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Advocate
01st March 2015.
Dear Sirs,
1.
The Union Budget for 2015-16 was presented yesterday. So far as C. Excise &
Service Tax laws are concerned, there are very few changes this year. We bring to
your notice, some of the important changes that may be of immediate relevance to
you. This note is not exhaustive, but we have included everything, which, in our
opinion, would be of immediate relevance to our clients & friends. The note is of
very general nature. The annexure to this note points out to some provisions
relevant to specific clients. Since they were not of general relevance to all, I have
not discussed it in the main note. You may please mail all your doubts & queries
at sanjay@srdlegal.in. We shall send a separate note on changes made in Service
Tax law.
2.
Education Cesses (on C. Excise duty) wholly exempted - General rate of duty
increased to 12.5%:
2.1. The general rate of duty has been increased to 12.5%. At the same time both the
cesses have been wholly exempted. Thus, in effect, the old rate of 12.36% has
now become 12.5%.
Note: With effect from 01/03/2015, the exemption to cess has been granted only
on C. Excise duty. Cess on Service Tax and Customs Duty continues. Also the rate
of service tax continues to be 12.36% at present. The government will announce a
date from which the new rate of service tax of 14% will become effective.
Duty
Old rate
New rate
12%
12.5%
Education Cess
2%
Nil
Remarks
Page 2 of 7
no. 14/2015-CE
1%
Nil
12.36%
12.5%
Most of other rates of basic excise duty have remained unchanged. Thus for
example the rate of 6% continues to remain as 6%. But, since the cess is nil,
effectively the old rate of 6.36% has reduced to 6%.
Duty
Old rate
New rate
6%
6%
Education Cess
2%
Nil
1%
Nil
6.18%
6%
CVD component: wholly exempted vide notification 14/2015-CE and 15/2015CE. (Even prior to budget, this was exempted, but the notifications were different)
CVD
equivalent
to
central
For ex. if the old rate was 12%, the new rate
Page 3 of 7
excise duty
would be 12.5%
SAD
4%
Receiver of the goods would be eligible to avail credit of the CVD and SAD
components.
We may compare the old and the new duty structure hereunder
Duty component
Old rate
New rate
Explanation
question
Assessable value + BCD
equivalent
to
central
12%
12.5%
excise duty
Educational Cess on CVD
0 Exempted (14/2015-CE).
Earlier 13/2012-Cus
0 Exempted (15/2015-CE).
Earlier 14/2012-Cus
Cess
Customs Educational cess
2%
Sr. 1A of notification
23/2003-CE deleted
Customs
Sec&
higher
1%
23/2003-CE deleted
educational cess
SAD
Sr. 1B of notification
4%
4%
TotalDuty
2%
4.
Page 4 of 7
1%
1%
5.
We will need proof of the date of receipt by the job-worker. This can be
established from:
6.
Transport documents
The provision applies to credit of inputs and input services. (It does not apply to
capital goods.). Now credit cannot be taken against a document older than one
year. The time limit has to be computed from the date of the document.
7.
Page 5 of 7
Inputs can be sent from one job-worker to another. This facility was
already available by way of boards instructions/ trade notices. Now it has
been incorporated in the rule itself.
ii.
However, separate provision has been made for sending capital goods to
the job-worker and accordingly the capital goods cannot be sent from
one job-worker to another without bringing them back to our premises.
iii.
8.
Now, the first condition has been deleted. Thus, we can take credit of our share of
tax immediately after we pay the same to government. However, please note:
[Partial Reverse Charge refers to the case where a portion of the tax is to be paid
by the service provider and balance by the service receiver directly to the
government.]
Page 6 of 7
C. Excise Registration:
i. Mandatory information in registration application - update within 3
months: You are requested to verify the form A-1 online and update the
following information within 3 months from today.
-
We can leave the fields blank only if we dont have such registrations.
10.
Invoicing:
-
When the buyer and the consignee are different we must mention
details of the both in our invoice.
Importer sending goods directly from port (or other place of import) to
the buyers premises should put such remark on his invoice.
Invoices can be digitally signed but a hard copy of the duplicate copy
attested by the manufacturer must accompany the goods.
11.
Page 7 of 7
12.
ii.
13.
Thanking you,
Yours faithfully,
Sanjay Dwivedi,
Advocate
512, Business Park, City of Joy, JSD Road, Mulund (West), Mumbai 400 080