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CA Sandesh Mundra

Consult Us For Construction

Summary of Indirect Tax Provisions - Budget 2013

Posted by on in Service Tax
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  • The Point no.s Continued from Direct Tax Provisions blog
  • 29. UNION BUDGET 2013-14 -INDIRECT TAX Prepared By- Arvind Rathi (Article Assistant),Sandesh Mundra & Associates.
  • 30. CENTRAL EXCISEOffences cognizable and non bailable:
  • Offences relating to excisable goods,involving evasion of duty or contravention ofprovisions pertaining to utilization of Credit.where the duty leviable thereon under the CE Act exceeds Rs. 50 lakhs, shall becognizable & non-bailable.Expansion in the scope of Advance Ruling proceedings:1. Any new business of production or manufacture proposed to be undertaken by an existing producer or manufacturer.2. Advance ruling can be sought, is proposed to be amended to cover the question of admissibility of credit of service.3. Resident public limited companies has been notified as a person eligible for seeking Advance Ruling. Prepared By- Arvind Rathi (Article Assistant),Sandesh Mundra & Associates.
  • 31. DUTY IMPACT ON CERTAIN GOODSNo change in the basic rate of excise duty- 12%.Readymade garments- Sold under a “brand name”,are subjectto Excise Duty at the rate of 12.36% from 10.30%,w.e.f. April 1, 2012.Mobile handsets- Including cellular phones having retail sale pricemore than Rs. 2000/- is being increased from 1% to 6%.Cigarettes-Excise Duty on cigarettes and other products of CETH 2402,has been increased,to about 18%. Prepared By- Arvind Rathi (Article Assistant),Sandesh Mundra & Associates.
  • 32. DUTY IMPACT ON CERTAIN GOODSExcise duty on SUVs- Including utility vehicles is being increasedfrom 27% to 30%, with immediate effect, the duty increase does notaffect SUVs used as taxis.Branded Ayurvedic Medicaments- They are being broughtunder MRP based assessment with an abatement of 35% from theMRP.Marble slabs- Excise Duty is being increased on marble slabs and tilesfrom Rs 30 per square meter to Rs 60 per square meter. Prepared By- Arvind Rathi (Article Assistant),Sandesh Mundra & Associates.
  • 33. FULL EXEMPTION FROM CENTRAL EXCISE DUTY Tapioca starch manufactured and consumed captively in the manufacture of tapioca sago. All goods for the manufacture of fertilizers. Henna powder or paste, not mixed with any other ingredient. All handmade carpets and carpets and other textile floor coverings of coir and jute,whether or not handmade. Prepared By- Arvind Rathi (Article Assistant),Sandesh Mundra & Associates.
  • 34. CENVAT CREDIT RULES,2004 An explanation has been inserted after Rule 3(5B) stating that non-payment of duty payable On removal of inputs or capital goods, would be recoverable in terms of Rule 14.It is applicable in respect of cases falling under sub-rules (5), (5A) and (5B) of Rule 3, i.e. duty payment on removal of inputs or capital goods as such or after being used, and on write off of any value of the inputs or capital goods fully or partially in the books of accounts. Alpump Pvt. Ltd. vs. Commissioner of Central Excise, Chennai Prepared By- Arvind Rathi (Article Assistant),Sandesh Mundra & Associates.
  • 35. SERVICE TAX Prepared By- Arvind Rathi (ArticleAssistant),Sandesh Mundra & Associates.
  • 36. SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME, 20131) To encourage voluntary compliance of filing returns and payment of tax dues, by making truthful declaration of the tax dues.2) The declarant shall be granted immunity from penalty, interest or any other proceedings on payment of the tax dues.3) The eligibility criteria of the scheme are set out below: a) The scheme is applicable for the tax dues. b) The declaration to be made on or before December 31, 2013. c) Declaration cannot be filed by a person who has furnished return .4) The timeliness for making payment of declared tax dues are as follows: a) At least 50% of the tax dues to be paid on or before December 31, 2013. b) Balance tax dues to be paid on or before June 30, 2014.5) The tax dues so paid shall not be refundable underany circumstances. Prepared By- Arvind Rathi (Article Assistant),Sandesh Mundra & Associates.
  • 37. DEFAULTS SECTION 89- Term of imprisonment for failure to deposit servicetax collected but not paid within 6 months increased from 3 years to 7years. Further, the offence is made cognizable. DEFAULT IN PAYMENT OF SERVICE TAX- To hold officers ofcompanies responsible for conduct of business, liable for contraventionof the provisions of the Act.Maximum penalty is Rs.1,00,000. SERVICE TAX REGISTRATION CAPPED- To cap penaltyfor failure to obtain registration,maximum of Rs.10,000. Prepared By- Arvind Rathi (Article Assistant),Sandesh Mundra & Associates.
  • 38. RATIONALIZATION OF ABATEMENT S.NO SERVICE TAX BASE ON CONDITION WHICH TAX TO BE CALCULATED,POST ABATEMENT(%) 1. The servic provided 25 For residential unit by way of having a carpet construction of area up to 2000 sq. complex, buildings, ft. or where the civil structure amount charged is intended for sale less then Rs. 1 Cr. prior to issuance of 30 For Other Than completion Above. certificate. Prepared By- Arvind Rathi (Article Assistant),Sandesh Mundra & Associates.
  • 39. EXEMPTIONS RATIONALIZEDS.NO TAXABALE SERVICE EXISTING AMENDMENTS NOTIFICATION1. Educational Institution Services provided to or The words ‘provided to by an educational or by’ has been replaced institution in respect of with ‘provided to’. education exempted from Service Tax.2. Restaurant Services Services provided in The condition that the relation to serving of restaurant should have a food or beverages by a license to serve alcoholic restaurant, eating joint beverage has been or a mess. deleted. Prepared By- Arvind Rathi (Article Assistant),Sandesh Mundra & Associates.
  • 40. NEGATIVE LISTA. Certain Educational Services forms part of Negative List of Services.B. The scope of the entry has been enlarged by including ‘State Council of Vocational Training’ as an approved vocational education course.C. The scope of the Negative List has been curtailed, and a course run by an institute affiliated to the National Skill Development Corporation set up by the Government of India has been removed.D. Any process amounting to manufacture or production of goods on which duties of excise is leviable under the CE Act or under a State Excise Act on the manufacture of alcoholic. Prepared By- Arvind Rathi (Article Assistant),Sandesh Mundra & Associates.
  • 41. EXEMPTIONS WITHDRAWNI. Service provided by an educational institution by way of renting of immovable property.II. Temporary transfer or permitting the use or enjoyment of a copyright relating to cinematographic films was fully exempt so far, this exemption will be restricted to exhibition of cinematograph films in a cinema hall or a cinema theater.III. Services by way of vehicle parking to general public.IV. Services provided to government, a local authority, by way of repair or maintenance of aircraft. Prepared By- Arvind Rathi (Article Assistant),Sandesh Mundra & Associates.
  • 42. WRONGFUL INVOCATION OF EXTENDED PERIOD OF LIMITATION where a demand has been raised invoking the larger period of limitation,i.e. 5 years, and the Court finds that the demand for the larger period isnot sustainable.Because the charges of fraud, suppression, wilful misstatement are notsustainable, the Department can determine the Service Tax liability for thenormal period and raise a demand accordingly.It seeks to clarify that in cases where the demand for the normal period(18 months) is sustainable but a Notice has been issued for 5 years, thesame can be severed and the entire demand need not be set aside. Prepared By- Arvind Rathi (Article Assistant),Sandesh Mundra & Associates.
  • 43. ADVANCE RULLING It is being extended to cover resident public limitedcompanies. A notification is being issued for this purpose,undersection 96A(b)(iii) of the Finance act,1994. Prepared By- Arvind Rathi (Article Assistant),Sandesh Mundra & Associates.
  • Participate in our next event on Indirect Taxation of Works Contract. Details on our website www.consultconstruction.com
  • Will This Budget Help Us?????For any information contact us at 079 40032950 /9426024975
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  • Check our new software on consolidation of accounts at www.consolidationofaccounts.com
  • Check our budget power point presentation at http://www.slideshare.net/sandeshmundra/budget-2013-17079734


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CA Sandesh Mundra, Consultant – Management Audit and Indirect Taxation - Chartered Accountant, Diploma in Information System Audit, Diploma in Insurance & Risk Management , Certificate from ICAI on International Financial Reporting Standards. Actively associated with clients in the industrial construction sector since last 9 years.He possesses special skills in structuring the indirect tax component of the works contracts and as management auditor, has visited several construction sites in various states like Orissa, Rajasthan, Gujarat, Maharasthra, Madhya Pradesh etc. During the course of said visits he has been to very large industrial complexes, refineries, power plants etc


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