J.K.Mittal
FCA, FCS,LLB
BUDGET CHANGES 2014-15
Presented By
J.K. MITTAL (Advocate)
Chairman, Indirect Taxes Committee, PHDCCI
Co-Chairman, National Council (Indirect Taxes), ASSOCHAM
LL.B.,F.C.A., F.C.S.
NEW DELHI
Ph: 011- 22056635, 011-22461071,72,76
Fax: 011- 22447420
Email: jkmittalservicetax@gmail.com
jkmittal@airtel.blackberry.com
J.K.Mittal FCA, FCS,LLB
Amendment in Indirect Taxes by the Finance
Act, 2014 – analysis and comments
1
“what a great man does, is followed
by others. People Go by the example
he sets”
J.K.Mittal FCA, FCS,LLB
In the words of Bhagwad Gita
Says-
2
“You must not worry whether the
desired result follows from your
action or not, so long as your motive
is pure, your means correct”
J.K.Mittal FCA, FCS,LLB
In the words of Mahatma Gandhi
3
Budget 2014-2015 Speech of Sh. Arun Jaitley,
Minister
of
Finance,
July10,2014
(Extract/Excerpt):
9.. I do hope we are able to find a solution in
the course of this year and approve the
legislative scheme which enables the
introduction of GST. This will streamline
the tax administration, avoid harassment
of the business and result in higher revenue
collection both for the Centre and the States.
J.K.Mittal FCA, FCS,LLB
GST
4
J.K.Mittal FCA, FCS,LLB
Budget 2014-2015 Speech of Sh. Arun Jaitley,
Minister
of
Finance,
July10,2014
(Extract/Excerpt):
Advance Ruling and Other Tax Related
Measures
11. Tax demand of more than `4 lakh crore is
under dispute and litigation before various
Courts and Appellate authorities. This is one
of the serious concerns of all taxpayers in
this country. In order to reduce litigation in
direct taxes, I propose to make certain
legislative and administrative changes.
5
13. As an administrative measure, I propose to set
up a High Level Committee to interact with trade
and industry on a regular basis and ascertain areas
where clarity in tax laws is required. Based on the
recommendations of the Committee, the Central
Board of Direct Taxes and the Central Board of
Excise and Customs shall issue appropriate
clarifications, wherever considered necessary, on
the tax issues within a period of two months.
J.K.Mittal FCA, FCS,LLB
Budget 2014-2015 Speech of Sh. Arun Jaitley,
Minister
of
Finance,
July10,2014
(Extract/Excerpt):
6
190. While preparing the tax proposals, I had to
encounter the challenge of an extremely limited
fiscal space. Nonetheless, I propose to introduce
measures to revive the economy, promote
investment in manufacturing sector and rationalize
tax provisions so as to reduce litigation as well
as to address the problem of inverted duty
structure in certain areas. I also propose to give
relief to individual taxpayers and to certain sectors
of the economy.
J.K.Mittal FCA, FCS,LLB
Budget 2014-2015 Speech of Sh. Arun Jaitley,
Minister
of
Finance,
July10,2014
(Extract/Excerpt):
7
252. To expedite the process of disposal of
appeals, amendments have been proposed in the
Customs and Central Excise Acts with a view to
freeing appellate authorities from hearing stay
applications and to take up regular appeals for
final disposal.
J.K.Mittal FCA, FCS,LLB
Budget 2014-2015 Speech of Sh. Arun Jaitley,
Minister
of
Finance,
July10,2014
(Extract/Excerpt):
8
TIMIT LIMIT FOR MAKING ADJUDICATION
(4B) The Central Excise Officer shall determine the amount
of service tax due under sub-section (2)—
(a)
within six months from the date of notice where it
is possible to do so, in respect of cases whose limitation is
specified as eighteen months in sub-section (1);
(b)
within one year from the date of notice, where it is
possible to do so, in respect of cases falling under the
proviso to sub-section (1) or the proviso to sub-section
(4A).
J.K.Mittal FCA, FCS,LLB
Finance Act, 2014 w.e.f. 06.08.2014, amended in service tax law
in line with the amendment already made sometime back in the
Central Excise Act.Under section 73, a new sub-section 4B has
been inserted by Finance Act, 2014 w.e.f 06.08.2014, to
prescribed the time limit for passing an order
9
FIXIED TIMIT LIMIT HAS BEEN FOR TAKING CENVAT
CREDIT OF INPUTS AND INPUT SERVICES
4. Conditions for allowing CENVAT credit.—(1) The CENVAT
credit in respect of inputs may be taken immediately on receipt of
the inputs in the factory of the manufacturer or in the premises of
the provider of output service.[Rule 4(1) of CENVAT Credit
Rules, 2004]
following proviso inserted
Provided also that the manufacturer or the provider of output
service shall not take CENVAT credit after six months of the date
of issue of any of the documents specified in sub-rule (1) of rule
9 [Third proviso Rule 4(1) of CENVAT Credit Rules, 2004 which
shall be effective from 01.09.2014]
J.K.Mittal FCA, FCS,LLB
The Central Government by the Notification no. 21/2014-CE(NT)
dated 11.07.2014 made amendment in the CENVAT Credit Rules,
2014 and fixed the time limit for taking CENAVT Credit on Input
and Input Services.
10
Following proviso inserteded
Provided also that the manufacturer or the provider of
output service shall not take CENVAT credit after six
months of the date of issue of any of the documents
specified in sub-rule (1) of rule 9 [sixth proviso Rule 4(7) of
CENVAT Credit Rules, 2004 which shall be effective from
01.09.2014]
J.K.Mittal FCA, FCS,LLB
The CENVAT credit in respect of input service shall be
allowed, on or after the day on which the invoice, bill or, as
the case may be, challan referred to in rule 9 is received.
[Rule 4(7) of CENVAT Credit Rules, 2004]
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Section 35F. Deposit of certain percentage of duty
demanded or penalty imposed before filing appeal.—The
Tribunal or the Commissioner (Appeals), as the case may be,
shall not entertain any appeal,—
(i)
under sub-section (1) of section 35, unless the
appellant has deposited seven and a half per cent. of the duty,
in case where duty or duty and penalty are in dispute, or
penalty, where such penalty is in dispute, in pursuance of a
decision or an order passed by an officer of Central Excise
lower in rank than the Commissioner of Central Excise;
(ii)
against the decision or order referred to in clause (a) of
sub-section (1) of section 35B, unless the appellant has
deposited seven and a half per cent. of the duty, in case where
duty or duty and penalty are in dispute, or penalty, where such
penalty is in dispute, in pursuance of the decision or order
appealed against;
J.K.Mittal FCA, FCS,LLB
MANADATORY PRE-DEPOSIT
12
Provided that the amount required to be deposited under this
section shall not exceed rupees ten crores:
Provided further that the provisions of this section shall not
apply to the stay applications and appeals pending before any
appellate authority prior to the commencement of the Finance
(No. 2) Act, 2014.
J.K.Mittal FCA, FCS,LLB
(iii)
against the decision or order referred to in clause (b) of
sub-section (1) of section 35B, unless the appellant has
deposited ten per cent. of the duty, in case where duty or duty
and penalty are in dispute, or penalty, where such penalty is in
dispute, in pursuance of the decision or order appealed
against:
13
The Hon’ble Finance Minister In Budget Speech 2014-15
said that:
252. To expedite the process of disposal of appeals,
amendments have been proposed in the Customs and
Central Excise Acts with a view to freeing appellate
authorities from hearing stay applications and to take
up regular appeals for final disposal.
J.K.Mittal FCA, FCS,LLB
Explanation.—For the purposes of this section “duty
demanded” shall include,—
(i)
amount determined under section 11D;
(ii)
amount of erroneous CENVAT credit taken;
(iii)
amount payable under rule 6 of the CENVAT
Credit Rules, 2001 or the CENVAT Credit Rules, 2002 or
the CENVAT Credit Rules, 2004.
14
Section 35FF. Interest on delayed refund of amount
deposited under section 35F.—Where an amount
deposited by the appellant under section 35F is required to
be refunded consequent upon the order of the appellate
authority, there shall be paid to the appellant interest at
such rate, not below five per cent. and not exceeding thirtysix per cent. per annum as is for the time being fixed by the
Central Government, by notification in the Official Gazette,
on such amount from the date of payment of amount till, the
date of refund of such amount:
Provided that the amount deposited under section 35F, prior
to the commencement of the Finance (No. 2) Act, 2014,
shall continue to be governed by the provisions of section
35FF as it stood before the commencement of the said Act.
J.K.Mittal FCA, FCS,LLB
INTEREST ON REFUND OF PRE-DEPOSIT
15
….
….
Section 15B. Penalty for failure to furnish information
return.—If a person who is required to furnish an
information return under section 15A fails to do so within the
period specified in the notice issued under sub-section (3)
thereof, the prescribed authority may direct that such
person shall pay, by way of penalty, a sum of one
hundred rupees for each day of the period during which
the failure to furnish such return continues.
J.K.Mittal FCA, FCS,LLB
Section 15A. Obligation to furnish information return.—
(1) Any person, being—
(a)
an assessee; or
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APPEAL TO SUPREME COURT
(2) For the purposes of this Chapter, the determination of
any question having a relation to the rate of duty shall
include the determination of taxability or excisability of
goods for the purpose of assessment.
J.K.Mittal FCA, FCS,LLB
Section 35L. Appeal to the Supreme Court.— (1) An
appeal shall lie to the Supreme Court from—
….
17
J.K.Mittal FCA, FCS,LLB
The Central Government w.e.f. 1-10-2014 by issuing
Notification No. 12/2014-ST, dated 11.07.2014, which
shall be applicable from 01.10.2014, by superseding the
earlier Notification No. 26/2004-ST, the rate of interest
payable under Section 75 on delayed payment of service
tax has been significantly enhanced from 18% p.a. to
interest payments on variable rates ranging from 18% to
30% per annum depending upon the period of delay in
payments of service tax, as given below at a glance:
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2.
3.
Period
of
delay
(2)
Upto
six
months
More than
six months
and
upto
one year
More than
one year
Rate of simple interest
(3)
18% p.a.
18% p.a. for the first six months of delay
and 24% p.a. for the delay beyond six
months
18% p.a. for the first six months of delay;
24% p.a. for the period beyond six
months up to one year and 30% p.a. for
any delay beyond one year
J.K.Mittal FCA, FCS,LLB
S.
No.
(1)
1.
19