News Flash Indirect Tax

Udyog Software (India) Ltd.

25/08/2014



This document contains a brief summary of the latest updates related to Indirect Taxes

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Customs: CBEC issues guidelines for ad hoc exemptions

Section 25 of the Customs Act provides for special exemptions in individual cases as well as general
exemptions for classes of goods. The CBEC has issued detailed guidelines under Circular 9/2014-Customs dated
19 August 2014 on special exemptions, indicating the persons who may be eligible and the documentation and
procedures that will be required. This can be seen at http://cbec.gov.in/customs/cs-circulars/cs-
circ14/circ09-2014cs.htm


Customs: Import duty on sugar increased

The central government has amended notification 12/2012-Customs to increase the basic customs duty on raw
sugar as well as refined or white sugar to 25% ad valorem. The notification 26/2014-Customs dated 21 August
2014 by which this has been done, can be seen at http://cbec.gov.in/customs/cs-act/notifications/notfns-
2014/cs-tarr2014/cs26-2014.htm


Customs: Exchange rates notified

The CBEC has notified rates of exchange for specified foreign currencies, effective from 22 August 2014, under
section 14 of the Customs Act 1962. For purposes of arriving at the value of goods for customs assessment, the
notified rate of, inter alia, the Euro is Rs 81.50 for imported goods and for export goods it is Rs 79.55; the rate
of the pound sterling is Rs 101.85 for imported goods and Rs 99.60 for export goods ; the rate of the US dollar
is Rs 61.25 for imported goods and Rs 60.25 for export goods. The notification 72/2014-Customs (NT) dated 21
August 2014 can be seen at http://cbec.gov.in/customs/cs-act/notifications/notfns-2014/cs-nt2014/csnt72-
2014.htm


Central excise: Sales to bulk consumers not assessable on basis of MRP

Section 4A of the Central Excise Act 1944 requires that if the goods are required to be marked with MRP under
the Legal Metrology Act, they shall be assessed to central excise duty on the basis of MRP minus the notified
abatement. Under the Legal Metrology Act, marking of MRP is not required for sales to institutional buyers.
The appellant SPL Limited manufactured and sold ceramic tiles to schools, hotels, builders and other such
bulk buyers and paid excise duty based on MRP. The department demanded differential excise duty from SPL
by working out the excise duty payable on the basis of transaction value under section 4. In appeal, the
CESTAT upheld the departments stand, observing that, even though the goods may have been marked with
the MRP and sold in retail packs, this was not required for such sales under the Legal Metrology Act, and
therefore the provisions of section 4A were not applicable.

To download / peruse this case, select case law search at
http://judis.nic.in/dist_judis/Cestat_Delhi/Retrieve/PDF_Retrieval_Main.asp, and then select Delhi bench
Excise as case type, and enter 1434 of 2006 as case number and year.


Service tax: Exemption for Mansarovar, Haj pilgrimages

The central government has exempted services provided by Kumaon Mandal Vikas Nigam and the Haj
Committee in respect of pilgrimages facilitated by the Ministry of External Affairs under bilateral
arrangement. This refers to the Mansarovar and Haj pilgrimages respectively. The exemption has been
inserted as serial number 5A in the mega exemption notification 25/2012-ST, by notification 17/2014-ST dated
20 August 2014, which can be seen at http://www.servicetax.gov.in/notifications/notfns-2014/st17-2014.htm

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Service tax: No consignment note, no service tax under GTA

Service tax on services of goods transport agencies has been subject to much controversy since its inception in
2004. Goods transport agency is an entity that receives goods for transport and issues consignment note, by
whatever name called. The department uses the phrase by whatever name called, to treat documents like
bills and money receipts as akin to consignment note. (Actually the phrase is probably intended to cover the
diversity of terms used for consignment note, like lorry receipt or bilty.) In the case of Nandganj Sihori Sugar
Company versus CCE Lucknow, ST/573/2008 the appellant was receiving fortnightly bills from its sugarcane
transporters, who were individual truck owners. The excise department demanded service tax on reverse
charge basis, alleging that this was goods transport agency service. The CESTAT struck down the demand,
observing that The fortnightly bills cannot be treated as consignment notes, as a consignment note issued by
Goods Transport Agency represent its liability to transport the consignment handed over to it to the
destination and deliver the same to the consignee and merely a bill issued for transportation of goods cannot
be treated as Consignment Note. This order of the CESTAT can be seen at
http://judis.nic.in/dist_judis/Cestat_Delhi/Retrieve/CaseNo_Qry.asp by entering entering Delhi bench,
Service tax and case number 573 of 2008 in the case number search. The order has been followed recently
by Delhi bench in deciding Service Tax Appeal number 227 of 2008 of South Eastern Coal Fields versus CCE
Raipur.

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Content provided by:

Radha Arun
Consultants to Udyog Software (India) Ltd.
radha.arjuni@gmail.com

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