New Indirect Tax Updates/Judgements

A).  Service Tax

1). Services provided by Member’s Club to its members not liable to service tax (Ranchi Club Limited v CCE & ST (2012) (26 STR 401) (Jharkhand High Court))

2). Eligibility of CENVAT credit on inputs used in construction of warehouse CCE v Sai Sahmita Storages Private Limited (2012) (34 STT 306) (Andhra Pradesh High Court)

3). Rule 5 refunds can be claimed on CENVAT credit availed in prior periods CCE v Chamundi Textiles Silk Mills Limited (2012) (26 STR 498) (Bangalore Tribunal)

4). Services consumed outside the SEZ are not eligible for service tax ex-emption DHL Lemuir Logistics Private Limited v CCE (2012-TIOL-705) (Mumbai Tribunal)

5). Levy of education cess and secondary and higher education cess to continue. (Circular No DOF No.334/1/2012-TRU dated June 29, 2012)

B). Customs

1).   High sea sales agreement to be executed on Rs. 100 stamp paper Commissioner of customs (Imports), ACC, Mumbai, Facility Notice No. 18/2012, dated May 22, 2012

C). Central Excise

1).   No requirement to reverse CENVAT credit when capital goods are ex-ported, without payment of duty, under bond, for repairs CCE, Indore v Grasim India Limited – 2012 (279-ELT-440) (Delhi Tribunal)

E-payment of customs duty made mandatory

Vide Circular No. 24/2012 – Customs, making of e-payment of duty has been made mandatory for importers registered under Accredited Clients Programme and importers paying customs duty of one lakh rupees or more per Bill of Entry with effect from 17.09.2012.

Recent Indirect Tax Updates

Plz click on the link below to view recent updates on service tax refund and various state VAT regulations.

Recent Updates on Service Tax and Various State VAT Regulations

Service tax refund should be available on CFA and logistics services in light of the following recent judgement

      Cenvat - GTA Service - Place of removal extends up to port of shipment when goods are to be delivered onboard vessel - If that is so, cost of transportation will become part of value of goods and whatever service have been availed up to that point would become an input service: CESTAT (2012-TIOL-1149-CESTAT-MUM).

Procedural Changes Announced related to Foreign Trade Policy

Ø  Export benefits under the FTP extended to post, courier or e-commerce exports

Exports from Delhi and Mumbai through post, courier or e-Commerce shall be entitled for export benefits  under the FTP. 

Ø  e-BRC initiative for electronic transmission of information on foreign exchange realization from banks to the DGFT

Under the e-BRC initiative, information on foreign exchange realization would be electronically transmitted to the DGFT on daily basis. This would obviate the requirement of obtaining Bank Export and Realization Certificate from banks and is envisaged to facilitate early settlement and release of FTP benefits.

Changes in Focus Market Schemes

Ø  Focus Market Scheme (FMS)

Products exported to specified countries are eligible for incentive under Focus Market Scheme. The benefit is now extended to seven new countries viz. Algeria, Aruba, Austria, Antilles, Cambodia, Myanmar, Netherland and Ukraine. 

Ø  Special Focus Market Scheme (SFMS)

Products exported to specified countries are eligible for incentives under SFMS. This benefit is now extended to seven new countries viz. Belize, Chile, El Salvador, Guatemala, Honduras, Morocco and Uruguay. 

Ø  Market Linked Focus Product Scheme (MLFPS)

MLFPS provides benefits on export of notified products to specified countries. This benefit has been extended to 46 new products exported to 12 new countries. Further, benefit under MLFPS provided to export of specified textile products to the United States of America and the European Union has been extended up to 31 March 2013. 

Ø  Focus Product Scheme (FPS)

Export of specified products is eligible for incentives under FPS. This benefit has been extended to 110  

new products.