GROWTH

DEVELOPMENT

REFORMS

INDIA BUDGET 2012

INCLUSION

Contents
Prologue. At a Glance Budget Estimates Budget Proposals Direct Tax Indirect Taxes Other Key Policy Initiatives Glossary.

Prologue
Each Budget bears a significant contrast from the other not only in the content and focus but also in how it takes into account the economic and political backdrop . For a Government which is clearly reeling under the sustenance pressures both internal and external like scams, coalition party pressures, incompetency allegations , a top up of Eurozone crisis, Middle East turmoil etc, the current budget was akin to playing a long shot from a tight spot. In his seventh budget, Minister of Finance, Sh. Pranab Mukherjee took little chance and concluded the speech on a non event note. However, as the saying goes Devil lies in the detail (read fine print). A humble looking budget speech hid behind it a slew of provisions which can go a long way in impacting the foreign investment scenario in the country. From laymens angle, like any budget, it took more from him than was ceded. Benefits in direct taxes were more than set off in form of increase in the indirect taxes. Deteriorating fiscal deficit was blamed on slipping direct tax revenue and increased subsidies in 2011-12. However, one must ask the point in estimating the fiscal deficit targets if they can not be met. The targeted fiscal deficit of 4.61% for 201112 stood close to 5.9% as we near the close of this fiscal. Even though substantial allocations are made towards various inclusion and growth schemes, the implementation and execution of schemes still remains a challenge and measures to improve the performance are not addressed. The year under the budget marks the start of 12th five year plan with the aim of faster, sustainable and more inclusive growth. We can only hope that the effective execution mechanism are defined and put in place to ensure that the intended benefit flows to those in need. On the tax proposals, the mention of DTC and GST was expected. Just that this time it was a with a glimmer of hope that the legislation finalization is underway and these will finally see the light of day in the years to come. A serious intent to curb generation and bring accountability for the black money is shown in this budget imparting confidence that if executed well, the pressure on economy will be eased from those collections instead of the emptying pockets of compliant citizens. FDI in aviation and retail found their mention in the speech and spells the intent to get things working on those fronts. Allowing QFIs to access Indian bond markets added to the efforts to lure foreign money in India. However, the redefinition of property and transfer with retrospective effect from the commencement of the Income Tax Act, 1961 may just be the pill to dry up the foreign investments flow. The investor confidence is surely going to quiver due to such uncertain tax regime which can be altered any time leaving them with no option but to cough up huge sums as penalty of doing business in India. The need of hour is to identify the pressing needs, pain points and provide just the right dose of reforms coupled with efficient execution mechanism and voila, the recipe for a world superpower is ready.

AT A GLANCE

At a glance
The key highlights of the Budget 2012-13 are as under:

Overview of the Economy

GDP growth estimated at 6.9 per cent in real terms in 2011-12. Slowdown in comparison to preceding two years is primarily due to deceleration in industrial growth. Headline inflation expected to moderate further in next few months and remain stable thereafter. Current account deficit at 3.6 per cent of GDP for 2011-12 and reduced net capital inflow in the 2nd and 3rd quarters put pressure on exchange rate. Indias GDP growth in 2012-13 expected to be 7.6 per cent +/- 0.25 per cent

provided for Endeavour to keep central subsidies under 2 per cent of GDP in 2012-13. Over next 3 year, to be further brought down to 1.75 per cent of GDP

Tax Reforms
DTC Bill to be enacted at the earliest after expeditious examination of the report of the Parliamentary Standing Committee. Drafting of model legislation for the Centre and State GST in concert with States is under progress. GST network to be set up as a National Information Utility and to become operational by August 2012.

Authority Bill, 2011, The Banking Laws (Amendment) Bill, 2011 and The Insurance Law (Amendment) Bill, 2008 to be moved in this session To protect the financial health of Public Sector Banks and Financial Institutions, Rs. 15,888 crore proposed to be provided for capitalisation. Possibility of creating a financial holding company to raise resources to meet the capital requirements of PSU Banks under examination Tax free bonds of Rs. 60,000 crore to be allowed for financing infrastructure projects in 2012-13.

Banking and Legislative Reforms Subsidies

Subsidies related to administering the Food Security Act will be fully Official amendment to The Pension Fund Regulatory and Development

At a glance
Industrial Development
Government has announced a financial package of Rs. 3,884 crore for waiver of loans of handloom weavers and their cooperative societies Rs. 5,000 crore India Opportunities Venture Fund to be set up with SIDBI Outlay for Rashtriya Krishi Vikas Yojana (RKVY) increased to Rs. 9,217 crore in 2012-13. Rs. 2,242 crore project launched with World Bank assistance to improve productivity in the dairy sector. Rs. 500 crore provided to broaden scope of production of fish to coastal aquaculture Allocation for NRHM proposed to be increased from Rs. 18,115 crore in 2011-12 to Rs. 20,822 crore in 2012-13 crore persons Proposal to lay a White Paper on Black Money in current session of Parliament Legislative measures for strengthening anti-corruption framework are at various stages of enactment.

Employment and Skill Development

Allocation for Prime Ministers Employment Generation Programme increased by 23 per cent to Rs.1,276 crore in 2012-13 Projects approved by National Skill Development Corporation expected to train 6.2 crore persons at the end of 10 years. Rs. 1,000 crore allocated for National Skill Development Fund in 2012-13.

Education and Health

6,000 schools proposed to be set up at block level as model schools in Twelfth Plan

Governance
Enrolment of 20 crore persons completed under UID mission. Adequate funds to be allocated to complete enrolment of another 40

BUDGET ESTIMATES

Budget Estimates 2012-13

Gross Tax Receipts estimated at Rs. 10,77,612 crore Non-tax Revenue Receipts estimated at Rs.1,64,614 crore Non-debt Capital Receipts estimated at Rs. 41,650 crore Temporary arrangement to use disinvestment proceeds for capital expenditure in social sector schemes extended for one more year Total expenditure for 2012-13 budgeted at Rs. 14,90,925 crore Plan expenditure for 2012-13 at Rs. 5,21,025 crore is 18 per cent higher than BE 2011-12. This is higher than 15 per cent projected in Approach to the Twelfth Plan 99 per cent of the total plan outlay met in the Eleventh Plan Non-plan expenditure estimated at Rs. 9,69,900 crore. Rs. 3,65,216 crore estimated to be transferred to States including direct transfers to States and district level implementing agencies Entire amount of subsidy is given in cash and not as bonds in lieu of subsidies Fiscal deficit at 5.9 per cent of GDP in RE 2011-12 Fiscal deficit at 5.1 per cent of GDP in BE 2012-13 Net market borrowing required to finance the deficit to be Rs.4.79 lakh crore in 2012-13 Central Government debt at 45.5 per cent of GDP in 2012-13 as compared to Thirteenth Finance Commission target of 50.5 per cent Effective Revenue Deficit to be 1.8 per cent of GDP in 2012-13

DIRECT TAX PROPOSALS

Provisions affecting Domestic Entities

INCOME TAX RATES
Corporate tax rates to remain unchanged; Basic exemption Limit increased to Rs. 200,000 in case of individual (below the age of 60) The threshold limit for individuals increased from Rs. 800,000 to Rs. 10,00,000 Individuals having income in excess of 10 lacs are set to gain Rs. 62,000 per annum from such change. The changes are in line with the proposed DTC interest earned.

WIDENING TAX BASE

Introduction of MAT on all persons (other than Company) who has claimed deduction under any Section (other than Section 80P) included in Chapter VIA. The same is applicable only if adjusted total income exceeds Rs. 20,00,000; Introduction of TDS @ 1% on transfer of immovable properties (over a threshold limit) other than agricultural land. This provision was earlier applicable only in case of transfer of immovable property by non resident assessees; TDS on remuneration other than salary to a director covered under the ambit of Section 194J. To widen the tax base, the finance bill has proposed the introduction of mandatory filing of income tax return in case of any resident having assets located outside India. The return would need to be filed irrespective of tax resident having taxable income in India. To ensure compliance, the finance bill has

given right to the assessing officer to reopen such cases for 16 years to identify the income which has escaped assessment. Scope of Section 56 widened to include the consideration received for issue of shares in excess of fair market value of such shares within its ambit. Such income to be taxable under the head Income From Other Sources

DEDUCTIONS
Health check up (self , spouse, dependent children/ parents added within the overall limit prescribed of 80D not exceeding the aggregate limit of Rs. 5,000 Section 80TTA introduces allowing deduction to the individual and HUF on account of any income by way of interest on saving account deposits. Welcome measure for salaried assessees who had to get into the hassle of paying tax on nominal

Provisions affecting Domestic Entities

RELIEF TO TAX PAYERS
With a view to remove the cascading effect of DDT in multi lier corporate structure, it has been proposed to amend Section 115O to provide that in case any company receives dividend from its subsidiary and such subsidiary has paid DDT (payable on such dividend), then dividend paid by the holding in the same year to that extent not to be subject to DDT. To give a boost to the investment by the tax payer in the business of power sector, initial depreciation has been introduced Threshold limit u/s 44AB increased to Rs. 1 Crore in case of business income and Rs. 25 lakh in case of profession. The change is directed towards reducing the undue hardship caused to small businessmen and professionals To avoid having separate dates for filing income tax returns and tax audit, the finance bill has proposed to extend the filing of tax audit report to 30th November for the assessees entering into international transaction.

COMPLIANCE MEASURES WITHOLDING TAX RETURNS

TDS returns has invited a lot of litigation because of non clarity of the rules and also debatable penal provisions. To get the same in order the following has been proposed in the finance bill: The payer who fails to deduct tax (whole/part) on the payment made to resident would not be treated as assessee in default if the same is paid by the resident before the due date of filing the income tax return. Stringent penal clauses introduced for non compliance of TDS provisions Assessees have been given the option of rectifying there returns and also to appeal against the intimation orders received.

STRINGENT REVIEW MEASURES

To ensure that the investments in closely held companies are made by known persons, the finance bill has proposed to treat fresh share capital/ share premium as unexplained income of the assessee in case the source for the same is unexplained. This move will lead to higher onus on the company besides the general onus of Company to establish identity and credit worthiness of creditors and genuineness of transaction. In order to curb the practice of laundering of unaccounted money by taking advantage of basic exemption, it is proposed to tax the unexplained credits at maximum marginal rate. It is also proposed that no deduction in respect of any expenditure to be allowed under any provisions of the Act.

Provisions affecting International Entities

RATIONALISATION OF INTERNATIONAL TAX PROVISIONS
In a fresh debacle against the pronounced Supreme Court ruling in the Vodafone case, the finance bill has proposed the amendment in the below mentioned with retrospective effect from 1st April 1962. Income Accruing or Arising in India to also include: To align the definition of Section 9 with the internationally accepted taxing provisions (taxation based on source rule giving taxing right to the source country on the gains derived from off shore transaction where the value is attributable to the underlying asset), a new clause is being proposed to be introduced in Section 9 to include income accruing or arising directly or indirectly through the transfer of a capital asset situated in India. Deduction on a transaction with a non resident A clarification has been proposed for Section 195 to include all persons (whether resident or non resident) making payments to a non resident have to deduct tax at source. The implications arising out of these retrospective amendments are that, the law laid down by the Supreme Court in the Vodafone case, would stand statutorily overruled, on a retrospective basis. It was widely expected that the Government would not go for a retrospective amendment, but only a prospective amendment, if at all. What has now come out from the Government's stead is a totally unexpected retrospective tax proposal, aimed at scuttling a decision of the Apex Court.

TAX RESIDENT CERTIFICATE

In the light of the landmark case of Azadi Bachao Andolan wherein the Tax resident Certificate was taken as a sufficient condition to obtain treaty benefit, the Indian revenue authorities had been on a back foot on a number of occasions where even third party residents have claimed unintended treaty benefits. Therefore it is proposed to make submission of Tax residency Certificate containing prescribed particulars as a necessary but not sufficient condition for availing benefits of the agreement.

Provisions affecting International Entities

TRANSFER PRICING
As per the existing provisions of transfer pricing, the transfer pricing officer is not empowered to review any international transaction not reported in Form 3CEB. This had been under litigation in recent past. To avoid such litigations the finance bill proposes to give powers to TPO to extend the scope of examination. To address various transfer pricing disputes and to bring certainty in the correct interpretation and applicability of transfer pricing provision, it has been proposed in the Finance Bill to introduce Advance Pricing Agreement (APA) which is viewed as the transfer pricing dispute resolution mechanism. The same is in line with the proposed DTC. To give a true scope to the definition of international transaction it is proposed to clarify the term intangible property. It is also proposed that business restructuring and reorganisation would also be covered under the meaning of international transaction. Since presently there is no penalty for non reporting of international transactions or maintenance or furnishing incorrect information or document, it is thus proposed to levy penalty @ 2%of the value of international transaction for such non compliance. The current provisions of DRP do not give any right of appeal to the income tax department. It has been therefore proposed to give right of filing of appeal to the income tax department against an order passed in pursuance of direction of the DRP. In order to establish the reasonability of the expenditure between the domestic related parties transfer pricing regulation is proposed to be extended to domestic transactions over Rs. 5 crores in aggregate. This is mainly in line with the ruling of supreme court in the case of CIT vs. Glaxo SmithKline Asia (P) Ltd. ANTI AVOIDANCE RULES In an environment of moderate rates of taxes, it is necessary that correct tax base be subject to tax in the face of aggressive tax planning and use of opaque low tax jurisdictions for residence as well as for sourcing capital. Most countries have codified the substance over form doctrine in the form of General Anti Avoidance Agreement. The finance bill has proposed to introduce GAAR to introspect transactions specially designed for tax evasion as against the legitimate business transaction.

INDIRECT TAX PROPOSALS

Central Excise (CENVAT) & Customs Duty

LEGISLATIVE CHANGES CENVAT
Provisions relating to offences and penalties under Central Excise have been aligned with Customs Imprisonment of seven years with fine to be now applicable where the value of impugned goods exceeds INR 30 lacs (enhanced from the current figure of INR 1 lakh) Penalty in case of short levy or nonlevy is reduced where the duty amount is paid along with interest within 30 days of the communication of the order. This benefit shall now be available only when the reduced penalty is also paid within 30 days Certain offences which were hitherto non-cognizable have been declared cognizable Offences other than those which are punishable with 3 or more years of imprisonment have been declared non-cognizable under section 9A of the Central Excise Act Notification providing exemption from CENVAT for goods cleared from units having carried out substantial expansion in the state of J&K has been retrospectively amended. It has been clarified that the exemption shall be provided for a period of ten years to be calculated from the date of commercial production from the expanded capacity The above clarification puts to rest doubts which were prevailing on the interpretation of provisions of this exemption in the case of units undertaking substantial expansion Cigarettes have been included in the definition of deemed manufacture in the Third Schedule of Central Excise Act. Thus, the process of labeling, re-labeling or alteration of MRP etc to make cigarettes marketable would now be subject to excise duty

Central Excise (CENVAT) & Customs Duty

LEGISLATIVE CHANGES CUSTOMS
The method to include Education and Secondary & Higher Education cess for computing customs duty has been changed to remove the cascading effect Under the current duty structure, with the revised mechanism to calculate customs duty, effective rate of customs duty now stands changed to 26.495% from 26.85% Baggage allowance has been increased from INR 25,000 to INR 35,000 for passengers of Indian origin A new provision has been inserted to provide for recovery of customs duty from persons having duty scrips which were obtained by collusion, mis-representation or suppression of facts Further, provisions relating to attachment of property has also been made applicable to the above persons Certain offences which were hitherto non-cognizable have been declared cognizable Now, serving of a notice, order or a decision shall be considered valid even if its served through courier. Earlier, any order etc used to be considered legally served only when it was sent through registered post

RATE OF DUTY
Standard rate of Excise duty (CENVAT) enhanced from 10% to 12% Effective rate of duty to be 12.36% with effect from March 17, 2012 Merit rate of 5% CENVAT has been increased to 6% 1% CENVAT applicable on 130 items (introduced in last year Budget) increased to 2% (except certain items including mobile phones) The standard rate of customs duty has not been changed

Central Excise (CENVAT) & Customs Duty

MOVEMENT IN RATES

S. No.
1. 2. 3. 4. 5. 6. 7. 8. 9.

Item
Duty Free Baggage allowance Large & luxury vehicles (MUVs, SUVs & others) Gold and Platinum Bars Coffee brewing and vending machines Capital goods imported for expansion of iron ore production Life saving drugs & raw material for syringes, needles LCD, LED Televisions, Digital camera Parts of mobile phone other than cleared to manufacturer & lithium batteries for electric vehicle Cars (CNG, LPG, Diesel & Others)

Customs

Excise

Service Tax
RATE OF TAX
With the increase in rate of Service tax from 10% to 12%, the effective rate now stands at 12.36% Revised rate shall be effective from April 1, 2012 (i) Services rendered by the Government or local authority Services in relation to posts, transport of goods/passengers and support services to business entities however, would be taxed (ii) Services by RBI and Foreign Diplomatic Missions (iv) Services relating to agriculture -Services relating to agriculture produce, supply of farm labour, breeding, plantation and even leasing of vacant land with a green house/storage shed would get covered as negative services (v) Trading of goods continue to be outside the purview of service tax. This includes commodity futures, future contracts. However, activities of commission agents or clearing or forwarding agents are not covered (vi) Any process amounting to manufacture/production of goods. This typically includes job work/contract work on activities which are subject to excise duty (vii) either under the Central Excise Act or under the State Excise Acts. Selling of space or time slots for advertisements other than those done by radio or television - Thus, sale of space for advertisement in print media, bill boards, public places, cell phones, ATMS etc would be nontaxable Access to roads and bridges on payment of toll charges is not taxable. However, if the toll is collected by a 3rd party, service tax will be accrued. This is in continuance of Circular 152/3/2012 Service Tax, Dated February 22, 2012 Betting , gambling or lottery However, any services used for organizing or promoting betting gambling would not be covered under the exemption

INTRODUCTION OF NEGATIVE LIST (NL)

There would be a paradigm shift in the way services would be taxed in future Global VAT/GST practice of taxing services under the negative list concept has been introduced The term Service has been defined and thus, any activity which qualifies as a service would be taxable unless covered under the Negative list or specifically exempt 17 specified services have been classified as negative services, not attracting service tax

(viii)

(ix)

Service Tax
(viii) Entry to Entertainment Events and Access to Amusement Facilities All theatrical performances, rides in malls, video parlours would be outside the ambit of service tax Any ancillary service like event manager for organising the event would however, be taxed (xii) Transmission or distribution of electricity - However, electricity charges, if any collected by a developer/housing society would be taxed (xiii) Renting of residential dwelling for use as residence - However, any residential dwelling if used for both residential and commercial purposes would get classified as bundled services and judged accordingly (xiv) Financial Services - Providing loans, extending deposits where consideration is received by way of interest or discount is covered Sale of foreign currency by banks/authorised dealers to individuals is not covered under this service (xv and xvi) Transportation of passengers and goods Travel by Indian Railways to become cheaper as long as it does not have the comfort of an air conditioner Travelling by Metered cabs, radio taxis and metro included in the NL which would ensure cheaper medium to travel (xvii) Funeral, burial, crematorium and mortuary services

(xi) -

Specified services in relation to Education Education in various forms has always been exempt from service tax School education and education as a part of curriculum leading to issuance of a degree or as part of an approved vocational course is not taxable For vocational courses, the institute has to be affiliated to National Council for Vocational Training or National Skills Development Corporation

Service Tax
Declared Services
Concept of Declared services has been purposely introduced by the Finance Bill 2012 Though, declared services are adequately covered under the definition of Service, but still have been declared to remove any ambiguity Renting of immovable property Construction of complex, building services - This has been in continuance of Circular No 151/2/2012-ST, dated February 10, 2012 Temporary transfer or permitting use or enjoyment of any IPR Development, design, programming, customisation etc of IT software License to use pre-packaged software where such software is considered as goods (as per Supreme Court decision in TCS) would not be subject to service tax Any advice/consultancy on software would be taxable (v) Activities in relation to Hire Purchase transactions involving delivery of goods: (i) Typically financial transactions forming part of a HP agreement are covered (ii) However, HP transactions per se would not be subject to service tax as such transaction involve transfer of property in goods, which is subject to VAT Exempt Services Certain services have been specifically exempt from service tax. Broadly, these include: - Specified healthcare services; Charities; Services by individual lawyers to non-business entities Sponsorship services relating to sports; Construction services pertaining to roads, bridges, tunnels etc Temporary transfer or use or enjoyment of a copyright relating to literary, dramatic, musical, artistic works Services of GTA of fruits, vegetables, etc Parking services Services of an organiser in respect of business exhibition held outside India Import of technology to the extent R&D Cess has been paid by the importer

(i) (ii)

(iii) (iv)

(vi) An agreement of performing an act or refraining to perform an act (commonly known as Non-Compete) has been specifically taxed. This has widened the scope of service tax, brining new players under the purview of this law (vii) Transfer of goods through hiring, licensing, leasing etc (viii) Parties to become expensive as restaurants would charge service tax on 40% and outdoor caterer on 60% of the gross invoice value. This will be irrespective of alcohol being served or not. Net result would be expensive outings

Service Tax
INPUT SERVICE DISTRIBUTOR (ISD)
Provisions relating to ISD have been amended to ensure that the cenvat credit of input services is allocated scientifically to only such units where they have been put to use and proportionate to turnover The above provision seeks to reverse some Tribunal judgments, wherein the Tribunals have held that there is no restriction on transfer of credit by the ISD to its manufacturing units. Some such judgments include: Tata Steel Ltd v CCE, Mumbai Ecof Industries Ltd v CCE, Bangalore 2010 (17) STR 590 The above changes are effective from April 1, 2012

REVERSE CHARGE PROVISIONS

A new term taxable territory has Hiring of 100% NIL 1. been defined in the Act motor (with Services provided only in the vehicle abatement) taxable territory would be subject to designed to service tax. Thus, any service provided in J&K would not be liable carry 40% (without 60% to service tax passengers abatement) The liability to pay service tax in Supply of 75% 25% case of a service provider located in 2. manpower J&K which provides service in the taxable territory would be on the Works 3. 50% 50% service recipient Contract In case of three services, the liability to pay tax has been fastened both on service provider as well as the POINT OF TAXATION RULES recipient. This is when the recipient is a body corporate and the provider Time period for issuance of invoices of service is an individual/firm/LLP: has been increased to 30 days For exporters, the period extended by RBI would be included in the period for which tax is allowed to be deferred Benefit available to individuals and firms to determine point of taxation on the basis of date of payment has been extended to all services

S. No

Service

Service Recipient

Service Provider

Service Tax
Place of Provision of Services Rules, 2012 (PPS Rules)
The new rules have been issued for debate and feedback, primarily to determine the place where a service shall be deemed to be provided The taxability of a service shall be determined based on the location of its provision The PPS Rules shall eventually replace the Export and Import of service rules provision of service, as follows: Rule 3 - to determine the place where the receiver is located Rule 4 to determine the place in case of performance based services Rule 5 - to determine the place of service in case of services related to immovable property Rule 6 - to determine the place in case of services relating to events Rule 7 - to determine the place in case of part performance of a service at different locations Rule 8 - to determine the place of provision where service provider and receiver is located in the taxable territory Rule 9 - to determine the place of provision in case of specified services Rule 10 - to determine the place of provision in relation to transportation of goods Rule 11- to determine the place of provision in case of passenger transport services Rule 12 - to determine the place in relation to services provided on board conveyances

Salient Features
Primarily meant for cross border service providers Based on the concept of place of consumption New charging section provides for levy of service tax only on such services which are provided in the taxable territory In all, 12 Rules have been proposed to determine the place of

CENVAT Credit Rules, 2004

Rule 5 - Refunds
Rule 5 will be substituted with a simplified scheme wherein correlation between input services and exports will not be required This will simplify the process of refunds as all permissible inputs services will be considered for refunds

Capital Goods removed as such

The higher of CENVAT Credit taken at the time of the purchase minus a percentage for the time used or the transaction value, will have to be reversed

Transfer can be made on the basis of challan containing name and address, registration number, etc

Reversal of CENVAT Credit

In case the service provider is rendering exempted and taxable service then he has the option of reversing 6% of exempted good/ service and avail the rest of the CENVAT Credit. The government has increased the percentage of duty and thus the service provider will be left with less CENVAT Credit

Motor Vehicles
Credit on motor vehicles would be permissible to all service providers Except motor vehicles such as vehicles with capacity of more than 10 people, racing cars, vehicles used for transportation of goods, motorcycles, etc Physical presence of inputs and capital goods no longer necessary for availing Cenvat credit The inputs and capital goods may not be present in the premises in order to avail the CENVAT Credit

Transfer of CENVAT Credit

Unutilized CENVAT Credit can now be transferred from one unit to another provided both the units are registered premises on the basis of common PAN

Other Miscellaneous Amendments

Special Audit
Any person failed to determine the value of services rendered or availed & utilized CENVAT Credit wrongly may be directed for special audit Audit to be conducted by Chartered Accountant or Cost Accountant Period and extent of the audit to be specified by the Commissioner

Registration
New registration form i.e. EST has been introduced This is a common form for both Excise and Service Tax

Returns
A common service tax and excise return form has been introduced For service providers (other than individual/ LLP/ partnership firms) who have service tax liability of more than Rs 25 lakhs in the previous year are liable to file service tax return on a monthly basis For service providers less who have service tax liability of less than Rs 25 lakhs in the previous year are liable to file service tax return on a quarterly basis

Recovery of service Tax

Issue of demand for recovery can be now be made up to 18 months against 12 months till now

Filing of Appeals
Limitation period for filing an appeal with Commissioner (Appeals) has been reduced to two months instead of three months Limitation period for filing an appeal with Appellate Authority has been specified as three months

GLOSSARY

Glossary
DTC Direct Tax Code GST Goods and Service Tax FDI Foreign Direct Investment QFI Qualified Foreign Investor MUV Multi Utility Vehicle SUV Sports Utility Vehicle CNG Compressed Natural Gas LPG Liquefied Petroleum Gas LCD Liquid Crystal Display LED Light Emitting Diode CENVAT Centralised Value Added Tax DDT Dividend Distribution Tax TDS Tax Deducted at Source GDP Gross Domestic Product NRHM National Rural Health Mission

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