Compliance Under Service Tax - 2012-13 - Bank Audit

The compliance under service tax provisions post Finance Bill 2012 may need clarity on 3 aspects which are discussed as under Small Service Provider Exemption The basic exemption is available to the CA whose taxable services in 2011-12 did [does] not exceed Rs.10 lakhs. Such CA would not be liable to service tax for services provided in 2012-13 upto a value of Rs. 10 Lakhs. Once the limit is exceeded then they would be liable for the incremental services beyond Rs. 10 Lakhs. Therefore if eligible for the exemption, no need to charge any service tax for the bank audit II. Date of Billing The Bank audit could have commenced in March 2012, however the completion of the services would be in April/ May 2012. Since the completion of service is important, as per the Point of Taxation Rules {POTR} the rate of service tax would be: Basic- 12% EC- 0.24 SHEC- 0.12- Total 12.36%. This is so because we do not receive any advance and billing prior to provision of service would not change the rate. III. Date of payment The date of payment would be irrelevant this year as the rate of 12% is effective for the year and changes if any are only expected to be in Budget 2013. This is for general guidance of members, however, members may take their independent and correct view regarding chargeability of service tax. Read more ...

How to File Revised Tax Return Online

If an individual has already filed the income tax return and subsequently discover any omission or wrong statement therein, he can re-file the return with necessary modification. This re-filing of the income tax return is referred to as Revised Return. The process for revising the return is very simple. Please remember that the process outlined below is applicable if you had filed the original return online. Rules related to Revised Return Revised return can be filed for any previous year at any time before the expiry of 1 year from the end of the relevant assessment year or before completion of the assessment whichever is earlier. For this financial year (2010-11), you can file the revised return till March 31st, 2012 However, if the income tax department completes the assessment of your return earlier, then a revised return cannot be filed. Revised return can be filed only if the original return was filed before due date. Thus if a return is filed after a due date then it cannot be revised A loss return filed within time can also be revised and in such case loss as per the revised is carried forward One should have acknowledgement number and date of filing the original return in order to file a revised return Return filed in response to the notice u/s 148 can also be revised. It should be noted that notice u/s 148 is issued in respect of the escaped income in the respective assessment year In case of concealment of income and furnishing of inaccurate information in income tax return an individual will be penalized Read more ...

NRI (non-resident indian)

Tax saving options for NRIs:- When it comes to NRIs they do not have as much tax saving options open to them as the Resident Indians do. Here we show you the list of tax saving options available for NRIs and how NRIs can make maximum profit from them:    1. Section 80C - From the various tax saving avenues available to Indian tax savers –    (i) ELSS (Tax saving Equity Mutual Fund schemes) – ELSS are equity-oriented mutual fund schemes that invest in a diversified portfolio of Indian stocks. ELSS schemes can be purchased online and come with a lock-in period of 3 years. They are ideal for long-term tax-free savings. (ii) House property – Buying a house property in India is a good investment if you plan to come back in the future. The principal and interest payments made every year for a home loan availed in India are allowed as deductions subject to an overall limit of Rs 1 lakh per year on principal payments (under section 80C) and full interest payments made during the year (under section 24b) - in case of let-out property.               (iii) Life Insurance and Pension Plans – There are many life insurance and retirement/pension plans of Insurers that can be bought by an NRI. You can buy retirement plan with or without life cover and also choose between a traditional plan (endowment, money-back) and a unit-linked plan depending upon your risk appetite. Point to note is that the policies are issued in Indian Rupees only. There is also a facility available with few insurers like LIC for NRIs to obtain insurance cover from their present country of residence where all formalities are completed in their present country of residence, subject to fulfilment of certain rules and restrictions on sum insured amounts and add-on riders.             2. Section 80D - [Health insurance premium payment] - NRIs can purchase health insurance policy in India for themselves, their family and also dependant parents and claim deduction for the premium paid up to Rs 35,000 per annum [Rs 15,000 in case of non-senior citizens and Rs 20,000 for senior citizens];            3. Other Deductions u/s 80 – (i) Deduction under 80G - for specified donations; (ii) Deduction under 80E – for interest payment towards Educational loan taken from any bank/approved financial institution for higher studies (comprising full time as well as vocational studies pursued after passing senior secondary examinations studies) for self or any of immediate family members (children, spouse)             Investments not available for NRIs – PPF (Public Provident Fund), NSC (National Savings Certificate), SCSS (Senior citizens savings account), tax saving infrastructure bonds under section 80CCF and POTD (Post office time deposits) are not available for NRIs. However, if you had already opened any of these accounts when you were a Resident Indian, you can continue to service the account(s) till maturity. The overall limit on section 80C, 80CCC is Rs 1 lakh per annum.              Read more ...

Calculate your tax liability based on your taxable income.

After Budget-12, the Income Tax Department has published Online Tax Calculation Software on their portal.  This calculator calculate Tax liablity which is based on your Taxable Income of Fin. Year 2012-13 i.e. Assessment year 2013-14.  Simple procedure to calculate tax with this calculator.   For Example – If you earn annually Rs. 800000/- (Gross Income), deduct from Gross Income your 10 (i) Deductions then Less/Add your House Property Income under section 24. After these Deductions add your Other source of Incomeand then Less deduction under chapter VIA. After all you get Taxable Income.  This Taxable Income Put on Tax Calculator and follow the procedute.  You will get Tax Liability for Assessment Year 2013-14. Click Here to Calculate your Tax Liability for Assessment year 2013-14. Read more ...

RBI has made special Arrangement to Deposit TAX Payments on 30, 31 March 2012

Due to rush hour ReserveBank of India has made special arrangement to deposit Tax Payment on 30, 31 March 2012 at Mumbai and Navi Mumbai Offices except normal working time Hours.  RBI further instructed to all BankAgencies i.e. State Bankof India and theirAssociates, Public SectorBanks as well as designated private sectorbank to receive all types of taxes beyond Normal working hours. Thus the All Taxpayers are requested to take advantage of these facilities provided for the financial year ending March 31, 2012 and assessment year 2012-13 as per Press Release : 2011-2012/1551. Schedule of Tax Deposit is as below: Date Office Cash DepositTimings Cheque Deposit Timings March 30.2012 Fort Mumbai 10.00 AM to 4.00 PM 10.00 AM to 5.00 PM March 30.2012 Navi Mumbai Belapur 10.00 AM to 4.00 PM 10.00 AM to 4.00 PM March 31,2012 Fort Mumbai 10.00 AM to 4.00 PM 10.00 AM to 5.30 PM March 31,2012 Navi Mumbai Belapur 10.00 AM to 4.00 PM 10.00 AM to 4.00 PM Read more ...

Income tax india

Income Tax Department facilitates a PAN holder to view its Tax Credit Statement (Form 26AS) online. Form 26AS contains Details of tax deducted on behalf of the taxpayer by deductors Details of tax collected on behalf of the taxpayer by collectors Advance tax/self assessment tax/regular assessment tax, etc. deposited by the taxpayers (PAN holders) Details of paid refund received during the financial year Details of the High value Transactions in respect of shares, mutual fund etc. The Tax Credit Statement (Form 26AS) are generated wherein valid PAN has been reported in the TDS statements. Tax Credits Statement (Form 26AS) can be viewed/accessed through 3 ways : 1. View Tax Credit from https://incometaxindiaefiling.gov.in Taxpayers who are registered at the above potal viz. https://incometaxindiaefiling.gov.in can view 26AS by clicking on 'View Tax Credit Statement (From 26AS)' in "My Account". The facility is available free of cost.  For "New Registration", Click on 'Register' on the portal. The registration process is user-friendly and takes minimal time. View Demo2. View Tax Credit (Form 26AS) from bank site through net banking facility The facility is available to a PAN holder having net banking account with any of authorized banks. View of Tax Credit Statement (Form 26AS) is available only if the PAN is mapped to that particular account. The facility is available for free of cost. View Demo List of banks registered with NSDL for providing view of Tax Credit Statement (Form 26AS) are as below       1. Axis Bank Limited        2. Bank of India        3. Bank of Maharashtra       4. Citibank N.A.       5. Corporation Bank       6. ICICI Bank Limited       7. IDBI Bank Limited       8. Indian Overseas Bank       9. Indian Bank       10. Kotak Mahindra Bank Limited        11. Oriental Bank of Commerce       12. State Bank of India       13. State Bank of Mysore       14. State Bank of Travancore       15. The Federal Bank Limited       16. UCO Bank       17. Union Bank of India       18. Bank of Baroda       19. Karnataka Bank       20. The Saraswat Co-operative Bank Limited       21. City Union Bank Limited       22. State Bank of Patiala 3. View Tax Credit (Form 26AS) from TIN website The facility is available to PANs that are registered with Tax Information Network for view of 26AS statement. The PAN holder has to fill up an online Registration form for such purpose. Thereafter, verification of PAN holder's identity is done by the TIN-Facilitation Centre personnel either at PAN holder's address or at the TIN-facilitation center that has been chosen by the PAN holder. The verification involves a cost at prescribed rates. Once authorised, the PAN holder can view Tax Credit Statement online. Read more ...

What Is The Difference Between Tax Free Bonds & Long Term Infrastructure Bonds?

The time of investing under schemes which help you save tax is approaching. Which is why people have started exploring new investment avenues which can reduce there taxable income. ‘Tax Free Bonds’ and ‘Long Term Infrastructure Bonds’ are two good investment options available which can help you save tax. But most of the people do not know the difference between both these terms and how much one can save by investing under these investment alternatives. So lets have a discussion to understand the difference between ‘Tax Free Bonds’ and ‘Long Term Infrastructure Bonds’. What Are Tax Free Bonds? Tax free bonds are bonds issues by Government entities, to arrange funds for building country’s infrastructure. Few designated entities which issue tax free bonds in India includes National Highway Authority Of India (NHAI) tax free bonds and PFC. These bonds generally offers a return of around 8% and With a maturity period of around 10 to 15 years. What Are Long Term Infrastructure Bonds? Long Term Infrastructure Bonds are bonds issues by Industrial Finance Corporation of India Ltd. Life Insurance Corporation of India Infrastructure Development Finance Company Limited A Non-Banking Finance Company (NBFC) classified as an Infrastructure Finance Company by the Reserve Bank of India (RBI) In 2010, the government of India introduced a new section under Income tax act 1961 i.e section 80CCF. This section had been introduced to offer additional income tax deduction on investment upto Rs 20,000 in the financial year 2010-11. This deduction is over and above Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor’s savings into infrastructure sector directly. Read more ...

EPFO Is Likely To Issue Passbook To All Employees Provident Fund (EPF) Accounts

The Employee Provident Fund (EPF) organization has plans to issue passbook to all the EPF account holders. This service is expected to be implemented from the coming financial year i.e from April, 2012 onwards. With this salaried employees will be issued an EPF Passbook just like bank passbook which will reflect the account balance status of the employee. The next meeting of EPF will be give a decision on this proposal which will be held on Feb 22, 2012. EPF Passbook Will Help Employees To :- Know the status of their EPF balance. In case of death of EPF account holder, nominee can check the status of the account and make withdrawal easily. This will encourage employees to save more for their retirement planning. Employee Provident Fund (EPF), as name suggest is employees fund. In simple words, a fraction of salary get deducted from the monthly salary of every employee and get invested under EPF scheme with equal contribution by the employer. EPFO i.e employee provident fund organization is an institution which manages this fund and invested the same on behalf of the employees and pays interest on the amount invested. This scheme has been made compulsory for all private sector employees, as there is no retirement benefits in private jobs, this scheme intends to save for the retirement of the employee. Features/Benefits Of Employee Provident Fund (EPF) The interest rate on EPF funds is 9.5% p.a. which is higher than other debt investments. Investors get equal contribution from employer of the organization. EPF account holder can also take loan from their EPF amount instead of taking the personal loans. Employees can easily transfer their EPF balance on switching company. Employees and employer contributes 12% of their basic salary to the EPF account. It is considered to the safest mode of investment, as maintained by the government organization. Offers tax exemption under section 80C of income tax act 1961. Interest earned on EPF is tax free. No TDS deduction at the time of retirement. Read more ...

Exemption from Filing of Income Tax Return A.Y 2011-2012

No.402/92/2006-MC (14 of 2011)Government of India / Ministry of FinanceDepartment of RevenueCentral Board of Direct Taxes*** rd New Delhi, dated the 23June, 2011 PRESS RELEASE The Central Board of Direct Taxes has notified the scheme exempting salaried taxpayers with total income up to Rs.5 lakh from filing income tax return for assessment year 2011-12, which will be due on July 31, 2011. Individuals having total income up to Rs.5,00,000 for FY 2010-11, after allowable deductions, consisting of salary from a single employer and interest income from deposits in a saving bank account up to Rs.10,000 are not required to file their income tax return. Such individuals must report their Permanent Account Number (PAN) and the entire income from bank interest to their employer, pay the entire tax by way of deduction of tax at source, and obtain a certificate of tax deduction in Form No.16. Persons receiving salary from more than one employer, having income from sources other than salary and interest income from a savings bank account, or having refund claims shall not be covered under the scheme. The scheme shall also not be applicable in cases wherein notices are issued for filing the income tax return under section 142(1) or section 148 or section 153A or section 153C of the Income Tax Act 1961. ***  Read more ...

AMENDMENTS IN INDIRECT TAX BUDGET 2012-13

Changes In Rates Of Excise Duty 1) The effective rate of excise duty of 10% on non-petroleum products is being increased to 12% with a few exceptionswhere exemptions/concessions have been given.2) Concessional rate of excise duty of 5% on non-petroleum products is being increased to 6%. 3) The lower rate of 1% on non-petroleum products is being increased to 2%. However, precious metal jewellery, coaland fertilizers would remain at 1%. SECTOR SPECIFIC PROPOSALS I. CEMENT: The excise duty structure on cement manufactured and cleared in packaged form is being rationalized. The graded RSP slabs for the purpose of charging of duty on cement manufactured and cleared in packaged form are being done away with. The rates on cement and cement clinkers are also being revised as under: Description Revised rate of duty 1. cement manufactured and cleared in packaged form:— (a) from mini cement plants 6% ad valorem + Rs.120 per tonne (b) from other than mini cement plants 12% ad valorem + Rs.120 per tonne 1 Cement cleared other than in packaged form. 12% ad valorem 2 Cement Clinker 12% ad valorem Cement is also being notified under section 4A, that is, retail sale price (RSP) based assessment with an abatement of 30% from RSP. II. PRECIOUS METALS:1) At present, branded jewellery of precious metals attracts excise duty of 1%. The scope of the levy is extended to include unbranded jewellery within its ambit. However, the duty on such unbranded jewellerywould be charged on 30% of transaction value declared in the invoice. 2) Unbranded silver jewellery is already exempt. Branded silver jewellery is being exempted from excise duty. 3) Excise duty on gold jewellery sold from EOUs into domestic tariff area (DTA) is being increased from 5% to 10%. 4) Excise duty on refined gold is being increased from 1.5% to 3%. 5) Excise duty on gold produced from copper smelting is being increased from 2% to 3%. 6) Excise duty on silver produced from copper smelting is being reduced from 6% to 4%. 7) Full exemption from excise duty is being provided on articles of goldsmith and silversmith wares of preciousmetals or of metals coated with precious metals, not bearing a brand name. 8) Gold coins of purity 99.5% and above and silver coins of purity 99.9% and above are being fully exempted from excise duty. III. TOBACCO PRODUCTS: 1) Cigarettes are being notified under section 4A for RSP based assessment with abatement of 50% from RSP. 2) The basic excise duty on hand-rolled bidis is being increased from Rs.8 to Rs.10 per thousand and on machine-rolled bidis from Rs.19 to Rs.21 per thousand. 3) The rates of duty per machine applicable to pan masala, guthka, chewing tobacco, zarda scented tobacco and unmanufacture tobacco under the compounded levy scheme are being increased. IV. MASS CONSUMPTION ITEMS: 1) Refills and inks used for the manufacture of writing instruments of value not exceeding Rs.200 per piece are being fully exempted from excise duty subject to actual user condition. 2) Exemption limit on footwear is being enhanced from Rs.250 per pair to Rs.500 per pair. Footwear above Rs.500 per pair would attract excise duty of 12%. 3) Excise duty on iodine is being reduced from 10% to 6%. V. ENVIRONMENT FRIENDLY GOODS: 1) Excise duty is being reduced from 10% to 6% on battery packs supplied to manufacturers of electric vehicles for use as spares and OEMs subject to end-use condition. 2) Excise duty is being reduced from 10% to 6% on specific parts of Hybrid vehicles supplied to manufacturers of hybrid vehicles subject to end-use condition. 3) Excise duty on LED lamps is being reduced to 6%. VI. TEXTILES: 1) For the purpose of charging excise duty on ready-made garments bearing a brand name or sold under a brand name, the level of abatement from the retail sale price (RSP) is being increased from 55% to 70%. VII. MISCELLANEOUS: 1) Full exemption from excise duty is being provided to food preparations containing fruits and vegetables falling under Chapter 20, which are prepared in a hotel, restaurant or a retail outlet, whether or not such food is consumed in such hotels/restaurants/retail outlets. 2) Excise duty on parts of mobile phones, other than those cleared to a manufacturer of mobile phones, is being reduced from 10% to 2%, provided no Cenvat credit is taken. 3) Excise duty is being reduced from 10% to 6% on: (a) Matches manufactured by semi-mechanized units (c) Processed food products of soya 4) Exemption from excise duty is being restored on intra ocular lens. Service tax provisions as amended by Budget 2012 1 Rate of Service Tax Increased from 10% to 12% across all the services; (effective date 1st April, 2012) 2. Consequent rates changes in the service tax have been made in specific and compounding rates of tax for the following (effective date 1st April, 2012): a) Service in relation to purchase and sale of foreign currencyincluding money changing, existing rates increased proportionately by 20%; b) Service of promotion, marketing, organizing or in any manner assisting in organizing lottery by raising the specified amounts from Rs. 7000/- to Rs. 11000/-; c) Works Contract Services from 4% to 4.8%; and d) Reversal of Cenvat Credit under rule 6(3)(i) from present 5% to 6% of 2 In case of Life Insurance Premium, where the premium is not towards risk cover, the first premium shall be taxed @ 3% and subsequent premiums @ 1.5% (effective date 1st April, 2012); 3 Transport of passengers embarking in India for domestic and international journey will now be taxed @ 12% of the ticket value (after abatement of 60%) effective service tax shall be 4.944% of the ticket amount. (effective date 1st April, 2012) 4 Introduction of Negative List of Services (Section 66D) mentioning 17 services out of the purview of Service Tax, the details are as under: (effective after Notified date) (a) Services by Government or a local authority excluding the following services to the extent they are not covered elsewhere: (i) services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services provided to a person other than Government; (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) transport of goods or passengers; or (iv) support services, other than services covered under clauses (i) to (iii) above, provided to business entities. (b) Services by the Reserve Bank of India. (c) Services by a foreign diplomatic mission located in India. (d) Services relating to agriculture by way of – (i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or seed testing; (ii) supply of farm labour; (iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter essential characteristics of agricultural produce but make it only marketable for the primary market; (iv) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use; (v) loading, unloading, packing, storage or warehousing of agricultural produce; (vi) agricultural extension services; (vii) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce. (e) Trading of goods. (f) Any process amounting to manufacture or production of goods. (g) Selling of space or time slots for advertisements other than advertisements broadcast by radio or television. (h) Service by way of access to a road or a bridge on payment of toll charges. (i) Betting, gambling or lottery. (j) Admission to entertainment events or access to amusement facilities. (k) Transmission or distribution of electricity by an electricity transmission or distribution utility. (l) Services by way of – (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognized by law; (iii) education as a part of an approved vocational education course. (m) Services by way of renting of residential dwelling for use as residence; (n) Services by way of – (i) extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount; (ii) inter-se sale or purchase of foreign currency amongst banks or authorized dealers of foreign exchange or amongst banks and such dealers; (o) Service of transportation of passengers, with or without accompanied belongings, by – (i) a stage carriage; (ii) railways in a class other than – (A) first class; or (B) an air conditioned coach; (iii) metro, monorail or tramway; (iv) inland waterways; (v) public transport in a vessel of less than fifteen tonne net, other than predominantly for tourism purpose; and (vi) metered cabs, radio taxis or auto rickshaws; (p) Services by way of transportation of goods – (i) by road except the services of – (A) a goods transportation agency; or (B) a courier agency; (ii) by an aircraft or a vessel from a place outside India to the first customs station of landing in India; or (iii) by inland waterways; (q) Funeral, burial, crematorium or mortuary services including transportation of the deceased. 6. Place of Provision of Services Rules, 2012 (Section 66C) is proposed containing the principles on the basis of which taxing jurisdiction of Service can be determined. (Effective date shall be from the receipt of assent to the Finance Bill by the President). On these rules becoming effective, the existing Export of Services Rules, 2005 and Taxation of Services (provided from outside India and received in India) Rules, 2006 will be rescinded; A transaction will qualify as exports when it meets following requirements (i) The service provider in located in taxable territory; (ii) Service recipient is located outside India; (iii) Service provided is a service other than in the negative list; (iv) The place of provision of service is outside India; (v) The payment is received in convertible foreign exchange. 7. Valuation Rules for Works Contract Services and for catering services revised. a) For Works Contract Transactions the value of services will be computed by reducing VAT Taxable Component from the Sale Proceeds and balance will be chargeable for service tax; b) If the value of the goods are not intimated to the VAT Authorities, then the assesee can still calculate the actual value of goods and the same will be relevant to deduce the value of the services involved; c) If still the value is not deduced then there shall be an computed @ 40% of the total amount for original works, 60% in case of other contracts and for contracts involving construction of complex or building for sale where any part of consideration is received before the completion of the building it shall be chargeable for the 25% of the total amount; d) The Input Tax Credit on goods forming part of the property on which VAT is payable shall not be available. However, tax paid on capital goods and Input Services will be available including for tax paid on 25% of theservice tax charged for construction of complex or building;e) For catering services the taxable portion shall be 40% in case the supply of food or any other article of human consumption or drink at a restaurant and if provided from elsewhere it shall be 60% of such amount resulting into effective rate of 4.944% and 7.416% respectively. 1 Valuation Rule 6 amended to prescribe inclusion on account of demurrage charges received, exclusion of interest on loan over and above sales consideration and amount received on account of accidental damages on account of unforeseen actions not relatable to the provision of services; 2 Abatement reduced in certain services wherein now for convention centre or mandap with catering, pandal or shamiana contractors with catering will be chargeable on 70% of the bill amount, accommodation in hotel will be chargeable on 60% of the total amount, railway goods no change with cenvat credits made available as per the rules specified; 1 New Levy on Passenger fares on 30% of the ticket amount (on first class and AC travels) with cenvat credit made available; 2 In case of coastal shipping the taxable amount will now be on the 50% of the bill amount and no cenvat credit will be available; 3 Section 67A to be inserted to prescribe the value of taxable service (more particularly for Import and Export of Taxable Services) and the rate of tax shall be determined in terms of Point of Taxation Rules, 2011 (effective date enactment of the Finance Bill); 4 Section 72A to be inserted to introduce provisions related to Special Audit in the Service Tax Law on the lines of Section 14A and Section 14AA of the Central Excise Act, 1944. Provision of these Sections reads as under: (effective date enactment of the Finance Bill); SPECIAL AUDIT IN CASES WHERE CREDIT OF DUTY AVAILED OR UTILISED IS NOT WITHIN THE NORMAL LIMITS, ETC. (1) If the Commissioner of Central Excise has reason to believe that the credit of duty availed of or utilised under the rules made under this Act by a manufacturer of any excisable goods - (a) Is not within the normal limits having regard to the nature of the excisable goods produced or manufactured, the type of inputs used and other relevant factors, as he may deem appropriate; (b) Has been availed of or utilised by reason of fraud, collusion or any willful mis-statement or suppression of facts, He may direct such manufacturer to get the accounts of his factory, office, depot, distributor or any other place, as may be specified by him, audited by a accountant nominated by him. (2) The accountant so nominated shall, within the period specified by the Commissioner of Central Excise, submit a report of such audit duly signed and certified by him to the said Commissioner mentioning therein such other particulars as may be specified. (3) The provisions of sub-section (1) shall have effect notwithstanding that the accounts of the said manufacturer aforesaid have been audited under any other law for the time being in force or otherwise. (4) The expenses of, and incidental to, such audit (including the remuneration of the accountant) shall be determined by the Commissioner of Central Excise (which determination shall be final) and paid by the manufacturer and in default of such payment shall be recoverable from the manufacturer in the manner provided in section 11 for the recovery of sums due to the Government. (5) The manufacturer shall be given an opportunity of being heard in respect of any material gathered on the basis of the audit under sub-section (1) and proposed to be utilised in any proceeding under this Act or rules made there under. 1 The one year time limit for issuance of Notice under Section 73(1) for evasion, short payment or nonpayment of collected taxes increased to 18 months. New Section 73(1A) introduced to prescribe follow on notices issued on the same grounds need not repeat the grounds but to state the amount of service tax chargeable to the subsequent period. (effective date enactment of the Finance Bill) 2 Section 83 is being amended to make Settlement Commission provisions applicable to the Service Tax and to make revision mechanism prescribed in Section 35EE of the Central Excise Act, 1944(effective date enactment of the Finance Bill); 3 Section 68(2) of the Finance Act amended to put the onus of payment of service tax on reverse charge basis partly on service provider and partly on service receiver on three types of Services i.e. hiring of Transport, Construction and Man power Supply, separate Notification for the charge of the same shall be issued in case of the three services; The details are as under Sl. No Description of Service Service Recipient Service Provider 1 Hiring of motor vehicle designed to carry passengers (a) With abatement; (b) Without abatement 100 % 60% Nil 40% 2 Supply of man power for any purpose 75% 25% 3 Works Contract Service 50% 50% It is clarified that the liability of the two persons is for the respective amounts and is not influenced by the compliance or lack of it by the other side. 1 Rule 2(1)(d) of the Service Tax Rules, 1994 is being suitably amended for definition “person liable to pay” 2 Exemption of Service Tax on repairs of roads is exempted vide Notification No. 24/2009 dt, 27.07.2009, the period of exemption increased from 16.06.2005 onwards; 3 Management, Maintenance and Repairs Service undertaken in relation to non commercial Government buildings is being exempted from Service Tax vide Section 98 with effect from 16.06.1995. The same shall be chargeable under Section 66B from the date on which Section 66B becomes effective; 4 Sub-rule 6-A inserted under Rule 6 of the Cenvat Credit Rules, 2004 to protect Domestic Tariff Area from the reversal of Cenvat Credit when they supply taxable services under exemption to the Authorised Operations of SEZ. (Retrospective effect from 10.02.2006); 5 Exemption made retrospective (i.e. from 16.06.2005) to the services provided by an Association of Dyeing Units in relation to Common Effulent Treatment Plants; 6 Waiver of penalty for the taxes due paid along with interest within six months in respect of Service Tax on Rent on Immovable Properties. Amendment in Cenvat Credit Rules 1 Existing Rule 5 to be replaced with new rule to simplify the procedures for refund of non utilized Cenvat Credit on account of exports; 2 Credit of tax paid on motor vehicles to be allowed in case of the supply of such vehicles for services on vehicle rent, insurance and repairs shall also be allowed; 3 Credit of Tax paid for Insurance and Service Station Services is allowed to insurance Companies in respect of motor vehicles insured and re-insured by them and manufacturers in respect of motor vehicles manufactured by them; 4 Rule 4(1) and Rule 4(2) is being amended to provide credit for the taxes paid to take the credit of input of service tax on delivery of goods, subject to compliance of certain conditions as against availment of credit only after they are brought to the premises of the Service provider; 5 Rule 7 in respect of Input Service Distributors is being amended to provide that the credit for the service tax attributable to service used wholly in a unit shall be distributed only to that unit and that the credit of service tax attributable to service used in more than one unit shall be distributed on pro-rata on the basis of the turnover of the concerned unit to the total turnover of all the units; 6 Rule 9(1)(e) is being amended to provide for the credit for the taxes paid by Challan by the Service recipient on reverse charge mechanism; 7 Interest on loan being an exempt service will require reversal of credits used for earning such income. For banking and financial institutions, provisions are available to reverse credits upto 50% in rule 6(3D), It is proposed to change the formula to actual basis, subject to a minimum of 50% of the interest paid on deposits and for the non financial sector, it is proposed that they may reverse credits on gross interest basis. Other Rules 1. Time Limit for issue of invoices is increased presently from 14 days to 30 days in case of assessee other than bank and financial institutions. In their case, the time limit shall be 45 days from the date of completion of service (Rule 4A of the Service Tax Rules). Similarly, Clause 89(a) of the provisions in relation to the prosecution for non issue of invoice is being replaced with “knowingly evades payment of service tax” to meet the demand of business that mere non issue of invoices should not be made punishable with prosecution; 1 Central Excise Section 35EE made applicable for revision of the Orders. Similarly Power of Advance Ruling Authority to hear cases relating to Cenvat Credit; 2 Rule 6(4A) is being amended to provide unlimited amount of permissible adjustments which is for service tax paid excess in advance for any month or quarter or the case may be. At present the said excess is allowed to be adjusted only in the subsequent month or the quarter as the case may be. 3 At present in case of Export and Individuals and firms rendering eight specified services, the date of payment shall be the date of rendering services and the special dispensation is shifted from the Point of Taxation Rules to the Service Tax Rules; 4 For Exporters, the period extended by RBI on specific requests is also being included in the period of deferment of the tax liability. 5 The option of deferred payment is being allowed to all service providers rather than for specific services. Now this facility will only be available to individuals and partnership firms (including LLP) upto a turnover of services of Rs. 50 lakhs, subject to the condition that their turnover of taxable service in previous year was below Rs. 50 lakhs. The limit of Rs. 50 lakhs is for whole entity with all the registered units and not for single registration. 6 Amount paid as refund for service tax to the extent of unrealized sale proceeds of the shipping bill will be recoverable from the exporters in future at any point of time. Necessary amendments to these effects are made. 7 Common EST-1 Form for Excise and Service Tax Registration introduced and Common EST-3 Form for Excise and Service Tax Returns filing introduced. 8 Filing of Appeals for Service Tax are being aligned with that of the Central Excise. 9 New Scheme for tax recovery from the registrants collected the tax and not paid to the Government to be introduced; Point of Taxation Rules Amended 1 Definition of continuous supply of services amended to include recurring nature of services and the obligation for periodically payment from time to time; 2 The effective rate of taxation shall be effective at the new rates on the continuous supply of services also, definition of the date of payment, option to determine the point of taxation in respect of advances upto Rs. 1000 received in excess of the amount indicated in the invoice or completion of the service rather than payment; 3 Incorporation of new residual rule to ascertain point of taxation in cases where the same cannot be ascertained by the rules prescribed; 4 Reverse charge mechanism amended to tax received from Jammu and Kashmir; 5 The exemption of Rs. 10 lakhs for exemption, will be in terms of invoices and not mere payments received; Changes in Payment of Service Tax 1. Assesee having made payment of Service Tax of Rs. 25 lakhs or more in the previous year and new assesees other than individual and firms – Monthly payments for others Quarterly; (Effective date from 1st April, 2012) General 1. Guidance Notes issued as under a) Guidance Note-2 : What is service; Services means all the services other than listed in the negative list. It includes any activity for consideration carried out by a person for another and includes a declared service and excludes any activity which constitutes only transfer in title of goods or immovable property by way of sale, gift or in any other manner, a transaction involving any money or actionable claim, any service provided by an employee to an employer in the course of the employment, fees payable to court or tribunal set up under a law for the time being in force. b) Guidance Note-3 : Taxability of service; Appropriate steps given to define the scope and method of valuation of the services. c) Guidance Note-4 : Negative List; List of 17 services d) Guidance Note-5 : Declared Services; e) Guidance Note-6 : Exemptions;f) Guidance Note-7 : Rules of Interpretation; Read more ...

AMENDMENTS IN INDIRECT TAX BUDGET 2012-13

Changes In Rates Of Excise Duty The effective rate of excise duty of 10% on non-petroleum products is being increased to 12% with a few exceptionswhere exemptions/concessions have been given.2) Concessional rate of excise duty of 5% on non-petroleum products is being increased to 6%. 3) The lower rate of 1% on non-petroleum products is being increased to 2%. However, precious metal jewellery, coaland fertilizers would remain at 1%. SECTOR SPECIFIC PROPOSALS I. CEMENT: The excise duty structure on cement manufactured and cleared in packaged form is being rationalized. The graded RSP slabs for the purpose of charging of duty on cement manufactured and cleared in packaged form are being done away with. The rates on cement and cement clinkers are also being revised as under: Description Revised rate of duty 1. cement manufactured and cleared in packaged form:— (a) from mini cement plants 6% ad valorem + Rs.120 per tonne (b) from other than mini cement plants 12% ad valorem + Rs.120 per tonne 1 Cement cleared other than in packaged form. 12% ad valorem 2 Cement Clinker 12% ad valorem Cement is also being notified under section 4A, that is, retail sale price (RSP) based assessment with an abatement of 30% from RSP. II. PRECIOUS METALS:1) At present, branded jewellery of precious metals attracts excise duty of 1%. The scope of the levy is extended to include unbranded jewellery within its ambit. However, the duty on such unbranded jewellerywould be charged on 30% of transaction value declared in the invoice. 2) Unbranded silver jewellery is already exempt. Branded silver jewellery is being exempted from excise duty. 3) Excise duty on gold jewellery sold from EOUs into domestic tariff area (DTA) is being increased from 5% to 10%. 4) Excise duty on refined gold is being increased from 1.5% to 3%. 5) Excise duty on gold produced from copper smelting is being increased from 2% to 3%. 6) Excise duty on silver produced from copper smelting is being reduced from 6% to 4%. 7) Full exemption from excise duty is being provided on articles of goldsmith and silversmith wares of preciousmetals or of metals coated with precious metals, not bearing a brand name. 8) Gold coins of purity 99.5% and above and silver coins of purity 99.9% and above are being fully exempted from excise duty. III. TOBACCO PRODUCTS: 1) Cigarettes are being notified under section 4A for RSP based assessment with abatement of 50% from RSP. 2) The basic excise duty on hand-rolled bidis is being increased from Rs.8 to Rs.10 per thousand and on machine-rolled bidis from Rs.19 to Rs.21 per thousand. 3) The rates of duty per machine applicable to pan masala, guthka, chewing tobacco, zarda scented tobacco and unmanufacture tobacco under the compounded levy scheme are being increased. IV. MASS CONSUMPTION ITEMS: 1) Refills and inks used for the manufacture of writing instruments of value not exceeding Rs.200 per piece are being fully exempted from excise duty subject to actual user condition. 2) Exemption limit on footwear is being enhanced from Rs.250 per pair to Rs.500 per pair. Footwear above Rs.500 per pair would attract excise duty of 12%. 3) Excise duty on iodine is being reduced from 10% to 6%. V. ENVIRONMENT FRIENDLY GOODS: 1) Excise duty is being reduced from 10% to 6% on battery packs supplied to manufacturers of electric vehicles for use as spares and OEMs subject to end-use condition. 2) Excise duty is being reduced from 10% to 6% on specific parts of Hybrid vehicles supplied to manufacturers of hybrid vehicles subject to end-use condition. 3) Excise duty on LED lamps is being reduced to 6%. VI. TEXTILES: 1) For the purpose of charging excise duty on ready-made garments bearing a brand name or sold under a brand name, the level of abatement from the retail sale price (RSP) is being increased from 55% to 70%. VII. MISCELLANEOUS: 1) Full exemption from excise duty is being provided to food preparations containing fruits and vegetables falling under Chapter 20, which are prepared in a hotel, restaurant or a retail outlet, whether or not such food is consumed in such hotels/restaurants/retail outlets. 2) Excise duty on parts of mobile phones, other than those cleared to a manufacturer of mobile phones, is being reduced from 10% to 2%, provided no Cenvat credit is taken. 3) Excise duty is being reduced from 10% to 6% on: (a) Matches manufactured by semi-mechanized units (c) Processed food products of soya 4) Exemption from excise duty is being restored on intra ocular lens. Service tax provisions as amended by Budget 2012 1 Rate of Service Tax Increased from 10% to 12% across all the services; (effective date 1st April, 2012) 2. Consequent rates changes in the service tax have been made in specific and compounding rates of tax for the following (effective date 1st April, 2012): a) Service in relation to purchase and sale of foreign currencyincluding money changing, existing rates increased proportionately by 20%; b) Service of promotion, marketing, organizing or in any manner assisting in organizing lottery by raising the specified amounts from Rs. 7000/- to Rs. 11000/-; c) Works Contract Services from 4% to 4.8%; and d) Reversal of Cenvat Credit under rule 6(3)(i) from present 5% to 6% of 2 In case of Life Insurance Premium, where the premium is not towards risk cover, the first premium shall be taxed @ 3% and subsequent premiums @ 1.5% (effective date 1st April, 2012); 3 Transport of passengers embarking in India for domestic and international journey will now be taxed @ 12% of the ticket value (after abatement of 60%) effective service tax shall be 4.944% of the ticket amount. (effective date 1st April, 2012) 4 Introduction of Negative List of Services (Section 66D) mentioning 17 services out of the purview of Service Tax, the details are as under: (effective after Notified date) (a) Services by Government or a local authority excluding the following services to the extent they are not covered elsewhere: (i) services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services provided to a person other than Government; (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) transport of goods or passengers; or (iv) support services, other than services covered under clauses (i) to (iii) above, provided to business entities. (b) Services by the Reserve Bank of India. (c) Services by a foreign diplomatic mission located in India. (d) Services relating to agriculture by way of – (i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or seed testing; (ii) supply of farm labour; (iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter essential characteristics of agricultural produce but make it only marketable for the primary market; (iv) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use; (v) loading, unloading, packing, storage or warehousing of agricultural produce; (vi) agricultural extension services; (vii) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce. (e) Trading of goods. (f) Any process amounting to manufacture or production of goods. (g) Selling of space or time slots for advertisements other than advertisements broadcast by radio or television. (h) Service by way of access to a road or a bridge on payment of toll charges. (i) Betting, gambling or lottery. (j) Admission to entertainment events or access to amusement facilities. (k) Transmission or distribution of electricity by an electricity transmission or distribution utility. (l) Services by way of – (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognized by law; (iii) education as a part of an approved vocational education course. (m) Services by way of renting of residential dwelling for use as residence; (n) Services by way of – (i) extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount; (ii) inter-se sale or purchase of foreign currency amongst banks or authorized dealers of foreign exchange or amongst banks and such dealers; (o) Service of transportation of passengers, with or without accompanied belongings, by – (i) a stage carriage; (ii) railways in a class other than – (A) first class; or (B) an air conditioned coach; (iii) metro, monorail or tramway; (iv) inland waterways; (v) public transport in a vessel of less than fifteen tonne net, other than predominantly for tourism purpose; and (vi) metered cabs, radio taxis or auto rickshaws; (p) Services by way of transportation of goods – (i) by road except the services of – (A) a goods transportation agency; or (B) a courier agency; (ii) by an aircraft or a vessel from a place outside India to the first customs station of landing in India; or (iii) by inland waterways; (q) Funeral, burial, crematorium or mortuary services including transportation of the deceased. 6. Place of Provision of Services Rules, 2012 (Section 66C) is proposed containing the principles on the basis of which taxing jurisdiction of Service can be determined. (Effective date shall be from the receipt of assent to the Finance Bill by the President). On these rules becoming effective, the existing Export of Services Rules, 2005 and Taxation of Services (provided from outside India and received in India) Rules, 2006 will be rescinded; A transaction will qualify as exports when it meets following requirements (i) The service provider in located in taxable territory; (ii) Service recipient is located outside India; (iii) Service provided is a service other than in the negative list; (iv) The place of provision of service is outside India; (v) The payment is received in convertible foreign exchange. 7. Valuation Rules for Works Contract Services and for catering services revised. a) For Works Contract Transactions the value of services will be computed by reducing VAT Taxable Component from the Sale Proceeds and balance will be chargeable for service tax; b) If the value of the goods are not intimated to the VAT Authorities, then the assesee can still calculate the actual value of goods and the same will be relevant to deduce the value of the services involved; c) If still the value is not deduced then there shall be an computed @ 40% of the total amount for original works, 60% in case of other contracts and for contracts involving construction of complex or building for sale where any part of consideration is received before the completion of the building it shall be chargeable for the 25% of the total amount; d) The Input Tax Credit on goods forming part of the property on which VAT is payable shall not be available. However, tax paid on capital goods and Input Services will be available including for tax paid on 25% of theservice tax charged for construction of complex or building;e) For catering services the taxable portion shall be 40% in case the supply of food or any other article of human consumption or drink at a restaurant and if provided from elsewhere it shall be 60% of such amount resulting into effective rate of 4.944% and 7.416% respectively. 1 Valuation Rule 6 amended to prescribe inclusion on account of demurrage charges received, exclusion of interest on loan over and above sales consideration and amount received on account of accidental damages on account of unforeseen actions not relatable to the provision of services; 2 Abatement reduced in certain services wherein now for convention centre or mandap with catering, pandal or shamiana contractors with catering will be chargeable on 70% of the bill amount, accommodation in hotel will be chargeable on 60% of the total amount, railway goods no change with cenvat credits made available as per the rules specified; 1 New Levy on Passenger fares on 30% of the ticket amount (on first class and AC travels) with cenvat credit made available; 2 In case of coastal shipping the taxable amount will now be on the 50% of the bill amount and no cenvat credit will be available; 3 Section 67A to be inserted to prescribe the value of taxable service (more particularly for Import and Export of Taxable Services) and the rate of tax shall be determined in terms of Point of Taxation Rules, 2011 (effective date enactment of the Finance Bill); 4 Section 72A to be inserted to introduce provisions related to Special Audit in the Service Tax Law on the lines of Section 14A and Section 14AA of the Central Excise Act, 1944. Provision of these Sections reads as under: (effective date enactment of the Finance Bill); SPECIAL AUDIT IN CASES WHERE CREDIT OF DUTY AVAILED OR UTILISED IS NOT WITHIN THE NORMAL LIMITS, ETC. (1) If the Commissioner of Central Excise has reason to believe that the credit of duty availed of or utilised under the rules made under this Act by a manufacturer of any excisable goods - (a) Is not within the normal limits having regard to the nature of the excisable goods produced or manufactured, the type of inputs used and other relevant factors, as he may deem appropriate; (b) Has been availed of or utilised by reason of fraud, collusion or any willful mis-statement or suppression of facts, He may direct such manufacturer to get the accounts of his factory, office, depot, distributor or any other place, as may be specified by him, audited by a accountant nominated by him. (2) The accountant so nominated shall, within the period specified by the Commissioner of Central Excise, submit a report of such audit duly signed and certified by him to the said Commissioner mentioning therein such other particulars as may be specified. (3) The provisions of sub-section (1) shall have effect notwithstanding that the accounts of the said manufacturer aforesaid have been audited under any other law for the time being in force or otherwise. (4) The expenses of, and incidental to, such audit (including the remuneration of the accountant) shall be determined by the Commissioner of Central Excise (which determination shall be final) and paid by the manufacturer and in default of such payment shall be recoverable from the manufacturer in the manner provided in section 11 for the recovery of sums due to the Government. (5) The manufacturer shall be given an opportunity of being heard in respect of any material gathered on the basis of the audit under sub-section (1) and proposed to be utilised in any proceeding under this Act or rules made there under. 1 The one year time limit for issuance of Notice under Section 73(1) for evasion, short payment or nonpayment of collected taxes increased to 18 months. New Section 73(1A) introduced to prescribe follow on notices issued on the same grounds need not repeat the grounds but to state the amount of service tax chargeable to the subsequent period. (effective date enactment of the Finance Bill) 2 Section 83 is being amended to make Settlement Commission provisions applicable to the Service Tax and to make revision mechanism prescribed in Section 35EE of the Central Excise Act, 1944(effective date enactment of the Finance Bill); 3 Section 68(2) of the Finance Act amended to put the onus of payment of service tax on reverse charge basis partly on service provider and partly on service receiver on three types of Services i.e. hiring of Transport, Construction and Man power Supply, separate Notification for the charge of the same shall be issued in case of the three services; The details are as under Sl. No Description of Service Service Recipient Service Provider 1 Hiring of motor vehicle designed to carry passengers (a) With abatement; (b) Without abatement 100 % 60% Nil 40% 2 Supply of man power for any purpose 75% 25% 3 Works Contract Service 50% 50% It is clarified that the liability of the two persons is for the respective amounts and is not influenced by the compliance or lack of it by the other side. 1 Rule 2(1)(d) of the Service Tax Rules, 1994 is being suitably amended for definition “person liable to pay” 2 Exemption of Service Tax on repairs of roads is exempted vide Notification No. 24/2009 dt, 27.07.2009, the period of exemption increased from 16.06.2005 onwards; 3 Management, Maintenance and Repairs Service undertaken in relation to non commercial Government buildings is being exempted from Service Tax vide Section 98 with effect from 16.06.1995. The same shall be chargeable under Section 66B from the date on which Section 66B becomes effective; 4 Sub-rule 6-A inserted under Rule 6 of the Cenvat Credit Rules, 2004 to protect Domestic Tariff Area from the reversal of Cenvat Credit when they supply taxable services under exemption to the Authorised Operations of SEZ. (Retrospective effect from 10.02.2006); 5 Exemption made retrospective (i.e. from 16.06.2005) to the services provided by an Association of Dyeing Units in relation to Common Effulent Treatment Plants; 6 Waiver of penalty for the taxes due paid along with interest within six months in respect of Service Tax on Rent on Immovable Properties. Amendment in Cenvat Credit Rules 1 Existing Rule 5 to be replaced with new rule to simplify the procedures for refund of non utilized Cenvat Credit on account of exports; 2 Credit of tax paid on motor vehicles to be allowed in case of the supply of such vehicles for services on vehicle rent, insurance and repairs shall also be allowed; 3 Credit of Tax paid for Insurance and Service Station Services is allowed to insurance Companies in respect of motor vehicles insured and re-insured by them and manufacturers in respect of motor vehicles manufactured by them; 4 Rule 4(1) and Rule 4(2) is being amended to provide credit for the taxes paid to take the credit of input of service tax on delivery of goods, subject to compliance of certain conditions as against availment of credit only after they are brought to the premises of the Service provider; 5 Rule 7 in respect of Input Service Distributors is being amended to provide that the credit for the service tax attributable to service used wholly in a unit shall be distributed only to that unit and that the credit of service tax attributable to service used in more than one unit shall be distributed on pro-rata on the basis of the turnover of the concerned unit to the total turnover of all the units; 6 Rule 9(1)(e) is being amended to provide for the credit for the taxes paid by Challan by the Service recipient on reverse charge mechanism; 7 Interest on loan being an exempt service will require reversal of credits used for earning such income. For banking and financial institutions, provisions are available to reverse credits upto 50% in rule 6(3D), It is proposed to change the formula to actual basis, subject to a minimum of 50% of the interest paid on deposits and for the non financial sector, it is proposed that they may reverse credits on gross interest basis. Other Rules 1. Time Limit for issue of invoices is increased presently from 14 days to 30 days in case of assessee other than bank and financial institutions. In their case, the time limit shall be 45 days from the date of completion of service (Rule 4A of the Service Tax Rules). Similarly, Clause 89(a) of the provisions in relation to the prosecution for non issue of invoice is being replaced with “knowingly evades payment of service tax” to meet the demand of business that mere non issue of invoices should not be made punishable with prosecution; 1 Central Excise Section 35EE made applicable for revision of the Orders. Similarly Power of Advance Ruling Authority to hear cases relating to Cenvat Credit; 2 Rule 6(4A) is being amended to provide unlimited amount of permissible adjustments which is for service tax paid excess in advance for any month or quarter or the case may be. At present the said excess is allowed to be adjusted only in the subsequent month or the quarter as the case may be. 3 At present in case of Export and Individuals and firms rendering eight specified services, the date of payment shall be the date of rendering services and the special dispensation is shifted from the Point of Taxation Rules to the Service Tax Rules; 4 For Exporters, the period extended by RBI on specific requests is also being included in the period of deferment of the tax liability. 5 The option of deferred payment is being allowed to all service providers rather than for specific services. Now this facility will only be available to individuals and partnership firms (including LLP) upto a turnover of services of Rs. 50 lakhs, subject to the condition that their turnover of taxable service in previous year was below Rs. 50 lakhs. The limit of Rs. 50 lakhs is for whole entity with all the registered units and not for single registration. 6 Amount paid as refund for service tax to the extent of unrealized sale proceeds of the shipping bill will be recoverable from the exporters in future at any point of time. Necessary amendments to these effects are made. 7 Common EST-1 Form for Excise and Service Tax Registration introduced and Common EST-3 Form for Excise and Service Tax Returns filing introduced. 8 Filing of Appeals for Service Tax are being aligned with that of the Central Excise. 9 New Scheme for tax recovery from the registrants collected the tax and not paid to the Government to be introduced; Point of Taxation Rules Amended 1 Definition of continuous supply of services amended to include recurring nature of services and the obligation for periodically payment from time to time; 2 The effective rate of taxation shall be effective at the new rates on the continuous supply of services also, definition of the date of payment, option to determine the point of taxation in respect of advances upto Rs. 1000 received in excess of the amount indicated in the invoice or completion of the service rather than payment; 3 Incorporation of new residual rule to ascertain point of taxation in cases where the same cannot be ascertained by the rules prescribed; 4 Reverse charge mechanism amended to tax received from Jammu and Kashmir; 5 The exemption of Rs. 10 lakhs for exemption, will be in terms of invoices and not mere payments received; Changes in Payment of Service Tax 1. Assesee having made payment of Service Tax of Rs. 25 lakhs or more in the previous year and new assesees other than individual and firms – Monthly payments for others Quarterly; (Effective date from 1st April, 2012) General 1. Guidance Notes issued as under a) Guidance Note-2 : What is service; Services means all the services other than listed in the negative list. It includes any activity for consideration carried out by a person for another and includes a declared service and excludes any activity which constitutes only transfer in title of goods or immovable property by way of sale, gift or in any other manner, a transaction involving any money or actionable claim, any service provided by an employee to an employer in the course of the employment, fees payable to court or tribunal set up under a law for the time being in force. b) Guidance Note-3 : Taxability of service; Appropriate steps given to define the scope and method of valuation of the services. c) Guidance Note-4 : Negative List; List of 17 services d) Guidance Note-5 : Declared Services; e) Guidance Note-6 : Exemptions;f) Guidance Note-7 : Rules of Interpretation; Read more ...