HIGHLIGHTS
OF BUDGET 2013-14: INDIRECT TAXES
Service tax
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Voluntary
Compliance Encouragement Scheme, 2013 (VCES) is proposed to be introduced to
encourage
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voluntary compliance and broaden the tax base.
In this scheme, it is proposed to provide one time amnesty by way of (i) waiver
of interest and penalty; and (ii) immunity from prosecution, to the stop
filers, non-filers or non-registrants or service providers (who have not
disclosed true liability in the returns filed by them duringthe period from
October 2007 to December 2012) who pay the "tax dues".
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Service tax to be
paid on 30% of the value of the unit having carpet area exceeding 2000 sqft or
where the amount charged is more than Rs.1 crore. Though taxability on residential unit
less than 1 crore / 2000 sqft. Space will continue on 25% of taxability.
Ø
All restaurants
with air-conditioning or central air heating (including restaurants not serving
liquor as well) in any part of the establishment at any time during the
year to be liable to service tax.
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Exemption to
transportation of petroleum and petroleum products, postal mails or mail bags
and household effects by railways and vessels will not be available
while the benefit of transportation of agricultural produce, food stuffs,
relief materials for specialized purposes, chemical fertilizers and oil cakes,
registered newspapers or magazines and defence equipments would be available to
GTA,.
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The following
exemptions are withdrawn:
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Services provided
by an educational institution by way of renting of immovable property or
education
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auxiliary service.
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Temporary transfer
or permitting the use or enjoyment of a copyright relating to cinematographic
films
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was fully exempt so far; now, this exemption
will be restricted to exhibition of cinematograph films in a
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cinema hall or a cinema theatre.
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Services by way of
vehicle parking to general public.
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Services provided
to Government, a local authority or a governmental authority, by way of
repair or
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maintenance of aircraft.
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Courses in
'designated trades' offered by Industrial Training Institute or Industrial
Training Center affiliated to State Council of Vocational Training to be
covered under the negative list.
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Definition of
"process amounting to manufacture or production of goods" to include
processes on which duties of excise are leviable under the Medicinal and
Toilet Preparations (Excise Duties) Act, 1955 thereby bringing the same under
the negative list. Testing activities directly related to
agriculture production of any agricultural produce like soil testing, animal feed
testing, testing of samples from plants or animals, for pests and disease
causing microbes to be covered under the negative list.
Ø
A show cause notice
issued for fraud cases, if not found sustainable by an appellate authority or
tribunal or court, to be deemed to be a notice issued for a period of
eighteen months.
Ø
Maximum penalty for
failure to obtain registration to be restricted to Rs.10,000 only as
against earlier penalty of Rs.10,000 or Rs.200 per day of default whichever is
higher.
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Director, manager,
secretary or other officer of the company, who is in any manner knowingly
concerned with specified contraventions, to be liable to a penalty of
Rs.1 Lakh. The specified contraventions would include evasion of service tax,
issuance of invoices, bill, challan without the provision of taxable service, availment
and utilization of credit without actual receipt of taxable service or
excisable goods or failure to pay any amount collected as service tax to the
credit of the Central Government beyond the period of 6 months from the date on
which such payment becomes due.
Ø
Appellate tribunal
may admit an appeal or permit the filing of memorandum of cross
objections even after the expiry of the period of 3 months in case of assessee
appeal also.
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Any person who
collects service tax exceeding Rs. 50 lakh, but fails to deposit the same to
the Central Government within 6 months, shall be punishable with
imprisonment for a term which may extend to 7 years but not less than 6 months.
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Section 90 is
proposed to be introduced to specify and differentiate the offences provided in
section 89(1) into cognizable offences from non-cognizable and bailable
offences.
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Commissioner of
Central Excise is to be empowered to authorize any officer of Central Excise
not below the rank of Superintendent of Central Excise to arrest a
person for offences specified under clauses (i) & (ii) of section 89(1) i.e.
where the amount exceeds Rs. 50 Lakh.
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Exemption limit of
Rs. 25 lakh will not be available in case of charitable organizations.
Central excise
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Speed post with
proof of delivery or courier approved by the Central Board of Excise
& Customs would also be the prescribed modes of delivery for any decision
or order or any summons or notices.
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Advance ruling may
also be sought on the matters relating to credit of service tax paid or deemed
to have been paid on input services.
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Offences
relating to excisable goods, (with the duty liability exceeding Rs.50 lakh)
which are punishable for evasion of payment of any duty or contravention of any
of the provisions relating to credit of any duty to be cognizable and
non-bailable. An offence involving evasion to be
punishable with a term of imprisonment extending to seven years with fine
in case the duty leviable exceeds Rs. 50 lakh instead of earlier Rs. 30 lakh.
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“Resident public
limited companies” to be eligible for seeking advance ruling on central
excise and service tax matters as is available under Customs.
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Money due to the
Government may now be recovered from any person other than from whom money is
due after giving a proper notice, if that other person holds money for
or on account of the first person.
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Recovery provisions
provided under rule 14 of the CENVAT Credit Rules, 2004 to apply in case of
failure to pay the amount on removal of inputs/capital goods as such,
after use and writing off the value of the inputs/capital goods.
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Service of a
statement containing details of duty not paid, short levied or erroneously
refunded to be deemed to be a show cause notice.
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The
officer-in-charge of police station to admit the arrested person to bail to
appear before the Magistrate or in default of bail forward him in custody of
Magistrate only where the offence is non-cognizable.
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Interest on refund
arising out of finalization of provisional assessment to be paid as per the
provisions of section 11BB.
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MRP based valuation
prescribed with 35% abatement for non-allopathic medicaments.
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Excise duty on
following goods enhanced:-
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Mobile phones of
retail sale price exceeding Rs 2000/-.
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Cigarettes
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Marble tiles and
slabs
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Full exemption from
excise duty on ships and other vessels. Hence, there will be no CVD on
import of the same.
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'Zero excise duty
route' restored in respect of branded readymade garments and made ups.
Customs
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Duty free allowance
in respect of jewellery for an Indian passenger who has been residing
abroad for over one year or a person who is transferring his residence to India
raised from Rs.10,000 to Rs.50,000 in case of a gentleman passenger and from
Rs.20,000 to Rs.1,00,000 in case of a lady passenger.
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Duty free allowance
for crew member of vessel/aircraft raised from Rs.600 to Rs.1500.
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Customs house
agents to be known as customs brokers. It is proposed that the minimum amount
of refund of customs duty will be Rs. 100.
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For issuance of the
show cause notice, it is proposed that the minimum amount demanded should be
Rs. 100.
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Interest free
period for payment of import duty to be reduced from five days to two days.
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Import/export
general manifest to be filed electronically. However, Commissioner of
Customs may, in cases where it is not feasible to electronically present the
same, allow the same to be delivered in any other manner.
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CBEC to be
empowered to permit the landing of vessels and aircrafts at any place other than
customs port or customs airport.
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Following specified
offences would be non-bailable:-
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evasion of duty exceeding Rs.50 lakh;
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import or export of prohibited goods notified
under section 11 which are also notified under section
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135;
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import or export of any goods not declared in
prescribed manner and the market price of which exceeds Rs. 1 crore;
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Fraudulent availment of drawback or exemption,
if the amount of drawback or exemption from duty exceeds Rs.50 lakh.
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The period of
storage of imported goods, pending clearance, in a public or private
warehouse to be reduced to thirty days. However, Commissioner of Customs may
extend the period of storage for further period not exceeding thirty days at a
time.
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The threshold limit
for punishment in an offence relating to evasion of duty or fraudulent
availment of drawback or exemption from duty in connection with export of
goods, to be increased from Rs.30 lakh to Rs.50 lakh.
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It is proposed that
any warehoused goods may be exported to a place outside India without
payment of import duty if a shipping bill or a bill of export in prescribed
form or label or declaration accompanying the goods as referred to in section
82 has been presented in respect of such goods.
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Importation or
exportation of goods to be prohibited for protection of "designs
and geographical indications" also.
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Provisional
attachment of property may be ordered in case of non-payment of duty on account
of fraud,suppression of facts etc as well.
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Provisions relating
to duty deferment to be omitted. No duty liability on any sample of goods
which is consumed or destroyed during the course of testing or examination.
Basic customs duty enhanced on the
following goods:-
·
Yachts and motor
vehicles
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Raw silk
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Set top boxes
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Luxury cars (duty
enhanced from 75% to 100%)
Common points
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Rate of service
tax, customs duty and excise duty not tinkered with.
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In cases where the
delay in disposing of the appeal is not attributable to the appellant, the Tribunal
may extend the period of stay by a period not exceeding 185 days subject to the
condition that if the appeal is not disposed of within the total period of 365
days from the date of order, the stay order shall stand vacated.
ü
The producer or
manufacturer allowed to seek advance ruling while starting a new line of
business of production or manufacture. Similarly, the importer or exporter also
would be allowed to seek advance ruling while starting a new line of business.
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Monetary limit of
the Single Bench of the Tribunal to hear and dispose of appeals enhanced
from Rs.10 lakh to Rs.50 lakh.
Goods and Services Tax
Roadmap for GST announced. First decisive step taken by
allocating a sum of Rs.9,000 crore towards the first instalment of the balance
of CST compensation.. Draft Constitutional Amendment Bill for GST and Draft GST
Bill to be placed in the Parliament within the next few months.
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