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Union Budget 2015

Proposals on Indirect Taxes

as introduced in Lok Sabha on 28th February 2015

3rd March 2015

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Budget Proposals – Excise

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Rate Change in Excise Duty

• BED rate changed from 12% to 12.5%.

• No more HE cess and SHE Cess on duty.

Impact :

Duty Type Earlier Now

BED 12% 12.50%

HE Cess 2% NIL

SHE Cess 1% NIL

Total Duty 12.36% 12.50%

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Other procedural changes in Excise

• Digital signature is allowed in invoice.

Duplicate for Transport copy should be self

attested by supplier.

• Export means goods taken out of India to a

place outside India. Hence sale to SEZ is not

export.

• Place of Removal in case sale to Merchant

Exporter shall be like other customer.

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Other procedural changes in Excise

• Limitation of extended period for issue of

SCN will be date of return filed not the due

date of filing the return.

• Online application for registration to be

approved within 2 days. No need for signed

registration certificate.

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Changes in CENVAT Credit Rules

Time Limit for availing CENVAT Credit

Earlier Now

SIX Months ONE Year

Effective from : 01.03.2015

Notification no. 6/2015-CE-NT, dated 01.03.15

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Earlier Now

Cenvat Credit eligible only on receipt of material in the factory of the manufacturer. Not when received at Jobworker place

Credit on receipt of material at Job Worker also.

Material can be sent to only one Job Worker.

One Job worker to another & likewise.

Reversal of Credit (Input & Capital Goods) if not received within 180 days.

Input : 180 Days (No change)

Capital Goods : 2 years

Cenvat Credit on Input/ Capital goods sent for Job work (w.e.f. 1ST

March)

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• Non Excisable and Exempted goods/ Services were different for the purpose of calculation of reversal of input credit

• No differentiation between Non Excisable and exempted goods/ Services for reversal of Input Credit.

• As a result, reversal of input credit would be more.

Notification no. 6/2015-CE-NT, dated 01.03.15

Effective from : 01.03.2015

Earlier Now

Reversal of Credit on exempted goods

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Earlier Now

Credit Taken and Utilised Wrongly:

•Recovery with Interest for both.

Credit taken wrongly :

•No Interest. Only such credit to be reversed if not utilised.

Sequence of utilization was not defined

Sequence defined: Opn. balance first, current month second and Inadmissible credit is then utilised

Interest on wrong Cenvat Credit taken

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• Minimum Penalty Rs 5000/-No change

• Late filling of Return: Rs 100/- per day but maximum Rs 20000/-

PANALTY in General

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PANALTY For Cases not involving fraud, collusion

• Maximum 10% of duty or Rs.5000/- whichever is

higher.

• No Penalty if duty and interest is paid before or

within 30days of issue of show cause notice.

• 25% of duty if duty, interest and penalty is paid

within 30 days of passing of order of adjudication.

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PENALTY for Cases involving fraud, collusion etc.

• 50% of duty if detail recorded in books for

08.04.11 to assent of Finance bill 2015.

• 15% if duty, interest & Penalty all are paid within

30 days of Receipt of Show cause notice.

• 25% if duty, interest & Penalty all are paid within

30days of Receipt of Order of adjudication.

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Budget Proposals – Service Tax

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• Basic rate of Service Tax Changed. From 12% to 14%

• Education cess & SHE cess no more payable.

• All reimbursable expenditure/ cost incurred by service provider, will be taxable.

Some important changes in Service Tax

(Not yet notified)

Tax Type Earlier Proposed

Service Tax 12% 14%

HE Cess 2% -

SHE Cess 1% -

Swachh Bharat Cess - 2%

Total Effective rate 12.36% 16%

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Some important Change in Abatement(w.e.f. 1st April 2015)

Type of Service Earlier Now

Transportation by Road

(GTA)

75% 70%

Travel By Air:

•Economy

•Other Class•60%

•60%

•60%

•40%

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Change in Reverse Charge Mechanism (w.e.f 01.04.15)

Service Type Extent of Service Tax paid by

Service Provider

Service Recipient

Earlier Now Earlier Now

Man Power & Security

25% - 75% 100%

Aggregator as a

service recipient- - - 100%

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Other changes in Service Tax

• Exempted list of Services broadened (w.e.f 1st April

2015)

– Services by operator of Common Effluent Treatment

Plant.

– Pre-conditioning , pre-cooling, retail packing etc of

fruits and vegetables.

– Admission to museum, national park, Zoo, Sporting

events theatrical performance, award function

(<Rs.500), .

– Service tax on loading unloading storage

warehousing  and transportation of cotton.

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Other changes in Service Tax

• Exemption withdraw on following.

– technical testing of newly developed drugs on

human participants.

– services by air-conditioned contract carriages;

– Ccontract manufacturing of alcoholic liquor for

human consumption.

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The Government expressed its resolve to introduce GST from April

1, 2016

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Budget Proposals - Customs

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• Peak rate of customs duty retained at 10%.

• Education cess and secondary and higher education

cess continues to be levied on BCD.

• Education cess and secondary and higher education

cess continues to be levied on CVD.

• Penalty not payable where there is no deliberate

suppression/misstatement/contravention to act.

• Provisions relating to Settlement Commission not

applicable to any proceeding referred back to

adjudicating authority by any court, Appellate Tribunal

or any other authority for fresh adjudication

Some important points :Customs

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Rate of change in BCD:

Description of Goods Old rate New

Rate

Metallurgical Coke BCD :

2.5%

BCD :

5%

Liquefied butanes BCD :

5%

BCD :

2.5%

Sulphuric Acid for the

manufacture of fertilizers

BCD :

7.5%

BCD :

5%

Ethylene dichloride BCD :

2.5%

BCD :

2%

Metal parts for use in

manufacture of electrical

insulators

BCD :

10%

BCD :

7.5%

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Rate of change in BCD: Description of Goods Old

rateNew Rate

Digital Still Image Video

Cameras (with some specific

requirements)

10% NIL

Parts used in Digital Still Image

Video Cameras (with some

specific requirements)

5% NIL

Organic LED (OLED) TV panels 10% NIL

Black Light unit module for use

in the manufacture of LCD/LED

TV Panels

10% NIL

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Rate of change-SAD & Additional Duty:

Description of Goods Old rate New Rate

Naphtha 4% 2%

Styrene/Ethylene dichloride/Vinyl Chloride Monomer or use in manufacture of excisable goods

4% 2%

Petrol / HSD Additional Duty (Road Cess): Rs.2 per litre

Additional Duty (Road Cess): Rs.6 per litre

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Sector specific changes in Customs rateRenewable Energy

•Exemption from BCD on Evacuated Tubes with three layers of

solar selective coating for use in the manufacture of solar water

heater and system.

Automobiles

•BCD on motor vehicles (for transport of 10 or more person)

increased from 10% to 20%. except on those which are in

completely knocked down condition.

•Benefit of concessional customs duty for use in the manufacture

of electrically operated/Hybrid motor vehicles extended by one

more year i.e March 31, 2016.

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Sector specific changes in Customs rateElectronics/IT

•SAD has been exempted on all goods (except

populated PCBs) for use in manufacture of ITA bound

goods.

•Exemption from BCD, CVD and on parts, components

and accessories for use in the manufacture of tablet

computers and their sub-parts.

•Exemption from CVD and SAD on specified raw

materials used in the manufacture of pacemakers.

Thank You

Questions & Answers

Further clarification-Place of Removal

• Place where sale takes place or when the property in goods

passes from the seller to the buyer is Place of removal.

• For Manufacturer Exporter, place of removal would be

Port/ICD/CFS.

• For Merchant Export, place of removal shall be the place where

the property in the goods passes from the manufacturer to the

merchant exporter i.e place would be the factory gate since it

is here that the goods are unconditionally appropriated to the

contract in cases where the goods are sealed in the factory,

either by the Central Excise officer or by way of self-sealing.

• Place can not be beyond the Port/ ICD/CFS where shipping bill

is filed by the merchant exporter.

AGGREGATOR

“Aggregator” Means person manages and owns

web based application and by means of application

and a communication device, enables potential

customer to connect to persons providing service of

a particular kind under brand name or trade name

of the aggregator. 100% Reverse charge.

Rate of change-SAD & Additional Duty:

Description of Goods Old rate New Rate

Naphtha SAD : 4% SAD : 2%

Styrene/Ethylene dichloride/Vinyl Chloride Monomer or use in manufacture of excisable goods

SAD : 4% SAD : 2%

Petrol / HSD Additional Duty (Road Cess): Rs.2 per litre

Additional Duty (Road Cess): Rs.6 per litre

Sector specific changes in Customs rate

Electronics/IT

•SAD has been exempted on all goods (except populated PCBs) for

use in manufacture of ITA bound goods.

•Exemption from BCD, CVD and on parts, components and

accessories for use in the manufacture of tablet computers and

their sub-parts.

•Exemption from CVD and SAD on specified raw materials used in

the manufacture of pacemakers.