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CENTRAL EXCISE, CUSTOMS, &
SERVICE TAX PROPOSALS
by
COMMISSIONER,
SERVICE TAX, MUMBAI
BUDGET THEME
Move towards GST - ST rate increase,
removing exemptions to sync with State
VAT levy.
Improve Ease of doing business
Remove ambiguity by changes in law &
clarifications
Boost to domestic manufacturing by
reducing tax burden
2
CENTRAL EXCISE & CUSTOMS
CHANGES
Central Excise duty rate increased from 12.36%
to 12.5% with abolition of education cesses.
Issue of balance credit of Education Cess as on
1st March under consideration of Govt.
Reduction of Customs duty on raw-materials,
intermediate and components (22 items) to
promote domestic manufacturing and minimise
duty inversion on items used by polymers,
Telecom, IT and Power Sector.
3
CENTRAL EXCISE & CUSTOMS CHANGES
Reduction in SAD to minimise CENVAT Credit
accumulation and liquidity issues. IT Sector
items, Polymers, metals and LED light goods
benefited.
Tablet Computers and their parts manufacturing
given boost by reduction of import duties
Excise duty increased on Cigarettes by 15 -25%.
Excise duty structure on Pan Masala and Gutka
also modified.
Clean Energy Cess increased from Rs 100 to 200
per MT to fund Swatcha Bharat Mission
4
EASE OF DOING BUSINESS.
On-line Central Excise & Service Tax registration
within 2 working days.
Tax payers allowed to use digitally signed
invoices.
Time limit for taking CENVAT Credit increased
from 6 months to 1 year from date of invoice.
Facility of direct dispatch of goods to the
customer of a dealer or job worker of
manufacturer allowed.
Time limit for return of capital goods from job
worker increased from 6 months to 2 years.
5
EASE OF DOING BUSINESS.
Clarification also issued for garnishing provision
and providing instalments for recovery of
arrears.
Withdrawal of prosecution cases permitted if the
adjudication proceedings are dropped on merit.
Exporters allowed credit of services used
between factory and port – clarification
Advance ruling facility extended to Indian firms
also.
Valuation provisions amended to add
reimbursement
6
MODIFIED PENAL PROVISIONS - Encouraging
Voluntary Compliance (All 3 taxes)
Non-suppression cases
can be closed on payment of Tax and interest, if
paid within 30 days of issue of SCN
25% of penalty if paid within 30 days of OIO
Max Penalty 10% of Tax amt
SUPPRESSION Cases
Only 15% penalty, if tax and interest is paid within
30 days of SCN.
Only 25% penalty if tax n interest is paid within 30
days of issue of order.
For existing cases also benefit available after
enactment of Finance Bill
7
SERVICE TAX CHANGES
Service Tax rate increased from 12.36% to 14%.
Levy of Swatch Bharat Cess at the rate of 2%.
New Levy on Tickets of amusement park, Theme
Park, Water parks etc.
New levy on entry ticket to concerts, award
functions, non-recognised sport events if the
ticket charge is more than Rs.500/-. However,
Cinema, Circus, dance, drama tickets remain
exempted.
8
SERVICE TAX CHANGES
Service Tax on contract manufacturing/job work
for alcoholic liquor liable to Service Tax.
Services provided by Govt. or local authority
to business entities charged Service Tax
Construction/repair services provided to Govt.
would be taxable except like canals, dam,
irrigation, water supply. (wef 1/4/15)
Construction of Airport and port also made
taxable.
9
SERVICE TAX CHANGES
Services provided by Mutual fund or Lottery agents
or chit fund selling agent made taxable on reverse
charge basis.
Services provided by the Banks on behalf of RBI or
similar services also taxable.
In case of foreign aggregator model (like UBER taxi)
the aggregator is liable to pay tax in India.
For transport of goods by Road and vessel uniform
abatement of 30% allowed.
10
SERVICE TAX CHANGES
In the case of executive air travel abatement reduced
from 60% to 40%.
Partial reverse charge on manpower supply and
security services made to full reverse charges.
CENVAT Credit allowed under partial reverse charge
without linking it to the payment to service provider.
Section 73 being amended to provide that if the short
payment has been declared, for recovery purpose
no need to issue any SCN.
11
THANK YOU