01 January 0001

Tax Amicus: March 2015

Latest amendment in the notification relating to exemption for supplies to International Competitive Bidding has been analysed by the author in the article in this issue. According to the article, domestic manufacturers may place reliance on the words “mutatis mutandis” in the proviso to the condition to state that only the conditions which can be fulfilled by the domestic manufacturers will be borrowed.

Notifications and Circulars section under the Customs portion of this Amicus covers many Budget 2015 proposals including the one where penalty provisions are proposed to be relaxed. Ministry of Finance has clarified that Certificate under Central Excise Rules is not required if the same is obtained under the Customs Rules. Kerala High Court has held that the requirement of pre-deposit makes the statutory right of appeal conditional one and that such conditions are not so onerous that it deprives a party of effective right of appeal. Mumbai Bench of the CESTAT has allowed a second refund claim for SAD in the same month in a situation where the statutory limit of one year to file the refund claim is about to end. These and other important orders are summarized in this issue.

Under Central Excise, this issue provides information relating to Budget 2015 changes including enhancement of excise duty rate of 12% to 12.5%. But, exemption has been provided from the Education Cesses (both Education Cess and Secondary & Higher Secondary Education Cess). While there is a proposal to relax the penalty provisions, registration procedures have been relaxed and various procedures under Central Excise and Cenvat Rules have been simplified. Among other orders, readers may see summary of an order by CESTAT holding that change in the name does not disentitle Cenvat credit based on documents containing old name.

Service tax portion of this Amicus covers all important changes proposed in the Service tax regime by way of various amendments proposed in the Finance Bill, 2015 and number of notifications issued on the Budget day. There is also a proposal to levy Swachh Bharat Cess at the rate of 2% on the value of service and amend Section 67 (of Finance Act, 1994) relating to valuation, to re-define and amplify ‘consideration’ so as to include any reimbursable expenditure or cost incurred by the service provider and charged in the course of providing service except in certain cases.

Under Value Added Tax (VAT), tax rates have been revised in Rajasthan for cellular phones, parts, accessories, tablet computers and works contract TDS. Residuary rate has also been increased from 14% to 14.5% from 9-3-2015. Allahabad High Court has held that “Hydraulic Excavator” is classifiable as motor vehicle. Further, Punjab & Haryana High Court has held that supply of medicines, implants, etc. during treatment or medical procedure would not constitute ‘sale’. These developments have been included in this issue.

March, 2015/Issue-45 March, 2015/Issue-45

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