Amendments in Point of Taxation Rules, 2011 (the Point of taxation Rules) as prescribed by Notification No. 25/2011 – Service Tax dated 31 March 2011 effective from 1 April 2011. Amendments in the Cenvat Credit Rules, 2004 (the Credit Rules) vide Notification No.13/2011 – Central Excise (N.T.) dated 31 March 2011 effective from 1 April 2011
The Point of Taxation Rules, 2011 notified through Budget Notification No. 18/2011 ST dated 1st March, 2011 led to a number of issues which the Government assured would be looked into. Some relief has been extended and many of the areas of difficulty have been addressed. The important point is that the rules are applicable from 1.4.2011 itself unless the service provider opts to continue with the old system for 3 months. In that case there may be some accounting issues and requirement to maintain the parallel records.
Constitution (One Hundred and Fifteenth Amendment), Bill, 2011 (GST Bill) as introduced in the Parliament on 22 March 2011, deals with key transaction taxes in India. The proposed GST Bill, inter alia seeks to introduce articles effecting the introduction of the Goods and Services Tax (GST) and the introduction of the GST Council. As per the existing structure of indirect taxation, the Parliament has the power to make laws on the manufacture of goods and the provision of services (Union List) while the State Legislatures have the power to make laws on the sale and purchase of goods within their respective states (State List). The Parliament has retained the exclusivity to make laws pertaining to sale of goods in the course of inter-state trade or commerce.
The Finance Bill, 2011 contains some international tax proposals that are focused on anti-tax avoidance, transfer pricing (TP), tax enforcement and provisions to encourage Indian companies to repatriate profits back from their foreign subsidiaries. The Finance Minister also reinforced the intent of the Government of India (GOI) to enact the Direct Taxes Code, 2011 (DTC) with effect from 1 April 2012. Here we have highlighted the key international tax provisions contained in the Finance Bill, 2011.
Guidelines on Asset Classification- All accounts need to be classified into four categories taking into account the degree of well defined credit weaknesses and extent of dependence on collateral security for realisation of the dues as given under :- 1. Standard Assets- Standard asset is one which does not disclose any problem and which does not carry more than normal risk attached to the business. Such an asset is not an NPA. However, Central Govt. Guaranteed advances, although categorized as NPA for the purpose of Income Recognition, are to be treated as Standard Assets (Govt Guaranteed) unless Govt repudiates its guarantee when invoked.
Central Excise- Changes in excise duty structure on textile goods . Branded ready-made garments which are returned to the factory and cleared there from after being re-made, re-conditioned, repacked are exempted from payment of excise duty subject to the following conditions: ─ CENVAT credit on the returned goods is not availed
Perhaps, for the first time in Indian history, we have a situation that the Union Budget is presented and passed by both the houses of the Parliament in less than a month. Not only this, that too in the current financial year itself. Thanks to virtually no debate in the house even on crucial proposals impacting economy and growth of nation and thanks to the democratic country we are. Simply because there are elections in few states in May / June, we had to cut short the economic agenda of Parliament and made budget a not so important event.
Maharashtra Deputy Chief Minister presented the State budget for the year 2011-12 on 23 March 2011. The changes effected in various regulations shall be effective from a date to be notified unless otherwise specified. Considering a satisfactory rise in the sales tax revenue by 26% over earlier year, it is proposed to retain VAT rate on goods covered under schedule E @ 12.5%. The budget proposes certain amendments under the Maharashtra Value Added Tax Act, 2002 (MVAT Act) in respect of the following, which will be notified in due course.
In terms of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, Indian companies are required to report the details of Foreign Direct Investment (FDI) in Form FC-GPR to the Regional Office of RBI within whose jurisdiction the Registered Office of the Company operates, within 30 days of issue of shares.
Section 39 of Punjab VAT Act 2005 deals with refund of tax. Some welcome changes have been made in said section by adding a new sub section 1-A to the said section which provides for provisional allowing of 75% of amount of refund claimed under PVAT Act subject to furnishing of indemnity bond in prescribed format and subject to such terms and conditions as may be prescribed.
