18 September, 2014

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Updates that Matters – UTM #14

Dear all,

Please find below the “Updates that Matter (UTM # 14)”,

Ø Central Excise: - CBEC clarificatory circular on quantum of pre-deposit for appeal. A sigh of relief on recovery post pre-deposit discharge.

Ø DVAT: -The new circular on penalty in cases of amnesty may hurt the dealers..

Ø DVAT :- Circular on Treatment in Delhi Vat for discounts / credit notes.

Ø Haryana VAT: - Against the anticipation, the limitation period of 30 days for opting composition scheme of developers has not been extended till date.

Ø Customs :- Imposition of Anti-Dumping Duty on Electrical Insulators

Ø Service Tax :- Notional interest on interest free deposit cannot be added to the taxable value.

a) CE: - CBEC has issued a clarificatory circular dated 16th September, 2014 addressing to the several issues as raised by trade in regard to recent amendments introduced by Budget, 2014 in regard to mandatory pre-deposit for admittance of appeal. Further, no coercive recovery measures where pre-deposit discharge and appeal filed.

Circular No 984/08/2014-CX dated 16th September, 2014

b) DVAT: Delhi VAT Authorities have issued a circular that may entangle a lot of dealers who opted for amnesty scheme in the jargons of the penalties of Delhi Value Added Tax Act, 2004. The circular prescribes that the penalty levied u/s 86(15) of the Act will be waived only in case of books leading to tax deficiency and not in the cases of books / records being maintained in false, deceptive and misleading manner.

Circular No. 12/2014-15 dated 11th September, 2014

c) DVAT: DVAT issued a circular in regard to the treatment of discounts and credit notes under DVAT at both the seller and buyer end. This circular supersedes the earlier circular in this regard. Major change introduced is non deduction of purchase price (buyer) and non adjustment to output tax liability (seller) in cases like facilities of rent warehouse & reimbursement.

Circular No. 11 of 2014-15 dated September, 08, 2014

d) HVAT: - It was anticipated by trade that the limitation period as prescribed under Rule 49A for opting of composition scheme for developers within 30 days from date of notification shall be duly extended in light of uncertainties in regard to the scheme. The same has not been extended till date.

e) Service Tax:-

“In the absence of specific provision in law and in the absence of any evidence led by Revenue to show that the security deposit taken has suppressed the rent, the impugned demands are not sustainable. Further, the Hon’ble Tribunal do not find any reason for adopting a rate of 18% per annum as rate of interest, which is neither the bank rate of interest for deposits or loans or the market rate of interest. Adoption of such an arbitrary rate militates against the concept of valuation. In view of the foregoing, notional interest on interest free security deposit cannot be added to the rent agreed upon between the parties for the purpose of levy of service tax on renting of immovable property.”

Murli Realtors Pvt. Ltd. and others Vs. Commissioner of Central Excise Pune-II [2014-TIOL-1 728-CESTAT-MUM

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Regards,

CA.Ankit Gulgulia (Jain)|B.COM(H), C.A, C.IFRS, C.B.V

Direct|+9811653975 |011-27356431|011-23642055|

Email| ankit@gravita.in

Indirect taxation |Litigation | Transfer Pricing | International Matters |

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