Significant Changes in Excise & Service Tax-Budget 2015-16

Significant Changes in Excise & Service Tax-Budget 2015-16

Change in Excise & Service Tax Rate

Central Excise duty to be rounded off to 12.5 % (from 12.36 %)
Service tax to be increased from 12.36 % to 14 %. Date of levy of new rate shall be notified after enactment of Finance Bill 2015. Till the time it is notified the rate shall be 12.36% only .

Procedure Changes

Online Excise and Service Tax registrations in 2 days

Digital invoices to be accepted

A provision for issuing digitally signed invoices is being added along with the option of maintaining of records in electronic form and their authentication by means of digital signatures.

Cenvat Credit

Rule 4(7) is being amended to allow Cenvat Credit of Service Tax paid under partial reverse charge by the service receiver without linking it to the payment to the service provider. This change will come into effect from 1.4.2015.

The period for availing Cenvat Credit can be availed within one year from the date of invoice. Previously it was restricted to six months only.

Penal Provisions

Section 11AC of CEA,1944 is proposed to be changed with new provision to impose penalty to tackle two situations as below :

1. evasion of duty or non payment of duty but without suppression
a) a penalty not exceeding 10% of the duty determined or Rs.5000 whichever is higher shall be payable;
b) no penalty shall be payable if duty and interest payable thereon under section 11AA is paid before issue of show cause notice