Assessment procedures - Indirect tax - Budget 2015

[CS Swati Dodhi]

Customs duty

Policy changes

The following changes will be effective on enactment of the Finance Bill:

Penal provisions in cases not involving fraud or collusion or willful misrepresentation of facts or contravention of any provision have been proposed to be rationalized wherein:

► No penalty to be imposed in case the duty and interest are paid within 30 days from the date of receipt of notice.

► Penal provisions in cases involving fraud or collusion or willful misrepresentation of facts or contravention of any provision have been proposed to be rationalized wherein:

► Reduced penalty of 15% imposed in case the duty, interest and penalty are paid within 30 days from the date of receipt of notice.

► Proceedings pending at adjudication level to be deemed to be concluded on payment of applicable customs duty, interest and penalty within 30 days of enactment of the Finance Bill.

► Maximum penalty on improper importation and/or exportation of goods under Section 112 and Section 114 reduced from 100% of duty amount to 10% of duty amount.

Excise duty

Policy changes

The following changes will be effective from the date of enactment of Finance Bill

► Specific rules to be introduced for recovery of excise duty where the non-payment or short payment of duty is reflected in the periodic returns.

► Penalty provisions in cases not involving fraud or collusion or willful misrepresentation of facts or contravention of any provision have been proposed to be rationalized wherein penalty to be imposed would be:

► Not exceeding 10% of the duty so determined or ₹ 5000, whichever is higher;

► Nil if duty and interest is paid either before or within 30 days of issuance of show cause notice;

► 25% of penalty payable if duty and interest paid within 30 days of the date of communication of order.

► Penalty provisions in cases involving fraud or collusion or willful misrepresentation of facts or contravention of any provision have been proposed to be rationalized wherein penalty to be imposed would be:

► Equivalent to the duty determined;

► 50% of the duty determined where the details relating to transactions are recorded in the specified record for the period beginning with 8 April 2011 and up to the date of enactment of the Finance Bill;

► 15% of duty determined, if duty and interest paid within 30 days of communication of show cause notice;

► 25% of duty determined, if duty and interest paid within 30 days of communication of order.

► Proceedings in the pending show cause notices shall be eligible for closure if following payments are made within 30 days of the enactment of the Finance Bill

► In cases involving fraud or collusion or willful misrepresentation of facts or contravention of any provisions - payment of duty, interest and penalty at the rate of 15% of the duty;

► In cases not involving fraud, collusion, willful mis-statement, etc. - payment of duty and interest.

► If show cause notices are adjudicated after the enactment of the Finance Bill, then option to pay reduced penalty within 30 days of communication of the adjudication order.

Service tax

Policy changes

The following key changes will be effective from the date of enactment of Finance Bill:

Any service tax disclosed in the return but not paid, proposed to be recovered without serving show cause notice.

Penal provisions in cases not involving fraud or collusion or willful misrepresentation of facts or contravention of any provision have been proposed to be rationalized wherein:

► Penalty amount cannot be more than 10% of service tax amount involved.

► No penalty to be imposed in case the service tax and interest are paid within 30 days from the date of service of notice.

► Reduced penalty of 25% in case where the service tax, interest and penalty is paid within 30 days from the date of receipt of original order.

► Reduced penalty of 25% shall also be allowed in case of appellate orders where the amount of service tax demanded has been modified by the appellate authority and the taxpayer pays service tax, interest and penalty within 30 days from the date of receipt of appellate order.

► Penal provisions in cases involving fraud or collusion or willful misrepresentation of facts or contravention of any provision have been proposed to be rationalized wherein.

► Penalty amount shall be 100% of service tax amount involved.

► Reduced penalty of 15% imposed in case the service tax, interest and penalty are paid within 30 days from the date of issuance of notice.

► Reduced penalty of 25% in case where the service tax, interest and penalty is paid within 30 days from the date of receipt of original order.

► Reduced penalty of 25% shall also be allowed in case of appellate orders where the amount of service tax demanded has been modified by the appellate authority and the taxpayer pays service tax, interest and penalty within 30 days from the date of receipt of appellate order.

► It has been proposed that service tax rebate claim appeals against the order of Commissioner (Appeals) are to be filed before the Government.