Union Budget 2016-17 - Indirect Taxes

35
Union Budget 2016-17 As announced on February 29 th 2016 Indirect Taxes

Transcript of Union Budget 2016-17 - Indirect Taxes

Page 1: Union Budget 2016-17 - Indirect Taxes

Union Budget 2016-17

As announced on February 29th 2016 Indirect Taxes

Page 2: Union Budget 2016-17 - Indirect Taxes

February 29, 2016

Contents

Backdrop

Indirect Taxes

• Customs Duty

• Central Excise Duty

• Service tax

• CENVAT Credit

• Others – Dispute Resolution Scheme

• Others – Baggage Rules

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February 29, 2016

Backdrop

■ The Union Budget 2016-17 was presented by the Finance Minister Mr. Arun Jaitley on 29th February 2016 in an environment of volatile and slowing global markets and India weathering the storm to outshine in the previous financial year

■ The Budget has been proposed when the forecasted challenges indicate global slowdown and additional fiscal burden due to 7th Central Pay Commission recommendations and One Rank One Pension (OROP) Scheme

■ On the bright side, the Budget has been proposed keeping in mind the best ever foreign reserves (UD$ 350 Billion) in the kitty of the Government’s Treasury

■ Government has been committed to introduce the Goods and Service Tax (GST) Regime

■ Priority is on transforming India and having a significant impact on the lives of people

■ Focus is on continuing with the pace of economic reforms and policy initiatives to change the lives of our people for the better; boosting domestic demand; and ensuring macro-economic stability and prudent fiscal management

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■ Definition of ‘warehouse’ has been amended to include the Special Warehouse for enabling storage of specified goods under physical control of the department

■ Separate provisions have been introduced with respect to granting of license, specified class of goods that can be stored in the special warehouse, regulating the process of cancellation of licences, etc

■ Definition of ‘warehousing station’ has been removed

■ Every notification under Section 25 which contains the exemption from Custom duty shall be effected only on the date of its issue for publication in official gazette. The requirement of it to be published and offered for sale on the date of issuehas been done away with

■ Increase in the period of limitation from one year to two years in cases not involving fraud, suppression of facts, willful mis-statement, etc

■ Customs Act to provide for deferred payment of Customs duties for importers and exporters with proven track record – to be notified

■ After approval from proper officer and fulfilment of certain conditions goods may be transferred to any place outside India or to another customs station without payment of duty in the same conveyance

Indirect Tax – Customs Duty

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■ Value of warehousing bond required to be submitted has been increased to thrice from twice of amount of duty payable

■ Period for which goods may remain in warehoused has been changed as follows:

In case of good including capital goods intended for use in EOU, EHTP or STP the goods can be deposited in warehouse without any time limit till its clearance or consumption irrespective of the nature of the goods

In any other case, time limit is one year from the date on which Proper officer has made an order for depositing of goods

■ The power of Proper officer over warehoused goods has been omitted as Section 73A has been inserted which states that custody of warehoused goods shall remain with the warehouse keeper

■ Section 63 relating to payment of rent and warehouse charges is being omitted in view of the privatization of services, and free market determination of rates, including those by facilities in the public sector

■ Removal of sample goods shall not be treated as improper removal of warehouse goods

■ The interest rate for the purpose of delayed payment of Customs duty has now been reduced to 15% from 18%

Indirect Tax – Customs Duty

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■ The owner’s right has been reduced to deal with warehoused goods in the following cases:

Separate the damaged goods

Take sample of warehoused goods without entry for home consumption

■ For carrying out manufacturing process in the warehouse, owner of goods are required to take the permission from Principle Commissioner or Commissioner instead of Deputy/Assistant Commissioner

■ Customs Single Window Project to be implemented at major ports and airports starting from beginning of next financial year – announcement in Budget

■ Increase in free baggage allowance for international passengers. Filing of baggage declaration only for those carrying dutiable goods.

■ Board is being provided the power to frame regulations for allowing transit of certain goods and conveyance without payment of duty

■ Extension to the period of warehousing to all goods used by Export Oriented Undertakings, Units under Electronic Hardware Technology Parks, Software Technology Parks, Ship Building Yards and other units manufacturing under bond

Indirect Tax – Customs Duty

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■ Infrastructure Cess being introduced on motor vehicles of Tariff Heading 8703:

Petrol/LPG/CNG driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1200cc – 1%

Diesel driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1500cc – 2.5%

Other higher engine capacity motor vehicles and SUVs and bigger sedans – 4%

■ No credit of this Cess will be available, and credit of no other duty can be utilized for payment of this Infrastructure Cess

■ This Cess will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931

■ Three wheeled vehicles, Electrically operated vehicles, Hybrid vehicles, Motor vehicles which after clearance have been registered for use solely as taxi, Cars for physically handicapped persons, ambulances, etc. will be exempt from this Cess

■ Customs duty rate changes aim to facilitate ‘Make in India’

Indirect Tax – Customs Duty

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■ Every notification under Section 5A which contains the exemption from Excise duty shall be effected only on the date of its issue for publication in official gazette. The requirement of it to be published and offered for sale on the date of issue has been done away with

■ Increase in the period of limitation from one year to two years in cases not involving fraud, suppression of facts, willful mis-statement, etc

■ Section 37B is being amended so as to empower the Board for implementation of any other provision of the Act in addition to the power to issue orders, instructions and directions

■ Revision of return extended to Central Excise assesses

■ Number of returns to be filed by a central excise assessee, above a certain threshold, is being drastically reduced, from 27 to 13, one annual and 12 monthly returns (w.e.f. 01.04.2016)

■ The interest rate for the purpose of delayed payment of Excise duty has now been reduced to 15% from 18%

Indirect Tax – Central Excise Duty

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■ Exemption to every manufacturing factory or premises engaged in the manufacture of articles of jewellery excluding articles of silver jewellery but including articles of silver jewellery studded with diamond, etc. from registration requirements

■ In order to claim rebate of duty on excisable goods used in goods exported to any country other than Bhutan, the specified declaration is required to be accompanied by a Chartered Engineer’s Certificate in respect of correctness of input-output ratio after which permission may be granted to the applicant for manufacture and export of finished goods. Additionally a new format of declaration has been prescribed

■ Increases the declared tariff value for readymade garments and made up articles of textiles from 30% to 60% which shall apply to all goods mentioned in Notification No. 20/2001-CE (N.T.)

■ The tariff value in respect of articles of jewellery (other than silver jewellery) at the rate of 30% of transaction value has been done away with

■ Extend Excise duty exemption, presently available to Concrete Mix manufactured at site for use in construction work to Ready Mix Concrete

Indirect Tax – Central Excise Duty

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■ Change in the rate of abatement as provided under Notification No. 49/2008-CE (N.T.)

All goods falling under Tariff Headings of Chapter 3401 and 3402 have been provided abatement of 30%

Abatement increased from 25% to 30% for all footwear covered under Chapter 64

Abatement of 25% provided to aluminium foils falling under Tariff Heading 7607

Abatement of 35% provided to wrist wearable devices (smart watches) falling under Tariff Heading 8517 62

Accessories of goods with respect to specified vehicles and earth moving vehicles (cranes, bull dozers, fork lifts, etc.) are being included for the purpose of RSP based assessment of Excise duty

■ If goods are not exported, interest is payable under Section 11AA

■ Extend Excise duty exemption, presently available to Concrete Mix manufactured at site for use in construction work to Ready Mix Concrete

Indirect Tax – Central Excise Duty

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■ With respect to rebate of duty on export of goods, while determining the market price, the ‘Indian market price’ shall have to be considered. Also, for the purpose of the said Notification, the limitation period for the rebate shall be guided by the provisions of Section 11B of the CEA

■ With respect to the instances where two or more premises are located within a closed area or same vicinity, single registration may be awarded after the verification of the concerned officer. As per the earlier provision, the premises should have been separated by a railway tracks etc., which is not the condition henceforth

■ New Central Excise (Removal of Goods at a Concessional Rate of Duty) Rules, 2016 have been introduced

■ Interest is leviable from the date of finalisation of assessement as against from the date of provisional assessment

■ The transporter invoice issued by the manufacturer is not required to be self-attested when the duplicate copy of the invoice is digitally signed

■ Proceedings on personnel of a company (including Directors) shall be deemed to have been consummated when the proceedings against Company stands concluded

Indirect Tax – Central Excise Duty

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■ Krishi Kalyan Cess @ 0.5% on all taxable services has been introduced. Input tax credit of this cess will be available for payment of this cess (w.e.f. 01.06.2016)

■ Annual return will have to be filed by Service tax assessees, above a certain threshold, taking total number of returns to three in a year (w.e.f. 01.04.2016)

■ Section 67A which provides for the ‘Date of determination of rate of tax, value of taxable service and rate of exchange’ has been amended to the effect that the time or the point in time with respect to rate of Service tax shall be determined as per the Point of Taxation Rules (POTR) (w.e.f. the date of when Finance Bill receives assent)

■ Interest rates rationalised at a uniform rate of 15%, except in case of Service tax collected but not deposited to the exchequer, in which case it would be 24% from the date it becomes due (w.e.f. the date of when Finance Bill receives assent)

■ In case of assessees, whose value of taxable services in the preceding year/years covered by the notice is less than Rs. 60 Lakh, the rate of interest on delayed payment of Service Tax will be 12% (w.e.f. the date of when Finance Bill receives assent)

Indirect Tax – Service Tax

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Services now taxable

■ Services removed from the negative list (w.e.f. 01.06.2016):

Transportation of passengers by way of a stage carrier

Services by way of transportation of goods by an aircraft or a vessel from place outside India up to the Customs station of clearance in India

■ Services provided by a senior advocate to an advocate or partnership firm of advocates providing legal service; and service provided by a person represented on an arbitral tribunal to an arbitral tribunal (w.e.f. 01.04.2016)

■ Assignment of right to use the spectrum and its subsequent transfer has been included in the declared list of services and thus made leviable to Service tax. These will not be treated as a sale of intangible goods (w.e.f. the date of when Finance Bill receives assent)

■ Clarified that any activity carried out by a lottery distributor or selling agent in relation to promotion, marketing, organizing, selling of lottery or facilitating in organizing lottery of any kind, in any other manner, on behalf of the State Government as per the provisions of the Lotteries (Regulation) Act, 1998, is leviable to Service Tax (w.e.f. the date of when Finance Bill receives assent)

Indirect Tax – Service Tax

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Services now taxable

■ Services provided by mutual fund agent/distributor to a mutual fund or asset management company

■ Services of transport of passengers, with or without accompanied belongings, by ropeway, cable car or aerial tramway (w.e.f.01.04.2016)

Indirect Tax – Service Tax

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■ Services Exempted (w.e.f. 01.03.2016):

Exemption on construction, erection, commissioning or installation of original works pertaining to monorail or metro, where contracts entered prior to 01.03.2016

Construction of affordable houses up to 60 square metres under any scheme of the Central or State Government including PPP Schemes

Service tax on the services of Information Technology Software on media bearing RSP provided Central Excise duty is paid on RSP in accordance with Section 4A of the Central Excise Act.

Services provided by the Indian Institutes of Management (IIM) by way of 2 year full time Post Graduate Programme in Management (PGPM) (other than executive development programme), Integrated Programme in Management and Fellowship Programme in Management (FPM)

Services by way of construction, erection etc. of a civil structure or any other original works pertaining to the “In-situ Rehabilitation of existing slum dwellers using land as a resource through private participation” as well as “Beneficiary-led individual house construction / enhancement” component of Housing for All (HFA) (Urban) Mission/ Pradhan Mantri Awas Yojana (PMAY)

Indirect Tax – Service Tax

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■ Services Exempted (w.e.f. 01.04.2016):

The regulatory services provided by Securities and Exchange Board of India (SEBI)

Services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana

Services provided by Assessing Bodies empanelled by Ministry of Skill Development & Entrepreneurship

General insurance services provided under ‘Niramaya’ Health Insurance Scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability

Annuity services provided by NPS and Services provided by EPFO to employees

Services provided by Insurance Regulatory and Development Authority (IRDA) of India

Reduction of Service tax on Single Premium Annuity (Insurance) Policies from 3.5% to 1.4% of the premium paid in certain cases

The threshold exemption to services provided by a performing artist in folk or classical art forms of music, dance or theatre is being enhanced from Rs 1 lakh to Rs 1.5 lakh charged per event

Indirect Tax – Service Tax

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Services Exempted (w.e.f. 01.04.2016):

Services provided by Biotechnology Industry Research Assistance Council (BIRAC) approved biotechnology incubators to incubatees

Services provided by National Centre for Cold Chain Development under Department of Agriculture, Cooperation and Farmer’s Welfare, Government of India, by way of knowledge dissemination

■ Special provision introduced whereby, services provided by way of construction, maintenance etc. of canal, dam or other irrigation works provided to bodies set up by Government or by an Act of Parliament or a State Legislature (with 90% or more participation) to carry out any function entrusted under Article 243W of the Constitution, during the period from the 01.07.2012 to 29.01.2014, have been exempted from Service tax with consequential refunds, subject to the principle of unjust enrichment

■ Pre-School & Education up to higher secondary; education as a part of an approved vocational education course; and education for obtaining a qualification recognized by law removed from Negative List but continue to enjoy exemption under Notification No. 25/2012-ST.

Indirect Tax – Service Tax

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■ Exemption with respect to services provided to Government or local authority or a Governmental authority, by way of construction, erection, commissioning, completion, repair, maintenance, etc., of (a) civil structure or original works predominantly meant for use other than for commerce, industry or any other business or profession; (b) a structure meant predominantly for educational establishment, clinical establishment or an art or cultural establishment; (c) a residential complex predominantly meant for self-use or for the use of their employees; under a contract entered before 01.03.2015 and stamp duty has been paid before that date; refund has been allowed from 01.04.2015 to 29.02.2015 (both days inclusive). Also, exempt from 01.03.2016 to 31.03.2020

■ Similar to the above, exemption has been granted to services in relation to construction of airport or port for the period 01.04.2015 to 29.02.2016 (both days inclusive) and refund has been allowed for such period when such services are under a contract entered before 01.03.2015 and stamp duty has been paid before that date. Also, exempt from 01.03.2016 to 31.03.2020

■ Application for refund in the above scenarios has to be made within 6 months from the date when the Finance Bill, 2016 receives President’s assent

Indirect Tax – Service Tax

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■ Benefit of refund of Service tax on services used beyond the factory or any other place or premises of production or manufacture of the said goods, for export of the said goods has been given from 01.07.2012 by making retrospective amendment in the parent notification. Accordingly, one month time period is proposed to be allowed from the date when the Finance Bill, 2016 receives President’s assent, to the exporters whose claim of refund were earlier denied in absence of amendment carried herewith

■ New Dispute Resolution Scheme introduced (discussed separately)

Indirect Tax – Service Tax

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Provisions with respect to offences (w.e.f. the date of when Finance Bill receives assent)

■ The longer period of limitation has now been extended to 30 months from the erstwhile 18 months from the relevant date (w.e.f. the date of when Finance Bill receives assent)

■ Proceedings on personnel of a company (including Directors) shall be deemed to have been consummated when the proceedings against Company stands concluded

■ Monetary limit for imposing penalty and launching prosecution (including power to arrest) increased from erstwhile `50 Lakhs to `2 Crores

■ Cognizable offence only when the tax has been collected and not deposited with the Government

■ Penal provisions with respect to non-cognizable and bailable offences have been omitted in light of omission of the clause that provided for treatment of all offences which were non-cognizable and bailable

Indirect Tax – Service Tax

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■ Facility of payment of Service tax on receipt basis is being extended to One Person Company whose aggregate value of services provided is up to `50 lakh in the previous financial year (w.e.f 01.04.2016)

■ Quarterly payment of Service tax is extended to One Person Company as well as to HUF has been provided (w.e.f 01.04.2016)

Indirect Tax – Service Tax

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Changes in Abatement Notification

■ Condition of non-availment of CENVAT credit of input service has been done away with, in the case of following categories:-

Transport of goods by rail

Transport of passengers, with or without accompanied belongings by rail

Transport of goods in a vessel

Indirect Tax – Service Tax

Category Taxable Value Condition

Transport of goods in containers by rail by

any person other than India Railways

40% CENVAT credit on input and capital goods, used for

providing the taxable service, has not been taken

under the provisions of CCR, 2004

Service of Goods Transport Agency in

relation to transportation of used household

goods

40% CENVAT credit on input, capital goods and input

services, used for providing the taxable service, has

not been taken by the service provider under the

provisions of CCR, 2004 Service provided by a foreman of chit fund in

relation to chit

70%

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Changes in Abatement Notification (w.e.f 01.04.2016)

■ The category ‘Service of goods transport agency in relation to transportation of goods’ has been changed to ‘Services of goods transport agency in relation to transportation of goods other than used household goods’

■ Rate of tax in case of service by a tour operator in relation to:

a tour, only for the purpose of arranging or booking accommodation for any person- 10%

tours other than above- 30%

■ In case of ‘construction of complex, building, civil structure, etc.’ for residential use, value of taxable services shall be now enhanced to 30% from 25%

■ Definition of ‘package tour’ has been removed

■ A condition mandating inclusion of cost of fuel in the consideration for availing abatement on the services by way of renting of motor-cab is being prescribed

■ Service by an AC stage carriage will also be eligible for benefit of abatement of 40% under ‘Transport of passengers with or without accompanied belongings’ (w.e.f 01.06.2016)

Indirect Tax – Service Tax

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■ ‘Capital goods’ will now include (w.e.f. 01.04.2016) :

railways and tramway wagons, falling under Tariff Heading 8606 92 of the CETA

appliance or equipments used in the office of the manufacturer of the final products

specified goods used in pumping of water outside the factory

■ All goods used for pumping of water shall be treated as an ‘input’ (w.e.f. 01.04.2016)

■ All Capital goods having a value upto ten thousand rupees per piece shall also be treated as an ‘input’ (w.e.f. 01.04.2016) so as to enable availing of credit in one year

■ ‘Exempted service’ shall not include transportation of goods by a vessel to a place outside India (w.e.f. 01.03.2016)

Indirect Tax – CENVAT Credit

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■ Credit of duties under Rule 3 of the CCR, other that National Calamity Contingent Duty (NCCD), shall not be available to discharge NCCD leviable under Section 136 of the Finance Act, 2001 (w.e.f. 01.03.2016)

■ CENVAT Credit cannot be utilized for the payment of ‘Infrastructure Cess’ (w.e.f. 01.03.2016)

■ Credit of Capital goods to a manufacturer of jewellery availing exemption based on value of clearance shall only be eligible if aggregate value of the clearances in the preceding financial year does not exceed twelve crores. In case of a manufacturer other than above, the aggregate value shall be four hundred lakhs for the preceding year (w.e.f. 01.03.2016)

■ With respect to refund claims filed under Notification No. 27/2012-CE(NT) dated 18.06.2012, the limitation of one year for service providers have been specifically provided (w.e.f. 01.03.2016) which shall be computed from –

the date of the receipt of the convertible foreign exchange, where service has been provided prior to the date of receipt of such payment; or

the date of issue of invoice, where payment has been received in advance

Indirect Tax – CENVAT Credit

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■ The permission to a manufacturer of final products for sending inputs outside the factory for job work would now be valid for three years as against one year earlier (w.e.f. 01.04.2016)

■ The credit of Service tax paid on account of assignment of rights to use natural resources such as radio-frequency spectrum, mines etc., shall be spread over the period of time for which the right has been assigned. However, such rights when delegated, the balance CENVAT Credit not exceeding the Service tax payable on the consideration charged by him for such assignment, shall be allowed in the same financial year. Also, the credit of annual or monthly user charges payable of such assignment shall be allowed in the same financial year (w.e.f. 01.04.2016)

■ A manufacturer of final products can avail the credit on jigs, fixtures, moulds and dies or tools falling under Chapter 82. Moreover, the credit will also be allowed when such goods are directly sent to job worker’s premise without bringing them to the premises of the principal manufacturer (w.e.f. 01.04.2016)

■ Reversal of CENVAT Credit on account of provision of exempted goods and/ or services, has been simplified and rationalised (please refer subsequent slides) (w.e.f. 01.04.2016)

Indirect Tax – CENVAT Credit

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■ That the manufacturers with multiple manufacturing units are now allowed to maintain a common warehouse for inputs and are enabled to distribute the inputs with credits to the individual manufacturing units by virtue of the insertion of Rule 7B to the CCR. Also, the procedure applicable to a first stage dealer or a second stage dealer would apply to such a warehouse of the manufacturer (w.e.f. 01.04.2016)

■ Invoice issued by a service provider for clearance of inputs or capital goods shall also be a valid document for availing credit (w.e.f. 01.04.2016)

■ The methodology for determining whether a particular credit has been utilised or not on a FIFO basis (as introduced in FY 2015-16) has been done away with and hence, it shall now be examined whether during the period under consideration, the minimum balance of credit in the account of the assessee was equal to or more than the disputed amount of credit (w.e.f. 01.04.2016)

Indirect Tax – CENVAT Credit

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Reversal of CENVAT Credit (revamping Rule 6)

■ ‘Exempted Services’ shall include the activities which are not falling within the definition of ‘Service’ as provided in Section 66B(44)

■ Manufacturer or the service provider who is exclusively engaged in exempted activities shall not be eligible for credit on any input or input services

■ When the manufacturer or service providers are engaged in two classes of activities, they can pay an amount to 6% of value of the exempted goods and 7% of the value of exempted services subject to a maximum of total credit taken or pay an amount as determined under sub-rule (3A)

■ The new sub-rule 3A lays down the procedure and conditions for calculating the credit allowed and not allowed and also directs that the credit not allowed shall be paid provisionally for each month. Such procedure would only be adopted with prior information to the Central Excise Authority

■ A new sub-rule 3AA has been inserted where assessee fails to inform the Authority under sub-rule 3A. In such a case, the assessee may be allowed to follow the prescribed procedure subject to payment of interest @15% per annum

Indirect Tax – CENVAT Credit

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Reversal of CENVAT Credit (revamping Rule 6)

■ However, sub-rule 3AB has been inserted as a transitional provision for the unit who are required to discharge the obligation in respect to previous period. In such cases, the erstwhile Rule 6 would continue to be in operation till 30.06.2016

■ Sub-rule 3B is amended whereby banks and other financial institutions providing services by way of extending deposits, loans or advances have the option to reverse credit on input and input services to the extent of 50% every month in addition to the option provided under new simplified mechanism of reversal of credit under sub-rule (1), (2) and (3)

■ Sub-rule 4 provides that in the case capital goods are being used for manufacturing of exempted goods or providing of exempted services for two years from commencement of activity or installation of capital goods, the credit shall not be allowed even if are used for taxable activities after the said period

■ Credit taken on inputs or input services in providing ‘transport of goods by a vessel from customs station of clearance in India to a place outside India’ shall not be required to be reversed as the same is not exempted service w.e.f 01.06.2016.

Indirect Tax – CENVAT Credit

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Input Service Distributor (ISD)

■ ‘Input service distributor’ includes an outsourced manufacturing unit (which can be equated to a job worker) (w.e.f. 01.04.2016)

■ That the manner of distribution of credit in terms of Rule 7 has been completely rewritten to the following effect:

credit attributable to a particular unit shall be distributed to only that unit

credit attributable to more than one unit but not all, shall be distributed to only those units and not all units

credit attributable to all units shall be attributed to all units

■ The prevailing mechanism of distributing credit on pro-rata basis shall prevail

■ ISD can distribute the credit to an outsourced manufacturing unit post 31.03.2016

■ An outsourced manufacturing unit will include a job worker or a manufacturer who manufactures goods for ISD under a contract and bearing the brand name of such ISD

Indirect Tax – CENVAT Credit

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Input Service Distributor (ISD)

■ Such outsourced manufacturing unit shall maintain separate account of credit received from each of the ISDs and shall use it for the payment of duty on goods manufactured for the concerned ISD

■ The credit of service tax available with ISD as on 31.03.2016 shall not be distributed to an outsourced manufacturing unit

■ The provisions of Rule 6 shall apply to the units availing the credit distributed by the ISD and not to the ISD distributing the credit itself

Indirect Tax – CENVAT Credit

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■ New Indirect Tax Dispute Resolution Scheme, 2016 introduced w.e.f 01.06.2016

■ Key Points

If case pending before Commissioner (Appeals), the assessee may make a declaration to the designated authority on or before 31.12.2016 and pay tax, interest and penalty equivalent to 25% of penalty imposed, within 15 days of the receipt of the acknowledgement of declaration

Such payment shall not be refunded and should be intimated to the designated authority within 7 days of making such payment

On receipt of the proof of payment, the designated authority shall within 15 days of such receipt, pass an order of discharge of dues and accordingly, the proceeding against the assessee shall be disposed off and the assessee shall get immunity from all the proceedings under the act for which the declaration has been made.

Also, such declaration shall become conclusive upon issuance of order and no matter relating to the impugned order shall be reopened thereafter.

The order passed under this scheme shall not be deemed to be an order on merits and has no binding effects.

Indirect Tax – Others – Dispute Resolution Scheme

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■ Scheme not applicable where:-

Impugned order is in respect of search and seizure proceeding; or

Prosecution for any offence punishable under the Act has been instituted before the 01.06.2016; or

Impugned order is in respect of narcotic drugs or other prohibited goods; or

Impugned order is in respect of any offence punishable under the India Penal Code (IPC), the Narcotic and Psychotropic Substances Act, 1985 or the Prevention of Corruption Act, 1988; or

Any detention order has been passed under the Conservation of Foreign Exchange and Prevention of Smuggling Act, 1974

Indirect Tax – Others – Dispute Resolution Scheme

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■ New Baggage Rules, 2016 has been introduced which shall come into force from 01.04.2016

■ ‘Infant’ has been defined for the first time which means a child not more than 2 years of age

■ ‘Personal Effects’ has been defined as things required for satisfying daily necessities but does not include jewellery

■ Passengers arriving other than from Nepal, Bhutan & Myanmar (earlier also included China):

Benefit to carry goods on the person or in the accompanied baggage of the passenger

An Indian resident or a foreigner residing in India or a tourist of Indian origin - Rs. 50,000

Tourist of foreign origin - Rs. 15,000 (earlier not available)

Only used personal effects shall be allowed duty free for infants

No benefit for Indian resident or foreigner coming via land route

No time limit of returning to India prescribed

Indirect Tax – Others – Baggage Rules

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■ Passengers arriving from Nepal, Bhutan & Myanmar:

Benefit to carry goods on the person or in the accompanied baggage of the passenger – Rs. 15,000

Only used personal effects shall be allowed duty free for infants

Benefit available to passengers coming via land route, only for used personal effects

No time limit of returning to India prescribed

■ Jewellery:

For gentleman passenger: 20 grams with a value cap of Rs. 50,000

For lady passenger: 40 grams with a value cap of Rs. 100,000

■ Tourists: Separate Rule for tourist removed

■ Transfer of Residence: A person who is transferring his residence to India or who is a professional abroad shall be allowed additional duty free clearance of articles

■ Currency: The import and export of the currency under this act shall be governed by FEMA Act and notifications issued thereunder

Indirect Tax – Others – Baggage Rules