In continuation to our previous article on Analysis and Highlights of Finance Budget 2017, enlisted below are the highlights of changes in indirect taxes in Union Finance Budget 2017:
Service Tax
- Services provided by IIMs
- IIMs provide services by way of two year full time residential Post graduate Programme(PGP) in Management, to which admissions are made on the basis of CAT (Common Admission Test) conducted by IIMs
- Earlier Service tax was applicable on residential programme only but with effect from 2nd Feb 2017, it will be applicable on both residential as well as non residential programmes conducted by IIMs
- Research and Development Cess (R & D) Act 1986 has been revoked in the Finance Budget 2017 thus Exemption from service tax equivalent to the amount of R&D cess paid at the time of import of technology would also not be available with respect of a taxable service involving import of technology.
- Proposed amendment is introduced to nullify the Hon’ble Delhi High Court Judgement in case of Suresh Kumar Bansal v UOI (2016) 70 taxmann.com 55 (Delhi). Rule 2 A of Service tax (determination of value) rules 2006 is amended so as to exclude the value of land or undivided share of land from the value of property in case of works contract involving transfer of goods and land or undivided share of land, as the case may be.
Central excise
- New sub rule (2) has been inserted in Rule 21 of Central Excise Rules, 2002 to limit the time for remission of duty to three months under section 5 of Central Excise Act 1944 read with rule 21.
- No excise duty is payable on the following items subject to the condition that no credit of input or input services or capital goods has been availed on manufacturing of those goods:
- Waste and scrape of precious metal (7105 or 7112)
- Strips, wires, plates and foils of silver (7106)
- Articles of silver jewellery, other than those studded with diamond, ruby emerald or sapphire (7113)
- Silver coins of purity 99.9% or above bearing a brand name (7114)
- A time limit of three months has been inserted for request of transfer of cenvat credit in case of shifting, sale, merger etc. of the factory (this time limit is further extendable to 6 months) even after explanation –I (e) to rule 6 of the cenvat credit rule, 2004 so as to exclude banks and financial institutions from this ambit.
- Changes in rates pre and post budget
| Particulars | Pre budget | Post budget |
| Handmade paper rolled bidis | INR 21 per Thousand | INR 28 per Thousand |
| Machine made paper rolled bidis | INR 21 per Thousand | INR 78 per Thousand |
| Catalysts and resin used in the manufacture of cast component of wind operated electricity generator | 12.5% | Nil* |
| Solar tempered glass used in manufacture of specified solar products | Nil | 6%*/ 12.5%* |
| Parts/ raw material used in manufacture of solar tempered glass for used in specified solar products | 12.5% | 6%* |
| Membrance Sheet and tricot/ spacer used in the manufacture of reverse osmosis membrance for household type filters | 12.5% | 6%* |
| Micro ATMs as per standard version 1.5.1fingerprint reader/scanner. Iris scanner, miniaturised POS card reader from m POS and parts and components of the above goods | Applicable duty | Nil* |
| All part for use in the manufacture of LED lights or fixtures including LED lamps | Applicable duty | 6%* |
*Proposed rates are applicable from 30 June 2017
Advance Ruling
- Application fee has been increased from Rs 2500/- to Rs 10,000/-.
- Time limit for passing an order under advance ruling has also been increased from 90 days to 6 months.
Settlement Commission
- Prior to the Finance Budget 2017, only assessee was able to make an application to settlement commission but after the Finance Budget 2017, any person other than assessee can also make an application to settlement commission.
- Time limit for passing an order under Settlement commission has also been increased from 90 days to 6 months.
The Union Budget is vast and understanding each and every underlying point requires references such that the right context can be grasped in time. The above article’s endeavour has been to keep you posted with the major highlights of the Finance Budget 2017.
