Vasai Branch of WIRC of ICAI is hosting Members Regional Convention on International Taxation-2012 to share knowledge of Basic Principles of international taxation to the Related Controversial Issues in International Taxation including Cross Border Transactions. The date of the event is Friday 21st & Saturday 22nd December, 2012 at Green Court Club (G.C.C.), Mira- Bhayandar, […]
Advocates were resisting being brought within the ambit of Service Tax by their argument that their basic function is to assist the Court in effective justice delivery system and while doing so they function more like officers of the Court than as service provides. They were assisting the litigants in obtaining justice and that charging of fees was just ancillary to the main object. However, appreciating the popular sense they have agreed to be so covered by the Finance Act 2012, albeit in a restricted manner.
Service tax, like any other indirect tax, is a destination based consumption tax born the ultimate user and collected by the provider. The core of the system is section 66B which is the charging section levying service tax @ 12% on the value of all services, other than those services specified in the negative list which are provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed.
With effect from 01-07-2012 section 66B of Chapter V of Finance Act, 1994 shall govern the CHARGE of service tax . Accordingly there shall be levied a service at the rate of 12% on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed.
There is No Excise Duty on jewellers who are engaged only in trading activity i.e. only buying & selling so long as they do not engage in the manufacture of the same. This being so they are not required to obtain any excise registration and/or keep separate documents and file any excise returns. No field excise officer can ever raise any demand for excise duty from jewellers who are traders only.
The scheme of levy of excise duty on precious metal jewellery was introduced in the Budget 2011 vide notification No. 1/2011. Under the this scheme excise duty of 1% ad valorem was applicable to precious metal jewellery manufactured or sold under a brand name. The levy would now apply to both branded and unbranded goods (except silver jewellery) at the same rate of duty of 1%. ad valorem.
Changes in the Rates of Duty- a. Central Excise rate for all goods, other than petroleum, called the Standard Rate has been enhanced from 10% to 12% ad valorem. b. The merit rate of excise duty for all non-petroleum goods has been increased from 5% to 6%. c. The concessional rate of duty of 1% imposed on 130 items in the last Budget-2011 has been increased to 2%. However, the following 4 items would attract only 1% duty:-
The Finance Bill-2011 levied Excise duty at the rate of 10% on ready-made garments and made-up articles of textiles when they bear or are sold under a brand name. Hitherto, ready-made garments and made-up articles were exempt from Central Excise duty on the condition that no credit of duty on inputs is taken by the manufacturer. If credit were taken, the applicable rate was 4% for goods of cotton, not containing any other textile material and 10% for others. By the proposed amendment this concessional treatment will apply only to those goods as above stated not bearing a brand name or not sold under a brand name. For such goods not bearing brand name ,therefore, the optional duty regime would continue. In the case of ready-made garments and made-up articles bearing a brand name or sold under a brand name, no such option would be available and a duty of 10% would be payable regardless of the composition of the item/article.
While initiating debate on the Finance Bill-2011 the Finance Minister said that the garment traders had criticised the proposed 10 per cent excise duty on readymade garments saying it would hurt the small business. He added. 1) “To address this concern, I propose to enhance the abatement of 40 per cent to 55 per cent on the retail sale price. 2) With this relief a unit will continue to be eligible for SSI exemption in 2011-12 even if it had a turnover based on retail sale price of Rs 8.90 crore in the current year”, the Minister said. (Current year means 31-03-2011)
While presenting his budget proposals for 2011-12 on 28th February 2011 the Finance Minister Shri Pranab Mukherjee proposed certain changes in the Central Excise rate structure to prepare the ground for the transition to GST, beginning with a reduction in the number of exemptions. He accordingly withdrew the exemption on 130 of these items and levied a nominal Central Excise duty of 1 per cent on these 130 items that entered the tax net. The manufacturers of these items were granted the benefit of the SSI exemption. The scheme of SSI exemption is governed by notification 8/2003 the salient features of which are discussed hereunder.
