CENTRAL EXCISE, CUSTOMS, &
SERVICE TAX PROPOSALS
by
COMMISSIONER,
SERVICE TAX, MUMBAI
BUDGET THEME
Move towards GST - ST rate increase,
removing exemptions to sync with State
VAT levy.
Improve Ease of doing business
Remove ambiguity by changes in law &
clarifications
Boost to domestic manufacturing by
reducing tax burden
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CENTRAL EXCISE & CUSTOMS
CHANGES
 Central Excise duty rate increased from 12.36%
to 12.5% with abolition of education cesses.
 Issue of balance credit of Education Cess as on
1st March under consideration of Govt.
 Reduction of Customs duty on raw-materials,
intermediate and components (22 items) to
promote domestic manufacturing and minimise
duty inversion on items used by polymers,
Telecom, IT and Power Sector.
3
CENTRAL EXCISE & CUSTOMS CHANGES
 Reduction in SAD to minimise CENVAT Credit
accumulation and liquidity issues. IT Sector
items, Polymers, metals and LED light goods
benefited.
 Tablet Computers and their parts manufacturing
given boost by reduction of import duties
 Excise duty increased on Cigarettes by 15 -25%.
Excise duty structure on Pan Masala and Gutka
also modified.
 Clean Energy Cess increased from Rs 100 to 200
per MT to fund Swatcha Bharat Mission
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EASE OF DOING BUSINESS.
 On-line Central Excise & Service Tax registration
within 2 working days.
 Tax payers allowed to use digitally signed
invoices.
 Time limit for taking CENVAT Credit increased
from 6 months to 1 year from date of invoice.
 Facility of direct dispatch of goods to the
customer of a dealer or job worker of
manufacturer allowed.
 Time limit for return of capital goods from job
worker increased from 6 months to 2 years.
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EASE OF DOING BUSINESS.
 Clarification also issued for garnishing provision
and providing instalments for recovery of
arrears.
 Withdrawal of prosecution cases permitted if the
adjudication proceedings are dropped on merit.
 Exporters allowed credit of services used
between factory and port – clarification
 Advance ruling facility extended to Indian firms
also.
 Valuation provisions amended to add
reimbursement
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MODIFIED PENAL PROVISIONS - Encouraging
Voluntary Compliance (All 3 taxes)
 Non-suppression cases
can be closed on payment of Tax and interest, if
paid within 30 days of issue of SCN
25% of penalty if paid within 30 days of OIO
Max Penalty 10% of Tax amt
 SUPPRESSION Cases
 Only 15% penalty, if tax and interest is paid within
30 days of SCN.
 Only 25% penalty if tax n interest is paid within 30
days of issue of order.
 For existing cases also benefit available after
enactment of Finance Bill
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SERVICE TAX CHANGES
 Service Tax rate increased from 12.36% to 14%.
Levy of Swatch Bharat Cess at the rate of 2%.
 New Levy on Tickets of amusement park, Theme
Park, Water parks etc.
 New levy on entry ticket to concerts, award
functions, non-recognised sport events if the
ticket charge is more than Rs.500/-. However,
Cinema, Circus, dance, drama tickets remain
exempted.
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SERVICE TAX CHANGES
 Service Tax on contract manufacturing/job work
for alcoholic liquor liable to Service Tax.
 Services provided by Govt. or local authority
to business entities charged Service Tax
 Construction/repair services provided to Govt.
would be taxable except like canals, dam,
irrigation, water supply. (wef 1/4/15)
 Construction of Airport and port also made
taxable.
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SERVICE TAX CHANGES
 Services provided by Mutual fund or Lottery agents
or chit fund selling agent made taxable on reverse
charge basis.
 Services provided by the Banks on behalf of RBI or
similar services also taxable.
 In case of foreign aggregator model (like UBER taxi)
the aggregator is liable to pay tax in India.
 For transport of goods by Road and vessel uniform
abatement of 30% allowed.
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SERVICE TAX CHANGES
 In the case of executive air travel abatement reduced
from 60% to 40%.
 Partial reverse charge on manpower supply and
security services made to full reverse charges.
 CENVAT Credit allowed under partial reverse charge
without linking it to the payment to service provider.
 Section 73 being amended to provide that if the short
payment has been declared, for recovery purpose
no need to issue any SCN.
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THANK YOU