CA IPCE Amendments in Indirect Taxation

Basic Concepts of Indirect Taxes

UNIT – 2: Central Excise Duty

1. Excise duty of 1% (without CENVAT credit) or 12.5% (with CENVAT credit) has been levied on articles of jewellery [excluding silver jewellery]. A jewellery manufacturer will be eligible for exemption from excise duty on first clearances upto Rs. 10 crore during a financial year, if his aggregate domestic clearances during preceding financial year did not exceed Rs. 15 crore.
[Notification No. 28/2016 CE dated 26.07.2016 to carry out the above amendment] [Effective from 26.07.2016]

2. Where the duplicate copy of the invoice meant for transporter is digitally signed, a hard copy of the same which is self-attested by the manufacturer is used for transport of goods. Such manual attestation of the transporter’s copy of invoice has been done away with. [Notification No. 8/2016] [Effective from 01.03.2016]

3. In place of Annual Financial Information Statement [ER-4], an Annual Return will have to be filed by central excise assessees by 30th November of the succeeding year. [Notification No. 8/2016] [Effective from 01.04.2016]

4. The central excise return can now be revised by the end of the calendar month in which the original return is filed. [Notification No. 8/2016] [Effective from 17.08.2016]

5. Interest payable on delayed payment of excise duty has been reduced from 18% to 15%. [Notification No. 15/2016] [Effective from 01.04.2016]

UNit-3: Customs Duty

1. Central Government has been empowered to permit certain class of importers and exporters to make deferred payment of customs duties or charges in prescribed manner. [Effective from 14.05.2016]

2. Warehousing of imported goods:

(i) The importer may not clear the goods for home consumption and request the goods to be warehoused. In such a case, he shall file an Into-Bond Bill of Entry for warehousing and is assessed to duty. Thereafter, he shall execute a bond binding himself in a sum equal to thrice the amount of the duty assessed on such goods.

(ii) The proper officer after satisfying himself that all the requirements have been fulfilled shall make an order permitting the deposit of the goods in a warehouse.

(iii) Subsequently, the importer of any warehoused goods may clear them for home consumption provided:- (a) an ex-Bond Bill of Entry has been presented to the proper officer and duty is assessed and paid by him, and (b) an order for clearance of such goods for home consumption has been made by the proper officer. [Effective from 14.05.2016]

3. Transitional product specific safeguard duty on imports from the People’s Republic of China abolished. [Effective from 14.05.2016]

UNIT – 4: Central Sales Tax

Where the gas sold or purchased and transported through a common carrier pipeline or any other common transport or distribution system becomes co-mingled and fungible with other gas in the pipeline or system and such gas is introduced into the pipeline or system in one State and is taken out from the pipeline in another State, such sale or purchase of gas shall be deemed to be a movement of goods from one State to another. [Explanation 3 has been inserted to section 3 of the Central Sales Tax Act, 1956] [Effective from 14.05.2016]

Basic Concepts of Service Tax
Charge of Service Tax [Section 66B]:

Tax shall be levied at the rate of 14% on Value of all taxable services.

Swachh Bharat Cess (SBC): (w.e.f. 15.11.2015): - Levied and collected on all the taxable services at the rate of 0.5% of value of taxable service.

- Charged separately on the invoice, accounted for separately in the books of account and paid separately under separate accounting code.

- No Cenvat credit

Krishi Kalyan Cess (KKC): (w.e.f. 01.06.2016): - Levied and collected on all the taxable services at the rate of 0.5% of value of taxable service.

- Charged separately on the invoice, accounted for separately in the books of account and paid separately under separate accounting code.

- Cenvat credit available against KKC.

Example: Value of Taxable Service: Rs 100
Service Tax = 100* 14% = 14
SBC = 100 * 0.5% = 0.5
KKC = 100 * 0.5% = 0.5
Total = 15 (i.e 14 + 0.5 + 0.5)
Thus Effective Rate becomes 15%

Services billed and provided prior to 01st June, 2016 exempted from Krishi Kalyan Cess (KKC): Taxable services the invoice for which have been issued on or before the 31st May, 2016 have been exempted from the whole of Krishi Kalyan Cess if the provision of service has been completed on or before the 31st May, 2016. [Effective from 23.06.2016]

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