Union Budget 2015 Tax proposals February 28, 2015

Transcription

1 Union Budget 2015 Tax proposals February 28, 2015 New Delhi Mumbai Bangalore Hyderabad 1

2 Union Budget 2015 Efforts on various fronts to implement Goods and Services Tax ( GST ) from next year Effective Service Tax (inclusive of Cesses) increased from 12.36% to 14% from a date to be notified Bill for a comprehensive new law to deal with black money parked abroad to be introduced in the Parliament Concealment of income/evasion of income in relation to a foreign asset, and offense under Section 132 of the Customs Act, 1962 relating to false declaration, false documents to be made a predicate offence under Prevention of Money Laundering Act, 2002 ( PML Act ) Proposal to restrict the scope of cases eligible for settlement under indirect taxes by excluding cases referred back by any court, appellate tribunal to the adjudicating authority (applicable w.e.f. date of enactment of Finance Bill) 2

3 Union Budget 2015 Leverage of technology by CBDT and CBEC for exchange of information from respective data bases Enabling provision to levy Swachh Bharat Cess at a rate of 2% on all or any services, if need arises Penalty provision in indirect taxes being rationalized to encourage compliance and early dispute resolution Central excise / Service tax assesses allowed to use digitally signed invoices and maintain record electronically Online central excise and service tax registration to be done in two working days Facility of Advance Rulings under Service Tax, Excise and Customs extended to all resident firms 3

4 Union Budget Service Tax Any service provided under aggregator model (applicable w.e.f ) If the service is provided using the brand name of the aggregator in any manner If the aggregator or any of his representative office is located in India If an aggregator does not have any presence (including representative) in such case agent appointed by the aggregator shall pay tax on behalf of the aggregator Person liable to pay tax has been defined as the aggregator or person representing the aggregator 4

5 Union Budget Service Tax Scope of Service Tax extended to cover Service provided by way of access to amusement facility and admission to entertainment event (wef from enactment of Finance Bill)) Amusement facility to include facility providing fun or recreation by means of rides, gaming devices or bowling alleys in amusement parks, amusement arcades, water parka and theme parks Entertainment event to include concerts, pageants, musical performances concerts, award functions and sporting events other than the recognized sporting event, if the amount charged is more than Rs. 500 for right to admission to such an event Existing exemption to service by way of admission to entertainment event namely exhibition of cinematographic film, circus, recognized sporting event, dance, theatrical performance including drama and ballet shall continue 5

6 Union Budget 2015 Scope of Service Tax extended to cover All services provided by the Government or local authority to a business entity, except the services that are specifically exempted or covered by any other entry in the Negative List Service by way of carrying out any processes as job work / contract manufacturing for production / manufacture of alcoholic liquor for human consumption Above change shall be applicable from a date to be notified Exemption from the levy of Service Tax withdrawn on - Construction, erection, commissioning or installation of original works pertaining to an airport or port 6

7 Union Budget Service Tax Exemptions withdrawn on following services and made taxable under reverse charge (applicable w.e.f ) - Services provided by a mutual fund agent to a mutual fund or assets management company Distributor to a mutual fund or AMC Exemption from levy of Service Tax provided by a performing artist in folk or classical art form of music, dance, or theater limited to cases where amount charged is Rs 1,00,000 for a performance (applicable w.e.f ) 7

8 Union Budget Service Tax Service Tax exemption extended to transportation of food stuff by rail, vessels or road limited to food grains including rice & pulses, flour, milk salt (applicable w.e.f ) Exemption on transportation of agricultural produce to continue Services provided by a Common Effluent Treatment Plant operator for treatment of effluent exempted from Service Tax (applicable w.e.f ) Service provided by way of exhibition of movie by the exhibitor (theatre owner) to the distributor or an association of persons consisting of such exhibitor as one of its members exempted from Service Tax (applicable w.e.f ) Goods transport agency service provided for transport of export goods by road from the place of removal to a land customs station exempted from Service Tax (applicable w.e.f ) 8

9 Union Budget Service Tax Scope of exemption available on specified services of construction, repair, maintenance, renovation or alteration service provided to the Government or authority restricted to (applicable w.e.f ) - A historical monument, archaeological site or remains of national importance Canal, dam or other irrigation work Pipeline, conduit or plant for water supply, water treatment or sewage treatment of disposal Service Tax Exemptions extended to (applicable w.e.f ) - Pre cold storage services in relation to fruits and vegetables Service provided by way of transportation of a patient to and from a clinical establishment by a clinical establishment 9

10 Union Budget Service Tax Other key changes - Uniform abatement prescribed for transport by rail (goods and passengers), road (goods) and vessel (goods) [applicable w.e.f ] - Service Tax payable on 30% of the value of such service Subject to a uniform condition of non-availment of Cenvat credit on inputs, capital goods and input services For manpower supply and security services when provided by an individual, HUF, or partnership firm to a body corporate whole of Service tax payable under reverse charge (applicable w.e.f ) - Presently, these are taxed under partial reverse charge mechanism 10

11 Union Budget Service Tax Other key changes Consideration for taxable service to include all reimbursable expenditure or cost incurred and charged by the service provider Recovery of Service Tax amount self-assessed and declared in the return but not paid to be made without service of notice Provisions in relation to penalty in cases involving and not involving fraud, collusion etc. have been rationalized Aforesaid changes to be applicable from the date of enactment of the Finance Bill, 2015 principles of interpretation of specified descriptions of services or bundled services clarified - reference to a service not to include reference to any input service used for providing such service 11

12 Union Budget Service Tax Other key changes In the matters involving rebate of Service Tax, a revision application can be filed with the Central Government against the order of the Commissioner (Appeal) Appeals pending with the Tribunal shall be transferred and dealt in accordance with above provision once the Finance Bill, 2015 receives assent of the President Alternative rate of Service Tax payable in respect of certain services like money changing, air travel agent, insurance service, to be revised proportionately Change to be applicable when the revised Service Tax rate comes into effect i.e. from a date to be notified 12

13 Budget Central Excise Standard ad valorem Excise rate increased from 12% to 12.5% Education Cess and Secondary and Higher Education Cess to be subsumed in Central Excise Duty (applicable w.e.f ) Provisions related to recovery of duties amended as so as to: Exclude cases where extended period of time applies but the transactions are recorded in the specified record Exclude cases where the non-payment or short payment of duty is reflected in the returns and that in such cases recovery of duty shall be made in such manner as may be prescribed in the rules Provide definition of relevant date where a return is not filed on the due date and where only interest is required to be recovered 13

14 Budget Central Excise Online Central Excise Registration simplified to ensure registration within two working days (Circular No. 997/4/2015-CE dated ) Garnishee provisions and recovery of arrears in installments including the procedure to be followed in this regard (Circular No.996/3/2015-CE dated ) Scope of the term place of removal in case of export of goods by manufacturers exporters as well as merchants exporters clarified (Circular No.999/6/2015-CE dated ) Application for withdrawal of prosecution to be filed in accordance with law where the quasi-judicial proceedings on identical set of facts have not been upheld and attained finality (Circular No.998/5/2015-CE dated ) 14

15 Budget Central Excise Amendments in Central Excise Rules, 2002 (applicable w.e.f ): To provide the facility of direct dispatch of goods by a registered dealer from seller to customer s premises. Similar facility allowed in case of job-workers Registered importer can also send goods directly to customer from the port of importation 15

16 Budget CENVAT Credit Time limit for taking CENVAT credit on inputs and input services increased from 6 months to 1 year from the date of invoice (applicable w.e.f ) Time limit for return of capital goods from a job worker increased from 180 days to 2 years (applicable w.e.f ) For the purpose of availment of CENVAT credit by a manufacturer engaged in manufacturing taxable and exempted goods, non-excisable goods are also included within the meaning of exempted goods (applicable w.e.f ) Export goods defined for availing refund of CENVAT Credit as goods to be taken out of India to a place outside India (applicable w.e.f ) 16

17 Budget CENVAT Credit Credit of service tax paid under partial reverse charge mechanism to be allowed after the payment of the Service Tax amount (applicable w.e.f ) Central Government authorised to impose restrictions on registered dealer to prevent misuse of CENVAT Credit (applicable w.e.f ) Provision related to recovery of CENVAT credit wrongly taken and utilized amended to provide for recovery of CENVAT credit taken but Not utilized (applicable w.e.f ) 17

18 Budget 2015 Customs Amendment to rate of duty (applicable w.e.f ) Road Cess on Motor Spirit and High Speed Diesel increased from Rs. 2 / litre to Rs. 6 / litre Rate of Basic Customs Duty reduced / exempted for certain specified goods Tariff rate of BCD on Commercial vehicles under heading 8702 and 8704 is increased from 10% to 40% However, effective rate of 10% BCD prescribed on import of commercial vehicles under heading 8702 and 8704 when imported in CKD form and electrically operated vehicles 20% BCD prescribed on import of commercial vehicles under heading 8702 and 8704 in any other form 18

19 Tax rates Basic Customs Duty and CVD exempted on parts, components and accessories for use in manufacture of tablet computer. Rate of SAD reduced to 2% ad valorem for certain specified goods SAD exempted on LED lights, LED lamps etc. SAD exempted on all goods (except populated PCBs) for use in manufacture of Information Technology Agreement bound goods, subject to actual user condition 19

20 t2 Budget Customs Changes applicable from the date of enactment of Finance Bill, 2015 Provisions related to recovery of duty amended to include the following: No penalty imposable ordinarily, if duty and interest is paid within thirty days of receipt of notice In cases of fraud, collusion etc, penalty reduced from 25% to 15% Penalty for improper importation and attempt to export goods improperly amended: In case of improper importation or attempt to export goods other than prohibited goods, penalty not exceeding 10% of duty or Rs 5000/, whichever is higher, shall be imposable 20

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