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?