Udyog Tax News Flash

January 2014

Service tax: clarification (?) on Cenvat credit of VCES payment

The CBEC informs us that trade and industry had sought clarity on whether Cenvat credit could be taken upon the payment of first instalment of dues or whether it should await issue of the discharge certificate after full payment of dues. In response the CBEC has issued a circular dated 20 January 2014 that purports to be a clarification. After citing the provisions of the scheme, the reply to the doubt is: It would be in the interest of VCES declarants to make payment of the entire service tax dues at the earliest and obtain the discharge certificate within 7 days of furnishing the details of payment. As already clarified in the answer to question No.22 of FAQ issued by CBEC dated 08.08.2013, eligibility of CENVAT credit would be governed by the CENVAT Credit Rules, 2004. This Circular no. 176/2/2014-ST dated 20 January can be seen at http://www.servicetax.gov.in/circular/st-circular14/st-circ-176-2014.htm

Central excise: Cenvat allowed for goods exempted under notification 1/2010-CE
As a general rule, input tax credit is allowed if the final product is dutiable, so as to neutralize the cascading effect of tax on tax. It is not allowed if the final product is exempted, as stipulated in Rule 6 of the Cenvat Credit Rules, except for zero rated items. However, under Rule 12, the embargo does not apply to specified area-specific exemptions; this is because of the manner of computing the exemption as stipulated in the relevant exemption notifications. The notification 1/2010-CE dated 6 February 2010 has been added to these as listed in Rule 12. Goods exempted under notification 1/2010-CE will now be eligible for Cenvat credit. The change in Rule 12 of the Cenvat Credit Rules 2004 has been made by notification 2/2014-CE(NT) dated 20 January 2014, which can be seen at http://cbec.gov.in/excise/cx-act/notfns-2014/cx-nt2014/cent02-2014.htm

Customs: Import duty on edible oils hiked

The central government has issued notification 2/2014-Customs dated 20 January 2014, by which the basic customs duty on import of various edible oils has been increased, by amending the relevant entries in notification 12/2012-Customs. The amending notification 2/2014-Customs can be seen at

http://cbec.gov.in/customs/cs-act/notifications/notfns-2014/cstarr2014/cs02-2014.htm

Customs: Exemption to operationalize advance authorization for export of prohibited items

The central government has issued notification 1/2014-Customs dated 17 January 2014, exempting material imported under advance authorization for export of items that are otherwise prohibited for export. The export has to be made within nine months. Sending the material out of the factory is not allowed, even for job work. There will be no provision for regularization of default. The notification 1/2014-Customs can be perused at http://cbec.gov.in/customs/cs-act/notifications/notfns-2014/cstarr2014/cs01-2014.htm

Central excise: Quilt shell is not quilt: HC

Bombay Dyeing Manufacturing Company had filed a rebate claim on material used in the manufacture of quilt shells that were exported. At that time, rebate was allowed for material used in manufacture of specified items only, which included quilts. The Delhi High Court held that quilts did not include quilt covers or shells. The judgement, given in WP(C) no. 1477/1998 in January of this year, can be perused at http://lobis.nic.in/dhc/SAS/judgement/15-012014/SAS10012014CW14771998.pdf

Customs: Anti-dumping duty on ABR, hexamine, DASDA

The central government has issued three notifications by which antidumping duty has been extended/re-imposed/levied, as follows. Acrylonitrile Butadiene Rubber: notification 6/2014-Customs (ADD) dated 23 January 2014 Anti-dumping duty had been levied vide notification 1/2009-Customs on acrylonitrile butadiene rubber from Korea RP. As the DG Anti-Dumping has undertaken a sunset review, the central government has notified that the duty will remain in force till 1 January 2015. Hexamine: notification 8/2014-Customs (ADD) dated 23 January 2014

Anti-dumping duty had been levied on hexamine from Saudi Arabia and Russia vide notification 89/2007-Customs, and had been extended uptil 24 July 2013 by notification 38/2012-Customs (ADD) pending sunset review by the DG Anti-Dumping. Upon recommendation of the said authority, the central government has now re-imposed the duty, at USD 86.35 per MT and USD 201.70 on the said goods from Saudi Arabia and Russia, respectively. This will be valid for five years. DASDA: notification 9/2014-Customs (ADD) dated 23 January 2014 The central government has levied anti-dumping duty on 4, 4 Diamino Stilbene 2, 2 Disulphonic Acid (DASDA) manufactured in or originating from the Peoples Republic of China. The rate is USD 270 if the product originates in China and the producer or exporter is Heibei Hua Chem Dye Chemical Company Limited, and is USD 460 in all other cases. The duty will be valid for five years. The above three notifications can be downloaded from http://cbec.gov.in/customs/cs-act/notifications/notfns-2014/csadd2014/csadd06-08-09-2014.pdf

Customs: Changes in drawback schedule

The central government has issued notification 5/2014-Customs (NT) dated 21 January 2014 to amend notification 98/2013-Customs (NT) by which the all-industry rates of drawback for 2013-14 had been notified. There are substantial changes in various categories. The new notification 5/2014Customs (NT) can be seen at http://cbec.gov.in/customs/cs-act/notifications/notfns-2014/csnt2014/csnt05-2014.pdf

WTO: public hearing in US COOL dispute

Hearings in a dispute raised by Canada regarding the country of origin labeling (COOL) requirements of the USA with regard to beef and pork will begin with a public hearing at Geneva on 18 February 2014. The USA requires that, in order to qualify for US origin, the meat must be of an animal that was born, raised and slaughtered in the USA. Canada contends that this is, inter alia, an impermissible technical barrier to trade. Other countries, including India, have reserved third party rights in the dispute. A summary of the dispute can be perused at http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds384_e.htm

Udyog has been successful in integrating iTAX with following the ERPs

SAP E.C.C. 6.0 MFG-QAD eB 2.1 BPCS BAAN FP 7

SAGE Accpac ERP 100 v 5.6 ABAS Adage Oracle

Updated and written by Radha Arun [radha.arjuni@gmail.com], Consultant to Udyog Software (India) Ltd.
Udyog Software (India) Ltd. www.udyogsoftware.com Phone: 022-67993535 Email: ca-service@udyogsoftware.com | sales@udyogsoftware.com
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.