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FINANCE ILL 2012

FINANCE ILL 2012. CA CHANDRASHEKHAR V. CHITALE Chairman, Direct Taxation Committee. Women Entrepreneurs’ committee. FINANCE BILL, 2012. INCOME TAX GST STT SERVICE TAX ECISE DUTY CUSTOMS. INCOME AX. Vodafone

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FINANCE ILL 2012

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  1. FINANCE ILL 2012 CA CHANDRASHEKHAR V. CHITALE Chairman, Direct Taxation Committee

  2. Women Entrepreneurs’ committee CA CHANDRASHEKHAR V. CHITALE

  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 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

  20. Thank you! CA CHANDRASHEKHAR V. CHITALE

  21. any questions? CA CHANDRASHEKHAR V. CHITALE

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