INDIRECT TAX LAWS & PRACTICE. Paper-18. Syllabus Set-2. Answer of Postal test Paper. Set-2.

Transcription

1 Paper-18 Syllabus-2016 Set-2 Answer of Postal test Paper Set-2

2 Q.1 i. Is not ii. Export iii. Identical Goods iv. Green Channel v. Service Provider B. i. ii. iii. iv. Joint Commissioner of Central Excise 12 months from the date of issue of such Authorisation Cotton Yarn Waste C. i. True ii. False. iii. False. (Valid from 1st April 2015 to 31st March, 2020 iv. False. Rule 5 of POP deals with location of immovable property v. True Q. 2 A.

3 B. The following important points should be kept in mind while paying service tax: Service tax is to be paid on the value of taxable services which is charged by an assessee. Where the amount of service tax is paid in cash (i.e. not e-payment), the date of payment is the date on which cash is tendered to the designated bank. Payment of service tax into non-designated banks does not amount to payment of service tax. Where the amount of service tax is paid by cheque, the date of presentation of the cheque into the designated bank (i.e. bank named by Central Board Excise and Customs) shall be considered as the date of payment, provided the cheque is realized upon presentation. Payment should be rounded off to the nearest rupee. C. (a) Excise duty = Rs 25,000 (b) 6th May 2015 (c) Interest = Rs 25,000 x 15/100 x 19/365 = Rs 195 Q. 3 (i) Post Export EPCG Duty Credit Scrip(s): Under this scheme, capital goods are imported on full payment of applicable duties in cash. Later, basic customs duty paid on Capital Goods is remitted in the form of freely transferable duty credit scrip(s) and it can be utilized in the similar manner as the scrip s issued under reward schemes. Specific EO shall be 85% of the applicable specific EO stipulated under EPCG scheme. Average EO remains unchanged. Duty Drawback can be claimed for the duties paid like CVD & Spl. CVD paid on import of capital goods provided CENVAT Credit not availed. ii) The provisions relating to SEZ are contained in Special Economic Zone Act, 2005 and SEZ Rules, SEZs are like a separate island within territory of India. SEZs are projected as duty free area for the purpose of trade, operation, duty and tariffs. Goods and services coming to SEZ units from domestic tariff area are treated as exports from India and goods and services rendered from SEZ to the DTA are treated as import into India. Any proposal for setting up of SEZ unit in the Private/Joint/State Sector is routed through the concerned State government who in turn forwards the same to the Department of Commerce with its recommendations for consideration.

4 B. Q. 4 B. CENVAT credit that can be availed by the manufacturer is Rs. 3,296. CENVAT credit cannot be reversed just because the supplier of inputs has given some reduction in price after removal of goods or the buyer manufacturer paid only reduced amount than that of invoice [unless supplier of inputs claims and get refund of excise duty paid by him]. [CCE v Trinetra Texturisers 2004 (CESTAT].

5 Q. 5 B. C. Job work under Business Auxiliary Service (BAS) is exempt if there is manufacture and excisable goods are emerged. Now, Service tax is exempted only if excisable goods are manufactured. Thus, if alcoholic liquor is manufactured (i.e. non excisable goods) on job work basis, the exemption will not be available. Therefore, Service in relation to production of alcoholic liquor on job work basis is taxable under the head of Business Auxiliary Services (w.e.f ). Thereby, manufacture of non-excisable goods for or on behalf of a client attracts levy of service tax.

6 D. Penultimate sale means the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if the following conditions are satisfied: there must have been pre-existing agreement or order to sell the specifi c goods to a foreign buyer. the last purchase referred to in section 5(3) must have taken place after an agreement with the foreign buyer was entered into. the last purchase must have been made for the purpose of complying with the pre-existing agreement or order. the goods purchased and sold by way of export should be the same. Q. 6 B. Advantages of VAT 1. Eliminate the Cascading effect of tax 2. Encourages maintaining proper books of accounts for claiming the Credit. 3. Evasion of tax is minimized. 4. Prices will become neutralized over a period of time. 5. Increases the revenue of the respective state governments.

7 6. Facilitates avoidance of undervaluation at all stages of production and distribution 7. Permits easy and effective targeting of tax rates as a result of which the exports can be zero rated; 8. Helps to claim credit on tax paid on inputs at each stage of value addition 9. Provides, encourages and results in a better administered system.