Download - Budget – 2011
CA Sandesh Mundra
Budget – 2011Indirect Tax Proposals
FICCI-Ahmedabad Chapter01.03.2011
CA Sandesh Mundra
•
• vs
Lets begin the game
CA Sandesh Mundra
Service Tax Excise Customs
Whom do we have to meet on the way
30 Min
CA Sandesh Mundra
•Service Tax
CA Sandesh Mundra
Point of Taxation Rules, 2011
• Service Tax Payment has been altered from receipt of payment to provision of service.
• Date of provision of service shall be earliest of:-– Date on which service provided– Date of Invoice– Date of Payment
Effective – 1.04.2011
Rewriting the service tax
CA Sandesh Mundra
• Services provided by Restaurants if– Air-conditioned– License to serve alcohol
Service Tax @ 3%
Effective – After issue of Notification
New Services under the net
CA Sandesh Mundra
• Service provided by Hotels, Inns, Guest Houses, Clubs– Continuous period of stay < 3 Months– Declared Tariff of Rooms > Rs. 1000
Service Tax @ 5%
Effective – After issue of Notification
New Services under the net
CA Sandesh Mundra
Expanding the scope of existing services
CA Sandesh Mundra
Authorised Service Station
• Services provided by any person whether authorised or not
CA Sandesh Mundra
Insurance Business• Complete Portion of Premium which is not invested by
Life Insurance Company• Rate – 1.5%, if paid on total premium
• Exemption to General Insurance under Rashtriya Swashya Bima Yojana
CA Sandesh Mundra
Commercial Training / Coaching• All unrecognised courses also brought
under the definition of the chapter.
CA Sandesh Mundra
Club / Association
• Services to non-members and members of other clubs now being made taxable.
CA Sandesh Mundra
Health Services
• Services by clinics if• Centrally AC• More than 25 beds at any time
• Services related to diagnostic tests / investigative services.
• Services by consultant doctors at hospitals• Service Tax @ 5%
CA Sandesh Mundra
Construction Services
• Cenvat Credit restricted to 40% under Work Contract services.
• Exemption – Complex services - JNURM and Rajiv Awaas Yojana
• Exemption – Work Contract services - Specified port / Airport
CA Sandesh Mundra
Money Changing Services
• Rate of composition reduced from 0.25% to 0.1%
• New Rule 2(b) for valuation
CA Sandesh Mundra
SSI
No Service Tax Audit < Rs. 60 Lacs
Interest Rate – Normal (-) 3%
.
CA Sandesh Mundra
SEZ
Provisions with regard to Cenvat Credit Amended
CA Sandesh Mundra
A.
B.
C.
D.
E.
Penal Provisions
Waiver from penalty if intention found to be ok
Delay in return filing – From Rs. 2K to Rs. 20K
Interest on delayed Payment – From 13% to 18% (1.4.11)
Prosecution provisions introduced – Delay > 6 Mnths
No concession from Penalty for cases involving Fraud
CA Sandesh Mundra
• Central Excise & Customs
CA Sandesh Mundra
• Basic rate of Excise remains unchanged• Concessional rate of excise duty of 4%
changed to 5% - Cakes, Drugs, Medical devices
• Excise Duty @ 1% without Cenvat imposed on 130 items earlier exempt – FMCG - Specs, Lenses, Cycles
• Concessional rate of 5% on exempted items like micro processors, storage media
• Branded Textile – ED @ 10%
Major Proposals
CA Sandesh Mundra
Cement – Other than a mini plant
Impact on prices likely to be Rs.5-10/- per bag.
Sector Specific Exemption
Cement Present Proposed
RSP < Rs.190 Rs.290 Per MT 10% + Rs.80 per MT
RSP > 190 10% of RSP 10% + Rs. 160 per MT
Clinker Rs. 375 per MT 10% + Rs. 200 per MT
CA Sandesh Mundra
Textile
ED @ 10% on branded textiles For non-branded products, old regime to continue Liability to pay of brand owners in case of
jobworking Excise duty on 5% on automatic looms and
projectile looms BCD on raw silk reduced from 30% to 5%. Various other products reduced by 2.5%. Reduction in BCD on acrylon and pulp to 2.5%
Sector Specific
CA Sandesh Mundra
Food / Agro Cold Chain AC and conveyor Belt –
Agr – Hort – Dairy – Poultry – Marine Reduction in BCD on micro irrigation systems by 2.5%.
Automobile Concessional rate of 10% for factory built ambulances. Excise - Taxi Refund Scheme extended to vehicles = 13
passengers Full exemption to parts of power tillers. Definition of CKD – (Preassembled Engine/Gear Box)- 60% instead
of 10%
Paper Exemption – Cotton Stalk Particle Concessional rate of 5% - Corrugated boxes Reduction in BCD on waste paper to 2.5%
Sector Specific
CA Sandesh Mundra
Precious Metals Excise Duty @ 1% on branded jewellery Excise Duty at Rs.1500/- per Kg on silver mfg during
gold refining
Water Supply Exemption to Pipe Fittings – Delivery of drinking water
from source- Plant-First storage Concessional rate – 1% for water filters w/o electricity
Health Excise duty reduced to 1% - Napkins / Diapers
Sector Specific
CA Sandesh Mundra
Power Excise Duty exemption for goods required for
expansion of existing ultra mega power projects. Further exemption from CVD on import also
continues. This probably will reduce Chinese Advantage by 4-5%.
Steel / Metals
Tax on iron ore exports increased from 15% to 20%. Reduction in customs duty on steel scrap and ferro
alloys
Sector Specific
CA Sandesh Mundra
Rule 2 Definition of inputs – Goods used in factory Input services – Construction services excluded Rule 5B – Asset written off – Cenvat Reversal Rule 6
Exempt Services to be paid at 5% Option to maintain separate books for goods and
prop for services Credit restricted to 50% for banking Credit restricted to 80% for insurance 6(5) omitted Exemption for services given to SEZ Concept of Trading service
Cenvat Credit Rules
CA Sandesh Mundra
CA Sandesh Mundra
• I have enough money to last me the rest of my life, unless I buy something."
— Jackie Mason