Categories: Direct TaxGST (Goods and Services Tax)Income TaxIndirect Tax

CORPORATE AND PROFESSIONAL UPDATE

A STEP TOWARDS GST, IN UNION BUDGET 2015

Taking a step towards GST, in Union Budget 2015, Honourable Finance Minister has proposed to abolish Education Cess and Secondary and Higher Education Cess (collectively referred as ‘cess’); in case of Excise Duty w.e.f. 1st March, 2015 and in case of Service Tax w.e.f. a date to be notified after the enactment of Finance Bill, 2015.

This amendment has raised questions regarding fate of cess, majorly, in following cases:

Closing balance of cess as on 28th February, 2015;
Cess in respect of inputs and capital goods received in factory in F.Y. 2014-15 but CENVAT Credit is omitted to be availed;
Cess in respect of input services received in F.Y. 2014-15 but CENVAT Credit is omitted to be availed;
Deferred cess of Capital Goods received in factory in F.Y. 2014-15;
Cess in respect of Capital Goods received in factory prior to F.Y. 2014-15;

Cess in respect of inputs and capital goods received on or after 1st March, 2015; and

Cess in respect of input services availed on or after 1st March, 2015.

To remove difficulties, Central Government has issued Notification No. 12/2015-CE (NT) dated 30th April, 2015 to provide provisions for utilisation of CENVAT Credit of cess for the purpose of payment of Excise Duty in following cases:

Cess paid on inputs or capital goods received in factory on or after 1st March, 2015;
Deferred cess in respect of capital goods received in F.Y. 2014-15;
Cess on input services received on or after 1st March, 2015

Therefore, though Central Government has allowed to utilise CENVAT Credit of cess in three cases mentioned in Para supra; fate of cess in respect of point no. a, b, c, and e is still full of doubts.

Here, it is pertinent to mention that similar doubts will also arise for Service Providers at the time of applicability of new Service Tax rate. Hope to see similar amendment in CENVAT Credit Rules, 2004 parallel with introduction of new rate of Service Tax to remove scope of difficulty as faced by manufacturers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: singh@carajput.com or call at 9555555480

Tags: CENVAT Creditcess paid on capital goodscess paid on input goodsClosing balance of cess as on 28th February 2015Deferred cess in respect of capital goodsinputs and capital goods

11 years ago

Rajput Jain & Associates

Rajput Jain & Associates is a Chartered Accountants firm, with it's headquarter situated at New Delhi (the capital of India). The firm has been set up by a group of young, enthusiastic, highly skilled and motivated professionals who have taken experience from top consulting firms and are extensively experienced in their chosen fields has providing a wide array of Accounting, Auditing, Taxation, Assurance and Business advisory services to various clients and their stakeholders. Rajput jain & Associates, a professional firm, offers its clients a full range of services, To serve better and to bring bucket of services under one roof, the firm has merged with it various Chartered Accountancy firms pioneer in diversified fields. We have associates all over India in big cities. All our offices are well equipped with latest technological support with updated reference materials. We have a large team of professionals other than our Core Team members to meet the requirements of our prospective clients including the existing ones. However, considering our commitment towards high quality services to our clients, our team keeps on growing with more and more associates having strong professional background with good exposure in the related areas of responsibility.