The Blog of Dr.Mahesh Gour: AMENDMENTS OF IDT CA FINAL MAY 12

PART – 1 : CENTRAL EXCISE

1. Provisions of section 11A relating to recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded substituted with the new section 11A.

Section 11A(1), Section 11A(2), Section 11A(3), Section 11A(4):- Already covered in book.

Section 11A(5):- Where during the course of any audit, investigation or verification, it is found that any duty has not been levied or paid, or short-levied, or short-paid, or erroneously refunded by reason of fraud, collusion, willful misstatement, suppression of facts, contravention of any provision (FCWSP). But the details relating to transactions are available in specified records, then the CEO shall issue the SCN within FIVE YEAR from the RELEVANT DATE to pay the amount specified in notice alongwith the interest u/s 11AA and the penalty equivalent to 50% of such duty.

Section 11A(6):- The assessee may pay following amount, before service of SCN :-

The duty in full or in part;
Interest u/s 11AA; and
Penalty equivalent to 1% of such duty p.m. (to be calculated from the month following the month in which such duty was payable)

25% of such duty, whichever is lower.

Note: It means the penalty of 50% of the duty can be reduced as per this sub-section and he shall inform the CEO about such payment.

Section 11A(7), Section 11A(8):- Already covered in Book.

Section 11A(9):- If the appellate authority, tribunal or court concludes that the SCN issued u/s 11A(4) was not the case of fraud, collusion etc., then the CEO shall re-determine the duty of excise as per section 11A(1) for the period of one year from the relevant date.

Section 11A(10), Section 11A(11), Section 11A(12):- Already covered in Book.

Section 11A(13):- Where the modified amount is more than the amount determined under sub-section (10), the time within which the interest and penalty payable shall be counted from the date of the order of appellate authority in respect of such increased amount.

Section 11A(14):- The person will be liable to pay duty along with interest u/s 11AA whether or not the amount of interest is specified separately in the order of determination of duty issued by CEO.

2. Section 11AA and 11AB relating to interest on delayed payment of merged into new section 11AA :

I. Interest payable on delayed payment of duty:

· Rate of interest:

With effect from 01.04.2011, the interest at the rate 18% per annum has been notified, in addition to the duty, whether such payment is made voluntarily or after determination of the amount of duty under section11A.

· Time period:

Interest shall be calculated from the date on which such duty becomes due up to the date of actual payment of the amount due.

3. Provisions of section 11AC relating to penalty for short-levy or non-levy of duty in certain cases substituted with the new section 11AC.

(1) The amount of penalty for non-levy or short-levy or non-payment or short payment or erroneous refund shall be as follows :—

(a) where any duty of excise has not been levied or paid or short-levied or short paid or erroneously refunded, by reason of FCWSP with intent to evade payment of duty, the person is liable to pay duty determined u/s 11A(10) + penalty (100% of duty).

(b) where details of any transaction available in the specified records, reveal that any duty of excise has not been levied or paid or short-levied or short-paid or erroneously refunded as referred to in sub-section (5) of section 11A, the person is liable to pay duty determined u/s 11A(10) + penalty(50% of duty)

(c) where any duty as determined u/s 11A(10) and the interest payable thereon u/s 11AA in respect of transactions referred to in clause (b) is paid within 30 days of the date of communication of order of the Central Excise Officer who has determined such duty, the amount of penalty liable to be paid by such person shall be 25% of the duty so determined;

(d) where the appellate authority modifies the amount of duty of excise determined by the Central Excise Officer u/s 11A(10), then the amount of penalties and interest payable shall stand modified accordingly and after taking into account the amount of duty of excise so modified, the person who is liable to pay duty as determined u/s 11A(10) shall also be liable to pay such amount of penalty or interest so modified.

Explanation:- For the removal of doubts, it is hereby declared that in a case where a notice has been served u/s 11A(4) and subsequent to issue of such notice, the Central Excise Officer is of the opinion that the transactions in respect of which notice was issued have been recorded in specified records and the case falls under sub-section (5), penalty equal to 50% of the duty shall be leviable.

(2) Where the amount as modified by the appellate authority is more than the amount determined u/s 11A(10) by the Central Excise Officer, the time within which the interest or penalty is payable under this Act shall be counted from the date of the order of the appellate authority in respect of such increased amount.”

4. Liability under Central Excise Act to be first charge - Section 11E inserted:

This section creates a first charge on the property of a defaulter for recovery of the Central Excise dues subject to the provisions of the Companies Act, Recovery of Debt due to Bank and Financial Institution Act and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. This implies that after the dues, if any, owing under the provisions of these Acts, dues under the Central Excise Act shall have a first charge.

5. Substitution of Standards of Weights and Measures Act, 1976 with Legal Metrology Act, 2009 in section 4A

With effect from 01.08.2011, in section 4A(1) of the Central Excise Act, 1944, for the words and figures “Standards of Weights and Measures Act, 1976”, the words and figures “Legal Metrology Act, 2009” shall be substituted.

6. Central Government empowered to apply the provisions of the Customs Act to the excise duties imposed under section 3A also [Section 12]

Section 12 has been amended so as to provide that Central Government has been empowered to the apply the provisions of the Customs Act, 1962 to the duties charged on the basis of capacity of production under section 3A in the following manner :-

‘with effect from 08.04.2011 provisions of the Customs Act, 1962 relating to Offences and penalties shall apply to like matters covered by section 3A’

7. Power of search and seizure [Section 12F inserted]

Where the JC / AC of Central Excise or such other Central Excise Officer as may be notified by the Board has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorize in writing any Central Excise Officer to search and seize or may himself search and seize such documents or books or things [Sub-section (1)].

The provisions of the Code of Criminal Procedure, 1973 relating to search and seizure, shall, so far as may be, apply to search and seizure under this section as they apply to search and seizure under that Code [Sub-section (2)].

8. Notifications issued under section 5B also to be laid before Parliament [Section 38(2)]

Now notification issued under section 5B must also be laid before Parliament for 30 days when Parliament is in session as this section has been brought in purview of section 38.

9. Notification No. 14/2011 CE (NT) dated 03.06.2011

Manufacturing units engaged in the manufacture of recorded smart cards falling under sub-heading 8523 have been exempted from obtaining registration if the manufacturer of such goods has a centralized billing or accounting system in respect of such goods manufactured by different manufacturing units and he opts for registering only the premises or office from where such centralized billing or accounting is done.

10. Notification No. 19/2011 CE (NT) dated 28.07.2011

Option to authorize the Job-worker to pay duty in case of ready-made garments and made up articles of textiles has been withdrawn. Now, only the merchant manufacturer can pay duty in such case.

In case any merchant manufacturer has already authorized the job-worker to pay the duty, he will have to obtain registration and comply with other related provision within a period of 30 days from 28.07.2011.

11. Monetary limit for filing appeals by the department revised by CBEC

With effect from 01.09.2011, the CBEC has revised the monetary limits below which appeal should not be filed in the Tribunal, High Court and Supreme Court as under :-

S. No.	Appellate Forum	Revised Limit
1	CESTAT	Rs. 5,00,000
2	High Court	Rs. 10,00,000
3	Supreme Court	Rs. 25,00,000

Now, the Commissionerate has been instructed not to send proposal to the board for filing Civil appeal or SLP in a case involving duty upto Rs. 25 Lacs whether with penalty and interest or otherwise. However, where the imposition of penalty is the subject matter of dispute and the said penalty exceeds the time limit prescribed, then the matter could be litigated further. Similarly, where the subject matter of dispute is the demand of interest and the amount of interest exceeds the prescribed limit, then the matter may require further litigation.

12. With effect from 01.10.2011, Form ER-1, ER-2, ER-3, ER-4, ER-5 & ER-6 has to be submitted electronically irrespectively of duty paid in the preceding year.

13. Vide Circular dated 25.10.2011 a uniform monetary limit i.e. above Rs. 5 Lacs and upto Rs. 50 Lacs has been fixed for both AC and JC for adjudication u/s 11A and u/s 33 of Central Excise Act, 1944.

PART 2: CENVAT CREDIT RULES, 2004

Rule 2(1A) outside the factory of the manufacturer of the final products for generation of electricity for captive use within the factory; or”

Rule 2(d) "exempted goods"
Rule 2(e) “exempted services”

4. Rule 2(k) “input”

5. Rule 2(l) “input service”

6. Rule 2(naa) “manufacturer” or “producer”

7. Rule 3(1) (i)

8. Rule (1)(vii)

9. Rule 3(1)(ixa)

10. Rule 3(4)

11.Rule 3(5)

12.Rule 3(5B)

13.Rule 4((2)

14. Rule 4(7)

15. Rule 6

16. Rule 6(1)

17. Rule 6(2)

18. Rule 6(3)

19. Rule 6(3A)

20. Rule 6(3B)

21. Rule (6A)

22. Rule 9(1)(bb)

23. Rule 9A(5)

REFER MY BOOK FOR 2 TO 23

PART- 3 THE CUSTOMS ACT, 1962

1. Section 3 relating to classes of officers of customs amended :

As per section 3, there shall be the following classes of officers of customs, namely:-

(a) Chief Commissioners of Customs;

(b) Commissioners of Customs;

(c) Commissioners of Customs (Appeals);

(cc) Joint Commissioners of Customs;

(d) Deputy Commissioners of Customs;

(e) Assistant Commissioners of Customs ~~or Deputy Commissioner of Customs~~

(f) such other class of officers of customs as may be appointed for the purposes of this Act.

2. Refund of import duty or interest in certain cases [Section 27]

Already covered in Book.

3. Provisions of section 28 relating to recovery of duties not levied or short-levied or erroneously refunded substituted with new section 28

Same as Excise

4. Section 28AA and 28AB relating to interest on delayed payment of duty merged into new section 28AA

Same as Excise

5. Electronic filing of bill of entry for importation now mandatory [Section 46]

The importer of any goods other than goods intended for transit / transhipment shall make entry thereof by presenting electronically to the proper officer a bill of entry for home consumption or warehousing in the prescribed form.

Imp. Note: - Commissioner may relax the condition of electronic filing.

6. Electronic filing of shipping bill / bill of export for exportation [Section 50]

The exporter of any goods shall make entry thereof by presenting electronically to the proper officer a shipping bill/bill of export as the case may be in the prescribed form.

Imp. Note: - Commissioner may relax the condition of electronic filing.

7. Introduction of self-assessment in customs

I. Assessment includes provisional assessment, self-assessment, re-assessment and any assessment in which the duty assessed is nil. [Section 2(2)]

II. Provisions relating to assessment of duty recast [Section 17]

(a) Duty shall to be self-assessed by the importer/exporter

(b) Verification may be performed by proper officer –

For verification of self-assessment, the proper officer may require the importer, exporter or any other person to produce any document or information.

(d) Speaking order for re-assessment should be passed unless the importer agrees with the reassessment within 15 days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be.

(e) Audit at custom office / premises of importer or exporter – Where re-assessment has not been done or a speaking order has not been passed on re-assessment, the proper officer may audit the assessment of duty of the imported goods or export goods at his office or at the premises of the importer or exporter, as may be expedient, in such manner as may be prescribed.

Explanation — In cases where an importer has entered any imported goods under section 46 or an exporter has entered any export goods under section 50 before 08.04.2011, such imported goods/export goods shall continue to be governed by the provisions of erstwhile section 17.

III. Provisional assessment of duty [Section 18]

The proper officer may direct that the duty leviable on such goods be assessed provisionally;

(a) where the importer or exporter is unable to make self-assessment and makes a request in writing to the proper officer for assessment; or

(b) where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test; or

(c) where the importer or exporter has produced all the necessary documents and furnished full information but the proper officer deems it necessary to make further enquiry; or

(d) where necessary documents have not been produced or information has not been furnished and the proper officer deems it necessary to make further enquiry,

Consequential amendments

• When the duty leviable on such goods is assessed finally or re-assessed by the proper officer in accordance with the provisions of this Act, then-

(a) in the case of goods cleared for home consumption or exportation, the amount paid shall be adjusted against the duty finally assessed or re-assessed, as the case may be, and if the amount so paid falls short of, or is in excess of the duty finally assessed or re-assessed, as the case may be, the importer or the exporter of the goods shall pay the deficiency or be entitled to a refund, as the case may be;

(b) in the case of warehoused goods, the proper officer may, where the duty finally assessed or re-assessed, as the case may be, is in excess of the duty provisionally assessed, require the importer to execute a bond, binding himself in a sum equal to twice the amount of the excess duty.

• The importer or exporter shall be liable to pay interest, on any amount payable to the Central Government, consequent to the final assessment order or re-assessment order, at the rate fixed by the Central Government under section 28AB from the first day of the month in which the duty is provisionally assessed till the date of payment thereof.

• If any refundable amount is not refunded within three months from the date of assessment of duty finally or re-assessment of duty, as the case may be, there shall be paid an interest on such un-refunded amount at such rate fixed by the Central Government under section 27A till the date of refund of such amount.

IV. Determination of duty where goods consist of articles liable to different rates of duty[Sec 19]

If the importer produces evidence to the satisfaction of the proper officer or the evidence is available regarding the value of any of the articles liable to different rates of duty, such article shall be chargeable to duty separately at the rate applicable to it.

V. CBEC empowered to prescribe regulations for specifying the manner of conducting audit at the office of the proper officer of customs/at the premises of the importer [Clause (d) to section 157(2) inserted]

8. Central Government empowered to allow drawback in certain circumstances even if the export remittances not received within the stipulated time period [Second proviso to section75]

In this regard, Central Government has been empowered to prescribe the circumstances under which duty drawback would not be disallowed even though the export remittances are not received within the period allowed under FEMA.

9. Adjudicating authority empowered to allow provisional release of goods pending adjudication [Section 110A]

The adjudicating authority has been empowered to allow the provisional release of any goods, documents or things seized under section 110, pending adjudication.

10. Issuance of show cause notice with prior approval of an officer not below the rank of an Assistant Commissioner of Customs [Section 124]

Section 124 has been amended so as to provide that the said show cause notice can now be issued with the prior approval of an officer of the rank of an Assistant Commissioner of Customs or above.

11. Liability under the Customs Act, 1962 to be first charge [Section 142A inserted]

12. CBEC empowered to issue orders/instructions/directions to the officers of customs for implementation of any Customs provisions relating to any prohibition / restriction /procedure for import/export of goods [Section 151A]

The said section has been amended thereby empowering CBEC to issue orders, instructions and directions for the implementation of any other provisions of the Customs Act or of any other law for the time being in force, in so far as they relate to any prohibition, restriction or procedure for import or export of goods.

13. Vide Circular dated 31.05.2011 CBEC has revised the monetary limits for adjudication of cases by different grades of customs officers.

14. Vide Circular. dated 29.07.2011 in order to reduce the transaction cost of importer and expedite the time taken for custom clearance, the CBEC has made e-payment of duty mandatory for the importers paying an amount of Rs. 1,00,000 or more per transaction.

However, the ACCREDITED IMPORTER under the Customs Accredited Client Program will have to pay duty through e-payment mode only irrespective of the amount of duty to be paid.

The board has set up a dedicated payment gateway called "ICEGATE". With this portal, the importer can make payment through internet payment having account with designated bank. For making payment, the payer can select his category as "Registered" if he is registered or as "Unregistered" if he is not register.

15. Notification No. 69/2011-Cus. (NT) dated 22.09.2011

Section 75A was amended earlier to reduce the time limit from two month to one month.

Now, the corresponding amendment has been made in Rule 13(4) of the Customs and Central Excise Duties and Service Tax Drawback Rules, 1995 from two month to one month to bring it in-line with time limit prescribed under Section 75A.

16. Vide Notification No. 67/2011-Cus. (NT) dated 22.09.2011, the facility of Advance Ruling under section 28E of customs act is available to "Resident Public Limited Companies".

Public Limited Companies as defined section 3(1)(iv) of Companies Act and shall include a private company that becomes a public company by virtue of Sec.43A of the said act.

PART-4 THE CUSTOMS TARIFF ACT, 1975

1. Substitution of Standards of Weights and Measures Act, 1976 with Legal Metrology Act, 2009 in section 3:

With effect from 01.08.2011, in clause (a) of proviso to section 3(2) of the Customs Tariff Act, 1975, for the words and figures “Standards of Weights and Measures Act, 1976, the words and figures “Legal Metrology Act, 2009” shall be substituted.

2. In case of circumvention (avoidance) of anti-dumping duty imposed on an article, Central Government may, after necessary enquiry, extend the anti-dumping duty to such article or an article originating in / exported from such country [Section 9A(1A)]

Circumvention in either of following ways :-

(i) by altering the description or name or composition of the article subject to such anti-dumping duty

(ii) by import of such article in an unassembled or disassembled form

(iii) by changing the country of its origin or export or

(iv) in any other manner, whereby the anti-dumping duty so imposed is rendered ineffective.

3. Section 9AA(1) has been substituted by a new sub-section

Where upon determination by an officer authorised in this behalf by the Central Government, an importer proves to the satisfaction of the Central Government that he has paid anti-dumping duty imposed under section 9A(1) on any article, in excess of the actual margin of dumping in relation to such article, such importer shall be entitled to refund of such excess duty.

PART-5: SERVICE TAX

Section 70 - Maximum penalty for delay in furnishing of return is now Rs. 20,000 which earlier was Rs. 2,000.

Section 73 - relating to recovery of service tax not levied / paid / short- levied / short paid /

erroneously refunded amended : Already covered in book.

Section 73B - Already covered in book.

Sec 75: Up to 31.03..2011 interest on delayed payment in the service tax charged at 13% p.a. (simple interest) for delayed period. Wef 01.04.2011 rate of interest increased to 18% pa.

Provided that in the case of a service provider, whose value of taxable service provided in a financial year does not exceed sixty lakh rupees during any of the financial years covered by the notice or during the last preceding financial year, as the case may be, such rate of interest shall be reduced by three percent per annum.

Sec 76: Penalty for failure to pay service tax:

Any person, liable to pay service tax in accordance with the provisions of section 68 or the rules made under this Chapter, who fails to pay such tax, shall pay, in addition to such tax and the interest on that tax amount in accordance with the provisions of section 75, a penalty which shall not be less than Rs. 100 per day during which such failure continues or at the rate of 1% of such tax, per month, whichever is higher, starting with the first day after the due date till the date of actual payment of the outstanding amount of service tax.

Provided that the total amount of the penalty payable in terms of this section shall not exceed 50% of the service tax payable.

Sec 77. Penalty for contravention of rules and provisions of Act for which no penalty is specified elsewhere:

(1) Any person,—

(a) who is liable to pay service tax, or required to take registration, fails to take registration in accordance with the provisions of section 69 or rules made under this Chapter shall be liable to pay a penalty which may extend to ten thousand rupees or two hundred rupees for every day during which such failure continues, whichever is higher, starting with the first day after the due date, till the date of actual compliance;

(b) who fails to keep, maintain or retain books of account and other documents as required in accordance with the provisions of this Chapter or the rules made thereunder, shall be liable to a penalty which may extend to Rs.10,000;

(i) furnish information called by an officer in accordance with the provisions of this Chapter or rules made there under; or

(ii) produce documents called for by a Central Excise Officer in accordance with the provisions of this Chapter or rules made there under; or

(iii) appear before the Central Excise Officer, when issued with a summon for appearance to give evidence or to produce a document in an inquiry, shall be liable to a penalty which may extend to five thousand rupees or two hundred rupees for every day during which such failure continues, whichever is higher, starting with the first day after the due date, till the date of actual compliance;

(d) who is required to pay tax electronically, through internet banking, fails to pay the tax electronically, shall be liable to a penalty which may extend to ten thousand rupees;

(e) who issues invoice in accordance with the provisions of the Act or rules made thereunder, with incorrect or incomplete details or fails to account for an invoice in his books of account, shall be liable to a penalty which may extend to ten thousand rupees.

(2) Any person, who contravenes any of the provisions of this Chapter or any rules made thereunder for which no penalty is separately provided in this Chapter, shall be liable to a penalty which may extend to ten thousand rupees.

78. Penalty for suppressing value of taxable service. –

(1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of FCWSP the person, liable to pay such service tax or erroneous refund, as determined u/s 73(2), shall also be liable to pay a penalty, in addition to such service tax and interest thereon, if any, payable by him, which shall not be less than, but which shall not exceed twice, the amount of service tax so not levied or paid or short-levied or short-paid or erroneously refunded:

Provided that where true and complete details of the transactions are available in the specified records, penalty shall be reduced to 50% of the service tax so not levied or paid or short levied or short-paid or erroneously refunded.

Provided further that where such service tax and the interest payable thereon is paid within thirty days from the date of communication of order of the Central Excise Officer determining such service tax, the amount of penalty liable to be paid by such person under the first proviso shall be 25% of the service tax:

Provided also that in case of a service provider whose value of taxable services does not exceed sixty lakh rupees during any of the years covered by the notice or during the last preceding financial year, the period of thirty days shall be extended to ninety days.

(2) Where the service tax determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the service tax as reduced or increased, as the case may be, shall be taken into account :

Provided that in case where the service tax determined to be payable is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, the benefit of reduced penalty under the first proviso shall be available, if the amount of service tax so increased, the interest payable thereon and twenty-five per cent of the consequential increase of penalty have also been paid within thirty days of communication of the order by which such increase in service tax takes effect.

Provided further that if the penalty is payable under this section, the provisions of section 76 shall not apply.

Explanation. - For the removal of doubts, it is hereby declared that any amount paid to the credit of the Central Government prior to the date of communication of the order referred to in the second proviso to sub-section(1)or the first proviso to sub-section (2) shall be adjusted against the total amount due from such person.

Section 80 - Waiver of penalty only in cases where the information is captured properly in the specified records:

In section 80, words “section 78” have been substituted with the words “first proviso to sub- section (1) of section 78”.

It causes that the penalty shall be waived only in cases where true and complete details of the transactions are available in the specified records, i.e., the information is captured properly in the specified records.

Section 82 - Power to search premises amended :

Power	Amendment by Finance Act, 2011
Power to issue search warrant	Joint Commissioner of Central Excise has the power to issue search warrant if he has a reason to believe that any documents or books or things which in his opinion will be useful for or relevant to any proceeding under the Act, are secreted in any place
Power to execute search warrant	Joint Commissioner of Central Excise may authorize Superintendent of Central Excise, to execute, or may himself execute the search warrant.

Section 83 - Some more provisions of Central Excise Act, 1944 made applicable to service tax

Section No.	Title
9A	Offences and penalties
9AA	Certain offences to be non-cognizable
9B	Power of Court to publish name, place of business, etc., of persons convicted under the Act
9E	Application of section 562 of the Code of Criminal Procedure, 1898, and ofthe Probation of Offenders Act, 1958
34A	Confiscation/penalties not to interfere with other punishments
35R	Appeal not to be filed in certain cases

Section 88 and 89 inserted wef 08.04.2011

Section 88 - Liability under Act to be first charge:- Already Covered

Section 89 - Prosecution provisions (NFCI)

1. Offences punishable with imprisonment

(a) Provision of service without issuance of invoice

(b) Availment and utilization of CENVAT credit without actual receipt of inputs/input Services

(d) Non-payment of amount collected as service tax for a period of more than six months from the due date of payment.

2. Term of imprisonment:

If any person is convicted of an offence under this section for the
First time	in the case of an offence where the amount is	The term of imprisonment
	(i) upto Rs. 50 lakh	Upto 1 year
	(ii) more than Rs. 50 lakh	6 months - 3years
Second & every subsequent time	Term of imprisonment shall be 6 months - 3years
Note : Such imprisonment shall be for a term of less than six months if there are special and adequate reasons to be recorded in the judgment of the Court.

3. Following Cases not to be regarded as special and adequate reasons for awarding lesser

imprisonment for a term of less than six months : (CPSA)

a) the fact that the accused has been convicted for the first time for an offence under this

Chapter;

b) the fact that in any proceeding under this Act, other than prosecution, the accused has been ordered to pay a penalty or any other action has been taken against him for the same act which constitutes the offence;

c) the fact that the accused was not the principal offender and was acting merely as a

secondary party in the commission of offence;

d) the age of the accused.

4. Prior sanction of Chief Commissioner of Central Excise is mandatory for prosecution for any offence.

Proviso to section 93A -

Finance Act, 2011 has amended the proviso to section 93A so as to empower the Central Government to prescribe the circumstances or conditions under which the said amount of rebate granted shall not be recovered, even if the sale proceeds are not realized by the exporter within the stipulated time.

PART-6 : THE FINANCE ACT, 1994

I. Two new services has been brought under the ambit of service tax net w.e.f. 01.05.2011

1. Restaurant service [Section 65(105)(zzzzv)]

Service provider : A restaurant having the facility of air-conditioning in any part of the establishment, at any time during the financial year, and licence to serve alcoholic beverages.

Service receiver : Any person

Scope of taxable service: Any service provided or to be provided to any person, by a restaurant, by whatever name called, having the facility of air-conditioning in any part of the establishment, at any time during the financial year, which has Licence to serve alcoholic beverages, in relation to serving of food or beverage, including alcoholic beverages or both, in its premises.

• It should not be confused with mere sale of food at any eating house, where such services are materially absent or so minimal that it will be difficult to establish that any service in any meaningful way is being provided.

Abatement of 70% of the gross amount charged will be allowed to the assessee.

2. Short-term accommodation services [Section 65(105)(zzzzw)]

Service provider: A hotel, inn, guest house, club or camps, by whatever name called.

Service receiver: Any person

Scope of taxable service: Any service provided or to be provided to any person by a hotel, inn, guest house, club or camps, by whatever name called, for providing of accommodation for a continuous period of less than three months.

Abatement of 50% of the gross amount charged will be allowed to the assesse.

II. Scope of existing services has also been amended:

Service station service [Section 65(105)(zo)]

S.No.	It was:	And now is:
1.	Service must be provided by an authorised service station	Service may be provided by any Person
2.	Service is to be provided in relation	Service is to be provided in relation to:-
3.	any service, repair, reconditioning or to restoration	any service for repair, reconditioning or restoration or decoration or any other similar services
4.	motor cars, light motor vehicles or two wheeled motor vehicles.	any motor vehicle other than three wheeler scooter auto- rickshaw and motor vehicle meant for goods carriage.

2. Life insurance services [Section 65(105)(zx)]

It was:

Only service in relation to risk cover in life insurance was subjected to service tax.

And now is:

Any service provided by the Life Insurance Companies is liable to service tax.

3. Services in respect of membership of clubs or associations [Section 65(105)(zzze)]

Services provided only to the members of such club or association were subjected to tax.

Service provided to any person is liable to service tax.

4. Legal consultancy services [Section 65(105)(zzzzm)]

Already discussed in running batch

5. Commercial training or coaching centre service[Section 65(27)]

It was:

Earlier the definition of commercial training or coaching centre specifically excluded the following:-

(a) the preschool coaching and training centre; or

(b) any institute or establishment which issues any certificate or diploma or degree or any

educational qualification recognized by law for the time being in force.

And now is:

Now departmental clarify that the scope of the service has been expanded to include all coaching and training that is not recognized by law irrespective of whether the institute is providing any other course(s) recognized by law.

Earlier, the unrecognized education which is imparted by an institute that issues any certificate or diploma or degree or any educational qualification recognized by law was outside the service tax purview. Thus, two identical courses may be treated differently merely because one of the institutes also conducts another course that is recognized by law. This anomaly is corrected by subjecting all such unrecognized education to tax.

Important note:- Exemption has been granted to;

(a) Preschool coaching and training and

(b) Coaching or training relating to educational qualifications that are recognized by law.

6. The Point of Taxation Rules makes some fundamental amendments in the service tax law.

Following points are important

1. These rules shall be called the Point of Taxation Rules, 2011 and they shall come into force on the 1st day of April, 2011.

2. Meaning of “continuous supply of service”

3. Meaning of “point of taxation”

4. Determination of point of taxation

5. Determination of point of taxation in case of change in effective rate of tax

6. Payment of tax in cases of new services

7. In the following types of services, provisions of POT Rules not applicable

8. Determination of point of taxation in case of continuous supply of service

9. Transitional Provisions

FOR 2 TO 9 REFER MY NOTES

The Blog of Dr.Mahesh Gour

Monday, 9 April 2012

AMENDMENTS OF IDT CA FINAL MAY 12

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