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Finance Act, 2015 comes into force

18 May, 2015

Finance Bill, 2015 has received President’s Assent and Finance Act, 2015 (20 of 2015) is in force from 14 May, 2015.

Major amendments include amendment to Section 28 of the Customs Act, 1962 to provide for non-imposition of penalty if duty with interest is paid within 30 days of receipt of show cause notice. The new provisions, relevant in case of SCNs issued not invoking the extended period (i.e. within the normal limitation period), make it clear that proceedings against such person shall be deemed to be concluded after payment of such duty and interest.

Similar provisions have also been made under Central Excise Act, 1944 and Finance Act, 1994 (for Service Tax). Reduced penalties have been provided for in the amended provision in respect of all the 3 Central indirect tax statutes involving extended period for issuance of show cause notice i.e. cases involving fraud, collusion, suppression, etc.

New Section 11AC of Central Excise Act provides for penalty upto 10% of duty in cases involving normal period of demand but no penalty is imposable if duty is paid with interest within 30 days of SCN. Significant change in service tax law relates to omission of Section 80 which provided for waiver of penalty in certain cases.

It may be noted that provisions relating to changes in the Negative List of services and the rate of Service tax are yet to come into effect. Similarly, provisions concerning Swachh Bharat Cess would also come into effect from a date to be notified in this regard by the Central Government now.
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