Mutha BCom FCA DISA 1 Changes in Services Tax Changes by Finance Bill 2011 Changes in Finance Act 1994 POINT OF TAXATION Old Law On Receipt Basis Receipt of charges or advance is taxable event ID: 276294
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CA Anand MuthaB.Com., F.C.A., D.I.S.A.
1
Changes in Services Tax
Changes by
Finance Bill, 2011
Changes in Finance Act, 1994Slide2
POINT OF TAXATIONOld Law
On Receipt BasisReceipt of charges or advance is taxable event.
New Law
Issue of invoice or Receipt of advance is Taxable event
Adjustment of service tax allowed if amount refunded or credit note issued.
2Slide3
Continuous ContractsWithin 14 days of completion of service
Issue of InvoiceReceipt of AdvanceCompletion of Events specified in the contracts Slide4
Penalty for late fling of return. Section 70
Maximum penalty has be increased by 10 times. Now
assessees
have bigger reason to worry for delay in filing service tax returns.
Old Law
New Law
Maximum penalty – Rs. 2000.
Maximum penalty – Rs. 20000.Slide5
5
General penalty for – non registration, non
maitenance
of books, non furnishing of information, non attending summons, non payment of tax
electrinically
, incorrect invoice, not accounting invoices, any other.
Old Law
New Law
Rs.
5000/-
Rs.
10000/-
* Waiver of Penalty if due to Reasonable cause.Slide6
Recovery of Service tax not levied or paid or short levied or short paid or erroneously refunded – Section 73(1A) & 73(2)
Old Law
New Law
The benefit of reduced penalty was available in cases of fraud, collusion suppression
etc.
The benefit of reduced penalty
not available
in cases of fraud, collusion, suppression etc
.Slide7
Penalty in case of – True and Complete Details available .
OLD LAW
NEW LAW
Penalty for failure to pay service tax,
higher of following:
Rs. 200/day during default ;or
2%/month of such tax.
Penalty for failure to pay service tax,
higher of following:
Rs. 100/day during default ;or
1%/month of such tax.
Maximum Penalty – 100% service tax payable
Maximum Penalty – 50% service tax payableSlide8
Recovery of Service tax not levied or paid or short levied or short paid or erroneously refunded – Section 73(4A) – Reduced penalty.
“Specified records” means records including computerised
data as are required to be maintained by an assessee in accordance with any law for the time being in force.However if there is no such requirement, the invoices recorded by the assessee
in the books of account shall be considered as the specified records.
Effective date - The above changes will come into effect from a date to be notified, after the enactment of Finance Bill, 2011.Slide9
Recovery of Service tax not levied or paid or short levied or short paid or erroneously refunded – Section 73(4A) – Reduced penalty.
Reduced penalty
1%/month of such tax, for the period during which the default continues.Maximum penalty – 25% of the tax amount,Conditions
During the course of any audit, investigation or verification;
it is found that any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded,
True and complete details of transactions are available in the specified records
Pay service tax along with interest payable thereon under section 75 and reduced penalty before service of notice on him and inform the Central Excise Officer of such payment in
writing.OR
within 30 days
of order.Slide10
Interest on delayed payment service tax
*Interest @ 18 % is payable Reduced rate of interest
Interest rate shall re reduced by 3%. IFValue of taxable services provided in a financial year does not exceed Rs. 60 Lacs during any of the financial years covered by the notice or during the last preceding financial year.Slide11
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Prosecution For Offences Not Issuing Invoice
Receiving Taxable service without invoiceWrong CENVATFalse books of accounts Non payment of tax for 6 monthsSlide13
Prosecution For Offences What is the Punishment for first time
Amount Above 60 lacs-minimum 6 months up to three years In any other case – up to 1 yearRepeated Offence
Minimum 6 months up to 3 years Slide14
How to submit DataPreviously only following details required
Receipts DetailsBilling DetailsSlide15
How to submit DataFrom 2011 following data is required
Billing DetailsDetails of Advances
Details of Advances received in Previous period Details of Adjusted bills. Slide16
How to submit DataSample Data Format available in soft.
BY Tomorrow Please send your request on anandmutha@gmail.comSlide17
What Care should be takenProper and in time invoice
Proper CENVATRegular & Timely payment of TaxE-payment of Tax when above 10 lacsTimely filling of ReturnBe in touch with consultant
4 updatesSlide18
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YOU
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Anand
Mutha
B.Com
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