JULY 14, 2014

By S Jaikumar, Advocate, Swamy Associates

LEGISLATIVE CHANGES

• Third parties to provide required information or face the music - Section 15A & 15B introduced (CEA / FA)

• e-payment made compulsory with certain exceptions (CEA / FA)

• Non- filers of monthly returns can also file applications before the Settlement Commission (CEA / CA / FA)

LEGISLATIVE CHANGES

• No more draconian provisions relating to expiry of stay orders in 180 / 365 days - Section 35C(2A) amended (CEA / CA / FA)

• Mandatory pre-deposit of 7.5% and 10% of duty & penalty prescribed with a ceiling of Rs.10 crores - Section 35F substituted (CEA / CA / FA) - Read : Stay @ Bay - Part I & Part II

• Advance Rulings extended to Indian Private Limited companies (CEA/CA/FA)

FINANCE ACT, 1994

LEGISLATIVE CHANGES

• Space selling for advertisement in "print media"alone would be in Negative List - Section 65B amended

• "print media" :- "book" as defined under Press and Registration of Books Act, 1867 but does not include business directories, yellow pages and trade catalogues which are primarily meant for commercial purposes;

• "newspaper" as defined under Press and Registration of Books Act, 1867

LEGISLATIVE CHANGES

• "Radio Taxi" removed from Negative List - Section 65B amended

• "radio taxi" means a taxi including a radio cab, by whatever name called, which is in two-way radio communication with a central control office and is enabled for tracking Global Positioning System ( GPS) or general Packet radio Service ( GPRS).

LEGISLATIVE CHANGES

• Rules to be made for determination of rate of exchange - Section 67A amended

• Time limits prescribed for adjudication - Section 73 amended

LEGISLATIVE CHANGES

• In case of serious offences, though the details are available on records, no waiver of Section 78 penalty - Section 80 amended

• Power to introduce explanation in a notification retrospectively but within one year - Section 83 amended to include Section 5A(2A)

LEGISLATIVE CHANGES

• Power to recover dues of the predecessor from the assets of the successor purchased from the predecessor - Section 87 amended

• Deterrent measures such as freezing of Cenvat credit etc, to apply for service tax cases also - Section 94 amended

CENVAT CREDIT RULES, 2004

• Transfer of credit by a Large Taxpayer (LTU) from one unit to another unit disallowed - Bid adieu to LTU

• Cenvat credit of inputs and input services to be taken within 6 months from the date of the document - Not applicable to Capital Goods

• When service tax on input service is paid on reverse charge fully by the recipient, Cenvat credit of such input service can be taken immediately after such payment - No need to remit the value

CENTRAL EXCISE RULES, 2002

• "In case of default in payment of duty, the assessed shall pay a penalty of 1% per month on the amount of duty not paid for each month or part thereof - Sub-rule 8(3A) amended

CE VALUATION RULES, 2000

• Sale price below manufacturing cost plus profit to be accepted as transaction value if there is no additional consideration - Rule 6 amended -FIAT ratio undone

SERVICE TAX - AMENDMENTS

• Bio - medical waste disposal - exempted

• Exemption to technical testing and clinical trials of new drugs withdrawn

• Education related exemption rationalised - Read : Back to square one

• Transportation by rail/vessel/road, loading & unloading, and storage of cotton exempted

• Air-conditioned contract carriages liable to Service Tax

SERVICE TAX - AMENDMENTS

• Reverse charge for Recovery Agents

• Reverse charge for "Directors" of "body corporate"

• Interest rates increased for delayed payment of Service Tax - Read: Draconian Interest

• Upto 6 months - 18%

• 6 months to one year - 24%

• More than one year - 30%

SERVICE TAX - AMENDMENTS

• Substantial changes in rent-a-cab service - Read: Never- rent-a-cab

• Rent-a-cab reverse charge liability - 50% instead of 40%, if the service provider avails credit

• Tour operator claiming abatement can take credit of sub-contractor operators

• Motor cab - Credit for input services - Innova???

SERVICE TAX - AMENDMENTS

• Service Tax (Determination of Value) Rules, 2006 amended to merge categories B & C under Rule 2A of the Works Contract Service to 70%

• Point of Taxation Rules, 2011 amended to calculate POT for reverse charge

• Place of Provision of Services Rules, 2012 amended to include commission agents of goods under the definition of "intermediary"

MISCELLANEA

• Third Schedule of CEA aligned to be in line with the MRP Notification

• Baggage allowance increased from Rs.35000/- to Rs.45000/- for an overseas stay of over3 days and from Rs.15000 to Rs. 17500 upto 3 days stay

• Manner of distribution of common input service credit under Rule 7(d) of Cenvat Credit Rules, 2004 clarified - Read: ISD-Always Complex

• Double levy of CESS on DTA clearances by 100% EOU’s removed