THE INDIAN BUDGET – A PERSPECTIVE

Budget 2014 – What is it for me?

Yesterday in the Learning & Development group, I shared some more key budget provisions.

Let us see some provisions of the budget pertaining to indirect taxes today.

Customs Duty

  • Peak rate of Basic Customs Duty remains unchanged at 10%.
  • Mandatory pre deposit prescribed as 7.5 or 10% on the stage of appeal. This is a first time under
  • this law
  • Advance ruling option made available to resident private limited companies.
  • Free baggage allowance increased from Rs 35000 to Rs 45000.

Service Tax

  • No change in effective tax rate of 12.36%
  • Advance ruling option made available to resident private limited companies
  • Amendments in negative list and exempt services.
  • Sale of space/time on media such as internet, films, billboards, etc. made, subject to service tax
  • Mandatory pre deposit prescribed as 7.5% orl0% depending on stage of appeal.
  • Location of service provider to be the place of supply for an intermediary of goods. This provision is of importance as the tax net would be widened
  • Graded increase in interest rates for delay. Interest rates for delay in payment of Service Tax beyond 6 months increased from 18% p.a. to 24% p.a. For further delay of 6 months, the interest rate to be 30% p.a.

Excise Duty

  • No change in effective tax rate of 12.36%
  • Advance ruling option made available to resident private limited companies
  • Mandatory pre deposit prescribed as 7.5% or 10% depending on stage of appeal.
  • Valuation of Excisable goods sold at a price below manufacturing cost and profit to be on the basis of ‘transaction value’ for excise duty, if no additional consideration flows directly or indirectly to the seller.
  • Applicability of excise duty on packing/repacking/labelling activities on specified goods widened

CENVAT Credit

  • Timeline of six months prescribed for availing CENVAT credit on inputs and input services from date of invoice or challan or other relevant documents.
  • Inter unit Transfer of credit by large taxpayer not allowed from 11 Jul 2014.

Others

  • No changes in CST rate.
  • No specific announcement on implementation of GST. Pending issues likely to be resolved during the year
  • Section 32E(1) is also being amended to allow filing of applications of settlement before the Settlement Commission in cases where the applicant has not filed the returns after recording reasons for the same
  • Section 35B(1) is being amended so as to increase the discretionary powers of the Tribunal to refuse admission of appeal from the existing Rs.50,000 to Rs.2 lakh.

Mohit Gupta