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FINANCE ILL 2012
CA CHANDRASHEKHAR V. CHITALE
Chairman, Direct Taxation Committee
Women
Entrepreneurs’
committee
CA CHANDRASHEKHAR V. CHITALE
FINANCE BILL, 2012
• INCOME TAX
• GST
• STT
• SERVICE TAX
• ECISE DUTY
• CUSTOMS
CA CHANDRASHEKHAR V. CHITALE
INCOME AX
• Vodafone
Decision of Hon’ble Supreme Court in the case
of Vodafone negated through a retrospective
Legislative amendment.
Indirect transfer of shares/ assets liable to be
taxed in India retrospectively with effect from
April 1, 1962.
CA CHANDRASHEKHAR V. CHITALE
INCOME AX
• Software Imports
• Software payments to be regarded as royalty.
Amendment in this regard introduced
• Retrospectively with effect from June 1, 1976.
CA CHANDRASHEKHAR V. CHITALE
INCOME AX
• Transfer Pricing
• APA introduced - fron 1 July 2012
• Ambit of transfer pricing applicability
widened
• Scope of TP Enlarged to Cover Specified
Domestic Related Party Transactions - Rs 5 cr.
• Shares Issue
• Share premium in excess of fair market value
of the shares to be treated as income
CA CHANDRASHEKHAR V. CHITALE
INCOME AX
• GAAR
• Circumstances under which transaction is
deemed to lack ‘commercial substance’ stated
• Onus of proof lies on the taxpayer
• Consequences if arrangement is declared as
impermissible avoidance arrangement
CA CHANDRASHEKHAR V. CHITALE
INCOME AX
• R&D
200% Weighted deduction for In-House R&D
extended for 5 years (i.e. upto AY 2017-18)
• 150% Weighted deduction for
Agricultural Extension Projects
Skill Development Projects
CA CHANDRASHEKHAR V. CHITALE
INDIRECT TAXES
GST
• Network to be active by August 2012
• GST not applicable from August 2012
• Proposed to be operative from 1-4-2013
• STT
• STT on delivery based trades cut from 0.125%
to 0.1%
CA CHANDRASHEKHAR V. CHITALE
INDIRECT TAXES - RATES
TAX GENERAL
RATE
EFECTIVE
DATE
Customs No Change N. A.
Excise 12.36% 17- 3- 2012
Service Tax 12.36% 01- 4- 2012
CA CHANDRASHEKHAR V. CHITALE
SERVICE TAX
• Paradigm shift from “selective tax”
to “comprehensive taxation”
• “Service” :- any activity
-for consideration;
-carried out by a person for another;
-includes declared services
CA CHANDRASHEKHAR V. CHITALE
SERVICE TAX – Négative List
• Negative List to include :
services in relation to agriculture,
education, trading of goods,
Government or local authority,
residential renting, interest on
deposits, loans or advances,
Entertainment
CA CHANDRASHEKHAR V. CHITALE
Exempt Services
• Certain services exempted by way of
Mega Notifications :
• Health care services
• Health care of animals or birds;
• Charitable activities by I tax regd. entity
• Renting of precincts of public religious place
training in recreational activities, arts, sports;
• Sponsorship of specified tournaments
CA CHANDRASHEKHAR V. CHITALE
SERVICE TAX
• Adjustment of excess Service Tax
paid allowed without any monetary
limit effective 1 April 2012
• Prosecution provisions rationalized
where invoice not issued without
intent to evade tax
CA CHANDRASHEKHAR V. CHITALE
CENTRAL EXCISE
• Excise duty rate (effective 17/3/ 2012):
-standard rate up from 10 % to 12 %
- merit rate increased from 5 % to 6 %
- 130 items increased from 1 % to 2 %
• Cess on Crude petroleum increased per
MT from Rs 2,500 to Rs 4,500
(effective 17/32012)
• Inter-unit transfer of unutilized SAD
credit permitted
CA CHANDRASHEKHAR V. CHITALE
CENTRAL EXCISE
• Substantial expansion in units
enjoying J&K exemption – ten year
period to be computed from the
expanded capacity
• Specified pharma products duty
slashed from 10 % to 6 %
• Designated Central excise officers
empowered to make arrests even
without prior approval of the
Commissioner
CA CHANDRASHEKHAR V. CHITALE
CUSTOMS DUTY
• Peak rate of Basic Customs Duty
retained at 10 % but increase in
effective rate from 26.85 % to 28.85 %
(: increase in excise duty)
• Education cesse on CVD exempted and
marginal relief provided
• •Exemption of SAD on pre–packaged
goods for retail sale - Declaration of
destination State of first sale and VAT
reg no now requd.
CA CHANDRASHEKHAR V. CHITALE
CUSTOMS DUTY
• China Imports : Condition of
‘increased quantities’ for imposition
of safeguard duty deleted
• Import against duty scrips obtained
fraudulently - Powers to recover
customs duty and attach property
CA CHANDRASHEKHAR V. CHITALE
Issues for Post Budget
Memorandum
Are welcome
CA CHANDRASHEKHAR V. CHITALE
CA CHANDRASHEKHAR V. CHITALE
Thank you!
CA CHANDRASHEKHAR V. CHITALE
any questions?
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