UNION BUDGET FOR 2015-2016
o GST to be implemented from 1st April, 2016, which will take Central Excise, Service Tax, VAT, CST, Works Contract Tax, Octroi and Local Body tax within its’ wings.
o Central Excise duty increased from 12% to 12.5%. Education Cess and SHE Cess fully exempted (notification No.14/2015-CE & 15/2015-CE). Effective rate will be increased from 12.36% to 12.5%. This is effective from 1st March, 2015.
o Service Tax Rate to be increased from 12% to 14%, from a date to be notified, after enactment of the Finance Bill. From that date Education Cess and SHE Cess will be exempted. Thus, effective rate of Service Tax stand increased from 12.36% to 14% from a date to be notified.
o From a date to be notified after enactment of the Finance Bill, 2015, “Swachh Bharat Cess” @ 2% of the Taxable value shall be levied on all or any of the taxable services, as may be notified by the Government;
o Since no Education & SH Education Cess is payable on Central Excise is payable credit remaining unutilised and accruing after 28.02.2015 cannot be used towards payment of Basic Central Excise duty. However, since Ed & SHE Cess is still payable on Service Tax, credit can be used towards payment of Service Tax, if a manufacturer is also engaged in providing of taxable services.
o From 1st April, 2015, Service Tax on Goods Transport Agency service is payable on 30% of value, instead of 25%;
o From 1st April, 2015, when services of Manpower supply and Security service are provided by an individual, HUF, or partnership firm to a Body Corporate, now full Service Tax has to be paid by the recipient of service on reverse charge basis, instead of 75% of Service Tax as in force at present;
o Time limit for taking Cenvat Credit on inputs and input service is increased from 6 months to one year from the date of the duty paying documents.
o A registered Dealer or a registered importer is allowed to send materials directly to a buyer, without first bringing the same to his premises;
o A manufacturer is also permitted to send inputs and Capital Goods directly to job-worker, without first bringing to his factory, and take credit of duty paid on inputs and Capital Goods;
o Time limit of return of Capital Goods from a job-worker is increased from six months to two years;
o Non-excisable goods are also included in Rule 6 of the Cenvat Credit Rules, for reversal of credit used for exempted goods and services;
o With simplified procedure for Central Excise and Service Tax registration, registration certificate shall be issued within two working days, and post-facto verification shall be carried out by the Central Excise officer;
o Issue of Digitally signed Central Excise and Service Tax invoices is permitted;