Ppt on budet 2013

Surcharge with effect for A.Y. 2014-15 (TDS Provisions only)

Non-resident (other than a company) : 10% if income > 1Crore
(In case of TDS also)

Foreign Company : (In case of TDS)

2% if income >1cr but upto 10cr.

5% if income > 10cr.
Note: a) No Surcharge in any other case of TDS.
b) ED. Cess & SHEC will also apply to NR and Foreign
CO.

04-03-2013 Confidential 2

(Other then TDS)

Every Individual, Hindu undivided family, association of persons, body
of individuals, artificial juridical person and his total Income exceeds
Rs.1crore then surcharge @ 10%.

Cooperative Society, Firms, Local Authorities and his total Income
exceeds Rs.1crore then surcharge @ 10%.

Domestic Company :
5% If income >1cr but upto 10cr.


Foreign Company : (In case of TDS)
2% if income >1cr but upto 10cr.

Note: a) Marginal Relief allowed on the Surcharge.
b) Education Cess & SHEC applied in all cases and marginal
relief allowed.


Agriculture Land should not be situated in any area

(a) in any area which is comprised within the jurisdiction of a municipality or a
cantonment board and which has a population of not less than ten thousand.

(b) In any area within such distance namely

 Not being more than 2 km from local limits of any municipality or
cantonment board referred in (a) above and having population of more than
ten thousand but not exceeding one lakh;

 Not being more than 6 km from local limits of any municipality or
cantonment board referred in (a) above and having population of more than
one lakh but not exceeding ten lakh;

5

 Not being more than 8km from local limits of any municipality or
cantonment board referred in (a) above and having population of more
than 10 lakhs.

 Conclusion : Redifining of area and population for Agriculture land .


 In case the premium payable during the tenure of the policy exceeds 15 %
(earlier was 10 %) of the actual capital sum assured then the sum received
along with bonus is taxable{ clause (d) of 10D w.e.f. A.Y. 2014-15}

If any sum received on policy:
Except :
 Death of the person (earlier)

 and (new third proviso) Policy issued on or after 1.4.2013 for the insurance on
life of any person who is –

 (i) disable person with severe disability mentioned in Sec. 80U or

 (ii) suffering from disease or ailment mentioned u/s 80DDB
Note :Under KMP , the assignment of a policy with or without consideration is
now covered.

 10(23D) : Income from Securitisation trust from the activity of
securitisaion is exempt.

 10(23ED): Any Income by way of contribution received from a depository,
of such investor protection fund is now exempt.

10(34A) : Any income arising to a Shareholder assessee on account of
buy back of shares is now exempt .
Note : This clause is N.A. in case of listed shares.

10(49) : any income of the national financial Holdings company limited
set up by Central govt. is exempt on or before 1.4.14.


Assessee covered :
 Any Company

Conditions for availing deduction:

 Manufacture/production of article or thing , acquire or install new asset
after 31.3.13 but before 1.4.15.

 Actual cost of the new asset exceeds Rs. 100 crore.

 New asset not to be sold within a period of 5 years from date of
installation other than amalgamation/demerger.


New Asset mean :
New plant or machinery (other than ship or aircraft ) but does not include :
 Any plant or machinery was used by the assessee before its installation
within or outside India.
 Installed in any office premised or any residential accomodation
including guest house.
 Any office appliances including computers or compute software.
 Any Vehicle
 Plant or machinery, the whole of the actual cost is allowed as deduction
by way of dep. Or otherwise under PGBP.
Amount of deduction :
(a) For A.Y. commencing from 1.4.14 : - 15 % of the actual cost installed
between 31.3.13 to 1.4.14 and
(b) For A.Y. commencing from 1.4.15 :- 15 % of the actual cost less deduction
mentioned in (a) above.


Clarificatory Amendment in clause (vii) and
clause(v) of sub section 2.

 Provision of bad and doubtful debts created under sub section (vii a) to
include all types of Advances including advances made by rural branches
of Banks specified in (viia).


New Clause (xvi) :

 Commodity Transaction tax is allowed as deduction if income is taxable
under PGBP


 Commodities Transaction Tax applicable from 1st March 2013

 CTT to be levied on taxable commodities transactions entered into
in a recognized association.

 Sale of commodity derivative (other than agriculture commodity)
CTT :- 0.01% , payable by seller.

 Commodity Transaction Tax paid by assessee allowed as deduction
u/s 36 applicable from 01.04.2014.

 Income arising from taxable commodity transaction is taxable
under PGBP.


 Applicability : Transfer of Asset (other than capital asset),
being land or building or both i.e. Stock in trade.

 Full consideration : If consideration received is less than the
value adopted or assessed or assessable by State Govt.
authority for Stamp duty, then the value adopted/assessed/
assessable shall be full consideration for computing
Profits/Gains .

 The same value adopted or assessed or assessable shall
apply for Sec. 50C.


 Date of determination of the Value :
Where date of agreement for fixing consideration and date of
registration are not same then value on the date of the agreement shall
be taken.

 Condition : Above mentioned shall apply only when full or part value
received by any other mode other than cash on or before the date of
agreement.


Inadequate consideration (earlier only without consideration
was covered)

Consideration Stamp duty value

Difference is more than Rs.50,000
then, Stamp duty value
Consideration
Income from other sources


Taxability of immovable property received for inadequate
consideration.

Date of agreement Are not same
Date of registration

Stamp duty on the date of agreement (if consideration is fixed
before the date of agreement).


w.e.f. 01/04/2014,

Limit has been increased for premium for life insurance
policies of persons with disability or disease from 10% to
15% of actual capital sum assured.


Rajiv Gandhi Equity Savings Scheme :

Deduction for investment by new retail investors in listed
equity shares or listed units :

 allowed for 3 consecutive assessment years.
 beginning with year in which above shares or units were
first acquired.
 GTI of new retail investor does not exceed ` 12 Lakh.


W.e.f. 01/04/2014, Inclusion of other health schemes of the
Central & State Governments which are similar to the Central
Government Health Scheme as may be notified by the
Central government.


 Section 80EE
 If an assessee being individual first times takes a home loan, he will be
allowed deduction of Rs. 1.00 lacs on interest on loan taken from financial
institution for residential house property for A.Y.2014-15 and if the
interest is less than 1.00 lacs then balance will be allowed in A.Y.2015-1 6.
 The deduction shall be subject to the following conditions, namely:—
 (i) the loan has been sanctioned between 01-04-2013 to 31-03-2014
 (ii) the amount of loan sanctioned for acquisition of the residential house
property does not exceed twenty-five lakh rupees;
 (iii) the value of the residential house property does not exceed forty lakh
rupees;
 (iv) the assessee does not own any residential house property on the date
of sanction of the loan.
21

 Section 80GGB (Co. contribution in Political party or Electoral Trust )
 Any sum contributed by way of cash will be disallowed w.e.f. 01-4-2014

 Section 80GGC (Other than Co. contribution in political party or Electoral
Trust)
 Any sum contributed by way of cash will be disallowed w.e.f. 01-04-2014

 Section 80-IA (Extension of sunset date to Power Sector)
 sub-section (4), 31-03-2013 substituted by 31-03-2014 w.e.f. 01-04-2014

 Section 80JJAA (Deduction for additional wages)
 the word “undertaking” substituted by the word “factory”
 “factory” shall have the same meaning as assigned to it in clause (m) of section 2 of the Factories
Act, 1948.’.

22

W.e.f. 01/04/2014, 100% deduction for donation to
National Children’s Fund.


 Individual resident in India, whose total
income upto Rs. 5,00,000 shall be entitled to
a deduction, from the amount of income-tax
(as computed before allowing the deductions
under this Chapter) on his total income with
which he is chargeable for tax, of an amount
equal to 100% of such income-tax or Rs.
2,000 whichever is less

 Provisions of this chapter shall apply to the
assessee even if such provisions are not
beneficial to him applicable w.e.f. 01-04-2016

 It is clarifactory in nature providing that
submission of tax residency certificate is
necessary but not an essential condition for
claiming benefits under the DTAA.


 The rate of tax has been increased from 10%
to 25% in respect of royalty or FTS paid to
non resident for the agreement entered on or
after 01.06.2005.
 W.e.f.01.04.2014


 Received by the domestic company during the financial year, if
such dividend is received from its subsidiary and,—

 (a) where such subsidiary is a domestic company, the subsidiary
has paid the tax which is payable under this section on such
dividend; or

 (b) where such subsidiary is a foreign company, the tax is payable
by the domestic company under section 115BBD on such dividend:

 Provided that the same amount of dividend shall not be taken into
account for reduction more than once


Section 144C :
 Sub Section inserted w.e.f. 1.4.2016.
 (14A) : No Assessment /Reassessment order shall be passed by A.O.
without the prior approval of Commissioner.

Section 153 : Time Limit excluded
 Time period commenced from the date of order of A.O. to get the
accounts audited and ends u/s 142(2A) with the last of furnishing the
audit report or
 Where such order is challenged in the court, then ends with the date on
which direction regarding the setting aside the order is received by the
Commissioner.


 Amendment in clause (viii) w.e.f. 1.6.2013 :-

 Period starts from the date on which a reference or first of the reference
for exchange of information is made by competent authority u/s 90 or u/s
90A and ending the date on which information is received by the
commissioner or 1 Year whichever is less.


 Amendment in clause (iii) of Explanation 1 w.e.f. 1.6.2013 :

In computing the Time limit for completing the
assessment/reassessment :

 When A.O. direct to get the accounts audited u/s 142(2A) and
ends when the report is furnished is excluded or

 Amendment : If above mentioned direction is pending
before a court, then the date on which the order of setting
aside such direction is received by the commissioner shall
also be excluded.


 Clause (ix) :

 The period starts from date on which a reference for declaration of an
arrangement to be an impermissible avoidance arrangement is received
by the commissioner u/s 144BA(1) and ending on which direction sub
section (3) or (6) or


 Eligible person : Any person being a transferee, responsible for paying to
resident transferor, any consideration for transfer of any immovable property
except Agriculture Land,

 Deduction : 1 % of such amount.

 Immovable property mean land other than agriculture land , building or
part of a building.

 Agriculture Land : As mentioned u/s 2(14) (iii)

 Mode : Cash or cheque or draft or any other mode.

 Note : This section is N.A. if amount of such consideration is less than ` 50
lakh.


 Applicability of Section 194LC :

 New proviso :

Applicability : Non resident non corporate assessee or foreign company
has deposited the foreign currency in designated a/c.

Such sum as converted in rupees used by non-resident or foreign
company to purchase Long Term infrastucture bond issued by the Indian
company.

Such borrowing shall be treated to have been made by such Indian
company in Foreign currency.

Rate : 5 % T.D.S. on interest of such borrowing.

TAX PROPOSALS
2013 AT A GLANCE
ON DIRECT TAX

MANOJ KUMAR MITTAL & CO.

INDIVIDUAL (OTHER THAN SENIOR CITIZEN & senior most
Citizen)
Including WOMAN & HUF, AOP, BOI- TAX SLAB –Same as in PY

NIL
UPTO 200000
ABOVE 2000000 TO 500000 10%
ABOVE 500000 TO 1000000 20%
ABOVE 1000000 30%


Senior Citizen from the age of 60 years to less than
80 years

NIL
UPTO 2,50,000
ABOVE 250000 TO 500000 10%
ABOVE 500000 TO 1000000 20%
ABOVE 1000000 30%

Senior Citizen of 80 years and above :TAX SLAB
NIL
UPTO 500000
ABOVE 500000 TO 1000000 20%
ABOVE 1000000 30%


 Surcharge

 Surcharge of 10% in case of person
(other than company) having total
income exceeding 1.00 crores
however subject to limit of amount
more than 1 crores rupees.


 In the case of domestic companies
having total income more than 1
crores but less than Rs. 10.00 crores,
surcharge @ 5% in case income
exceeds 10.00 crores, surcharge @
10% subject to marginal relief.


 In the case of companies other than
domestic companies having total
income more than 1 crores but less
than Rs. 10.00 crores, surcharge @
2%, in case income exceeds 10.00
crores, surcharge @ 5%.
 Marginal relief will be available.


 Nochange in Education & Secondary
Higher Education Cess of 3%


Commodity Transaction Tax
(CTT)-Chapter VII of FA,2013
 A new tax called CTT is levied on taxable commodities
transaction entered in a recognized association
@0.01% payable by seller.

 Taxable Commodities transaction means a transaction of
sale of commodity derivatives in respect of commodity,
other than agriculture produce, traded in a recognized
association.

 Procedural requirement relating to collection, filling of
return, assessment procedure, chargeability of interest,
appeal is also provided.

 Applicable from the date notified

 Deductible u/s 36 (xvi) if the income arising
from such taxable commodity transaction is
computable under profit from business or
profession.

 Amendment in Section 36(xvi) w.e.f
01.04.2014.


Taxation of income by way of royalty or fee
for technical service
 Section 115A-
 The rate of tax has been increased
from 10% to 25% in respect of royalty
or FTS paid to non resident for the
agreement entered on or after
01.06.2005.
 W.e.f.01.04.2014


Sec 32AC-Investment in P&M
 If a company invest more than 100 crores in
new assets (being P&M) during the F.Y.2013-14
to 2014-15, deduction of 15% of the aggregate
amount of actual cost of new assets will be
allowed.
 No transfer of such assets for next five years
except for amalgamation or merger or
demerger.
 W.e.f.01.04.2014


Sec 80IA(4)(iv)- Extension of sun
set date to power sector
 The deduction of profit under this is available to
the undertaking engaged in generation or
distribution of power or transmission or
distribution by laying new lines or substantial
renovation or modernization in this area.

 This benefit is extended for A.Y.2014-15 also


Section 87A- Rebate
 An individual resident having total
income up to Rs. 5 lakh will be
allowed a rebate of Rs. 2000/- from
income tax.


Sec 80EE- deduction in respect
of interest on housing loan
 If an assessee being individual first times takes a home loan, he
will be allowed deduction of Rs. 1.00 lacs on interest on loan taken
from financial institution for residential house property for
A.Y.2014-15 and if the interest is less than 1.00 lacs then balance
will be allowed in A.Y.2015-16.

 This deduction is subject to following condition:
 1- The loan is from Financial Institution during 2013-14.
 2-The amount of loan does not exceed Rs. 25.00 lacs.
 3- The value of Residential house not to exceed Rs. 45 lacs
 4- The assessee does not own any other residential house on the
date of sanction of loan.
 W.e.f. 01.04.2014


Sec 10(10D) and 80C(3A)- Raising the limit of
premium
 In case the person is suffering from disability
u/s 80U or from diseases u/s 80DDB, then limit
of premium of the capital sum assured including
bonus has been increased from 10% to 15%.

 W.e.f.01.04.2014


Sec-80D-Mediclaim
 The list of contribution to various
organization for health of assessee or
his family has been extended to
various health scheme of the central
government or state government as
may be notified.
 W.e.f 01.04.2014


80CCG- Investment in listed
equity shares of a company
 A resident individual who invest in listed equity shares
as per scheme notified by the govt is allowed a
deduction of 50% of the amount invested subject to
limit of allowability of Rs. 25000/-. This deduction is one
time deduction. This is available to new retail investors
whose gross income does not exceed Rs. 10 lacs.
( RGESS)
 The benefit under this has been extended for three
consecutive years beginning from the year in which the
investment is made first time by new retail investor and
whose income does not exceed Rs. 12 lacs.
 W.e.f. 01.04.2014


80G-Donation to National Children’s Fund

 Under Section 80G- A new clause (iiib)
has been inserted providing for 100%
deduction to contribution to National
Children’s fund.
 W.e.f. 01.04.2014


115BBD- Dividend from specified foreign
company
 The rate of taxation is 15% as
provided by the finance Act 2012 and
it will continue for A.Y.2014-15.


115O-Dividend Distribution Tax-removing of cascading
effects

 Where tax on dividend received by a domestic
company from a foreign subsidiary (in which the
domestic company holds more than 50% of
equity share capital) is payable u/s 115BBD by
the holding company, then any dividend
distributed by the holding company, in the same
year, to the extent of such dividends shall not
be subject to DDT U/S 115O.
 W.e.f.01.06.2013


194LC-Concessional rate of withholding tax-
Benefit extended
 It provides that if an Indian company borrows money in foreign
currency from non resident, it will be subject to TDS @5%.

 It is now provided that where a non resident deposits foreign
currency in designated bank account and such money as converted
in Indian rupees is utilized for subscription to long term
infrastructure bond issue of an Indian company, then borrowing for
the purpose of this section shall be deemed to be in foreign
currency and interest on that shall be subject to 5% TDS.

 W.e.f 01.06.2013


Taxation of Securitisation trust-Chapter XII-
EA, Sec 115TA to 115TD
 The income of it will be exempt u/s 10(23DA)
 Additional tax on income distributed to
individual or HUF @25%
 In other case,30% on the income distributed.
 No addition tax for person if income below
taxable limit.
 In hand of other investors, it shall be tax free.
 W.e.f 01.06.2013


Sec-98 of FA for securities Transaction Tax,
w.e.f.01.06.2013
S.N Nature of taxable Payable by Existing rate Proposed rate
O. securities transaction In percent In percent
1 2 3 4 5
1 Delivery based purchase of Purchaser 0.1 Nil
units of an equity oriented
fund entered into in a
recognized stock exchange
2 Delivery based sale of units of Seller 0.1 0.001
an equity oriented fund
entered into in a recognized
stock exchange

3 Sale of futures in securities Seller 0.017 0.01
4 Sale of units of EOF to MF Seller 0.25 0.001


194-IA- TDS on transfer of certain
immovable property
 Itis proposed to provide tds @1% by
purchaser if the value of property
exceeds Rs. 50.00 lacs.
 W.e.f.01.06.2013


Chapter XII-DA-DDT on buy back of unlisted
shares of a company Sec-115QA to 115QC
 If a company buy back its own unlisted shares at a
consideration which is more than the amount received
by the company at the time of issue of shares, then
company will deduct DDT @20% of the distributed
income to the shareholders.
 The income received by the shareholders is exempt
from tax in the hand of shareholders.
 w.e.f.01.06.2013


Sec-43CA- Computation of income on transfer of
immovable property held as stock in trade
 Where there is a transfer of an assets(other than capital
assets) being land or building held as stock in trade and
consideration is less than stamp duty value, then
consideration shall be taken as stamp duty value ( 50C
brought in case of stock in trade).
 Where there is a difference between date of transfer of
an agreement and date of registration of transfer. The
SDV shall be taken of the date of transfer of an
agreement where the consideration or part thereof has
been received on or before the date of agreement other
than in cash.
 w.e.f 01.04.2014


 Allahabad high court in case of Kan
Constructions, latest Delhi High Court
order in Discovery Estates case
(18.02.2013 order) hold that section
50C being limitedly applicable to
capital gains assessment cannot apply
to assessee holding land/building as
trader (stock in trade) and assessed
for the same under business head.

Sec 56(2)(vii)-taxability of immovable property
received for inadequate consideration
 Where an individual or HUF purchases an immovable
property for a consideration which is less than SDV,
then difference will be assessed as income from other
source.
 Where there is a difference between date of transfer of
an agreement and date of registration of transfer. The
SDV shall be taken of the date of transfer of an
agreement where the consideration or part thereof has
been received on or before the date of agreement other
than in cash.
 w.e.f 01.04.2014


 Delhi High Court in case of
Khoobsurant Resorts and P&h High
court Chandni Bhuchar where it was
held that on basis of deeming rate
given under section 50C, purchaser
cannot be straightway assessed for
differential amount being
unexplained/undisclosed income.


Chapter X-A- Section 144BA
 GAAR will come effect from
01.04.2016.


Sec 115R- Rationalization of tax on distributed income by
mutual fund, w.e.f.01.06.2013

S.no Particulars Existing rate Proposed rate
. of DDT in of DDT in
percnet percent
1 Distribution of income by a 12.5 or 25 25
fund other than equity depending upon
oriented fund to an nature of fund
individual or HUF
2 In case of infrastructure 12.5 or 25 5
debt fund set up by NBFC, depending upon
on distribution of income to nature of fund
non resident as on payment
of interest in case of loan
from NR is 5%


Sec-2(14)-Change in the defination of capital
assets
 The Section 2(14)(iii)(b) has been amended to provide that the
land situated in any area within the distance, measured
aerially(shortest aerial distance),
 I) not being more than two kilometers, from the local limits of any
municipality or cantonment board referred to in item(a) and which
has a population of more then ten thousand but not exceeding one
lakh or
 II) not being more than 6 kilometers from the local limits of any
municipality or cantonment board referred to in item a and which
has a population of more than 1 lakh but not exceeding 10 lakh or
 III) not being more than 8 kilometers from the local limits of any
municipality or cantonment board referred to in item (a) and which
has a population more than 10 lakh
 Shall form part of capital assets
 W.e.f 01.04.2014

Sec 10(10D)-Taxability of key
man insurance policies
 This section provides that if any amount is received from life
insurance policy, it is exempt from tax except key man insurance
policy.
 Generally, the key man insurance policy is assigned to the person
before his maturity and he pays certain premium and claims tax
exemption on the ground that it is not a key man insurance policy.
It is so held by courts also.
 To club this loopholes, it is provided that a keyman insurance policy
which has been assigned to any person during his term with or
without consideration, it shall continue to be treated as a Keyman
Insurance Policy.
 W.e.f. 01.04.2014


Sec 80GGB and 80GGC-Contribution to political
party or electoral trust
 The contribution made in cash will be
disallowed

 W.e.f. 01.04.2014


Sec 179 and 167C- Meaning of
Tax Due
 Tax due means for the purpose of this
definition is tax due includes penalty,
interest or any other sum payable
under the act.

 w.e.f.01.06.2013


80JJAA- Deduction for additional
wages
 This section provides for deduction of an
amount equal to 30% of the additional wages
paid to the new regular workman employed in
industrial undertaking engaged in production or
article or things.

 Now it is changed that it will be provided to
Indian company engaged in manufacture of
goods in factory.
 W.e.f. 01.04.2014


Sec 90 & 90A-Tax Residency certificate

 It is clarifactory in nature providing that
submission of tax residency certificate is
necessary but not an essential condition for
claiming benefits under the DTAA.

 W.e.f.01.04.2013


Sec 132B- Application of seized
assets
 The section provides for adjustment of seized
assets under section 132B against existing
liability under income tax Act, Wealth tax act
and interest tax act etc.

 The existing liability is clarified to include all
outstanding tax/interest/penalty and not
advance tax liability only.

 w.e.f.01.06.2013

Sec 139(9)-Extending the scope of defective
return
 Thescope of defective return has
been enhanced to include the return
where tax together with interest is not
paid u/s 140A along with return.

 W.e.f. 01.06.2013


Sec 142(2A)-Direction for special audit

 The section provides power to AO to give direction of audit having
regard to the nature and complexity of accounts and interest of
revenue.
 The list of causes for audit has been expanded to include
– Nature and complexity of accounts
– Volume of accounts
– Doubts about the correctness of accounts
– Multicipility of transaction in accounts
– Specialized nature of business activity of assessee
– Interest of revenue

– W.E.F. 01.06.2013

MANOJ KUMAR MITTAL
& CO.

Sec 271FA- Penalty for non filling of Annual information
return

 If a person fails to furnish AIR within the time
prescribed under that section then AO may direct the
assessee to pay penalty at Rs. 100 per day for the
default continues.
 It is provided further, that if the return is not filed within
the period prescribed in notice u/s 285BA(5), then
assessee shall pay penalty under section 271FA @ 500
per day from day immediately following the day on
which the time specified in such notice for furnishing the
return expires.
 W.e.f 01.04.2014

MANOJ KUMAR MITTAL &
CO.

Sec 14A and 14B- Annexure less
return under wealth Tax Act
 Theamendments is provided to
enable filling e wealth tax return
without annexure.

 W.e.f. 01.04.2013


 THANKS
 From Manoj Kumar Mittal & Co.

 Chartered Accountants

 305, Dakha Chamber, 2068/38

 Nai Wala. Karol Bagh, New Delhi-110005

 Ph: 011-28756284, 41557022, 9810764620


SKS Associates – Law Firm
SNAPSHOT – BUDGET 2013 – INDIRECT TAX

Customs – Non Tariff
Protection provided to designs and geographical indications along with patents,
trademarks and copyrights
Allow provisional attachment of property belonging to any person to whom notice
served for cases of collusion; or wilful misstatement; or suppression of facts,
Advance Ruling available for any new business of import or export by an existing
importer or exporter.
Allow electronic filing of import / export manifest and to insert a proviso that where
this is not feasible, the Commissioner of Customs may allow the delivery of such
manifest in any other manner.
Where imported goods are not immediately entered for home consumption goods it is
permitted to be stored for a period not exceeding thirty days in a public warehouse
and the private warehouse with a further possible extension of 30 days
Certain specified offences made non-bailable
Vacation of Stay order where appeal is not disposed of within the total period of 365
days from the date of order
Department allowed to recover money due to the Central Government from any other
person other than the defaulter after giving such other person a notice in writing
Duty deferment under Section 143A when any material is imported under an import
licence belonging to the category of Advance Licence is withdrawn
No duty liability on any sample of goods which is consumed or destroyed during the
course of testing or examination
Agents made equally liable for any act or omission when the agent is expressly or
impliedly authorised by the owner, importer or exporter of any goods

(Office: 431/D-22, II Floor, Chattarpur Hills, New Delhi 110074)

Excise-
Excise- Non tariff
Duty evasion limit enhanced from thirty lakh rupees to fifty lakh for offences
punishable with a term of imprisonment extending to seven years
Offences relating to excisable goods where the duty leviable exceeds fifty lakh rupees
and the person has committed evasion of payment of duty or contravened any of the
provisions in relation to credit of any duty allowed has been made cognizable and non
bailable.
Department allowed to recover money due to the Central Government from any other
person other than the defaulter after giving such other person a notice in writing
Service of a statement containing details of duty not paid, short levied or erroneously
refunded shall be deemed to be a service of notice
Provisional attachment provisions amended to include offences involving extended
period of limitation also.
Advance Ruling application allowed for credit of excise duty paid or deemed to have
been paid. The scope of admissibility has been expanded to include credit of service
tax paid or deemed to have been paid on input services.
Speed post with proof of delivery or courier approved by the Central Board of Excise
& Customs included as additional modes of delivery.

Service tax
'Approved vocational education course' provided in section 65B to include State
Council of Vocational Training' (SCVT) and excluding National Skill Development
Corporation since it is not an affiliating body
Definition of "process amounting to manufacture or production of goods", amended
to include processes on which duties of excise are leviable under the Medicinal and
Toilet Preparations (Excise Duties) Act, 1955
Testing activities directly related to production of any agricultural produce like soil
testing, animal feed testing, testing of samples from plants or animals, for pests and
disease causing microbes will be covered by the negative list;
If a show cause notice issued for longer period of limitation is not found sustainable
by an appellate authority or tribunal or court, the same will be deemed to be a notice
issued for a period of eighteen months;
Maximum penalty for failure to obtain registration has been made ten thousand
rupees only
Nee Section 78A introduced, to make provision for imposition of penalty on director,
manager, secretary or other officer of the company, who is in any manner knowingly
concerned with specified contraventions
Tribunal can admit an appeal or permit the filing of memorandum of cross objections
after the expiry of the relevant period;


Section 89 is being rearranged and amended to specifically provide that in the case
of failure to pay service tax collected, within six months, for amount exceeding fifty
lakh rupees shall be punishable with an imprisonment for a term which may extend
upto seven years but not less than six months
Section 91 is being introduced to provide for power to arrest by an authorized officer
not below the rank of Superintendent of Central Excise particularly for nonpayment of
collected service tax;
Abatement in case of 'construction of complex, building or civil structure, or a part
thereof..” where the carpet area of residential unit exceeds 2000 square feet or the
amount charged is more than One Crore Rupees, taxable portion for service tax
increased to 30%. This is effective 01 March 2013.
Exemption to Charitable organizations, providing service towards any other object of
general public utility limited to threshold exemption limit of 10 lacs only (earlier 25
Lacs) effective 01 April 2013.
All restaurants having air-conditioning or central air heating in any part of the
establishment at any time during the year brought under service tax effective 01 April
2013.
Exemption to Services provided by an educational institution by way of renting of
immovable property removed.
Exemption to Temporary transfer or permitting the use or enjoyment of a copyright
relating to cinematographic films limited to exhibition of cinematograph films in a
cinema hall or a cinema theatre.
Exemption to Services by way of vehicle parking to general public removed.
Exemption to Services provided to Government, a local authority or a governmental
authority, by way of repair or maintenance of aircraft removed.
One time amnesty from imposition of interest and penalty and prosecution, provided
to the stop filers, non-filers or non-registrants or service providers (who have not
disclosed true liability in the returns filed by them during the period from October
2007 to December 2012) and who pay atleast 50% of the "tax dues" by 31.12.2013 and
the remaining part by 30 June 2014.


SKS Associates - Law Firm
SNAPSHOT - BUDGET 2013 - INDIRECT TAX

Customs – Tariff Related Changes

I. AGRICULTURE/AGRO PROCESSING/PLANTATION SECTOR:

1) Basic customs duty on dehulled oat grain is being reduced from 30% to 15%.
2) Basic customs duty on hazel nuts is being reduced from 30% to 10%.
3) Export duty of 10% on de-oiled rice bran oil cake is being withdrawn.

II. AUTOMOBILES:

1) Basic customs duty on new passenger cars and other motor vehicles (high end cars) with
CIF value more than US$ 40,000 and/or engine capacity exceeding 3000cc for petrol run
vehicles and exceeding 2500 cc for diesel run vehicles is being increased from 75% to
100%.
2) Basic customs duty on motor cycle with engine capacity of 800cc or more is being
increased from 60% to 75%.

III. METALS:

1) Export duty is being levied on ilmenite unprocessed at 10% and on ilmenite, upgraded at
5%.
2) Export duty is being levied on bauxite at 10%.
3) Basic customs duty is being reduced from 10% to 5% on stainless steel wire cloth stripe
and from 7.5% to 5% on wash coat for use in the manufacture of catalytic convertors and
their parts.
4) Full exemption from export duty is being provided to galvanized steel sheets falling under
certain sub-headings, retrospectively w.e.f. 01.03.2011.

IV. PRECIOUS METALS:

1) Basic customs duty is being reduced from 10% to 2% on pre-forms of precious and semi-
precious stones.


V. CAPITAL GOODS/INFRASTRUCTURE:

1) Basic customs duty on steam coal is being increased from Nil to 2% and CVD from 1% to
2%.
2) Basic customs duty on bituminous coal is being reduced from 5% to 2% and CVD from 6%
to 2%.
3) Basic customs duty is being reduced from 7.5% to 5% on 20 specified machinery for use
in leather and footwear industry.

VI. AIRCRAFTS & SHIPS:

1) Basic Customs Duty on yachts and motor boats is being increased from 10% to 25%.
2) Time limit for consumption of imported goods by ship repair units is being extended from
3 months to 1 year.
3) Time period for consumption/installation of parts and testing equipments imported for
maintenance, repair and overhaul (MRO) of aircrafts by units engaged in such activities
is being extended from 3 months to 1 year.
4) Presently, the basic customs duty exemption is available to parts and testing equipments
for maintenance, repair and overhaul of aircrafts. This exemption is now being extended
to parts and testing equipments for maintenance, repair and overhaul of aircrafts and
parts thereof.

VII. ENVIRONMENT PROTECTION:

1) Full exemption from basic customs duty is being provided to lithium ion automotive
battery for manufacture of lithium ion battery packs for supply to the manufacturers of
hybrid and electric vehicles.
2) Time period of exemption (Nil BCD, CVD of 6% and Nil SAD) for the specified parts of
electric and hybrid vehicles is being extended by 2 more years up to 31st March, 2015.

VIII. TEXTILES:

1) Basic customs duty on raw silk (not thrown), of all grades is being increased from 5% to
15%.
2) Basic customs duty is being reduced from 7.5% to 5% on textile machinery & parts.

IX. ELECTRONICS/HARDWARE:

1) Basic customs duty on Set Top Boxes for TV is being increased from 5% to 10%.

X. MISCELLANEOUS:

1) Full exemption from basic customs duty and additional customs duty is being provided to
trophy imported by National Sports Federation recognized by the Department of Sports
and Youth Affairs or any Sports Body registered under Societies Registration Act, in
connection with any international tournament held in India.
2) Withdrawal of exemption from education cess and secondary & higher education cess on
aircraft and aircraft parts, soyabean oil, olive oil etc.


SKS Associates - Law Firm
SNAPSHOT - BUDGET 2013 - INDIRECT TAX

Excise – Tariff Related Changes

I. AGRICULTURE/AGRO PROCESSING/PLANTATION SECTOR:

1) Full exemption from excise duty is being provided on tapioca sago (sabudana) and
tapioca starch manufactured and consumed captively in the manufacture of tapioca
sago.
2) Full exemption from excise duty is being provided on henna powder or paste, not mixed
with any other ingredient.

II. AUTOMOBILES:

1) Excise duty on SUVs is being increased from 27% to 30%.
2) Excise duty on truck chassis (8706 00 42) is being reduced from 14% to 13%.
3) Sports Utility Vehicles registered solely for use as taxis will not suffer additional excise
duty consequent to the increase in excise duty on SUVs from 27% to 30%. Taxi refund in
respect of SUVs is being adjusted accordingly.

METALS:
III. METALS:

1) Excise duty of 4% is being levied on silver manufactured from zinc/lead smelting.
2) Compounded levy on stainless steel "Patta Patti" is being increased from Rs 30,000 per
machine per month to Rs 40,000 per machine per month.
3) It is being clarified that the item "trimmed or untrimmed sheets or circles of copper
intended for use in the manufacture of handicrafts or utensils" presently leviable to
excise duty at Rs. 3500 per MT includes copper and copper alloys including brass.

SHIPS:
IV. AIRCRAFTS & SHIPS:

1) Full exemption from excise duty is being provided on ships and other vessels.
Consequently, there will be no CVD on these ships and vessels when imported.


V. TEXTILES:

1) Full exemption from excise duty is being provided on hand made carpets and carpets and
other textile floor coverings of coir or jute, whether or not handmade.
2) 'Zero excise duty route', as existed prior to Budget 2011-12, is being restored in respect
of branded readymade garments and made ups. In the case of cotton there will be zero
duty at the fibre stage and, in the case of spun yarn of man made fibres, there will be a
duty of 12% at the fibre stage. The 'Zero excise duty route' will be in addition to the
CENVAT route now available.

VI. HEALTH:

1) Branded Ayurvedic medicaments and medicaments of Unani, Siddha, Homeopathic or
bio-chemic system are being brought under MRP based assessment with abatement of
35% from MRP.

VII. ELECTRONICS/HARDWARE:

1) Excise duty on mobile phones of retail sale price exceeding Rs 2000/- is being increased
from 1% to 6%.

VIII. MISCELLANEOUS:

1) Excise duty on cigarettes is being increased by about 18% on all cigarettes except
cigarettes of length not exceeding 65 mm. Cigars and cigarillos duty is also being
similarly raised.
2) Excise duty on marble tiles and slabs is being increased from Rs 30 per sq. mtr to Rs 60
per sq. mtr.
2) Full exemption from excise duty is being provided to intermediate goods manufactured
and consumed captively by exempted units under Area Based Exemption Scheme in
Himachal Pradesh and Uttarakhand.


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