President’s assent to Finance Bill (No. 2) 2014 :Changes in Servicve Tax which are effective from the date the bill receives the assent of the President

The Finance Bill, 2014 which was brought into by the Union Budget, 2014-15 has received the assent of the President on 6^th August, 2014. As a result, the changes which were effective from the date the bill receives the assent of the President, stands imbibed in the Act w.e.f. 6^th August, 2014.

The changes applicable w.e.f. 6^th August, 2014 are as follows:

1. Section 83 has been amended to include reference to Sections 5A (2), 15A and 15B of the Central Excise Act. Given Sections have following relevance:

• Section 5A(2): It prescribes that insertion of Explanation in any Notification/ Orders within one year of issue of such Notification shall have effect as if it had always been part of the first such notification/ order.
• Section 15A: Power to obtain information from third party.
• Section 15B: This section imposes penalty in case of failure to furnish information under section 15A.

2. Compulsory pre-deposit @ 7.5% or 10% of Service Tax /Penalty, as the case may be (depending on the stage of appeal).
3. Time limits prescribed for completion of adjudication.
4. An amendment has been made in Section 80, the effect of which will be that the power to waive of 50% of the penalty in case facts have been suppressed but records are available is being withdrawn. Henceforth, the levy of 50% of the penalty shall be mandatory even if the assesse is carved out to be bonafide.
5. Joint Commissioner or Additional Commissioner or any other officer notified by the Board can authorize any Central Excise Officer to search and seize.
6. Power to recover dues of a predecessor from the assets of a successor purchased from the predecessor has been introduced.
7. In Section 67A, for determination of rate of exchange, rules will be prescribed for calculation of taxable value in respect of certain services.
8. Section 94 has been amended to obtain rule making powers

• to impose upon assesses, inter alia, the duty of furnishing information, keeping records and making returns and specify the manner in which they shall be verified;
• for withdrawal of facilities or imposition of restrictions on service provider or exporter, to check evasion of duty or misuse of CENVAT credit; and
• to issue instructions in supplemental or incidental matters.

9. Sub-section (6A) of section 86 specifying a fee of Rs. 500/- when application is filed to Appellate Tribunal for grant of stay or for rectification of mistake or for any other purpose or for restoration of appeal has been amended to omit the words “for grant of stay or”.

Contributed By:

Atul Kumar Gupta
B Com (Hons) FCA, FCMA, MIMA, CIQA, PGDEMM
Central Council Member of ICAI (2013-16)