16 August, 2014

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Updates that Matters - UTM #12


Dear Readers,

Please find below the “updates that matter (UTM # 12)”,

Ø  Finance (no.2) bill, 2014 has received assent of Hon’ble president of India

Ø  Service tax :- Service tax audit not to be conducted by department or CAG

Ø  Circular on DVAT on refund processing
(circular no. 06 of 2014-15)


Ø  Central Excise: - Interest Refund Rate is 6% only.

Ø  Service tax :- The provisions effective with immediate effect vide Finance (No.2) bill assented by Hon’ble President
  



Ø  Haryana VAT: - 1% / 5% Scheme Notified. (No Suggestions Considered by State Government)


Ø  Central Excise :- Valuation of fertilisers assessable value to exclude subsidy Component.

(Fiat Case is not a Blanket Principle Decider)


a)    Finance (No. 2) bill, 2014 has received the assent of the president on 6th august, 2014, published in the gazette of India, dated 6th august 2014 as act no. 25 of 2014. The same is now applicable in all contexts.    

b)    Service tax: - The Hon’ble Delhi High Court has held in case Travelite (India) Versus UOI and Others 2014 (8) TMI 200 that the seeking of records under Rule 5A for scrutiny by audit party under service tax is an Ultra vires act. In short, the Rule 5A(2) is ultra vires the provisions of section 72A.  

c)    Circular on Dvat on refund processing: - Circular states procedure to claim Dvat refund. The circular guides on the process and is a clear indicative of the tedious of process of obtaining refund under Delhi VAT Regime. Also, whether the online mode is that transparent and smooth, only time can tell.

Circular no. 06 of 2014-15                 

d)    Amnesty scheme: - Government of NCT of Delhi had notified a scheme named Delhi tax compliance achievement scheme, 2013 vide notification No. f.3(16)/fin./Rev.i/2013-14/dsvi/786 dated 20/09/2013.

The scheme envisages declaring tax deficiency voluntarily and paying tax and seeking registration under the Dvat, 2004. Now a circular has been released by Delhi VAT as clarification on how the existing assessment orders / demands / penalties will be nullified in cases where DSC-3 has been duly issued.

Circular No. 07/2014

e)    Central Excise The refund rate under section 35FF has been fixed at 6% per annum. It is worthwhile to note that the rates for delayed payments under service tax has been made as high as 30% in few cases by the recent budgets.

Notification No. 24 / 2014 – CE (N.T.) dated 12.08.2014

f)     Service Tax Provisions immediately effective after assent of President to Finance (No.2) Bill

Immediate applicability of amendment related to :-
a)    Mandatory Pre-deposit prior to filing of Appeal
b)    Limiting the scope of Section 80
c)     Power to recover dues from purchaser of property from predecessor.
d)    Time Limits for adjudication completion.

g)    Haryana VAT: - 1% composition scheme for developers & builders has been issued as a formal applying notification vide No. S.O.88/H.A. 6/2003/S. 60/2014 on 12th August, 2014. Incidentally, no suggestions as filed by several associations and individually by stakeholders have been considered by the state vat authorities.
Further, there is no specific mention on the applicability of Amnesty scheme in the said notification. Further, the rates of Composition scheme for Works contractors have also been increased to 5% (effectively to 5.25%).
The said is bound to stir legal frictions.
h)    Central Excise: - The Board has clarified that in respect of fertilizers for which subsidy is provided by the Government, the excise duty will be chargeable on the MRP and not on the subsidy component provided by the Government.
“The manufacturers of fertilizers do not gain any extra commercial advantage vis-a-vis other manufacturers because of the subsidy received from the Government. The subsidy paid by the Government to the manufacturer is in larger public interest and not for benefitting any individual manufacturer-seller and it is also not paid on behalf of any individual buyer or entity.”
            F.No.354/35/2011-TRU
--
Regards,
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