Baroda Branch of WIRC of ICAI March 2, 2013 Indirect Taxes – Analysis of Union Budget & Recent Issues Indirect Taxes – Analysis of Union Budget & Recent Issues Presented by : CA Anirudh Sonpal

No direction towards GST Has largely ignored concerns and recommendations of trade & industry CA Anirudh Sonpal

“Clarity in Tax Laws, a Stable Tax Regime, a non-adversarial Tax Administration, a Fair Mechanism for Dispute Resolution, and an Independent Judiciary will provide great assurance.” CA Anirudh Sonpal

No Change in Peak Rate Of Customs – 10% Central Excise – 12% Service Tax – 12% CA Anirudh Sonpal

ProductsExisting (BCD) Rate BCD RevisedChange Hazel Nuts 30%10% De-Hulled Oat 30%15% Bituminous Coal 5% + 6% CVD2% + 2% CVD Steam Coal Nil + 1% CVD2% + 2% CVD Raw Silk 5%15% Pre-Forms of Precious and Semi-Precious Stones 10%2% 20 Specified machinery for use in leather or footwear industry 7.5 %5% Textile machinery and parts Thereof 7.5%5% CA Anirudh Sonpal Customs

ProductsExisting (BCD) Rate BCD RevisedChange Set Top box 5%10% Cars/motor vehicles with CIF value > US $ 40,000 or with engine capacity > 3000 cc for petrol-run vehicles and > 2500 cc for diesel-run vehicles or with both 75%100% Import of old cars 100%125% New motorcycles with engine capacity of 800cc or more 60%75% Yachts and other vessels 10%25% CA Anirudh Sonpal Customs

Validity Period of Exemption granted to Identified Parts of Hybrid and Electric Vehicles – Extended up to Exemption from Education Cess and Secondary and Higher Education Cess withdrawn on Aeroplanes, Helicopters and their Parts. Time period for Consumption/installation of Parts and testing Equipment imported for maintenance, repair and overhaul(“MRO”) of Aircraft by units engaged in such activities increase from 3 month to 1 Year. Customs CA Anirudh Sonpal

Customs CA Anirudh Sonpal Limit of Jewellery allowed duty free to an Indian Passengers who has been residing abroad for more than 1 Year or coming to India for residency has been increased: Old Value allowed duty free Revised Value allowed duty free Gentleman Passenger Rs. 10,000Rs.50,000 Lady PassengerRs. 20,000Rs.1,00,000

ProductsExisting BEDRevised BEDChange Marble Slabs and Tiles30 Per Sq. Meter 60 Per Sq. Meter Silver Produced or Manufactured during the Process of Zinc or lead smelting starting from the stage of Zinc or lead ore or concentrate Nil4% Compounded duty Rate on Stainless steel “patta – Patti” Rs. 30,000 per Machine per Month Rs. 40,000 per Machine per Moth Mobile Handsets including cellular Phones having Sales Price > Rs.2,000 1%6% SUV/Utility Vehicles – Under Tariff Heading 8703 and Engine capacity >1500 CC 27%30% Chassis of diesel mother vehicles for the transport of good 14%13% CA Anirudh Sonpal Excise

CA Anirudh Sonpal Excise Exemption- All handmade carpets and carpets and other textile floor coverings of Coir and Jute, weather or not hand made Branded Aruvedic Medicaments and medicaments of Unani, Siddha, Homeopathy or Bio-Chemic system are brought under “MRP” based assessment with an abatement of 35% from MRP. Validity Period of Concessional Excise duty of 6% granted to Specified Parts of Hybrid and Electric Vehicles – Extended by Excise duty on Cigarettes and other products – increased.

Approved Vocational Course with also include Courses Conducted by State Council for Vocational Training. “Process Amounting to Manufacture or Production” with also include processes under the Medicinal & Toilet Preparations(Excise Duties) Act, Services in relation to Agriculture or Agricultural Produce will include all testing in relation to Agriculture or Agricultural Produce. Service Tax – Changes in Negative List CA Anirudh Sonpal

Abatement for Construction of Complex, Building, Civil Structures(Notification 2/2013, w.e.f ) Residential Unit having Carpet area upto 2000 sq. feet or Amount charged is < Rs. 1 Crore – 75% Other than above – 70%. CA Anirudh Sonpal Issue – Rate under Works Contract?

Exemptions withdrawn Services Provided by an Educational Institution by way of Auxiliary Educational Services and Renting of Immovable Property. Vehicle Parking to General Public Modifications in Exemptions CA Anirudh Sonpal

Temporary Transfer or Permitting use or enjoyment of copyright – only to films exhibited in cinema halls Restaurant/Eating Joint/ Mess – Taxable if having facility of Air Conditioning or Central Air Heating. Exemptions CA Anirudh Sonpal

Transportation by Rail or Vessel – Exemption withdrawn for Petroleum, Postal Mails & Household effects; Few Harmonized with Exemption to GTA. Service by Entities Registered under Section 12 AA of the I.T Act – Charitable Activities will not include Advancement of any other Object for General Public Utility. Exemptions CA Anirudh Sonpal

Vacation of Stay order – Max 365 days Power of Single Bench to hear and Dispose Appeals – limit increased from Rs.10 lacs to Rs.50 lacs. Excise – Modes of Recovery – from Refund and Third Party. Customs & Central Excise – Other Changes CA Anirudh Sonpal

Recovery (Section 73) – if demand for intended period fails on account of charges not having been established, the CEO will determine tax for 18 months(Normal Period) Penalty (Section 77) – Restricted to Rs.10,000. Penalty (Section 78A) – Upto 1 lacs on directors/Manager/Secretory/Officer in charge – specified contraventions by Company – Wilful Actions Service Tax – Recovery & Penalties CA Anirudh Sonpal

Monetary limit increased from Rs. 30 lacs to Rs. 50 lacs for Specified offences inviting imprisonment (Section 89) – similar changes also incorporated under Central Excise Section 90 - Offence cognizable(Failure to deposit tax collected); - Other specified offences Non Cognizable & Bailable Service Tax - Offences CA Anirudh Sonpal

Section 91 Power to Arrest - CCE to authorize Superintendent; Release by Asst/Deputy Com for non- cognizable and bailable offences Service Tax - Offences CA Anirudh Sonpal

Custom & Excise – New Activity / Business by Existing Eligible Applicants. Excise – Cenvat Credit of Service Tax on Input Service used in Manufacture. Excise & Service Tax – Resident Public Limited Company – Eligible. Advance Ruling CA Anirudh Sonpal

Service Tax – Voluntary Compliance Encouragement Scheme, 2013 CA Anirudh Sonpal Amnesty or Facilitation for Non-Filers and Stop-Filers, as claimed?

Declaration of Tax Dues Payable from to but not paid till Conditions No Notice till Not Eligible if Return Filed but Tax Disclosed and Not Paid. Service Tax – Voluntary Compliance Encouragement Scheme, 2013 CA Anirudh Sonpal

Liable to be rejected vide an order if Enquiry/Summons/Audit etc. pending as on Declaration before Service Tax – Voluntary Compliance Encouragement Scheme, 2013 CA Anirudh Sonpal

Payment Not less than 50% before Balance -before without interest -till with interest Immunity from Penalty/Interest etc. Acknowledgement & Discharge Service Tax – Voluntary Compliance Encouragement Scheme, 2013 CA Anirudh Sonpal

Revised ST 3 Return – Due date for the period July- September 2012 Reimbursement of Expenses – Delhi High Court in the matter of Intercontinental Consultants Technocrats Pvt. Ltd. Other Issues CA Anirudh Sonpal

POT- Circular 158/9/2012 dated – Rate of Tax - Delhi High Court – in the matter of Delhi Chartered Accountants Society Recovery even if stay application not disposed of – CBEC Circular 976/01/2013 dated Other Issues CA Anirudh Sonpal

TAMSO MA JYOTIRGAMAYA CA Anirudh Sonpal