Central Excise- e- payments and e-filing will increase from new Financial Year.

[C.A. DEV KUMAR KOTHARI]

New Notification:

By exercising the powers conferred by section 37 of the Central Excise Act, 1944, the Central Government has vide recent notification No. 04/2010-Central Excise (N.T.) issued at Head Quarters at New Delhi, on 19th February, 2010 increased the ambit of electronic payment and e-filing of returns of Central Excise amending the Rule no. 8 and 12 of  the Central Excise Rules, 2002 w.e.f. 01.04.2010.The notification will be applicable on all India basis.

The operating part of amendment of Rules reads as follows:

In third proviso to Rule 8 (1):

New words, after substitution will  read as follows:

"total duty of rupees ten lakh or more including the amount of duty paid by utilization of CENVAT credit in the preceding financial year".

The exisiting words are as follows:

"duty of fifty lakhs rupees or more, other than the amount of duty paid by utilization of CENVAT credit, in the preceding financial year," 

Rule 12 (1) :

New proviso to be inserted w.e.f. 01.04.2010 between existing 2^nd and 3^rd proviso will read as follows:

"Provided also that where an assessee has paid total duty of rupees ten lakh or more including the amount of duty paid by utilization of CENVAT credit in the preceding financial year, he shall file the monthly or quarterly return, as the case may be, electronically:"

Analysis:  

Analysis of existing and amended provisos and their impact is tabulated below with necessary highlights: 

Proviso effective till 31.03.2010	Proviso w.e.f. 01.04.2010	Actual impact w.e.f. 01.04.2010
Provided also that an assessee, who has paid duty of fifty lakhs rupees or more, other than the amount of duty paid by utilization of CENVAT credit, in the preceding financial year, shall thereafter, deposit the duty electronically through internet banking. [Third proviso to Rule 8(1)]	Provided also that an assessee, who has paid total duty of rupees ten lakh or more including the amount of duty paid by utilization of CENVAT credit in the preceding financial year shall thereafter, deposit the duty electronically through internet banking. [Amended third proviso to Rule 8(1)]	Any assessee who has paid total duty of rupees ten lakh or more including duty paid by utilizing CENVAT credit in the preceding financial year will have to compulsorily pay excise duty by internet banking  w.e.f. 01.04.2010. At present (till 31.03.2010) the ceiling is Rs. 50 lacs excluding duty paid by CENVAT.
-----	Provided also that where an assessee has paid total duty of rupees ten lakh or more including the amount of duty paid by utilization of CENVAT credit in the preceding financial year, he shall file the monthly or quarterly return, as the case may be, electronically. [New proviso to Rule 12(1) between existing second and third proviso]	W.e.f. 01.04.2010. assesses required to pay duty through net banking will also have to file their   monthly or quarterly returns electronically mandatorily.

Effective date:

The effective date is 01.04.2010. This means that it is intended to apply the new conditions, limit, and procedures from the new financial year beginning from 01.04.2010. Though the amended provision are procedural and come into force from 01.04.2010, it appears that they are not applicable for the Financial year 2009-10, therefore, in respect of payments which one may make or return which one may file for any period up to 31.03.2010, though on or after 01.04.2010 can pay tax otherwise than e-payment and can file returns otherwise than e-filingi if allowed as per present limits and applicable Rules.

A specific clarification in this regard is desirable to avoid confusion in mind of tax payers, bankers and concerned authorities.

The above limit is only for excise duty:

The above limit is only for excise duty and not inclusive of service tax. For compulsory e-payment of service tax we find an independent limit of Rs.50 lakh as provided in proviso to Rule 6(2) of the Service Tax Rules 1994. The relevant part of which readsa s follows:

           Provided that the assessee, who has paid service tax of rupees fifty lakh or above in the preceding financial year or has already paid service tax of rupees fifty lakh in the current financial year, shall deposit the service tax liable to be paid by him electronically, through internet banking.

(**Inserted vide Notification No. 27/2006 dated 21/9/2006)

We find that in case of service tax even if a service provider has already paid Rs.50 lakh or more in nay financial year, then he is required to pay by way of e-payment for that current year also. In case of this proviso there is no clarity about groos or net of CENVAT credit. However, considering the fact that e-payment means actual payment and at present in case of Central Excise Rules also the requirement is linked to net payment (other than CENVAT), therefore, it can be considered that in case of service tax requirement is of net payment that is other than CENVAT credit.

Limits may be combined:

For many assesses Central excise and service tax both are payable. In such cases limit of Rs. Ten lakh may be combined for Central Excise, Service Tax and on basis of payment by all units of manufacturing and service units of the same assessee instead of separate limit for each such unit.