Union Budget

2015-16

Sanjay Dwivedi
Advocate
Mumbai March 07, 2015

SRD LE
LEGAL

LE
SRD L
EGAL

Both Education Cesses exempted

Duty

Old rate

New rate

Basic Excise Duty

12%

12.5%

Education Cess

2%

Nil

Remarks

Exempted vide Notification

no. 14/2015-CE

Sec. & Higher Ed. 1%

Nil

Cess
Total Effective rate

Exempted vide Notification

no. 15/2015-CE

12.36%

12.5%

SRD LE
LEGAL

Cess on Service Tax and Customs

No exemption to Cesses on Service Tax and Customs

Service Tax rate continues to be 12.36%
Customs:
No Cess in CVD component
Customs Cess continues
Customs Duty Structure

SRD LE
LEGAL

Issues awaiting clarification

Credit balance of Cess (P.L.A. and Cenvat Credit a/c)

Fresh credit of cess on old stock being received
Method of payment of duty on removal of goods as such [rule 3(5)]
Receipt and removal of goods under rule 16

SRD LE
LEGAL

Cenvat Credit Time Limit extended

Cenvat Credit can be availed within one year from the date of the
invoice/ Bill of Entry etc.
This applies to credits on inputs as well as input services
Does not apply to credit of Capital Goods
(w.e.f. 01/03/2015)

SRD LE
LEGAL

Cenvat Credit Direct delivery to Job-worker

Credit available immediately on receipt of goods by job-worker

Proof:
Acknowledgment by the job-worker
Entry in records of the job-worker
Transport documents

SRD LE
LEGAL

Invoicing

When the buyer and the consignee are different we must mention
details of the both in our invoice.
Importer sending goods directly from port (or other place of import)
to the buyers premises should put such remark on his invoice.

SRD LE
LEGAL

Digital Signature

Invoices can be digitally signed but a hard copy of the duplicate

copy attested by the manufacturer must accompany the goods.
Electronic Maintenance of records is permissible but each page
must be digitally signed.
This applies to C. Excise as well as Service Tax

SRD LE
LEGAL

Recovery of Wrong Credits

Credit taken but not utilized

Credit recoverable;
Interest not payable
Penalty to be imposed
Credit taken and utilized: Credit + Interest + Penalty
Utilization sequence:

Opening Balance

Admissible Credits

Inadmissible Credits
SRD LE
LEGAL

Credit of Service Tax paid under partial reverse

charge:

Earlier
(a) value + tax to the service provider, and
(b) our share of tax to the government.
Now
First condition deleted
But
Credit to be reversed if payment not made within 3 months
(this applies to all service tax credits)
SRD LE
LEGAL

C. Excise Registration: Update form A-1

Update within 3 months:

e-mail address and mobile number of the applicant.
Customs Registration No (BIN No)
Import Export Code (IEC) Number
State Sales Tax /(VAT) Number
Central Sales Tax Number
Company Index Number (CIN)
Service Tax Registration Number
Leave blank only if we dont have such registrations
SRD LE
LEGAL

C. Excise Registration

Signed copy of registration certificate is not required.

Print out from www.aces.gov.in - adequate proof
De-registration: Submission of hard copy not required

SRD LE
LEGAL

Penal Provisions-1 (after enactment of bill)

No fraud, collusion, suppression of facts

Penalty equal to 10% of the duty or 5000 (whichever is higher)
If duty + interest paid before SCN or within 30 days of SCN no
penalty all proceedings deemed to be concluded.
If duty + Interest + Penalty is paid within 30 days of order penalty
= 25% of penalty imposed [i.e. 2.5%].
(Nil ----- 2.5% ----- 10%)
SRD LE
LEGAL

Penal Provisions-2 (after enactment of bill)

Evasion by fraud, or collusion or suppression of facts etc.

Penalty equal to duty
If Duty + interest + penalty paid within 30 days of SCN penalty =
15% of duty all proceedings deemed to be concluded.
If Duty + interest + penalty paid within 30 days of order penalty =
25% of duty all proceedings deemed to be concluded.
(15% ------ 25% ------ 100%)
SRD LE
LEGAL

Penalty Late filing of C. Excise returns

Rs. 100/- per day

Maximum: Rs. 20,000/-

SRD LE
LEGAL

Supply of goods to SEZ units/ developers

Rebate not available (rule 18 of C. Excise Rules, 2002)

Refund of accumulated Cenvat Credit Not available (rule 5 of
Cenvat Credit Rules, 2004)

SRD LE
LEGAL

SERVICE TAX

SRD LE
LEGAL

Services by Government

All services provided by government to Business Entity have become

taxable: (earlier only support services + following 3 were taxable)
Normal charge in case of following 4 services:

Dept of Post (speed post, express parcel, life insurance,

agency)
Aircraft/ vessel
Transport of Passengers
Renting of immovable property

Reverse Charge for all other services (the Business Entity receiving
the service, would take registration, pay tax, file returns etc.)
SRD LE
LEGAL

Exemptions withdrawn w.e.f. 01st April 2015

Construction Industry (entries deleted from 25/2012-ST)

Sr. 12
(a) a civil structure or any other original works meant predominantly for
use other than for commerce, industry, or any other business or
profession;
(c) a structure meant predominantly for use as (i) an educational, (ii) a
clinical, or (iii) an art or cultural establishment;
(f) a residential complex predominantly meant for self-use or the use of
their employees or other persons
SRD LE
LEGAL

Exemptions withdrawn w.e.f. 01st April 2015

Sr. 14(a) (amended)

Exemption withdrawn on services by way of construction, erection,
commissioning, or installation of original works pertaining to airport or
port
Exemption continues to railways, including monorail or metro

SRD LE
LEGAL

Exemption Exemptions withdrawn w.e.f. 01st April

2015

Job-work in case of alcoholic liquors for human consumption no

more exempted [sr 30 (c) of 25/2012-ST amended]

SRD LE
LEGAL

Fresh Exemption granted (w.e.f. 01/04/2015)

Operation of common effluent treatment plant (sr. 43)

Services by way of pre-conditioning, pre-cooling, ripening, waxing,
retail packing, labelling of fruits and vegetables which do not
change or alter the essential characteristics of the said fruits or
vegetables; (sr. 44)

SRD LE
LEGAL

GTA Abatement reduced

Abatement is reduced from 75% to 70%

W.e.f. 01/04/2015 Tax payable on 30% of the bill amount

SRD LE
LEGAL

Reverse Charge Mechanism (w.e.f. 01/04/2015)

100% tax payable by service receiver in case of

Manpower Supply; and

Security Service
If service receiver is a body corporate; and
Service provider is NOT a body corporate
[Earlier the liability was shared as 75% & 25%]

SRD LE
LEGAL

Thank You
Sanjay Dwivedi
Advocate
9320 456 555
sanjay@srdlegal.in

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Advocates & Consultants
C. Excise Service Tax Customs Foreign Trade
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