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Finance Bill 2009

Finance Bill 2009. Service Tax Provisions at a Glance. System of Applicability. Changes affected from Retrospective Effects . Exemption to Goods Transport Agency Services (from the date of enactment of bill). notification No. 1/2009. Now Applicable from 1 st Jan 2005

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Finance Bill 2009

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  1. Finance Bill 2009 • Service Tax Provisions at a Glance by CA. Atul Kumar Gupta

  2. System of Applicability by CA. Atul Kumar Gupta

  3. Changes affected from Retrospective Effects • Exemption to Goods Transport Agency Services (from the date of enactment of bill). notification No. 1/2009. • Now Applicable from 1st Jan 2005 • Information Technology Services • Clause V and VI-change of word acquired to provided (from the date of Notification) by CA. Atul Kumar Gupta

  4. Changes applicable from 7th July • Works Contract Services Composition Scheme • Composite Contract • Two Separate Contract • Free Supply • Contract entered prior to 7th July. by CA. Atul Kumar Gupta

  5. Changes applicable from 7th July • Rule 3(5B) of the CENVAT Credit Rules 2004 for reversal of CENVAT credit claimed on Input/Capital Goods write off before “put to use”. • Rule 6(3) of the CENVAT Credit Rules 2004 for payment of credit on exempted activity @6% on exempted activity (if not maintaining separate books of accounts) by CA. Atul Kumar Gupta

  6. Changes applicable from 7th July • Private Bus Operator (Not. 20/2009) • Contract carriage permits was taxable under tour operator services. Whereas no tax was there on the “stage Carriage permits”. • Sale and Purchase of Foreign Exchange by Scheduled Banks (Not. 19/2009). Scheduled Bank as referred in schedule II of the RBI Act. • Club or association membership fee on certain associations of FIEO. (Not. 16/2009). Valid upto 31st March 2010. • Service become taxable provided/received in CSI/EEZ related to certain installation, structure, vessels. (Not. 22/2009). Presently was taxable for designated areas. by CA. Atul Kumar Gupta

  7. Changes applicable from 7th July by CA. Atul Kumar Gupta

  8. Exempted Service to Exporter of Goods • Transport of goods by road, from the place of removal to any ICD, CFS, port or airport; or from any CFS or ICD to the port or airport; and • Services provided by a foreign commission agent for procuring orders. Maximum 10% of the FOB. • More than that no exemption, no refund. by CA. Atul Kumar Gupta

  9. Exempted Service to Exporter of Goods..Conditions.. • registered with an export promotion council. • having Import-Export Code Number • registered with the Department under section 69 of the Finance Act, 1994 • inform the jurisdictional AC/DC in Form EXP – 1 before availing such exemption for the first time • exporter should preserve the originals of relevant document by CA. Atul Kumar Gupta

  10. Exempted Service to Exporter of Goods..Conditions.. • should self-certify on the face of Documents for the receipt of services and their use in export of goods. • required to file a half-yearly return in form EXP – 2 within 15 days from the end of every half-year. by CA. Atul Kumar Gupta

  11. Exempted Service to Exporter of Goods..Conditions.. • following documents should be enclosed with the return: • Self-attested copies of shipping bill/bill of exports pertaining to the exports in respect of which the exemption has been claimed. • Self-attested copies of bill of lading/airway bill pertaining to above exports . • The original invoice/bill/challan issued by the provider of taxable service in the name of the exporter. by CA. Atul Kumar Gupta

  12. Exempted Service to Exporter of Goods..Conditions.. • The said original invoice/bill/challan should be self-certified by the exporter. • Even in case an exporter does not avail any benefit under this notification during a half year, he should file a Nil return by CA. Atul Kumar Gupta

  13. Refund to Exporter of Goods • Replaces the Notification No. 41/2007 • exporters of goods who are registered with the Export Promotion Councils exporters and having import export code • have not claimed CENVAT credit on such service tax paid. • claim of refund which is for Rs.500 or more by CA. Atul Kumar Gupta

  14. Refund ..Procedure • not a manufacturer-exporter and is not registered with the department, shall first file a declaration in Form A-2 for obtaining a service tax code. • The refund claim should be filed in Form A-1 within one year from the date of export of goods. by CA. Atul Kumar Gupta

  15. Documents to attach-refund • Self-attested copies of shipping bill/bill of exports • Self-attested copies of bill of lading/airway bill. • The original invoice/bill/challan issued by the provider of taxable service • in case the amount of total claim is upto 0.25% of the total declared fob value of the export under the claim, such certificate will be issued by the exporter or by an authorized person by CA. Atul Kumar Gupta

  16. Documents to attach-refund • in case the amount exceeds the above limit, such certification shall be done by the Chartered Accountant who audits the annual accounts in Co.Act or Income Tax Act. • Deptt. need to intimate deficiency in five days and grant refund in 30 days. by CA. Atul Kumar Gupta

  17. Changes Applicable from Enactment of Finance Bill 2009 • Power to First Appeal of Order Issued by Authorities Lower than Commissioner. • Amendment in Section 94 to get sufficient power for GST. by CA. Atul Kumar Gupta

  18. Changes will become applicable from date of Notification after enactment of Finance Act 2009 • Transport of Goods through Rail (amended Services) • transportation of goods in containers by rail, by other than Government railways is taxable under section 65(105)(zzzp) since 2006 • New Services introduced • Transport of Coastal Goods through Inland water & National Waterways • Legal Consultancy Service • Cosmetic and Plastic Surgery service by CA. Atul Kumar Gupta

  19. Legal Advisory Services • Advisory In any Branch of Law • Separate Clause, hence no effect on CA. • By Business entity to another Business entity. • No Tax if rendered by individual and vice se versa. • No tax for appearance before any court of law/statutory authorities. by CA. Atul Kumar Gupta

  20. Cosmetic or Plastic Surgery Services • An extension to Beauty Treatment services. • Activity related to cosmetic surgery of face, nose, eyelid, ears, fat removal, brow lift, cheek, forehead, lip, dental and facial covered except done for reconstructive surgery due to any congenital defect, abnormalities, disease, injury will not be covered. by CA. Atul Kumar Gupta

  21. Changes will become applicable from date of Notification after enactment of Finance Act 2009 • Amendment in existing Services • Modification in Business Auxiliary Service (BAS) [section 65(19)].. • Job Work classify as manufacturing and excisibility. • Stock-broker Service [section 65(105)(a)] • Information Technology Services. by CA. Atul Kumar Gupta

  22. Opportunities for CAs • Section 14AA of the Central Excise Provides for Special Audit was earlier can be performed only by Cost Accountants. Now CA can also do. • Certification of refund claim of Service Tax beyond 0.25% of the FOB value declared by the exporter of goods. • New EXP-2 Return for Exporter to claim exemption. by CA. Atul Kumar Gupta

  23. Thank You CA. Atul Kumar Gupta Partner: APRA & Associates Chartered Accountants 9810103611 atul@servicetax.net www.servicetax.net by CA. Atul Kumar Gupta

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