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RECAPITULATION OF ERRORS THAT NEED INSTANT RECTIFICATION

Service Tax - By: - Pradeep Jain - Dated:- 9-2-2016 - With the budget round the corner, the Department of Ministry of Finance is flooded with the representations conveying the expectations, suggestions, amendments and clarifications in the laws to be implemented in the forthcoming budget. Although, the list of expectations and amendments needed is never ending, but this article is penned to highlight the changes expected by the assessees in indirect taxation laws which if not considered, may cre .....

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of this circular that in case of export, the place of removal is port/ICD/CFS is being imported into the provisions of the notification no. 41/2012-ST dated 29.06.2012 whereby refund of services availed beyond the place of removal is being granted. It is being interpreted that since the said notification grants refund of services availed beyond place of removal only, the refund claims filed by the exporters with respect to services availed from factory gate to port of export is not admissible. C .....

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the Explanation A (i) specifying that refund is admissible for services used beyond place of removal for export of goods has been amended and now, refund is admissible for taxable services used beyond factory or any other place or premises of production or manufacture of goods for export. Moreover, the clause (B) stating that the place of removal will have meaning as given under section 4 Central Excise Act, 1944 is also deleted to put an end to the litigation. Now, it is only hoped that the gen .....

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er, it is difficult to make heena paste without any ingredient and so by literally interpreting this notification, exemption was denied to all the heena paste manufacturers. Resultantly, representation was made to the Finance Minister for issuing suitable clarification as regards grant of exemption to heena paste if it is being mixed with basic ingredients like water, oils etc. Consequently, in the Budget 2014-15, it was clarified in the Tax Research Unit Letter that exemption contained in the s .....

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ed so that product is capable of being used for a longer period of time. Moreover, oils are being mixed by all heena paste manufacturers. If the meaning of liquid is considered as only water then the exemption will not be extended to even single heena paste manufacturer. Therefore, amendment/clarification with respect to this notification is also urgently needed. Cenvat Credit of Commission paid to agent in light of Gujarat High Court decision in Cadila Healthcare Ltd. 2013 (1) TMI 304 - GUJARAT .....

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care Ltd. was not engaged in sales promotion activities is ignored and credit is being denied irrespective of examining the fact that the commission agent is engaged in sales promotion activities or not. The defination of input service given under Rule 2(l) of the Cenvat Credit Rules, 2004 specifically includes sales promotion within its ambit and ignoring the said provision, the demands for recovery of cenvat credit are being confirmed. However, it appears that the litigation in this regard is .....

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publication in the official gazette thereby meaning that the dispute as regards credit availment would continue for the period prior to this amendment. However, as the amendment is made by way of explanation, it should be considered as clarificatory in nature and should be applied retrospectively. Clarification of utilisation of balance of Education cess and SHE cess as on 01.03.2015 and 01.06.2015:- With the exemption being given to Education Cess and SHE Cess, the government has although made .....

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then, the cenvat credit of the balance of education cess and SHE Cess should also be available for utilisation by the assessees. A clarification in this regard is also urgently needed. Admissibility of Cenvat Credit of Swachh Bharat Cess:- Presently, the Swachh Bharat Cess is imposed on all the taxable services but no cenvat credit is available for the same. Moreover, Notification no. 02/2016-C.E. (N.T.) dated 03.02.2016 specifies that cenvat credit of any duty specified under Rule 3 (1) of CCR, .....

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03/2016-ST dated 02.02.2016 have been issued to allow refund of SBC paid on services used in SEZ and to allow rebate of SBC paid on services used for export of goods. It is pertinent to note that the government missed to amend the notification no. 41/2012-ST dated 29.06.2012 permitting exporters filing refund of service tax for services used in relation to export of goods. By the amendments introduced, it can be comprehended that the government does not wants to export domestic taxes. However, a .....

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were not operated during part of month:- The Stainless Steel Patta Patti manufacturers operating under the special scheme of payment of excise duty commonly called as compounded levy scheme wherein duty is paid on the basis of number of machines operated in the factory premises are being denied refund claims if certain machines were not operated during part of the month. These assessees are required to pay excise duty in advance in the beginning of the month and if certain machines are discontin .....

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(4) TMI 164 - HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR] which states that proportionate refund of duty is admissible as there can be no levy of excise duty when there was no manufacture. However, inspite of this decision, litigation cost is borne by assessees for claiming refund for want of specific provision. Hence, Notification no. 17/2007-CE dated 01.03.2007 may be suitably amended. Demand under Rule 6 to job worker clearing goods under notification no. 214/86-C.E. dated 25.03.1986: .....

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