udyog tax news flash 31st mar 12
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Point of Taxation Rules - application of amended provisionsRule 7 of the Point of Taxation Rules 2011 was amended vide notification 4/2012-ST dated 17 March 2012. Earlier it had provided that for the services of consulting engineer , Architect, Interior Decorator, Chartered Accountant, Cost Accountant, Company Secretary, Scientific and Technical consultancy and Legal Consultancy, the date of payment would be the point of taxation.The notification amended the said Rule 7 to provide that for individuals and partnership firms providing these services, whose turnover of taxable services did not exceed Rs 50 lakhs in the previous financial year, the payment of service tax is deferred till receipt of payment of Rs 50 lakhs for taxable services in the current financial year. Questions arose as to the point of taxation for these services if provided before 1st April. The CBEC has clarified vide Circular No. 154/5/2012-ST dated 28 March 2012 that for invoices issued before the 1st April, the point of taxation will continue to be the date of receipt of payment. The clarification can be seen at http://www.servicetax.gov.in/circular/st-circular12/st-circ-154-2012.htm.TRANSCRIPT
Udyog Software (India) Ltd (www.udyogsoftware.com) Phone: 022-67993535, Email: [email protected]
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation. Page 1
Point of Taxation Rules - application of amended provisions Rule 7 of the Point of Taxation Rules 2011 was amended vide notification 4/2012-ST dated 17 March 2012. Earlier it had provided that for the services of consulting engineer , Architect, Interior Decorator, Chartered Accountant, Cost Accountant, Company Secretary, Scientific and Technical consultancy and Legal Consultancy, the date of payment would be the point of taxation.The notification amended the said Rule 7 to provide that for individuals and partnership firms providing these services, whose turnover of taxable services did not exceed Rs 50 lakhs in the previous financial year, the payment of service tax is deferred till receipt of payment of Rs 50 lakhs for taxable services in the current financial year. Questions arose as to the point of taxation for these services if provided before 1st April. The CBEC has clarified vide Circular No. 154/5/2012-ST dated 28 March 2012 that for invoices issued before the 1st April, the point of taxation will continue to be the date of receipt of payment. The clarification can be seen at http://www.servicetax.gov.in/circular/st-circular12/st-circ-154-2012.htm. Restrictions on Cenvat credit: 1% duty on coal & fertiliser The excise duty of 1% on coal and fertiliser under s.no. 67 and 128 respectively of notification 12/2012-CE dated 17 March 2012 is not to be taken as Cenvat credit. Rule 2(d) of the Cenvat Credit Rules 2004 has been amended accordingly, by notification 21/2002-CE(NT) dated 27 March 2012, which can be viewed at http://cbec.gov.in/excise/cx-act/notfns-2012/cx-nt2012/cent21-2012.htm Nepal export : clarifications on excise duty As reported earlier in these columns, the special procedure for export to Nepal was rescinded w.e.f. 1 March 2012. To recapitulate, under the old procedure the Indian exporter paid excise duty on exports to Nepal, and the amount was then transferred by the Indian government to the Nepal government. After this procedure was removed, Nepal exports are treated like any other exports. Some confusion inevitably arose as to the status of exports that were cleared from the factory before 1 March but not exported as on that date. The CBEC has clarified that these will be treated as exported under the old procedure, and the exporter cannot claim rebate of the duty paid.
UDYOG TAX NEWS FLASH 31st MARCH 2012
Udyog Software (India) Ltd (www.udyogsoftware.com) Phone: 022-67993535, Email: [email protected]
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation. Page 2
Udyog has been successful
in integrating iTAX with
following erp
SAP E.C.C. 6.0
MFG-QAD eB 2.1
BPCS
BAAN FP 7
SAGE Accpac ERP
100 v 5.6
ABAS
Adage
Oracle
Doubts were also raised by field formations of central excise as to whether export under bond without payment of excise duty, and rebate of excise duty, were applicable when the export proceeds are realised in Indian rupees from Nepal. The CBEC has clarified that both export under bond as well as export under claim for rebate are applicable even if the exports proceeds are in Indian rupees. The circular dated 26 March 2012 can be seen at http://cbec.gov.in/excise/cx-circulars/cx-circ12/961-2012cx.htm. Payment of arrears of excise duty out of Cenvat credit It is by now a well settled position that payment of excise duty out of Cenvat credit is on the same footing as payment by treasury challan. Even arrears of duty are paid by debiting the Cenvat account. In this context doubts arose as to whether it is correct to allow arrears to be paid by using credit that accrued subsequent to the period covered in the demand. The CBEC has clarified that it is acceptable. The circular number 962/05/2012 dated 28 March 2012 can be seen at http://cbec.gov.in/excise/cx-circulars/cx-circ12/962-2012cx.htm. Excise: CBEC clarifies on procedure for availing exemption for supply to mega power plant The exemption for supplies to mega power projects requires certain procedures to be followed. A certificate is required from the Joint Secretary that the project has the status of a mega power project. If this certificate is provisional, then a fixed deposit receipt to cover the duty payable for 36 months or more has to be deposited. The CBEC has now clarified that this FDR has to be deposited with the jurisdictional Deputy or Assistant Commissioner where the factory claiming the exemptin is located. There can be more than one FDR, given at intervals, but each must be for 36 months. The CBEC has also clarified that the provisions of the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules 2001 are not applicable. The clarification, given under Circular no. 963/06/2012-CX dated 29 March 2012, can be seen at http://cbec.gov.in/excise/cx-circulars/cx-circ12/963-2012cx.htm. Condition of non-availment of Cenvat applies to a ‘case’ not an assessee The CESTAT has confirmed that the abatement notification 1/2006-ST in service tax, with its condition of non-availment of Cenvat credit, has to be applied to contracts and not to the assessee. In other words, it is not necessary that the assessee
Udyog Software (India) Ltd (www.udyogsoftware.com) Phone: 022-67993535, Email: [email protected]
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation. Page 3
Combo of Indirect
Tax Integratable
with Any ERP
Modules of iTAX
Excise
Service Tax
VAT and CST
TDS & e-TDS
EOU
SEZ
should not at all take Cenvat credit in relation to any contract. It is sufficient if he does not take Cenvat credit in relation to the specific contract for which he is claiming the abatement. The case is reported as Bharat Heavy Electricals Limited v CCE Nagpur, 2012-348-TIOL-CESTAT-MUM. Import of filter rods of a type used in cigarettes Acetate tow and filter rod are subject to certain import prohibitions under notification 16/2011-Customs (NT) dated 1 March 2011. The acetate tow is permitted for import only for the manufacture of filter rod for cigarettes or for manufacture of pharmaceutical products. The filter rods were hitherto permitted, upto 17 March 2012, for import for manufacture only of filter cigarettes or pharmaceutical products; then notification 20/2012-Customs (NT) dated 17 March 2012 changed the description of the prohibited item to ‘filter rod of a kind used in the manufacture of cigarettes and bidis’, and restricted the import only for the manufacture of filter cigarettes and bidis. Now notification 27/2012-Customs (NT) dated 28 March 2012 has restored the manufacture of ‘pharmaceutical products’ as a permitted end use for the import of these filter rods. The amending notification can be seen at http://cbec.gov.in/customs/cs-act/notifications/notfns-2012/cs-nt2012/csnt27-2012.htm. SAD recredit in DEPB / Reward Scheme scrips The DGFT has again extended the time limit upto which SAD (special additional duty of customs to countervail VAT) can be recredited in DEPB / Reward Scheme scrips. Accordingly the CBEC has issued circular no. 10/2012-Customs dated 29 March 2012 informing its field formations that the date has been extended upto 30 June 2012. The circular also conveys the DGFT’s communication that no recrediting will be done if the amount was paid by debiting the scrip. The DGFT requires that the amount should henceforth be paid in cash only if the exporter wants a refund. http://cbec.gov.in/customs/cs-circulars/cs-circ12/circ10-2012-cs.htm Dhamra port can now handle all goods Dhamra port, which was earlier notified under notification 64/94-Customs (NT) as amended from time to time, to handle only all types of coal and limestone, is now open to handle “all class of goods except containers, project imports, hazardous cargo and liquid cargo, but including carbon black feedstock and edible oil.” The notification 65/94-Customs (NT) has been amended to this effect by notification 25/2012-Customs (NT), which can be seen at http://cbec.gov.in/customs/cs-act/notifications/notfns-2012/cs-nt2012/csnt25-2012.htm.
Udyog Software (India) Ltd (www.udyogsoftware.com) Phone: 022-67993535, Email: [email protected]
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation. Page 4
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Update Written
By Radha Arun,
Consultant To
Udyog Software ( India) Ltd
Rules of origin for imports from Thailand amended There are changes in the rules of origin relating to import from Thailand under the preferential tariff concessions. The changes relate to invoicing from a third country, and to the rule of origin for certain types of refrigerator-freezers of the household type. They have been made under notification 29/2012-Customs (NT) dated 30 March 2012.