FEBRUARY 21, 2015

By Ajay Modi

CENTRAL EXCISE

To implement GST, make negative list of goods (not to be taxed), so automatically Central Excise Tariff, 1985 will go. Customs Tariff is sufficient for classification as per GST.

One or two rate of excise duty, number of excise exemption will go.

Abolish distinction between capital goods and input for cenvat credit. All goods used in the factory by the manufacturer of final product but excludes certain specified item.

All goods and services used by the manufacturer in the final product are eligible to Cenvat credit except negative item list. This list refers only to those where no Cenvat credit is allowed.

Abolish so many duties, merge ECess & SHE cess into duty rate.

Withdraw SSI exemption and allow SSI unit to pay 12% x 80% = 9.6% duty on final product, so all SSI unit will cover in GST.

Allow SSI unit to pay lump sum duty like VAT, no books of manufacturing.

Abolish PLA register (Personal Ledger Account) as in e-payment era and monthly/quarterly duty payment this register is now no use.

Abolish ER-4 to ER-7 return, and make tax audit report like 3CD of income tax.

Remove ARE-1 and Rebate procedure; on basis of e-BRC, bank will credit 10% of realisation.

Remove Bond/UT-1 procedure; excise invoice, IEC code is sufficient for security. If any fraud then block the IEC of manufacturer/exporter.

Remove proof of export procedure, Shipping bill + e-BRC is sufficient for proof of export. No submission with dept., demand at the time of Audit. As per RBI all person has to bring export realisation within one year.

Implement single central excise registration system for factory all over India like IEC number. Or use IEC number + BIN number for central excise assesses.

SERVICE TAX

Allow 10 lakh exemption for Service tax payment under reverse charge mechanism.

Also allow to pay service tax of RCM from cenvat credit.

Make clear list of services eligible for cenvat credit, or allow all services as input services.

Remove Goods Transport Agency exemption like LR basis or full truck basis, collect service tax @ 1% of total freight paid during quarter/month.

For works contract allow lump sum ST @ 2% on total work order value.

(The author is Manager Logistics & SEZ Compliance, Indofil Industries Ltd., Bharuch-Gujarat)