FII’s can invest directly in Mutual funds – This gains importance as MF industry has been battling volatility and cash crunch. The disinvestment target of Rs.40,000 cr is as expected. The previous highest disinvestment done by the govt was Rs.23,550 cr in 2008-09. Doesn’t surprise me much because given the response Coal India Limited (CIL) got last year, the companies that are lined up this year are IOC, MMTC and Rashtriya ISPAT ltd might also get positive response from the market. But FM has assured that the 51% govt holding in all the PSUs would stay. Sudden and full disinvestment would only result in.
The Finance Minister as a move towards GST to be implemented by 2012 took a step in removing the exemption regime by levying duty on 130 items out of 370 where VAT is charged by the States. The items covered are mainly consumer goods. The balance 240 items would be roped in along with the implementation of GST in 2012.
The exemption from excise duty on Cashew shell liquid (CNSL) is being withdrawn and consequently it will now attract a concessional rate of 1% without CENVAT credit facility. (S. No. 6 of Notification No. 3/2006 – C.E dated 1st March, 2006, is being omitted by Notification No. 3 /2011-C.E dated the 1st March 2011, S. No. 1 of Notification No. 1/2011-C.E &2 /2011- C.E both dated the 1st March 2011 refers)
The Finance Minister has introduced the Finance Bill, 2011 in Lok Sabha on 28th February, 2011. Changes in Customs law and rates of duty have been proposed through the Finance Bill, 2011 (clauses 35 to 58 for customs). In order to prescribe effective rates of duty and to carry out changes in the Rules made […]
The Finance Minister has introduced the Finance Bill, 2011 in Lok Sabha on 28th February, 2011. Changes in Central excise law and rates of duty have been proposed through the Finance Bill, 2011 (clauses clauses 59 to 70 for Central Excise). In order to prescribe effective rates of duty and to carry out changes in the Rules made under the respective Acts, the following notifications are being issued:
The Interest liability is amplified in all the sections of custom, excise and service tax to 18% as from earlier of 13% per annum from this budget. This is one of highest increase in the rates of interest ever. In Central Excise the notification no. No. 6/2011-Central Excise (N.T.) dt. 01.03.2011 has brought an amendment for the purpose of the section 11AB of the Central Excise Act, 1944 by fixing the interest rate at 18% p.a. The similar amendment is made in the section 75 of Service Tax Act vide notification No. 14/2011-Service Tax dt. 01.03.2011 and 15/2011-Service Tax dated 01.03.2011 in which also the rate of interest is increased to 18% p.a. from 13% p.a. The new rate of interest of 18% will be applicable from 1st April, 2011.
In respect to the service tax Law, the Central Government of India, as always, has come with lots of amendments and clarifications in the Budget, 2011. When a particular service will be taxed is the major aspect in the service tax law. As on date the service tax is payable on the receipt of payment towards the service provided, but now government has notified the “Point of Taxation Rules, 2011” which prescribe the procedure for determination of point of taxation, i.e. when the service tax will be payable. For prescribing these rules, Notification No. 18/2011-Service Tax dated 1st March, 2011 has been issued which will be effective as from 1.4.2011.
Major amendments have been brought in Ready made garments and made-up articles through the budget 2011-12. These goods fall under chapter 61 of the Central Excise Tariff Act, 1985. Earlier these goods were exempted vide serial no. 16 of Notification no. 30/2004-CE dt. 09.07.2004. The entry at this serial no. exempted all the goods falling in chapter 61 subject to the condition of non availment of cenvat credit on inputs. This notification is amended vide notification no. 12/2011-CE dated 1.3.2011 the impact of which is that after budget, only those goods of chapter 61 will be exempted that neither bear the brand name nor are sold under the brand name.
Banking and other Financial Services: Money changing services [Section 65(105)(zm and zzk)]: There is no change in the scope of the levy of these services. However, the following changes have been made in the actual collection of tax:(a) A new rule 2B has been introduced in the Service tax (Determination of Value) Rules, 2006 prescribing the value of the service in terms of section 67 of the Act. The value shall be as follows:
Senior Citizens should be a happy lot after the Budget. After meeting their long-standing demand of making 60 as the defining age of senior citizens, the finance minister has also introduced a special category — ‘very-senior’ — for citizens over the age of 80, perhaps in tune with the rising life expectancy. The basic exemption limit for this new category will be Rs 5 lakh (Rs 500,000), double than that for senior citizens.
