01 07 2015
Wednesday
THE Hyderabad Central Excise and Service Tax Audit Commissionerate has issued an FAQ on audit, which explains the rights and obligations of the assessees. All Commissionerates should give wide publicity to this and maybe every audit party should carry a copy and give to the assessee when they go for audit. Maybe it should be enclosed with the audit intimation.
| Question 1: What is Central Excise/Service Tax Audit? |
| Ans: Audit is a verification of financial accounts and other records particularly records relating to production, clearance of goods or provision of service by the assessees to ascertain that duties of Central Excise / Service Tax are correctly paid. |
| Question 2: Who Conducts the Audit? |
| Ans: The Central Excise officers posted in Commissionerate of Audit conducts Audit which include Assistant / Deputy Commissioner, Joint / Additional Commissioner or Joint Director (Cost). |
| Question 3: When I file returns periodically to the department, what is the need of conducting audit? |
| Ans: The returns filed with the department are based on self-assessment. The correctness of the payment and application of statute are verified during the periodical Audits conducted by the department. |
| Question 4: Will assessee be audited every year? |
| Ans: The present periodicity of Central Excise audit: |
| 1.Units paying more than Rs. 3 crores (PLA&Cenvat) |
Every Year |
| 2.Units paying between Rs. 1 crore and Rs. 3 crores |
Once every two years |
| 3.Units paying between Rs. 50 lakhs and Rs. 1 crore |
Once every five years |
| 4.Units paying below Rs. 50 lakhs |
10% of the units every year |
| For the categories mentioned at S. Nos. 2 to 4 of the above, the selection of units would be based on the unit-wise rupee risk parameters circulated by DG (Audit) combined with local risk parameters, if any. The quantum of annual duty payment in cash and cenvat are taken together for selection of unit. |
| The present periodicity of Service Tax audit: |
| 1.Taxpayers paying more than Rs. 50 lakhs |
Every year |
| 2.Taxpayers paying between Rs. 25 lakhs and Rs. 50 lakhs. |
Once in two years |
| 3.Taxpayers paying between Rs. 10 lakhs and Rs. 25 lakhs |
Once in five years. |
| 4.Taxpayers paying below Rs. 10 lakhs - |
2% of the total number every year |
| For the categories mentioned at S. No. 2 to 4 the selection of assessees would be based on working on rupee risk (S1 parameter) and local risk parameters mentioned in the Service Tax Audit manual. The quantum of annual duty payment in cash and cenvat are taken together for selection of unit. |
| Question 5: What is the duration of the Audit? |
| Ans: It depends upon the quantum of the record to be scrutinized and period covered for audit. In any case it may spread from two days to ten days. |
| Question 6: Will it be a surprise audit? |
| Ans: No. A minimum of 15 days prior notice is served on the assessees regarding proposed audit. |
| Question 7: If I am registered for both Central Excise and Service Tax, whether two separate audits are conducted? |
| Ans: Simultaneous Audit for Central Excise, Service Tax and OSPCA would be conducted. |
| Question 8: If factory is registered in one Commissionerate, Service Tax registration is in another Commissionerate, where registered office is located, what is the criterion for selection of audit? |
| Ans: If both the registrations i.e., Central Excise and Service Tax are in Hyderabad zone, simultaneous audit would be conducted by Audit Commissionerate. |
| Question 9: If an assessee is having multi location manufacturing units, who conducts audit? |
| Ans: Normally audit for Hyderabad Zone registered units is conducted by Hyderabad Audit Commissionerate. Multi locational units' audit in a few cases would be taken up under the Co-ordination of Audit Directorate. |
| Question 10: Under what authority department conducts audit? |
| Ans: The statutory provisions relevant for audit is clause (x) of Section 37(2) and Rule 22 of the Central Excise Rules, 2002 for conducting Central Excise Audit and Rule 5A (2) of the Service Tax Rules, 1994 for Service Tax audit. |
| Question 11: Do I need to produce all my business records/documents? |
| Ans: Since there are no prescribed Central Excise records, records maintained by the assessees are requested for scrutiny. These may include, financial statements, invoices, ledgers, bank statements, cenvat credit documents, accounting policies etc., apart from statutory returns. |
| Question 12: How much time is given for production of records? |
| Ans: As an intimation of 15 days is given in advance, all records should be furnished to the audit team on or before their visit to the unit for audit. |
| Question 13: If records/accounts are maintained on a system using accounting packages like SAP/Tally/Focus etc., what is the procedure for conducting audit? |
| Ans: In such cases, normally Computer Aided Audit Programme is conducted. You are requested to produce the soft copy of the records and also the records maintained in physical form. |
| Question 14: Can I ask for postponement of audit due to prior business engagements? |
|
Ans: Yes. In genuine cases on production of proper evidence, the competent authority may consider the request for postponement. Since the audit programme is drafted months in advance, postponements are not encouraged.
Who is this Competent Authority?
|
| Question 15: Will I get to know the objections raised during audit? |
| Ans: Yes. The auditors discuss each and every objection they are going to raise and issue a spot memo. If assessees voluntarily rectify the error and corrects the same by payment of duty, interest and penalty etc., the para would be settled in MMCM. (What is this?) |
| Question 16: Can I get a copy of Final audit report? |
| Ans: Yes. |
| Question 17: How long does it take to receive Final Audit Report? |
| Ans: Normally within 15 days from the date of approval of audit report in Monthly Monitoring Committee meeting. |
| Question 18: Do I have opportunity to contest of (sic) the audit objection after receipt of Final Audit Report? |
| Ans: Yes, you may like to send your detailed reply to the concerned ADC/JC of the circle. |
| Question 19: What is the next cource (sic) of action if the Department do not agree with my reply? |
| Ans: A Show Cause notice is issued by the Audit Commissionerate answerable to respective competent authority in executive Commissionerate. The assessees written reply and submissions made in personal hearing will be considered and the case will be adjudicated. |
| Question 20: In case of grievance regarding the method of audit or behaviour of auditors, whom should I contact? |
| Ans: You may contact the concerned circle Additional Commissioner. The assessees are also provided along with final audit report, a feed-back form regarding quality of audit and suggestions for improvement of audit. |
| Question 21: Can I get guidance from the auditors regarding record keeping and application of law? |
| Ans: Yes. The auditors are professionally trained to guide, educate and encourage tax compliance. |
The questions marked in red are those of DDT.
The Commissionerate has given a disclaimer - For general information - not statutory provisions.
FTP - Prohibition on Trade with Islamic State in Iraq and Levant (ISIL)
IN compliance with United Nations Security Council Resolution No. 2199 [2015] trade in oil and refined oil products, modular refineries and related materials, besides items of cultural (including antiquities), scientific and religious importance is prohibited with the Islamic State in Iraq and the Levant [ISIL], Al Nusrah Front [ANF] and other individuals, groups, undertakings and entities associated, directly or indirectly, with Al Qaida.
DGFT Notification No. 14/2015-2020, Dated: June 30, 2015
Import of certain categories of processed metallic scrap, at designated ports
DGFT has inserted paragraph 2.54 A in the Handbook of Procedures of FTP 2015-20, and Appendices 2N-2, 2G-1 and 2FI-1 in Appendices and Aayat Niryat Forms of FTP 2015-20:
Import of processed metallic scrap, may be allowed at designated ports (with Scanner/RDE facility), as listed in Appendix 2G-1 of Appendices and Aayat Niryat Forms of FTP 2015-20, without PSIC subject to fulfillment of certain conditions:-
(a) The importer shall have to submit a self declaration cum legal undertaking, as given in Appendix 2 N-2 of Appendices and Aayat Niryat Forms of FTP 2015-20, along with a Pre-shipment Inspection Certificate in Format 2FI-1, issued by the Inspecting Agency/Scrap Yard.
(b) Importer shall furnish bank guarantee of Rupees 10,00,000/- (Rupees ten lakh) to the Customs as security amount.
(c) Importer shall also have to submit a copy of contract with the exporter stipulating that the consignment does not contain any type of arms, ammunition, mines, shells, cartridges, radioactive contaminated material, or any other explosive material.
(d) All scrap consignments, so imported at the designated ports, shall have to compulsorily pass through the Scanner / Radiological Detection Equipments (RDEs), installed at these ports, before being cleared by the Customs.
DGFT Public Notice No. 23/2015-20 New Delhi: Dated June 30, 2015
Tariff Values Decreased
THE Government has decreased the Tariff value of Gold from 385 USD to 382 USD per 10 grams and Silver from 519 USD to 516 USD per kilogram.
Tariff values of Poppy Seeds and Areca Nuts remain unchanged. Tariff Values of oils are decreased. Brass scrap also sees a downward trend.
The Tariff values as on 15.06.2015 and with effect from 30.06.2015 are as under:
|
Table 1
|
| S. No. |
Chapter/ heading/ sub-heading/tariff item |
Description of goods |
Tariff value USD (Per Metric Tonne) from 15.06.2015
|
Tariff value USD (Per Metric Tonne) from 30.06.2015
|
|
(1)
|
(2)
|
(3)
|
(5)
|
(6)
|
| 1 |
1511 10 00 |
Crude Palm Oil |
680 |
662 |
| 2 |
1511 90 10 |
RBD Palm Oil |
690 |
682 |
| 3 |
1511 90 90 |
Others - Palm Oil |
685 |
672 |
| 4 |
1511 10 00 |
Crude Palmolein |
701 |
683 |
| 5 |
1511 90 20 |
RBDPalmolein |
704 |
686 |
| 6 |
1511 90 90 |
Others -Palmolein |
703 |
685 |
| 7 |
1507 10 00 |
Crude Soyabean Oil |
800 |
763 |
| 8 |
7404 00 22 |
Brass Scrap (all grades) |
3592 |
3533 |
| 9 |
1207 91 00 |
Poppy seeds |
2602 |
2602 |
|
Table 2
|
|
S. No.
|
Chapter/ heading/ sub-heading/tariff item
|
Description of goods
|
Tariff value USD from 15.06.2015
|
Tariff value USD from 30.06.2015
|
| 1 |
71 or 98 |
Gold, in any form in respect of which the benefit of entries at serial number 321 and 323 of the Notification No. 12/2012-Customs dated 17.03.2012 is availed. |
385 per 10 grams |
382 per 10 grams |
| 2 |
71 or 98 |
Silver, in any form in respect of which the benefit of entries at serial number 322 and 324 of the Notification No. 12/2012-Customs dated 17.03.2012 is availed. |
519 per kilogram |
516 per kilogram |
|
Table 3
|
|
S. No.
|
Chapter/ heading/ sub-heading/tariff item
|
Description of goods
|
Tariff value USD (Per Metric Tons) from 15.06.2015
|
Tariff value USD (Per Metric Tons) from 30.06.2015
|
| 1 |
080280 |
Areca nuts |
2268 |
2268 |
Notification No. 65/2015-Cus.(N.T.), Dated: June 30, 2015
Income Tax e-filing is ready
THE e-filing portal of the Income Tax Department is ready to accept online filing of income tax returns with the new forms notified recently.
Najib Shah - New Chairman of CBEC - Please clarify Education Cess
Mr.Najib Shah will take over as the new Chairman of CBEC today. Sir, while there are a lot of issues crying for your attention, it will be a good idea to start your innings with a clarification on what happens to the accumulated credit of education Cesses lying in the CENVAT accounts of the assessees. The assessees are really concerned about this blocked up amount and the unconcerned silence of the Board. Will you ask your concerned officers to clarify the position as soon as possible?
WCO Photo Competition 2015 - Lithuania Entry
Until Tomorrow with more DDT
Have a nice day.
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