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Post Budget 2014 - Central Excise

Madhukar N Hiregange 
on 12 July 2014

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There could be various situations which we have examined separately as follows:

A. Goods Earlier exempted now exemption withdrawn./ Not liable or nil rated in Central Excise tariff

• Goods removed prior to 10.7.2012 not liable: This would be even if finished goods are removed to depots or warehouses. Subsequent sales should have stamp that these goods have been manufactured and removed from factory prior to 10.7.12 to avoid seizure in between.

• Goods at job workers premises in progress, in stock at factory/ies liable

• Whether manufacturing own / unbranded goods: If so then the value of manufactured goods in 13- 14 is to be examined. [ including exempted goods]  This is to determine whether the SSI exemption of Rs. 150 Lakhs is eligible for goods removed after 10 July 14.

• If branded goods or not SSI then liable from 10th July midnight.

• Registration of factory/ies, dealers who supply major material under CE

• Stock taking and availment of credit on stocks in hand

• Invoice/ Delivery documents format with adequate disclosure’s.

• Paying duty after adjusting credit by 5th of August 2014

• Filing of returns by 10th August 2014.

B. Added to Process amounting to Manufacture in Chapter notes.

• First time goods made liable or process amounting to manufacture – Liability from the notified date.

• Procuring all inputs under duty paying documents

• Removing all finished goods after they are manufactured promptly to the customer or depot.

• Getting registration etc as in case of A above and all subsequent activities thereon. 

C. Reduction in rate: This maybe unlikely. However if this happens all goods in factory still to be removed when removed would be at lower rate from 10th July midnight.

D. Increase in rate: All goods in factory would be removed at higher rate from 10th July Midnight.

 

E. Exempted: All goods post midnight of 10july would not be on payment of duty mentioning that these are removed post 10th July if document not clear. Further the cenvat credit on raw material, WIP, FG which are still in stock may require to be reversed.

Post Budget 2014 – Service Tax

The changes possible are only by way of change in rate, withdrawal of exemption or addition to negative list/ exempted services. See template.

Post Budget 2014- Customs

The changes would depend on the filing of the Bill of Entry for imported goods as well as those which are removed from the bonded warehouse. See template.

Template for IDT

Impact of Budget - Template- Indirect Taxes- [Normal Applicability unless specifically set out]

 

Central Excise

Applicable from

Applicable to

Not Applicable to

1. Increase in rate [ from 2-4 or 12 -14]

Midnight 10th July

Fin. Goods in Factory

Goods removed to depot

 

FG with JW- Third party

Goods in Transit to customers

 

Inputs "as such"- cr. reversed

 

2. Decrease in rate [ from 12 -10]

As above

As above

As above

 

3. Earlier exemption withdrawn

As above

As above

As above

Stock Taking of RM/ WIP/FG needed

     

Evaluation of SSI etc

     
 

4. Earlier nil rate now levied for 1st time

As above

As above

As above

Stock Taking of RM/ WIP/FG needed

     
 

5. Deemed Manufacture added

On passing of Bill +

Goods deemed mfred after date

Fin. Goods in Factory

Stock Taking of RM/ WIP/FG needed

On Pres. Accent

 

Goods removed to depot

Evaluation of SSI etc

   

Goods in Transit to customers

 

6. MRP added

wef date notified

goods removed after date

same as above

 

Service Tax

     
 

a. Increase/ decrease

Maybe dt specified

services after such date/ invoice raised/advance received[could be 2 out of three post change then increase/decrease applies]

Completed Service-risk could be

 

POTR as Relevant*

 

taxed as  change in effective rate

       

b. Additional to Negative List + Exempt.

Maybe dt specified

Services provided after such date

completed services

 

POTR as Relevant*

   
 

c. Withdrawal from Negative + exempt.

As above

services after such date taxed

Completed Service

 

* POTR may be amended.- However date

     

rendering service maybe important.-wrt Constitution

   
 

Customs Duty

     
       

i. Increase/ Decrease in rate

10 July Midnight

BOE filed after 10th

BOE filed before 10th

 

BOE filing

Goods in Warehouse pn 10th-not

 
   

crossed customs frontier

 

ii. Exemption/ Withdrawal

As above

As above

As above

 

AL IDT

     

Rules / Notification normally date specified

     

Provisional Collection Act may have to

     

be seen.

     
 

Areas of Doubt:

     

Changes in exemptions entries-what if dates from when applicable not specified

 

Retrospective amendments-beneficial/detrimental

   

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