Recent Amendments in IDT
Recent amendments in Service Tax:
1. Applicable Rate of service tax changed w.e.f. 01-04-2012 to 12.36%.
2. Time limit for issue of invoice u/s 4A of Service Tax Rules,1994 increased from 14 days to 30 days and correspondingly under rule 3 of POT Rules, 2011 also time limit for issue of invoice increased to 30 days but in rule 5 of POT Rules, 2011 it remains 14 days only.
3. Where service provider is an Individual or partnership firm, whose total value of taxable services provided in the previous financial year does not exceed Rs. 50 lac, he may opted to pay service tax in the current financial year upto a total taxable services of Rs.50 lacs on receipt basis.
4. The limit of Rs.2 Lacs for adjustment of excess service tax deposited for any period, and intimation of adjustment to the department within 15 days, now omitted. It means now adjustment of excess service tax deposited can be made of any amount, but the adjustment allowed only towards next period liability of service tax.
5. For life insurance business, service tax payable @ 3% of the Gross premium charged for first year and @1.5% of the Gross premium charged for the subsequent year (earlier it was 1.5% of Gross premium for all).
6. The distributor or selling agents providing taxable services in relation to lottery, now required to pay Rs 7000/- and Rs. 11000/- instead of Rs.6000/- and Rs.9000/- respectively.(others conditions remains same).
7. In case of foreign exchange services, the slab rate of service tax changed as under –
Amount of currency exchanged Service Tax
(i) Upto Rs. 1,00,000/- 0.12% of Gross amount
(subject to minimum of Rs. 30/-)
(ii) Exceeding Rs. 1,00,000/- upto Rs. Rs. 120/- and 0.06% of Gross amount.
10,00,000/-
(iii) Exceeding Rs. 10,00,000/- Rs. 660/- and 0.012% of gross amount
(subject to maximum of Rs 6000/-
8. In case of works contract services, in composition scheme, rate of service tax increased to 4.8% (earlier it was 4%) of gross amount of works contract.
9. Rule 2A inserted
Rule 2A : Date of payment: For the purposes of these rules, “date of payment” shall be the earlier of the dates on which the payment is entered in the books of accounts or is credited to the bank account of the person liable to pay tax:
Provided that —
(A) the date of payment shall be the date of credit in the bank account when —
(i) there is a change in effective rate of tax or when a service is taxed for the first time during the period between such entry in books of accounts and its credit in the bank account; and
(ii) the credit in the bank account is after four working days from the date when there is change in effective rate of tax or a service is taxed for the first time; and
(iii) the payment is made by way of an instrument which is credited to a bank account,
(B) if any rule requires determination of the time or date of payment received, the expression “date of payment” shall be construed to mean such date on which the payment is received.
10. Rule 6 omitted
11. Rule 7 replaced to remove exception applicable for specified 8 taxable services of professional nature.
12. Rule 8A inserted
8A. Determination of point of taxation in other cases.- Where the point of taxation cannot be determined as per these rules as the date of invoice or the date of payment or both are not available, the Central Excise officer, may, require the concerned person to produce such accounts, documents or other evidence as he may deem necessary and after taking into account such material and the effective rate of tax prevalent at different points of time, shall, by an order in writing, after giving an opportunity of being heard, determine the point of taxation to the best of his judgment.”.
13. Wherever the service provider receives a payment up to Rs. 1000/- in excess of the amount indicated in the invoice, the POT for the excess amount, at the option of service provider, shall be the date of invoice only.
Note: correspondingly as per rule 4A of STR. 1994, no separate invoice required to be issued for excess amount.
Cenvat Rules
1. Definition of ‘Capital Goods’ [Rule 2(a)] amended to cover certain specified motor vehicles and their components, spares and accessories etc. to make them eligible for Cenvat as capital goods used in the factory of the manufacturer of the final product.
2. Definition of ‘Exempted Goods’ [Rule (d)] has been amended to include goods in respect of which exemption under Entries at Serial no. 67 & 128 of Notification No. 24/2012 is availed.
3. Definition of ‘Input Service’ [Rule 2(l)] amended to cover specified services related to motor vehicles for Cenvat.
4. Rule 3(5) third proviso omitted and Rule 3(5A) substituted to insert the condition that if the capital goods are removed as waste and scrap, the amount payable shall be equal to Cenvat credit taken on the said goods reduced by the specified percentage or duty leviable on transaction value of such scrap, whichever is higher.
5. A provision inserted to rule 4(1) and rule 4(2)(a) to allow credit on input and capital goods on delivery of such goods to the service provider without bringing them into the premises subject to due documentation.
6. Rule5 regarding Refund of Cenvat Credit replaced to allow refund of Cenvat credit as determined by formula asunder:
Export turnover of goods and services X Net Cenvat credit
Total turnover
7. Rule 6(3) amended to change rate to 6% for Cenvat credit reversed for exempted goods and services.
8. Rule 6(3c) omitted.
9. Rule 7 substituted to revised manner of distribution of Cenvat Credit by ISD.
10. New rule 10A inserted to allow transfer of Cenvat credit of ACD u/s 3(5) of CTA.
11. Rule 12 amended to specify that procedure and facilities for LTU not applicable to unit availing exemption of Notification No. 01/2010.
12. Rule 14 amended to provide that interest payable in either of the following two cases
(i) Cenvat credit has been taken and utilises wrongly; or
(ii) Cenvat credit has been erroneously refunded.
Central Excise Rules
13. Rule 4(1A) amended to withdraw option to authorise job-worker to pay duty in case of ready made garments and made up of articles of textiles.
14. Rule 12AA of CER, 2004 renumbered as 12AAA and rule 12CC of CER, 2012 renumbered as 12CCC.
15. Rule 22(3) amended to cover CA / ICWA nominated u/s 14A/14AA to produce documents on demand for the scrutiny.
15. Fourth proviso to Rule 12(1) amended to extend relaxation of filing of quarterly return to on assessee availing exemption in respect of certain specified goods of Notification No. 12/2012.
16. CBEC notified new form of Return ER-1 & ER-3
17. Application for registration of new factory after option as large taxpayer unit status to be made to Asstt. Comm. in place of the Chief Commissioner.
18. Wef 01-11-2011 e-filing of Excise Return and statements mandatory for all assessee.
19. Provision and procedures of export to Nepal amended.
Other Misc. Amendments and Clarifications
20. Sec 11AB substituted with section 11AA.
21. Rule 5 of CE (Removal of Goods at Concessional rate of duty for Manufacture of Excisable Goods) Rule 2001 changed to provide submission of quarterly return instead of monthly return.
22. A clarification issued by the CBEC that arrears of duty demanded U/s 11A can be paid by utilising Cement credit which has accrued subsequently to the period to which the demand pertained and restriction of Rule 3(4) proviso shall not apply on demand made U/s 11A.
23. The CBFC vide Circular dated 02-04-2012 clarified that Structural Components which are to be used essentially as part of ‘boiler system’ would be eligible for Cenvat as inputs.
24. Wef 01.09.2011 the CBEC has revised monetary limit below which appeals should not be filed in the CESTAT, High Court and the Supreme Court as under-
Tribunal Rs 5.00 Lacs
High Court Rs 10.00 Lacs
Supreme Court Rs 25.00 Lacs
· It has been clarified by the Board that above monetary limits are of duty/ Tax amount under dispute only and does not include interest or penalty but where dispute is of the demand of interest or penalty only, the amount of interest or penalty exceeds the specified limit then the matter may require litigation.
· This monetary limit shall not applicable where the Constitutional validity of provision of the Act or Rule is under challenge or where Notification/ Instruction/ order or Circular has been held illegal or ultra-vires.
· The above mentioned limit shall also applicable in case of refund.
25. For SSP exemption, first clearance up to Rs. 10.00 Lacs to be in terms of invoices and not payments received.
26. The CBEC has clarified that Service tax not chargeable on delayed payment charges collected by the Stock Broke.
Customs
27. E- Payment of Customs duty made mandatory for importers paying duty of Rs. 1.00 Lacs or more.
28. Sec 28 of the Customs Act amended retrospectively to validate Show Cause Notice issued by all persons appointed as officer of Customs u/s 4.
29. In Customs, Advance Ruling facility also available to resident Public Limited Companies.
30. Appendix E of Baggage Rules, 1998 has been amended to revise the limits of duty free baggage for tourist.
31. Ed. Cess and SHE Cess exempted on ACD u/s 3(5) of CTA.
32. Appendix A of Baggage Rules, 1998 has revised the allowance for resident passengers to Rs 35000, Rs 15000, Rs 15000 in place of Rs 25000, 12000/- & Rs 12000/- respectively.
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