Service Tax Voluntary Compliance Scheme

Service Tax Voluntary Compliance Scheme

The Finance Act, 2013 has provided amnesty scheme namely Service Tax Voluntary Compliance Encouragement Rules, 2013 for following persons:

• Stop filers
• Non Filers
• Non Registrants
• Service providers who have not disclosed there full liability in the return filed by them.

The period covered under this rule is from Oct’2007 to Dec’ 2012

Who is not eligible to make declaration under these rules:

• Person against whom order or notice under section 72/73/73A has been issued before 01-03-2013 or person against whom an inquiry or investigation has been initiated and such inquiry or investigation is pending on 01-03-2013.
• Person who has already furnished return and disclosed the amount of service tax payable, but has not paid the service tax. The declaration shall not be made for that period.

Procedures to comply with VCES:

• Registration is mandatory. If a person is not registered under Service Tax, he must first apply for registration and thereafter he can make declaration under this scheme.
• Declaration in Form VCES-1 before 31-12-2013.
• Acknowledgement of declaration in Form VCES-2 by the department within 7 days of filing the declaration.
• Tax payable without interest and penalty should be paid but Cenvat credit shall not be utilized for payment of tax dues.
• Minimum 50% of dues to be paid before 31-12-2013, and balance before 30-06-2014.
• If the declared tax is not paid before 30-06-2014, interest is charged on the balance amount. In any case, whole of the amount is to be paid before 31-12-2014
• Acknowledgement of discharge shall be issued in Form VCES-3 by the department within 7 days from the date of furnishing of details of payment of tax dues in full along with the interest, if any.

Other Important Points:

• Any amount paid under this scheme is not refundable under any circumstances
• On issue of acknowledgement of discharge, no matter shall be reopened thereafter in any proceedings before any authority or court relating to period covered by such declaration.
• However, if CCE has reasons to believe that the declaration made by a declarant is substantially false, he may reopen the case. But no action can be taken after expiry of 1 year from the date of declaration.

 

CA Rahul Jain

rahuljain@rpmd.in

Recent Important Changes/Amendments in Income Tax

Important amendments in Income Tax.

• Trading in Commodity derivatives would no longer be considered as speculative transaction. 

• E filing of Income Tax Return mandatory for AY 2013-14 if total income exceeds Rs. 5 Lakhs

• E-filing of Audit Reports Mandatory for AY 2013-14

• Seller of bullion/jewellery to collect TCS @ 1% from the buyer if amount exceeds Rs. 2 Lakh (Bullion)/ 5Lakh (Jewellery) w.e.f. 01-06-2013

• Buyer of immovable property (other than agricultural land) to deduct TDS @1% if the consideration amount is Rs. 50 Lakhs or more w.e.f. 01-06-2013

• For non-resident, uniform tax rate of 25% on royalty and fees for technical services

• Tax rebate of Rs. 2000/- for resident individuals if total income is not more than Rs. 5 Lakh

• Payment made by the Company to the shareholders on account of buyback of shares : Excess amount over issue price shall be charged to tax @ 20%. Applicable w.e.f. 01-06-2013

• Income tax return will be treated as defective if tax together with interest is not paid before furnishing the return.

CA Rahul Jain

rahuljain@rpmd.in

Service Tax Return (2nd Qtr Jul-Sep'12) further extended to 30-04-2013

Service Tax Return - 2nd Quarter - 2012-13

Due date for Service Tax Return - Jul-Sep'2012 has been further extended to 30th April'2013.

Service Tax Return (ST 3) for the period 1st July- 30th September, 2012 is now available in a modified format for e-filing in ACES. Only offline version is available and there is no online version. The utility needs to be downloaded afresh either from http://acesdownload.nic.in/ or from the 'DOWNLOADS' section of ACES website, www.aces.gov.in,
Link to dowload the utility -  http://acesdownload.nic.in/Documents/ACES-EFiling-ST3_July-Sept_2012.zip


Those assessees who are registered on or after 01.07.2012 and the service description is 'All Taxable Services Other than in the Negative List' or those assessees who have amended their Registration by adding the description 'Other than in the Negative List', are required to fileamendment to their Registration online by deleting the said description and adding the relevant description(s) of Taxable Services available in the dropdown list in the online Amendment Form. Only after doing so, these assessees will be able to file their return for the period July, 2012 onwards.

CA Rahul Jain

+91-9811613999

rahuljain@rpmd.in

DVAT Amendment

Changes in Delhi Value Added Tax

·         Monthly Tax payment: Tax to be deposited by 21^st of each month irrespective of the return period.

·         DVAT Return: No Monthly returns. Only quarterly returns for all dealers irrespective of their turnover. Annexure 2A and 2B to be prepared quarter wise- party wise. Earlier, it was month wise-party wise. New Annexure 2C/2D related to Debit/ Credit notes to filed along with return

·         Form T-2 – DVAT dealers with GTO of 10 Crore and more to file Form T-2 for Central purchases.

·         Tax credit in respect of capital goods –1/3rd of input tax on capital goods is allowed immediately and balance 2/3 in corresponding tax periods, in two successive financial years.

·         Exemption Limit: Exemption limit for DVAT registration increased to Rs. 20 Lakh from Rs. 10 Lakh

·         TDS on Works Contracts: The rate of TDS increased from 4% to 6% in case of contractors/ sub-contractors not registered under DVAT Act.

·         Audit of Accounts – In case of failure, penalty increased from Rs. 10000 to Rs. 1 Lakh or 1% of Turnover whichever is less.

·         For the purpose of calculation of DVAT payable - Imported goods cannot be sold below the value determined by the Custom Authorities for payment of Custom Duty

CA Rahul Jain

rahuljain@rpmd.in

Assessee can take Cenvat credit of service tax paid on input services availed by it prior to date of its registration

In a recent case of C. Metric Solution (P) Ltd., Ahmedabad Bench of Cestat held that assessee can take Cenvat credit of service tax paid on input services availed by it prior to date of its registration.

Similarly, the Delhi Tribunal in the case of J.R. Herbal Care India limited, held that ‘ there is no provision in the rules that cenvat credit was not available to the unregistered manufacturers’

Also, in case of SSI units also, wherever SSI benefits have been denied, Cenvat Credit has been allowed.

Statutory requirement for availing Cenvat Credit of service tax on input services.

•  Allowed to the manufacturer or producer of final products or provider of output service [Rule 3 of Cenvat Credit Rules (CCR), 2004]
• Cenvat credit in respect of input service shall be allowed, on or after the day on which the invoice, bill as per Rule 9 is received by such person. [Rule 4(7) of CCR, 2004]

Primarily, to avail Cenvat credit, the assessee must fulfill above two conditions i.e. Person shall be manufacturer or producer of final products or provider of output service and have received a invoice issued as per Rule 9.

Also, as per Rule 9 of CCR, it is not mandatory to mention Excise Registration number or Service Tax Registration number of the assessee receiving services.

CA Rahul Jain
rahuljain@rpmd.in

Budget 2013-14

Union Budget (2013-2014)
We are presenting herewith a synopsis of the union budget to apprise the reader with the impacts of the proposed amendments. Though, our team have briefed the relevant amendments, you may ask us for any further clarification or query.

Income Tax

• Tax Savings of Rs. 2000 for assessee having taxable income upto Rs. 5 Lakhs
• Additional deduction of interest upto Rs. 1 Lakhs for person taking home loan(not exceeding Rs. 25 Lakhs) for their first home(not exceeding Rs. 40 Lakhs) during the period 01-04-2013 to 31-03-2014
• 10% Surcharge on Individual, HUF, Partnership firms  if the taxable income exceeds Rs. 1 Crores
• 10% Surcharge on domestic Companies if the taxable income exceeds Rs. 10 Crore. (5%  - Surcharge if the taxable income exceeds Rs. 1 Crore) – Valid only for 1 year
• 5% Surcharge on foreign Companies if the taxable income exceeds Rs. 10 Crore. (2% Surcharge if the taxable income exceeds Rs. 1 Crore) - Valid only for 1 year
• Surcharge on Dividend Distribution Tax etc increased from 5% to 10%
• Concessional rate of 15% tax on dividend received by an Indian Company from its foreign subsidiary proposed to continue for more than 1 year. No dividend distribution tax on domestic company on receiving dividend from its foreign subsidiaries
• Investment allowance of 15% for companies investing Rs. 100 Crore or more in plant and machinery during 01-04-2013 to 31-03-2015
• STT Reduced on Equity Futures/ MF Units.
• Commodity transaction tax introduced on non-agricultural commodities futures contracts
• GAAR Provisions applicable from 01-04-2016
• Land & building held as stock in trade cannot be sold below the stamp duty valuation for the purpose of Income Tax.
• 1% TDS on the value of the transfer of immovable property (except agricultural land) where the consideration exceeds Rs. 50 Lakhs
• Gross Total Income Limit under Rajiv Gandhi Equity Savings Scheme has been increased from 10 Lakhs to 12 Lakhs which shall be allowed for three consecutive assessment years.
• Final withholding tax @ 20% on profits distributed by unlisted companies to shareholders through buyback of shares
• Rate of tax on payments by way of royalty and fees for technical services to non-residents has been increased from 10 % to 25% - Subject to DTAA

Service Tax

• All AC restaurants(Whether serving Alcohol or not) are subjected to Service Tax
• Service Tax to be charged on Vehicle Parking fees
• All kinds of testing in relation to agriculture or agricultural produce shall be exempt from the charge of Service Tax
• Courses approved by the State Council for Vocational Training shall also be exempt from the charge of Service Tax
• Service Tax exemption on copyright on cinematography limited to films exhibited in cinema halls.
• Abatement reduced from 75% to 70% for construction other than residential properties having a carpet area upto 2000 Sqft or where the amount charged is less than Rs. 1 Crore.
• If a show cause notice is issued after invoking the extended period of limitation i.e 5 years but the charge of evasion is not established, the notice will continue to be valid for 18 months.
• Penalty for failure to take Service Tax Registration  - upto  Rs. 10000
• Penalty on Director or officer of the company for specified offences - upto Rs. 100000
• Offices granted Power to arrest in specified cases.
• Voluntary Compliance Scheme –No Penalty or Interest- for returns not filed or wrongly filed during the period 01-10-2007 to 31-12-2012. Not applicable to the persons against whom any inquiry or investigation is pending

Excise

  

• Exemption from Excise Duty – Cotton at fibre stage, Handmade Carpets, Textile floor coverings of coir and jute.  In case of spun yarn made of manmade fibre – 12% at fibre stage
• Specific Excise Duty Increased on Cigarettes, Cigars, Cheroots, Cigarillos
• Excise Duty increased on SUV(Except those registered as taxis) from 27% to 30%
• Excise Duty increased on Marble – Rs. 30/Sqm to Rs. 60/Sqm
• Excise duty of 4% imposed on silver produced or manufactured during the process of zinc/lead smelting
• Compounded duty rate on stainless steel patta-patti increased from Rs. 30000 per machine per month to  Rs. 40000 per machine per month
• Excise duty increased on mobile phones (Pricing above Rs. 2000) from 1% to 6%
• MRP based assessment for branded medicaments of Ayurveda, Unani, Siddha, Homeopathy and bio-chemic systems of medicines

Customs

• No export duty on de-oiled rice bran oil cake, Raw/white/refined Sugar, Flat rolled iron products plated/coated with Zinc
• Duty free jewellery allowed from abroad in case of gentleman - Rs. 50000, in case of Lady – Rs. 100000.
• BCD (Basic Custom Duty) Increased on set Top boxes  from  5% to 10%
• BCD Increased on Raw Silk from 5% to 15%
• BCD Increased on Motor vehicles (Cars) with CIF value more than $ 40000 or more than 3000cc/2500cc from 75% to 100%
• BCD Increased on Old cars from 100% to 125%
• BCD Increased on Motorcycles having capacity of 800cc or more from  60% to 75%
• BCD reduced on specified machinery for manufacture of leather and leather goods including footwear from 7.5% to 5%
• BCD reduced on Hazel Nuts from 30% to 10%
• BCD reduced on De-Hulled Oat Grain from 30% to 15%
• BCD reduced on Pre forms of Precious/ Semi-precious stones  from 10% to 2%

CA Rahul Jain

+91-9811613999

Email - rahuljain@rpmd.in

Delhi Budget 2013-14

Delhi Budget (2013-2014)

Highlights of Delhi budget 2013-14 presented by the Delhi CM on 20-03-2013. These changes will take effect from the date to be notified later on.

Proposed Changes in Delhi VAT.

• Online registration under the Delhi VAT Act and Central Sales Tax Act
• Uniform tax period for all dealers irrespective of their turnover, which will be "a quarter" i.e. no monthly return.
• Increase in Exemption Limit for registration from Rs. 10 lacs to Rs. 20 lacs
• Instead of submitting the hard copy of the entire DVAT return, dealers will file the signed copy of the acknowledgment, downloaded from the web-site (Same practice as followed under the Income Tax Act);
• If the dealer voluntarily admits its tax liability at the time of field inspection/survey and deposits the tax due under the Act – Mitigation of penalty up to 80%
• A new Composition Scheme for Works Contractors, effective from 01.04.2013, has already been notified, which will replace the existing Composition Schemes
• Items exempted from VAT - Refused derived fuel, Tiles made from malba, Chilly spray used for self defense, Empty pencil, geometry box, charki and manza used for kites, organic gulal and organic colours, all types of footwear having MRP upto Rs. 500
• VAT Reduced from 12.5% to 5% on LED Lights and Desi Ghee

Miscellaneous

• Financial support of Rs.1,000 per month for transgenders living in Delhi for at least 3 years.
• Monthly aid of Rs.1,500 for senior citizens, differently-abled person and women in distress.
• Two new hostels, one each for boys and girls, for blind university students.
• Residential school for scheduled castes/Scheduled Tribes/other backward class/minorities students
• One-time grant of Rs.100,000 to RWAs which offer to provide house essential equipment and open the facility to public at no profit no loss basis.
• 100 new ambulances to be procured for Centralised Accident & Trauma Services (CATS).
• Rs.5 crore fund for the welfare of journalists of Delhi.
• Rs.150 crore to improve level of civic services in industrial estates.
• Seven new hospitals and nine new dispensaries.
• Five new Rajakiya Pratibha Vikas Vidyalaya (RPVV), and one RPVV for exclusive science. Thirty-four new school buildings to be completed in 2013-14.
• Skill Development Centre to come up at Jaunapur.
• Ownership rights to be granted for 45 JJ resettlement colonies.
• New water treatment plant of 31 MGD at Palla.
• Procurement of 625 low floor and 1,100 other buses.
• Eight thousand new auto rickshaws for corporate houses on the lines of radio taxis.

CA Rahul Jain

+91-9811613999

Email: rahuljain@rpmd.in

Website: www.rpmd.in