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Government of India V. K. Garg Dated: February 28, 2013 Subject: Union Budget 2013: Changes in Service Tax-reg. The service tax changes in Budget 2013 are largely guided by the objectives to provide a stable tax regime and improve voluntary compliance. The important changes are as follows: A. Legislative changes Following changes are being made in the Finance Act, 1994: 1. There are following changes in relation to the negative list:
2. The provisions of section 73 are being modified such that if the grounds for invoking extended period are not sustained, the Central Excise officer will be able to determine the demand for the shorter period of eighteen months. 3. The penalty under section 77(a) is being restricted to Rs 10,000. A new section 78A is also being introduced to impose penalty on directors and officials of the company for specified offences in cases of willful actions. New provisions are being introduced to prescribe revised punishments for offences in section 89, make certain offences cognizable and others non-cognizable and bailable. The Policy wing of the Board will be issuing detailed instructions in due course. These changes will come into force when the Finance Bill, 2013 is enacted. B. Exemptions 4. The following changes are being made w.e.f April 1, 2013 in the exemption notification number 25/2012-ST dated June 20, 2012:
C. Abatement 5. The abatement available under S. No 12 of notification 26/2012-ST dated June 20, 2012 for construction of a complex, building, civil structures etc. is being reduced from the existing 75% to 70% for construction other than residential properties having a carpet area up to 2000 sq ft or where the amount charged is less than Rs 1 crore. This will come into effect from March 1, 2013. D. Voluntary Compliance Encouragement Scheme, 2013 (VCES) 6.1 A new scheme is proposed to be introduced to encourage voluntary compliance with the following main features:
6.2 The scheme will come into force when the Finance Bill is enacted. It is clarified that the tax-payers will need to settle their dues for the period after December 31, 2012 under the present law. E. Advance Ruling Authority 7. The benefit of Advance Ruling Authority is being extended to resident public limited companies. F. Disclaimer and requests 8. This letter is meant to provide a quick glimpse of the important changes and should not be used in any quasi-judicial or judicial proceedings, where only the relevant legal texts need to be referred to. 9. Despite best efforts it is possible that you may find some unintended errors, or omissions. I shall be extremely thankful if you could point out them to me or to my colleagues at the earliest. 10. Please also feel free to contact us in case of any doubt, difficulty, or suggestion relating to interpretation or implementation of the provisions mentioned above. You may also like to contact Shri J.M. Kennedy, Director (TRU) [Tel: 23092634; e-mail: jm.kennedy@nic.in] or Shri G.D. Lohani, Director [Tel: 23092374; e-mail: gd.lohani@nic.in] or Shri Sachin Jain, O.S.D. [Tel: 23092374; e-mail: sachinjainirs@yahoo.com]. 11. I express my sincere thanks for your suggestions which provided us rare perspectives on many issues and helped us carry out our task with greater precision. Sincere regards, D.O.F. No. 334/3/2013-TRU (V K Garg) |