CA Loan Bajaj Finserv
CA Final Online Classes
CA Classes

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Budget Analysis 2015-16 - Central Excise

Swapnil Munot 
Updated on 05 July 2016

LinkedIn


Changes in:

- Central Excise Act 1994
- Central Excise Rule 2002
- Cenvat Credit Rules 2004
- Excise & Service Tax Regitration
- Other miscellaneous changes in Act, Rules & Tariff

EXCISE DUTY RATE:

For most of the goods, Excise Duty rate applicable before budget was 12.36%. (12% Cenvat/Excise Duty + 0.24 Education Cess + 0.12% Higher Secondary Education Cess = 12.36%).

However now in general, Excise Duty Rate will be 12.5% as explained under:

Basic Excise Duty / Cenvat

It is increased from 12% to 12.5%.

Education Cess of 0.24%

It is exempted on all goods vide Notification No 14/2015 CE dated 1st March 2015

Secondary & Higher Education Cess of 0.12%

It is exempted on all goods vide Notification No 15/2015 CE dated 1st March 2015

(Note: Duty Rate given above are in general. One must see Central Excise Tariff Act 1985 & Notification issued thereunder)

CHANGES MADE IN CENTRAL EXCISE ACT 1944 BY FINANCE BILL 2015-15:

SECTION

TYPE OF AMENDMENT

SUMMARY OF CHANGES

ANALYSIS

Sec 3A

Explanation Added

This section empowers the Central Government to charge excise duty on the basis of capacity of production in respect of notified goods (Tobacco, Pan Masal).

Explanation added to provide for word 'Factor' includes 'Factors'

This will enable the Central Government to specify more than one factor relevant to the production of such goods.

Accordingly Government has issued Notification No 4/2015 & 5/2015 CE NT dt 1st March 2015 to specify more factors.

Sec 11A

Amendment

This section empower Central Government to recover duties non paid/levied or short paid/levied or erroneously refunded.

Amendment is made by way of omission of some subsection of Sec 11A and amending the Explanation.

Below clause is omitted:

Extended Period of 5 years to issue show cause notice will be applicable in case where during audit/investigation it is found that there is default in payment of Service Tax deliberately/fraudulently but details of the same are available on specific records.

Explanation is added to provide that:

Sec 11A will not be applicable in case of non payment/short payment is declared in periodic return filed.

With this amendment government tried to remove the ambiguity in Section 11A and to bring more clarity. Also it is provided that such non payment/erroneously refund is reflected in the periodic returns filed, Sec 11A will not be applicable.

Sec  11AC

Substitution of New Section

Section 11 AC provide for amount of Penalty payable in cases mentioned in Section 11A. New Section 11AC is substituted to provide for penalty in more rationalized way. Now penalty payable will be as under:

Sr. No.

Particulars

Cases Not involving Fraud/ wilfulmis-statement/ suppression of facts/ contravention of any provision of the Act or rules

Cases involving Fraud/ wilfulmis-statement/ suppression of facts/ contravention of any provision of the Act or rules

A

In addition to the duty as determined under sub-section (10) of section 11A, assessee in default is also liable to

penalty not exceeding 10% of the duty so determined or `5000 whichever is higher

penalty equal to 100% of the duty so determined shall be payable

B

if duty and interest payable under Sec 11AA is paid either before issue of SCN/within 30 days of Notice

No Penalty

Penalty payable shall be 15% of the duty demanded, provided same is also paid within 30 days of SCN

C

if such penalty along with duty  & Interest as determined under Sec 11A(10) & Sec 11AA is paid within 30 days of Order

Penalty equal to 25% of the penalty so imposed shall be payable

Penalty equal to 25% of the penalty so imposed shall be payable

Note: if the duty amount gets reduced in any appellate proceeding, then penalty amount shall also stand modified accordingly, and benefit of reduced penalty (25% of penalty imposed) shall be admissible if duty, interest and reduced penalty is paid within 30 days of such appellate order

Sec 31 to 32

Amendment

Section 31 to 32 provide for Settlement of Cases. Many of the provisions under this Section were become redundant due to passage of time. Hence same are omitted.

Also It is provided that, if due to occurrence of vacancy in the office Chairman of Settlement Commission due to any reason,  Vice chairman or Member of the Settlement Commission to act as Chairman.  Earlier only Vice chairman was designated.

Unwanted Garbage from provisions of Settlement Commission is removed. Also member of Settlement Commission also allowed to act as Chairman in event of vacancy in the office of Chairman due to any.

Sec 37(4) & 37(5)

Amendment

Section 37 empower Central Government to fram rules in various cases. Also it provide for penalty in some cases of Rs 2000.

Amount of such penalty is increased to Rs 5000

Section 37 empower Central Government to fram rules in various cases. Also it provide for penalty in some cases of Rs 2000.

Amount of such penalty is increased to Rs 5000

Third Schedule to Central Excise Act 1944

Amendment

Third Schedule to Tariff Act provide for goods in which case packing/repacking/labelling/Re-labelling shall amount to Manufacture and accordingly Excise duty needs to be discharged on such activity.

Scope of this Schedule is increased to include more goods under it.

It will increase Excise Revenue of Government by increasing the ambit of Excise

CHANGES MADE IN CENTRAL EXCISE RULES 2002 BY NOTIFICATION NO 8/2015 CE NT DATED 1ST March 2015:

RULE

TYPE OF AMENDMENT

SUMMARY OF CHANGES

ANALYSIS

EFFECTIVE FROM

Rule 10

Amendment

This rules prescribe Rules for maintenance of Daily Stock Account (DSA).

Now facility of maintenance of DSA is provided in electronic form as well, with a condition that each page of DSA will be authenticated by Digital Signature

Welcome move towards Paperless Society

1st March 2015

Rule 11

Amendment

This rules prescribe the regulation w.r.t Invoicing.

Now it is provided that:

a. If goods are directly sent to a job worker, on the direction of a manufacturer/service provider, the invoice shall state manufacturer/service provider as Buyer and job worker as the consignee and it should provide their details.

b. If goods are directly sent to any person on the direction of the registered dealer, the invoice shall also contain the details of dealer as the buyer and the person as the consignee, and that person shall take CENVAT credit on the basis of the registered dealer’s invoice.

c. If the goods imported by register Importer and   sent directly to buyer’s premises, then invoice issued by the importer shall mention that goods are sent directly from the place or port of import to the buyer’s premises.

d. Other provisions of Rule 11 shall also made be applicable to register Importer mutatis mutandis.

e. Invoice now can be digitally signed. However Duplicate copy for Transporter still needs to be self-attested by manufacturer.

Clarification provided for business procurement process of “Bill To – Ship To”

Move towards E-Governance by allowing to authenticate the invoice by digital signature.

1st March 2015

Rule 12(6) & 17(5)

New Sub-Rule

This Rule contain provision relating to various returns. Now Penalty clause is inserted for late filing of Return.

Penalty of Rs 100/- per day is payable for after due date till filing of return, subject to Maximum of Rs 20000/-

In Excise, there was no separate penal clause for charging penalty for late filing of Excise Return. Under general clause Penalty for late filling of return was levied.

With introduction of this amendment, timely filing of returns is to be insured. Else be ready to pay penalty upto Rs 20000/- PER RETURN.

This will increase Tax Revenue drastically or will change habit of assessee so that timely returns will be filled.

1st March 2014

Rule 18

Amendment

This Rule provides for Rebate of duty paid on goods used in Exports.

Explanation to this rules is substituted with new one, to provide that

" Export means taking goods out of India to a place outside India and includes shipment of goods as provision or stores for use on board a ship proceeding to a foreign port or supplied to a foreign going aircraft."

Due to this amendment Litigation w.r.t Rebate on supply of goods to EOU will come to any end.

Changes in the same line is also incorporated in Rule 5 of Cenvat Credit Rules 2004

1st March 2014

Importer Dealer:

Notification No. 08/2014 – CE NT dated 28th Feb 2014 made mandatory to Import Dealer to get registered under Excise, if he wish to pass-on the Cenvat Credit like registration requirement for First Stage Dealer (FSD) / Second Stage Dealer (SSD). However there are many regulations in Central Excise Rule 2002 governing FSD/SSD which were not prescribed for Import dealer. However now vide Notification No 8/2015 CE NT dated 1st March 2015, same were also made applicable to Import Dealer as well.

CHANGES MADE IN CENVAT CREDIT RULES 2004 BY NOTIFICATION NO 6/2015 CE NT DATED 1ST March 2015:

RULE

TYPE OF AMENDMENT

SUMMARY OF CHANGES

ANALYSIS

EFFECTIVE FROM

Rule 4

Amendment

This rule provide Condition for eligibility of Cenvat Credit.

Changes made under this rule is as under:

Cenvat credit on Inputs/Capital Goods can be taken by manufacturer/service provider immediately on receipt of goods by job worker If goods are directly sent to job worker from suppliers premises.

However in case of Capital Goods, Cenvat credit in first year will be available upto 50%.

If such goods is not received back by manufacture from job worker within 180 days in case of inputs & 2 years in case of Capital Goods, then Cenvat credit needs to be reversed.

1. Time limit for availment of Cenvat credit on inputs & input Services is increased to 1 year from date of document. Earlier it was 6 month.

2. Goods sent to job worker, can sent to another job worker from the place of first job worker. However period of 180 is applicable.

3. Service tax paid under Reverse Charge whether partial or full, credit is available once service tax is paid, irrespective of whether payment for value of input service is made within 3 months or not. However this is applicable from

Great Relief to Industry and Business. Now:

a. Goods can be sent to job worker’s premises directly without worrying for Cenvat eligibility.

b. Time limit for Cenvat availment is increased to 1 year

c. Cenvat credit of Service tax paid under partial reverse charge can be availed immediately after payment of service tax, irrespective whether payment for value of service is made or not.

Amendment mentioned in (1) to (3) is effective from 1st March 2015.

Amendment mentioned at (4) is effective from 1st April 2015.

To read the full article: Click Here


Tags :



Category Others
Other Articles by -
Swapnil Munot 

Report Abuse

LinkedIn



Comments


update