The hon’ble Finance Minister of India has introduced the Finance Bill, 2011 on 25.2.2011. This bill has withdrawn a no. of exemptions given to various tariff items. By this bill, a no. of entries that attracted the NIL rate of duty in tariff has also been brought under the purview of excise duty. On some tariff items, rate of duty have been fixed as 5%. These two are the major changes that have been made in the Excise Tariff vide Finance Bill, 2011. But as it mostly happens, these two exemptions have created an ambiguity amongst the assessees. This piece talks about the various spheres of these two notifications.
The rate of customs duty on the import of Stainless Steel Scrap under exemption Notification No. 21/2002-Cus dated 01.03.2002 has always been surrounded by controversies. There has been an amendment in the rate of duty on the import of SS scrap in almost all the Budgets announced in the recent years. We wrote article earlier on this controversy titled as “Non- Melting Controversy on Melting Scrap”
With effect from 16.05.2008, the services pertaining to purchase or sale of foreign currency, including money changing was brought under service tax. The authorised dealers in foreign exchange or authorized changers were also covered. The Authorised money exchanger was required to be authorised under Section 10(1) of the Foreign Exchange Management Act, 1999 to deal in foreign exchange or foreign securities. Thus, the authority from Reserve Bank of India was a pre-condition for treating a foreign exchange broker as an authorised dealer of foreign exchange.
It has been proposed in the Budget 2011-12 to increase the ceiling of 4% on declared goods under section 15 of CST Act to 5%. Currently State Governments cannot levy VAT more than 4% on declared goods. Declared goods are those goods which are of special importance and have been defined u/s 14 of CST Act 1956. This increase has been made in view of recent increase in the VAT slab rate of 4% to 5% by many states.
The Ministry of Corporate Affair (MCA) has notified 35 Indian IFRS standards (known as “Ind-AS’), without announcing the applicability date. In its press release, the MCA has stated that Ind-AS will be applied in a phased manner, to ensure smooth transition for all stakeholders. The notification of Ind-AS is a significant step toward the implementation of converged standards in India. Companies may particularly note that the MCA will intimate the implementation date later; however, it does not state if the implementation is deferred. Also, the question regarding whether a company can apply Ind-AS early, if it desires to do so, and the manner of quarterly reporting still remains open.
The scheme of refund of service tax paid on specified services which were utilised for export of goods was given effect in 2007 vide Notification No. 41/2007-ST dated 06.10.2007. The exemption was granted by way of refund. However, announcing the grant of exemption and actual granting of refund of service tax paid proved to be two different scenarios. The exporter claiming refund of service tax was not granted refund claim on various issues.
steps proposed to be taken for introduction of GST by the Finance Minister are establishment of a strong IT infrastructure. It was also announced that significant progress on the GST network (GSTN) has been made. The key business processes of registration, returns and payments, was told to be in advanced stages of finalization. The National Securities Depository Limited (NSDL) has been selected a technology partner for incubating the National Information Utility that will establish and operate the IT backbone for GST.
The following are the major Highlights of the Union Budget 2011-12 presented by the Hon’ble Finance Minister Mr. Pranab Mukherjee in the Parliament on Monday (i.e. Feb. 28th 2011). Direct Tax Code (DTC) is proposed to be introduced from April 1st 2012. As a consequence, no DTC provisions have been incorporated in the Budget proposals. The proposals/initiatives that require urgent attention and made in the Finance Bill- 2011 are as follows:
The Union Finance Minister has presented the budget for 2011-12 in the backdrop of growth of GDP @ 8.6% in 2010-11, contributed by a growth of 5.4% in agriculture, 8.1% in industry and 9.6% in services. The Minister shared that the economy has shown remarkable resilience to both external and domestic shocks.
Budget to help broad based rebound in agriculture and continued momentum in Manufacturing Sector. CS Anil Murarka, President, ICSI. Budget reflects financial translation of the policy initiatives of the government towards inclusive growth. CS N K Jain, Secretary & CEO, ICSI
