by swamy associates chennai. coimbatore. bengaluru. hyderabad. ahmedabad BUDGET SAFARI

central excise

central excise … 4% increased to 8% across the board (except for food / pharma / paper products / notified medical equipments & textile machinery) Goods of ch. hdg 68 site unconditionally exempted Exemption to packaged software on the value representing “transfer of right to use” (both under BED as well as CVD) Notification No. 22/ Notification No. 80/

central excise … Motor vehicles above 2000 cc to cost less Petrol driven transport vehicles & its chassis to cost less ( except Dumpers) - Notification 16 /

central excise … Compound wall for compounding ! - one time compounding cap for Section 9 (1) offences (except for attempt / abetment) - parallel offence under NDPA - one time compounding for any offence under CEA on goods valued more than Rs.1 crore -convicts on or after 30/12/ clause 103 of Finance (No.2) Bill,2009

central excise … CAs’ Budget ◦ - inclusion in special audits u/s 14 A & 14 AA of CEA along with cost accountants ◦ - certification in export refunds of service tax - clause 104 & 105 of Finance (No.2) Bill,2009

central excise … COD power to High Courts ◦ - Sections 35 G & 35 H of CEA amended -clause 107 & 108 of Finance (No.2) Bill, ◦ - Sections 130 & 130 A of CA amended -clause 86 & 87of Finance (No.2) Bill, Return of non – relied docs within 30 days of issue of SCN Rule 24A of CER 2002 introduced Notification No. 17/2009 NT –

customs

customs … Remission & Refund ◦ - Section 26 A of CA introduced ◦ - refund on imported defective goods / not as per specs ◦ - goods to be exported or relinquished or destroyed ARA of IT ( under Section 245 – O of the ITA) to be ARA of Customs (under Section 28F of CA) - clause 84 & 85 of Finance (No.2) Bill,2009

customs … DGCEI is DRI too! - Notification 27 / 2009 – Customs (N.T) revalidated w.e.f 9/5/ to have all India jurisdiction - clause 91 of Finance (No.2) Bill,2009

customs … Compound wall for compounding ! - one time compounding cap for Sections 135 & 135 A offences - parallel offence under NDPA / Chemical weapons convention Act / Arms Act / Wild Life (Protection) Act -smuggling of specified goods under Appendix 3 of Schedule 2 of ITC / prohibited items under Section 5 of FT(D&R)Act / goods or docs affecting sovereign relationship or national honour - one time compounding for any offence under CA on goods valued more than Rs.1 crore -convicts on or after 30/12/ clause 103 of Finance (No.2) Bill,2009

customs … Tariff value provision to CTA Section 3 (2) of CTA amended Machinery provisions to safeguard duty Sections 8B (4A), 8C (5B) & 9 (7A) of CTA Revalidations to Sections 8B,8C,9 &9A of CTA Margin of dumping to be based on facts upon non availability of records Sub-section 6A to section 9A of CTA - clause 93 – 101 of Finance (No.2) Bill,2009

service tax

service tax … new services…  Cargo transport by rail  Transport of coastal cargo  Cargo transport thru Inland waterways  Legal consultancy claw!)  Cosmetic / plastic surgery ( effective after a notified date) - clause 112 of Finance (No.2) Bill,2009

service tax … amended services…  BAS to include beers! ( Business Auxiliary Service to exclude only manufacture of “excisable goods”)  Sub – brokers out of service tax net.  “acquiring” to become “providing” in IT service w.e.f 16/5/ ( effective after a notified date) - clause 112 of Finance (No.2) Bill,2009

service tax … No more revision – only appeal Rule making power to determine: ◦ date for rate ◦ place of provision ◦ Retrospective amendment to Notfn.1/2009 from 1/1/2005 ( services provided to GTA) - clause 112 of Finance (No.2) Bill, f

service tax … Works’ contracts tightened ◦ Composition only if gross value of all goods used are included ◦ FOC materials to be included in composition scheme ◦ Supply under separate contracts to be included under composition w.e.f 7/7/2009 but not to apply for WC, which have already commenced or payment is received in part or full Notification 23/

service tax … Point 2 Point bus transport spared Notification 20/2009 w.e.f 7/7/ Inter-bank transactions of sale/purchase of forex by scheduled banks exempted Notification 19/2009 w.e.f 7/7/ Notified export promotion councils exempted till 31/3/2010

service tax … Refund of service tax on exports ◦ - New modified scheme ◦ - “terminal handling service” included ◦ - Refund based on self certification ( up to 0.25% FOB) or on Company’s CA certification ◦ - time limit to file claim extended to one year ◦ - “relevant date” is the date of export ( What if ST is paid after one year?) Notification 17 /

service tax … Exemption for exports - GTA between place of removal to ICD / CFS / port / airport - Foreign Commission agents - BRC not a criterion ( slip or intentional?) - 1% Cap on exemption for Commission paid - Half yearly returns to be filed - Scheme available for exports after 7/7/2009 Notification 18 /

cenvat credit

cenvat credit … Steel & Cement are no more inputs if used in construction ◦ ( Explanation to rule 2(k) of CCR amended) Cenvat to be reversed on Inputs / Capital goods, by a service provider, upon writing off in full ◦ ( Rule 3(5B) of CCR amended) Reversal under Rule 6(3)(i) of CCR reduced: - 10% to 5% for manufacturers - 8% to 6% for service providers Notification 16 / 2009 NT

THANKS swamy associates chennai. coimbatore. bengaluru. hyderabad. ahmedabad