17 January, 2015

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Updates that Matter (UTM # 19)

Dear All,

Please find below the “Updates that Matter (UTM # 19)”,

Ø DVAT – Form 9 due date extended to 5th February, 2015

Ø GST: - FM assures States won’t lose a penny due to GST. Tech Network Implementation may lead to delays.

Ø Service Tax:- Where payment is delayed but assessee has sufficient balance in Cenvat then interest cannot be levied {CESTAT- Ahd.}

Ø Central Excise:- Sunset Clause for 2nd Proviso to 12/2012-CE expires. Automotive & Capital Goods to face higher duties.

Ø DVAT :- Mismatch Assessments to be conducted based on 2A-2B as on 16.01.2015

Ø CE/Customs:- Mandatory Pre-deposit applicable in case of appeals against demand of drawback u/s 129E.

Ø Cenvat Credit: - Credit availed during the next period utilized for duty of the previous period - such utilization allowed - Tri (Bang.)

Ø VAT: - Input Tax Credit from cancelled dealer denied on non ability to evidence actual movement

{ Hon’ble Guj. HC }

Ø Income Tax:- CBDT Proposes 12 Income Computation and Disclosure Standards (ICDS) for Comments

a) DVAT – The Due date for filing reconciliation return i.e. Form 9 has been extended from 9th January, 2015 to 5th February, 2015.


b) GST: The finance minister has re-tried to allay the fears of the states, including W Bengal, on GST. “We have also given an assurance to all the states that as a result of the implementation of the GST, which has been a long demand, no state will lose a single rupee of revenue. We have assured them of compensation against any loss of revenue,” he emphasised.


c) ST: Hon’ble Ahmedabad CESTAT in its recent judgement held that,

“It has to be thus held that interest is not payable with respect to duty required to be debited in the CENVAT Credit Account provided sufficient balance was available in the CENVAT Credit Account.”

M/s. Oil & Natural Gas Corporation Limited v. CCE & ST, Surat 2015 (1) TMI 41

d) CE: - Notification 12/2012-CE prescribes the effective rate of duty for items listed therein r.w conditions prescribed therein. It is this notification which reduced the effective rate of central excise duty for automotive and capital goods. Incidentally, the 2nd proviso provides for sunset clause of these reduced rates of duties. The sunset clause was extended from 30th June, 2014 to 31st December, 2014 vide Notification 6/2014-CE. No further extensions have been made. Hence for items listed in serial number 345 to 369 of the said notification, the benefits of this notification shall not apply w.e.f 1st January, 2015.

e) DVAT:- In its public notice, it is clarified by department that DVAT Assessment for Fourth Quarter of FY 13-14 to be framed based on data as on 16.01.2015. Dealers can revise the returns for mismatches of FY 2013-14. The mismatch order framed for Q1, Q2 and Q3 to be reviewed in accordance with data as on 16.01.2015. The latest revisions will be accepted only till 6:00 PM of 16th January, 2015.

f) CE & Customs: - CBEC has clarified that Drawback, like rebate in Central Excise, is refund of duty suffered on the export goods. Section 129E stipulates that appellant filing appeal before the Commissioner (Appeals) shall pay 7.5% of the duty demanded where duty and penalty are in dispute. Accordingly, it is clarified that mandatory pre-deposit would be payable in cases of demand of drawback as the new Section 129E would apply to such cases.

Circular No. 993/17/2014-CX dated 05.01.2015

g) Cenvat: - Hon’ble CESTAT held that, When there is no one to one correlation between the output and the input for the purpose of utilization of CENVAT credit and in the absence of specific provision denying the utilization of CENVAT credit during the default period, in case of default by the appellant in monthly payment, utilization of CENVAT credit during the next month for payment of duty relating to the previous month cannot be faulted with. Needless to say the interest is liable to be paid and appellants have apparently paid the interest for delayed payment next month.

Andhra Cements Ltd. V CCE, Vishakapatnam 2015 (1) TMI 129

h) VAT : - Hon’ble Gujarat HC held that where the dealer/s have failed to establish and prove the aforesaid important aspect of actual physical movement of the goods alleged to have been purchased by them from cancelled dealers (whose registrations were cancelled retrospectively) and on which the input tax credit have been claimed, the AO as well as the Tribunal have rightly rejected the claim of the respective appellant/s.

Karnavati Ispat Pvt. Ltd. Versus State of Gujarat & 1 2015 (1) TMI 380 (Guj-HC)

i) Income Tax:- CBDT has released 12 Income Computation & Disclosure Standards for comment from stakeholders and general public by 8th February, 2015. The comments and suggestions on the draft ICDS may be submitted by 8th February, 2015 at the email address (dirtpl3@nic.in or rkbhoot@gmail.com)

Copy of Proposed Standards

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