16 September 2013

Tax Amicus: May 2013

Refund of Cenvat credit on services under reverse charge mechanism is the topic of discussion in this May 2013 issue of Tax Amicus. Article in this issue concludes that service providers who are under partial reverse charge are in advantageous position in terms of Cenvat credit and refund as compared to those under full reverse charge mechanism. Under Customs, this issue analyses recently released Annual supplement to the Foreign Trade Policy covering changes in EPCG scheme, SFIS scheme, Incremental Exports Incentivisation Scheme, SHIS, various Chapter 3 schemes, Advance Authorization and deemed exports. Exporters have been allowed to utilize 4% re-credited SAD in the duty credit scrips, till 30-9-2013.

Bombay High Court has ordered grant of interest on delayed payment of sale proceeds of auctioned goods as directed by the Settlement Commission. Under Central Excise, other than some post-budget changes, ‘Ratio decidendi’ covers CESTAT Larger Bench order holding that Education Cess is payable only once on DTA clearance by EOU. Madras High Court has held that EOU would be eligible for rebate of duty paid on export goods. Percentage of abatement in case of construction service for payment of Service Tax has been amended. Mumbai branch of CESTAT has held that agent can discharge Service Tax liability of the principal. VAT section covers a High Court order holding that rentals received during the tax period is the sale price received by the dealer, exigible to tax in a financial year. Under Income Tax, e-filing has been made mandatory in case of specified audit reports and returns. ITAT has held that virtual presence through website does not create permanent establishment in India and this order is discussed in this issue.

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