3. FINANCE BILL, 2012
• INCOME TAX
• GST
• STT
• SERVICE TAX
• ECISE DUTY
• CUSTOMS
CA CHANDRASHEKHAR V. CHITALE
4. 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
5. 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
6. 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
7. 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
8. 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
9. 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
10. 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
11. 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
12. 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
13. 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
14. 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
15. 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
16. 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
17. 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
18. 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
19. Issues for Post Budget
Memorandum
Are welcome
CA CHANDRASHEKHAR V. CHITALE