quarter
97)  Interest is payable @ 18%pa if Service Tax is not paid before the due date.
98)  Interest @ 30% is to be paid if service Tax is not paid for a Year.
99)  Service Tax return should be filed Half Yearly before 25th October and 25th April.
100)          If service Tax is not paid of Rs. 50 lakhs then there is imprisonment

Notification on Education Cess

Amendment to The CENVAT Credit Rules,2004 (CCR,2004)

 

Rule 3(7)(b) of the CCR,2004 has been amended so as to allow utilization of credit of Education Cess and Secondary Education Cess for payment of basic excise duty in the following situations:

 

1.       Education Cess and Secondary & Higher Education Cess on inputs or capital goods received in the factory of manufacture of final product on or after the 1^st day of March,2015;

 

2.       Balance 50% Education Cess and Secondary and Higher Education Cess on Capital Goods received in the factory of manufacture of final product in the financial year 2014-15; and

 

3.       Education Cess and Secondary & Higher Education Cess on input services received by the manufacture of final product on or after 1^st day of March,2015;

 

(Notification No.12/2015-Central Excise (N.T.) dated 30-04-2015 refers)

 

Circular on Goods cleared from DTA to SEZ treated as Exports

Goods cleared from DTA to SEZ treated as Exports

CBEC vide Circular No. 1001/8/2015-CX, Dated: April 28, 2015 has clarified that Benefit of rebate of duty under Rule 18 of Central Excise Rules, 2002 and Refund of accumulated CENVAT credit under Rule 5 of CENVAT Credit Rules, 2004 will continue to be available on goods cleared from Domestic Tariff Area (DTA) to Special Economic Zone (SEZ).

As per the provisions of SEZ Act, supply of goods from DTA to the SEZ is treated as export; as a SEZ is treated as a territory outside the customs territory of India. The DTA supplier supplying goods to the SEZ shall clear the goods either under bond or as duty paid goods under claim of rebate on the cover of ARE-1. Thus, any licit clearances of goods to an SEZ from the DTA will continue to be treated as export only.

 [Circular No. 1001/8/2015-CX, Dated: April 28, 2015]

Change in ITR forms on hold

Considering difficulties expressed by cross section of tax payers,decision ws tkn to review ITR forms: Revenue Secy Shaktikanta Das to ANI

Foreign Tax Credit

Big victory for Wipro, Karnataka HC grants Foreign Tax Credit to tax holiday entities

IT major Wipro has won a legal victory with the Karnataka High Court allowing it to save a significant amount in taxes from its overseas operations.

The judgment is likely to have an impact on Indian companies that have overseas operations.

US taxes

In a ruling on Thursday, the High Court said Wipro can take credit for taxes it paid in the US out of revenues it earned from its operations there. Earlier, Wipro was denied tax credit since the Indian operations came under the tax holiday ambit.

The issue relates to Wipro's operations in the US, and the taxes it has paid — both at the state and Federal levels, which comes under the ambit of foreign tax credits. According to Amit Maheshwari, Partner, Ashok Maheshwary & Associates, Wipro did not get this tax credit and appealed to the Karnataka High Court, since it would amount to double taxation. Wipro also enjoyed tax holiday status in India at the time.

While the income under consideration could not be ascertained, Wipro had filed the income for the assessment year 2007-08. Further, it disputed the total income computed and the total tax computed. When contacted, Wipro officials did not comment as they have not yet received the formal order. Industry watchers believe this is an important development. According to Maheshwari, this is a significant judgment when it comes to the principle of foreign tax credits and sets a precedent.

Finance Bill,2015

Section 295 is amended to provide for the power to the Board to make rules for the purpose of granting relief for deduction of  foreign taxes paid in other countries.

This amendment is effective from 1^st June, 2015

Duplicate "C" Form Allowed

·         2015-VIL-77-MAD

·         M/s SREE KUMAR ENGINEERING WORKS Vs THE ASSISTANT COMMISSIONER (CT)

·         Central Sales Tax Act, 1957 – Loss of original 'C' Form by the department – Acceptance of the duplicate copy of 'C' Form – Insistence of Declaration by means of indemnity bond – HELD - From a reading of Rule 10(2) of the Central Sales Tax (Tamil Nadu) Rules, it is clear that the petitioner is entitled to file Form of Declaration / Certificate relating to the year at any time before the final assessment of the accounts of that year. In this case, the petitioner has filed 'C' Form in original before the authority of the respondent and an endorsement has also been made by the concerned officer. The contention of the respondent relying upon Rule 12(2), by requiring the petitioner to produce the indemnity bond, cannot be accepted, as the same would be applicable only in case the petitioner had lost the original 'C' Form. The respondent in this case shall accept the duplicate copy of the 'C' Form already filed before them by the petitioner. When the said document filed by the petitioner before the authority had been misplaced by the Department, insisting of Declaration by means of indemnity bond, is not correct and there is no duty cast upon the petitioner to file the indemnity bond, when the petitioner has not lost the original of the same and when the petitioner has also not requested by stating that they have misplaced the original document - When the authority has misplaced the original of the document for whatever be the reason, there is no hard and fast rule to deny the request of the petitioner for accepting the duplicate copy of the document, which is available with the petitioner - Impugned orders are set aside and the matters are remitted back

PF Administrative Charged Reduced

The Government of India issues notification on reducing the administrative charges under the Employees' Provident Funds Scheme, 1952	Tax Knowledge & Solution

The Ministry of Labour and Employment, Government of India, has issued a notification to revise the rate of administrative charges under the Employees' Provident Funds Scheme, 1952. The changes will be effective from 1 January 2015.

EPFO (Employees Provident Fund Organisation) has cut the administrative fee it charges from nearly eight lakh employers coming under the ambit of its social security schemes, effective from January 1^st 2015.

The administrative charges have been reduced to 0.85% of basic wage from 1.10% as per a Labour Ministry Notification.

The decision in this regard was taken by the EPFO';s apex decision making body, the Central Board of Trustees (CBT), in February last year in its meeting.

According to the notification, the minimum monthly administrative charges will be Rs 75 for every non-functional firm having no (PF) contributing member and Rs 500 for any other establishments.

As many as 7.96 lakh firms were covered under the various social security schemes run by the EPFO as on March 31, 2014.

Form A-1 Dispensed

A P (DIR Series)

CIRCULAR NO

76/RBI., Dated: February 12, 2015

Foreign Exchange Management Act, 1999 - Import of Goods into India

Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to the A.P.(DIR Series) Circular No. 82 dated February 21, 2012 in terms of which applications by persons, firms and companies for making payments, exceeding USD 5,000 or its equivalent towards imports into India must be made in Form A-1.

2. To further liberalise and simplify the procedure, it has been decided to dispense with the requirement of submitting request in Form A-1 to the AD Category -I Banks for making payments towards imports into India. AD Category -I may however, need to obtain all the requisite details from the importers and satisfy itself about the bonafides of the transactions before effecting the remittance.

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 Section 10 (4) and Section 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.

RBI/2014-15/467

(C D Srinivasan)

Chief General Manager

Chargeability of Interest under Section 234A of the Income-tax Act

CIRCULAR NO 2/2015, Dated: February 10, 2015

Subject: Chargeability of Interest under Section 234A of the Income-tax Act, 1961 on self-assessment tax paid before the due date of filing of return of income-regarding

 
Interest under Section 234A of the Income-tax Act, 1961 (hereinafter the Act) is charged in case of default in furnishing return of income by an assessee. The interest is charged at the specified rate on the amount of tax payable on the total income, as reduced by the amount of advance tax, TDS/TCS, any relief of tax allowed under section 90 and section 90A, any deduction allowed under section 91 and any tax credit allowed in accordance with the provisions of section 115JAA and section 115JD of the Act. Since self-assessment tax is not mentioned as a component of tax to be reduced from the amount on which interest under section 234A of the Act is chargeable, interest is being charged on the amount of self-assessment tax paid by the assessee even before the due date of filing of return.
 
2. It has been held by the Hon'ble Supreme Court in the case of CIT vs Prannoy Roy, 309 ITR 231 (2009) that the interest under section 234A of the Act on default in furnishing return of income shall be payable only on the amount of tax that has not been deposited before the due date of filing of the income-tax return for the relevant assessment year. Accordingly, the present practice of charging interest under section 234A of the Act on self-assessment tax paid before the due date of filing return was reviewed by CBDT.
 
3. The Board has decided that no interest under section 234A of the Act is chargeable on the amount of self-assessment tax paid by the assessee before the due date of filing of return of income.
 
4. This Circular may be brought to the notice of all officers for compliance.
 
5. Hindi version shall follow.
 
F. No. 385/03/2015-IT(B)
 
(Sandeep Singh)
 
Under Secretary to Government of India

Customs Procedures Simplified for Shipping

GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF EXCISE & CUSTOMS NEW DELHI CIRCULAR NO 02/2015-Cus., Dated: January 15, 2015 To The Chief Commissioner of Customs/Customs (Preventive) The Chief Commissioner of Customs and Central Excise The Commissioner of Customs/Customs (Preventive) The Commissioner of Customs and Central Excise Subject: Simplification of Customs procedures for shipping - regarding. The avoidable delays on account of non-uniform Customs procedures adopted at some ports/Customs stations not only increase transaction cost and time of clearance but also prove to be major constraints in making Indian ports international transshipment hubs. Therefore, a Committee was set up by Ministry of Shipping for simplification of shipping related Customs procedures. The Committee has made, interalia, certain recommendations for implementation by Customs: 2. Board has examined the recommendations of the said Committee in consultation with identified Chief Commissioners of Customs. Accordingly, the following decisions have been taken to streamline the extant procedures at various ports: (i) It is reported that the number of hard copies of Import General Manifest (IGM) filed by shipping lines/steamer agents varies from 2 to 6 at various ports. Board, has noted that the Customs is already receiving the IGM electronically as well. The requirement of large number of hard copies of this document leads to unnecessary escalation of compliance cost. Therefore, taking into account the requirement of Customs as well the fact that an electronic version of IGM is already available, Board has decided that henceforth the number of hard copes of IGM required to be submitted by shipping lines/steamer agents at a Customs House shall be restricted to 2 (two) only. (ii) The port clearance requires submission of numerous documents on behalf of other agencies - Lighthouse Dues Certificate, NOC for Immigration, Port Health Certificate etc. At present, the port clearance is given on the strength of a bond and a guarantee which are given each time a vessel enters. As a measure of simplification, Board has decided to give an option to the steamer agent to (a) give a continuity bond and (b) merge the guarantee with the continuity bond. This would reduce the number required documents from 2 (two) to 1 (one) and periodicity (of submission) would also get reduced drastically. (iii) Reportedly, in case of transshipped cargo, shipping lines send multiple hard copies of 'Sub Manifest Transhipment Permit' (SMTP) to the destination ICD despite the same also being transmitted electronically. However, there may be situations warranting hard copy of the document such as when amendments have to be made. Recognizing the need for reducing number of copies of SMTP, Board has decided that only 1 (one) copy of SMTP would be sufficient and Customs at ICD should not insist on more number of hard copies of SMTP. (iv) Currently , separate permissions are required whenever the mode of transport of transhipment containers changes from train to road or vice versa. The view is that this may be dispensed with since the carrier has already executed a bond for safe carriage of the goods to the destination port/ICD. With a view to boost inter-modal transportation of transshipped cargo and simply procedure, Board has decided that henceforth no separate permission is required from jurisdictional Customs in case of change of mode of transshipment under the Goods Imported (Conditions of Transhipment) Regulations, 1995. However, the carrier is required to intimate the change to the jurisdictional Commissioner of Customs who will ensure the bond covers both modes of transport. 3. Chief Commissioners of Customs/Customs and Central Excise are requested to ensure that the aforementioned decisions are complied with strictly by field formations in their jurisdiction. Suitable Trade notice/Public Notice may also be issued for guidance of trade and staff. 4. Difficulty, faced if any, may be brought to the notice of the Board. F. No. 450/221/2014-Cus IV (Pawan Khetan) OSD ( Cus IV)

GST Bill: 10 Facts

Cabinet Clears Amendment to GST Bill: 10 Facts

The Cabinet on Wednesday cleared the Constitutional Amendment Bill on Goods and Services Tax or GST, paving the way for tabling of the new legislation in the current session of Parliament.

Here's your 10-point cheat sheet on this big story:

1) The revised Bill takes into account the deal reached between the Centre and states on contentious issues like including petroleum, alcohol and tobacco in GST. These items account for a major portion of states' tax revenues.

2) At present, petroleum products will be not be included in the GST but will remain within the central act and will be brought in at a later stage through the GST councils. Alcohol will be exempt from GST and states would have the freedom to decide their own levy. Service tax will be subsumed within GST.

3) In case of losses in the states' exchequer, the Centre will give 100 per cent compensation for the first three years, 75 per cent compensation for the fourth year and 50 per cent compensation for the fifth year.

4) The government wants to introduce the Bill in the ongoing winter session that concludes on December 23.

5) The government on Monday decided to keep petroleum out of the proposed GST in return for states agreeing to entry tax being subsumed in the new indirect tax regime proposed from April 2016.

6) The GST Bill needs to be cleared by at least half of the states, besides Parliament, before its implementation.

7) The launch of GST has been delayed by nearly seven years, as states were concerned about revenue losses on introduction of the new tax regime.

8) The GST will cut down the large number of taxes imposed by the central government and states and will lead to the creation of a unified market, which would facilitate seamless movement of goods across states and reduce the transaction cost of businesses

9) The GST Constitutional Amendment Bill, which was introduced in the Lok Sabha in 2011, has lapsed and the Modi government will be required to come up with a fresh bill.

10) If successful, economists say the implementation of GST could add 2 percentage points to GDP growth.

(With PTI inputs)

GST Highlights

Highlights of New Proposed Goods & Service Tax (GST) 

1. The basic principal governing behind GST is to have single Taxation System for Goods and Services 
across the country. Currently Indian economy has various taxes on Goods and services such as VAT, 
Service Tax, Excise, Entertainment Tax, Luxury Tax Etc. now in the new Proposal of GST; we will be 
having only two taxes on all goods and Services as follows: 
a. State Level GST(SGST) 
b. Central Level GST (CGST) 
2. In case of Central GST, following Taxes will be subsumed with CGST which are at presently levied 
separately on goods and services by Central government: 
a. Central Excise Duty 
b. Additional Excise Duty 
c. The Excise Duty levied under Medicinal and toiletries preparation Act 
d. Service Tax 
e. Additional Custom Duty (CVD) 
f. Special Additional Duty 
g. Surcharge 
h. Education Cess and Secondary and Higher Secondary education Cess 
3. In case of State GST, following taxes will be subsumed with SGST; which are priestly levied on goods 
and services by State Governments : 
a. VAT/ Sales Tax 
b. Entertainment Tax (unless it is levied by local bodies) 
c. Luxury Tax 
d. Tax on lottery 
e. State Cess and Surcharge to the extend related to supply of goods and services. 
4. The basic principal for subsuming of taxes in GST is provided as follows: 
a. Those taxes which commences with import / manufacture /production of goods or provision 
of services at one end and the consumption of goods and services o other end. 
b. The taxes, levies and fees which are not related to supply of goods & services should not be 
subsumed under GST. 
5. Taxes on items containing alcohol and petroleum product are kept out of GST. They will continue to 
be taxed as per existing practices. 
6. Tax on Tobacco products will be subject to GST. But government can levy the extra Excise duty over 
and above GST. 
7. The Small Taxpayer: The small taxpayers whose gross annual turnover is less than 1.5 Crore are 
exempted from CGST and SGST. 
8. Input Tax Credit (ITC): Taxes Paid against CGST allowed as ITC against CGST. Taxes paid against SGST 
allowed as ITC against SGST.  
9. Cross utilization of ITC between the Central GST and State GST would not be allowed. Exception: Inter 
State Supply of goods and services. 
10. PAN based identification number will be allowed to each taxpayer to have integration of GST with 
Direct Tax. 
11. IGST Model and ITC: 
a. Center would levy IGST levy ( CGST + SGST) 
b. The ITC will be allowed in this transaction will be SGST, IGST, CGST as applicable. 
c. Appropriate provision will be provided for consignment or Stock transfer. 
12. GST Rate Structure: 
a. Two Rate Structure 
b. A lower rate for necessary items and goods of basic importance 
c. Standard rate for goods in General 
d. Special Rate 
13. Exports are fully exempted with Zero rates.

Forwarded as received...

Circular on Re-Credit of Cenvat

GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF EXCISE AND CUSTOMS CIRCULAR NO 990/14/2014-CX-8, Dated: November 19, 2014 To, Principal Chief Commissioners/Chief Commissioners of Central Excise (All) Principal Chief Commissioners/Chief Commissioners of Central Excise of Central Excise & Customs (All) Director General, Directorate General of Central Excise Intelligence Principal Commissioners/Commissioners of Central Excise (All) Principal Commissioners/Commissioners of Central Excise & customs (All) Web-master, CBEC Madam/Sir, Sub: Clarification regarding availment of CENVAT credit after six months-reg. Attention is invited to the Notification of the Government of India in the Ministry of Finance, Department of Revenue No. 21/2014-CE (NT) dated 11.07.2014, vide which, inter alia, amendment was made in Rule 4(1) and 4(7) of CENVAT Credit Rules, 2004 (CCR, 2004) to prescribe that manufacturer or output service provider shall not take CENVAT credit after six months of the date of issue of any of the documents specified in sub-rule (1) of Rule 9. 2. Concerns have been expressed by trade that in view of above changes, the re-credit taken in following three situations may be hit by the time limit of six months prescribed: i. 3rd proviso to Rule 4(7) of CCR, 2004 prescribes that if the payment of value of input service and service tax payable is not made within three months of date of invoice, bill or challan, then the CENVAT Credit availed is required to be paid back by the manufacturer or service provider. Subsequently, when such payment of value of input service and service tax is made, the amount so paid back can be re-credited. ii. According to Rule 3(5B) of CCR, 2004, if the value of any input or capital goods before being put to use on which CENVAT Credit has been taken, is written off or such provisions made in Books of Account, the manufacturer or service provider is required to pay an amount equal to credit so taken. However, when the inputs or capital goods are subsequently used, the amount so paid can be re-credited in the account. iii. Rule 4(5)(a) of CCR, 2004 prescribes that in case inputs sent to job worker are not received back within 180 days, the manufacturer or service provider is required to pay an amount equal to credit taken on such inputs in the first instance. However, when the inputs are subsequently received back from job worker, the amount so paid can be re- credited in the account. 3. The matter has been examined. The purpose of the amendment made by Notification No. 21/2014-CE (NT) dated 11.07.2014 is to ensure that after the issue of a document under sub-rule (1) of Rule 9, credit is taken for the first time within six months of the issue of the document. Once this condition is met, the limitation has no further application. It is, therefore, clarified that in each of the three situations described above pertaining to Rule 4(7), Rule 3(5B) or Rule 4(5) (a) of CCR, 2004, the limitation of six months would apply when the credit is taken for the first time on an eligible document. It would not apply for taking re-credit of amount reversed, after meeting the conditions prescribed in these rules 4. Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board. Hindi version follows. F. No. 267/72/2013-CX.8 (Pt)   Shankar Prasad Sarma OSD, CX.8

Non Submission of C Form-Interest

Interest chargeable from 'Return Date' on Form "C" non-production, not 'Assessment' under CST Act

 

HC quashes Tribunal order, interest chargeable from the date of furnishing monthly returns in case of default in furnishing 'C' Form declarations claiming concessional rate under Central Sales Tax (CST) Act; Tribunal misread SC judgement in J. K. Synthetics wherein liability to pay tax and interest thereon was held to arise only after adjudication and not earlier to it; In instant case, assessee aware of liability on inter-state sale, hence tax paid pursuant to assessment order ought have been paid alongwith return, as prescribed under CST Act; Having failed to do so, State deprived of revenue and hence, interest payable from the date when assessee became liable to pay tax to compensate the delay; Rejects assessee's contention that no interest payable absent provision in CST Act, Sec 9(2B) r/w Sec 36 & 37 of Karnataka VAT Act makes it very clear that power conferred to levy interest flows from statutory provision  : Karnataka HC

04/11/2014

The ruling was delivered by Justice N. Kumar and Justice B. Manohar.

Ms. S. Sujatha appeared on behalf of the Revenue, while assessees were represented by Ms. H. Vani, Mr. T. Surya Narayana and Mr. T. Rajaram. 

[TS-499-HC-2014(KAR)-VAT]

Extension of CLSS till November 15, 2014

Extension of CLSS till November 15, 2014. General Circular No 40/2014 dated 15/10/2014.

Wef FY 2015-16, Co Audit Report to state about existence of Adequate Internal Financial Controls System & its Operating Effectiveness. Notification of 14-10-14.

Restructuring of CBEC

Alert on Re-oganisation of CBEC Officer

 

Although the reorganization of formations under CBEC will take effect from 15th October 2014, to avoid inconvenience to the existing Central Excise and Service Tax assessees, they will continue to be mapped in ACES to the existing location codes (Commissionerate, Division and Range). Applicants for new registration can also apply to the existing formations. After migration of the assessees to the new formations, information will be sent to the assessees via email informing them of their new locations. Facility will also be provided in ACES for assessees to ascertain their new location codes, on their own, without visiting the Range offices, through "know you location code" on ACES website and filling of the registration number.

CBEC on Excise Audit

CBEC Circular - Excise Audit has 'statutory backing', Officers can verify records; HC ratio inapplicable

Earlier, in Travelite (India) case [TS-310-HC-2014(DEL)-ST], Delhi HC struck down Rule 5A(2) of Service Tax Rules requiring production of records to audit party on demand and CBEC Circular dated January 1, 2008 pertaining to general audit, as ultra vires the Finance Act. It held that Parliament had clear intention to provide for only special audit u/s 72A of Finance Act on fulfilment of special circumstances, and it did not contemplate a general audit that "every assessee" may be subjected to "on demand".  

However, now the CBEC has issued Circular clarifying on powers of Central Excise Officers to conduct audit. Clarifies that the above refereed Judgment does not deal with issue of audit in Central Excise and there is adequate statutory backing for conducting audit by Excise officers.

 Therefore, Central Excise Officers to continue conduct of audit, as provided in statute.

Railway Certificate-CENVAT Credit

CERTIFICATE ISSUED BY INDIAN RAILWAYS IS AN ELIGIBLE DOCUMENT FOR CENVAT CREDIT

 

 

Service tax on transportation of goods was effectively levied w.e.f. 1st Oct'12(though levied from 1st July'12, but was deferred till 30th Sep'12).

 

However, abatement of 70% was allowed vide N/N 26/2012-ST, hence effective rate of tax imposed was 3.708%.

 

Ministry of Railways issued a circular- TCR/1078/2011/2 ,dated 27th Jun'12 to deal with the issues arising out of the aforesaid levy & in para 4(xi) of the same, it was stated that on written request from customers, a consolidated certificate for each customer shall be issued by the authorised officer of Indian Railways(CCM/Dy. CAO) on monthly basis giving following details date-wise & rake-wise:

 

·         o Service Tax;

·         o Education Cess;

·         o Higher Education Cess; and

·         o Total Service Tax

 

 It further stated that the said certificate can be used by the customers for taking CENVAT. However, no corresponding amendment was made by Ministry of Finance in rule 9 of CENVAT Credit rules, 2004, which deals with the list of eligible documents for availment of CENVAT.·

 

 Now, vide N/N 26/2014-C.E.(N.T.), rule 9 of CENVAT Credit Rules, 2004 has been amended· & clause (fa) has been inserted therein to include following certificate as an eligible document for the purpose of availing CENVAT:

 

"a Service Tax Certificate for Transportation of goods by Rail (herein after referred to as STTG Certificate) issued by the Indian Railways, along with the photocopies of the railway receipts mentioned in the STTG certificate".

 

Henceforth, the eligibility stated vide circular issued by Ministry of Railways has finally been brought at par with CENVAT credit rules.

Notification No. 26/2014 – Central Excise (N.T.), dated 27-Aug-2014

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

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

 

Notification No. 26/2014 – Central Excise (N.T.)  New Delhi, the 27th August, 2014

 

G.S.R. (E). – In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2004, namely : –

 

1. (1) These rules may be called the CENVAT Credit (Eighth Amendment) Rules, 2014.

 

(2) They shall come into force from the date of their publication in the Official Gazette.

 

2. In the CENVAT Credit Rules, 2004, in rule 9, in sub-rule (1), after clause (f), the following clause shall be inserted, namely:-

 

"(fa) a Service Tax Certificate for Transportation of goods by Rail (herein after referred to as STTG Certificate) issued by the Indian Railways, along with the photocopies of the railway receipts mentioned in the STTG certificate; or" 

 

[F. No. 267/87/2013-CX.8]

(Pankaj Jain)

Under Secretary to the Government of India

 

Note.- The principal rules were published in the Gazette of India, Extraordinary, Part II,  Section 3, Sub-section (i), dated the 10th September, 2004, vide Notification No. 23/2004 –Central Excise (N.T.) dated the 10th September, 2004, vide number G.S.R. 600(E), dated the 10th September, 2004 and last amended vide Notification No. 25/2014 - Central Excise (N.T.) dated the 25th August, 2014 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 615 (E), dated the 25th August, 2014.