1 Union Budget 2015 Proposals on Indirect Taxes as introduced in Lok Sabha on 28 th February rd March 2015

2 Budget Proposals – Excise

3 Rate Change in Excise Duty BED rate changed from 12% to 12.5%. No more HE cess and SHE Cess on duty. Impact : Duty TypeEarlierNow BED12%12.50% HE Cess2%NIL SHE Cess1%NIL Total Duty12.36%12.50%

4 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.

5 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. 

6 Changes in CENVAT Credit Rules Time Limit for availing CENVAT Credit  EarlierNow SIX MonthsONE Year Effective from : Notification no. 6/2015-CE-NT, dated

7 EarlierNow 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. I nput : 180 Days (No change) Capital Goods : 2 years Cenvat Credit on Input/ Capital goods sent for Job work (w.e.f. 1 ST March)

8 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 Effective from : Earlier Now Reversal of Credit on exempted goods 

9 EarlierNow 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

10 Minimum Penalty Rs 5000/-No change Late filling of Return: Rs 100/- per day but maximum Rs 20000/-  PANALTY in General

11 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.

12 PENALTY for Cases involving fraud, collusion etc. 50% of duty if detail recorded in books for to assent of Finance bill % 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.

13 Budget Proposals – Service Tax

14 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 TypeEarlierProposed Service Tax12%14% HE Cess2%- SHE Cess1%- Swachh Bharat Cess-2% Total Effective rate12.36%16%

15 Some important Change in Abatement (w.e.f. 1 st April 2015) Type of ServiceEarlierNow Transportation by Road (GTA) 75% 70%  Travel By Air: Economy Other Class 60% 40% 

16 Change in Reverse Charge Mechanism (w.e.f ) Service TypeExtent of Service Tax paid by Service Provider Service Recipient EarlierNowEarlierNow Man Power & Security25%-75%100% AggregatorAggregator as a service recipient %

17 Other changes in Service Tax Exempted list of Services broadened (w.e.f 1 st 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.

18 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.

19 The Government expressed its resolve to introduce GST from April 1, 2016

20 Budget Proposals - Customs

21 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

22 Rate of change in BCD: Description of GoodsOld rate New Rate Metallurgical Coke BCD : 2.5% BCD : 5% Liquefied butanesBCD : 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%

23 Rate of change in BCD: Description of GoodsOld 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 panels10%NIL Black Light unit module for use in the manufacture of LCD/LED TV Panels 10%NIL

24 Rate of change-SAD & Additional Duty: Description of GoodsOld rateNew Rate Naphtha 4%2% Styrene/Ethylene dichloride/Vinyl Chloride Monomer or use in manufacture of excisable goods 4%2% Petrol / HSDAdditional Duty (Road Cess): Rs.2 per litre Additional Duty (Road Cess): Rs.6 per litre

25 Sector specific changes in Customs rate Renewable 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.

26 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.

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 GoodsOld rateNew Rate NaphthaSAD : 4%SAD : 2% Styrene/Ethylene dichloride/Vinyl Chloride Monomer or use in manufacture of excisable goods SAD : 4%SAD : 2% Petrol / HSDAdditional 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.