01/03/2015
Top 10 Budget changes in Indirect Taxes you must know:
1. Excise duty rate increased from 12.36% to 12.5%. Education cess (‘EC’) and Secondary and Higher Education Cess (‘SHEC’) eliminated on Excise Duty. This amendment is effective from 01 March 2015;
2. Effective rate of Service-tax to be increased from 12.36% to 14%. EC and SHEC on Service tax to be eliminated;
3. Proposal to levy ‘Swachh Bharat cess’ at a rate of 2% on the value of all or certain services. Where the cess is levied, the effective Service tax rate would be 16% (i.e. 14% as Service tax and 2% as Swachh Bharat cess). This amendment would be effective from a date to be notified;
4. No change in peak rate of Basic Customs duty. Further, EC and SHEC on Customs duty to continue;
5. Any service provided by Government to a business entity proposed to be taxed under Service tax law (currently only specified support services were subject to service tax). Further, the liability to deposit Service tax on such services to be on the service recipient (under the reverse charge mechanism). This amendment would be effective from a date to be notified;
6. Services in the nature of ‘manpower supply service’ and ‘security services’ when provided by an individual, HUF, or partnership firm to a body corporate, to be brought under full reverse charge (currently 75% of the tax is required to be deposited by the service recipient). This change would be effective from 01 April 2015;
7. Service tax made applicable on manufacture, production (including intermediate manufacture/ processing by job-worker) of alcoholic liquor for human consumption. This amendment would be effective from a date to be notified;
8. Admission to entertainment events or access to amusement facility proposed to be brought under the Service tax net. However, exemption proposed for admission to specified events. This change would be effective from a date to be notified;
9. For service provided under aggregator model (e.g., UBER taxi), the liability to pay Service tax to be on the aggregator or his representative in India. This change to be effective from 01 March 2015.
10. Time limit for availing CENVAT credit on inputs and input services increased from 6 months to to 1 year from the date of relevant documents. This change is effective from 01 March 2015.
Presented by Smart Tax Planners..........
