TaxTMI 
TaxTMI 
Memorandums
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.... investment deci- sions; ♦ reducing the corporate tax rate so as to, - · reduce ex-ante cost of capital and provide larger internal accruals for modernisation and expansion; · remove any disincentive to firms from incorporating by equating the corporate tax rate with the top marginal personal income tax rate; and · provide deserved relief to those corporates that bear the heavier part of the corporate tax burden; improving the equity of the tax structure by reducing tax incentives, in particular, accelerated depreciation to reflect the impact of reduction in corporate tax rates and low inflation in the price of capital goods over the last decade, without adversely affecting internal accruals for replacement; · providing further impetus to new investment; streamline tax administration business processes through rapid computerisation and quality taxpayer service so as to, - · reduce transaction costs and facilitate voluntary compliance; · leverage tax administration capabilities of both direct and indirect taxes to identify non-compliance. 2. Subject to certain exceptions, which have been indicated while dealing with the releva....
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....ther than salaries will continue at the same level as those specified in Part II of the First Schedule to the Finance (No.2) Act, 2004. The tax deducted at source in each case is proposed to be increased by a surcharge for purposes of the Union. The rates of surcharge are, - (i) ten per cent on the tax deductible on payments to individuals, Hindu undivided families, association of persons and body of individuals if the payment or the aggregate of the payment made or likely to be made exceeds ten lakh rupees; (ii) ten per cent on the tax deductible on payments to artificial juridical persons; (iii) ten per cent on the tax deductible on payments to a firm, website: http://indiabudget.nic.in 2 (iv) ten per cent on the tax deductible on payments to a domestic company; (v) two and one-half per cent on the tax deductible on payments to every company other than a domestic company. The additional surcharge, called the "Education Cess on Income tax", levied so as to fulfil the commitment of the Government to provide universalised quality basic education, at the rate of two per cent. on the amount of tax deducted at the rates in force inclusive of surcharge, is propos....
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..../- is to be increased to Rs. 1,25,000/ -. In other words, no resident woman below the age of sixty-five year needs to pay tax on incomes upto Rs. 1,25,000/ -. In the case of a resident individual of the age of sixty-five years or more at any time during the previous year, the proposed basic exemption limit of Rs. 1,00,000/- is to be further increased to Rs. 1,50,000/ -. In other words, no resident individual of the age of sixty-five years or more with income upto Rs. 1,50,000/- will pay any tax. The tax payable would be increased by a surcharge for purposes of the Union at the rate of ten per cent. of the tax payable (after allowing rebate under Chapter VIII-A) where total income exceeds Rs.10,00,000/ -. In the case of artificial juridical person surcharge at the rate of ten per cent. is levied irrespective of the threshold limit. No surcharge would be payable by such persons (other than artificial juridical person) having incomes of Rs.10,00,000/- or below. Marginal relief would be provided to ensure that the additional amount of income-tax payable, including surcharge, on the excess of income over Rs.10,00,000/- is limited to the amount by which the income is more than Rs.10,0....
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.... C. Firms In the case of firms, the rate of income-tax has been specified in Paragraph C of Part III of the First Schedule to the Bill. This rate has been reduced from thirty-five per cent. to thirty per cent. The surcharge for the purposes of the Union on tax payable by firms has been increased from two and a half per cent to ten per cent. of the tax payable. The Education cess at the rate of two per cent. on the tax payable inclusive of surcharge will continue. D. Local authorities In the case of local authorities, the rate of income-tax has been specified in Paragraph D of Part III of the First Schedule to the Bill. This rate is the same as that specified in the corresponding Paragraph of Part I of the First Schedule to the Bill. The surcharge for the purposes of the Union at the rate of two and one-half per cent. on the tax payable has been withdrawn. No surcharge for the purposes of Union is, therefore, levied on Local Authorities. However, Education cess at the rate of two per cent. on the tax payable will continue to be levied. E. Companies In the case of companies, the rate of income-tax has been specified in Paragraph E of Part III of the First Schedule to t....
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....hod. The provisions of section 80L allow for a deduction from the gross total income of an individual or a Hindu Undivided family of any income by way of interest on government securities, National Savings Certificates, interest on debentures of public sector companies, interest on deposits with banking companies or financial corporations, etc subject to a limit of twelve thousand rupees. An additional deduction of three thousand rupees is allowed with respect to interest on government securities. The provisions of section 88 provide for a deduction from the tax payable on the total income of an individual or Hindu undivided family, which is equal to a fixed percentage of sums paid or deposited by way of life insurance premia, contributions to provident fund, schemes for deferred annuities, national saving certificates, infrastructure bonds, payment of tuition fees, repayment of principal amount of housing loans, etc. For the purpose of deduction under this section, the aggregate sums to be paid or deposited in the eligible schemes is limited to rupees seventy thousand with an additional amount of rupees thirty thousand for investment in infrastructure bonds. Further, within ....
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....deposited in the previous year, out of income chargeable to tax, in certain specified schemes. The investments eligible for deduction under the proposed section are the same as those entitled for rebate from income-tax under section 88. These include life insurance premia, contributions to provident fund or schemes for deferred annuities, purchase of infrastructure bonds, payment of tuition fees, repayment of principal amount of housing loans, etc. However, in order to minimise distortions, there are no sectoral caps in the proposed section and the assessee is free to invest in any one or more of the eligible instruments within the overall ceiling specified. It is further proposed to insert another new section 80CCE to provide that the aggregate amount of deductions under section 80C, section 80CCC and section 80CCD shall not exceed one lakh rupees. It is also proposed to omit section 88 to provide that no deduction from the amount of income-tax under the said section shall be allowed to any assessee for assessment year 2006-07 and subsequent years. It is also proposed to amend section 80L so as to provide that no deduction under the said section shall be allowed to any in....
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....n assessee whose salary income exceeds rupees five lakhs, a deduction of rupees twenty thousand is allowed. In view of the proposed increase in the general exemption limit to rupees one lakh and the substantial broadening of the income slabs, it is proposed to amend the said section so as to withdraw the above benefits. The proposed amendment will take effect from 1st April, 2006 and will, accordingly, apply in relation to the assessment year 2006- 2007 and subsequent years. [Clause 6] FRINGE BENEFIT TAX Introduction of Fringe Benefit Tax The taxation of perquisites or fringe benefits provided by an employer to his employees, in addition to the cash salary or wages paid, is subject to varying treatment in different countries. These benefits are either taxed in the hands of the employees themselves or the value of such benefits is subject to a 'fringe benefit tax' in the hands of the employer. The rationale for levying a fringe benefit tax on the employer lies in the inherent difficulty in isolating the 'personal element' where there is collective enjoyment of such benefits and attributing the same directly to the employee. This is so especially where the expenditure inc....
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....ovisions of this Act. Fringe benefits as outlined in section 115WB, mean any privilege, service, facility or amenity directly or indirectly provided by an employer to his employees (including former employees) by reason of their employment. They also include reimbursements, made by the employer either directly or indirectly to the employees for any purpose, contributions by the employer to an approved superannuation fund as well as any free or concessional tickets provided by the employer for private journeys undertaken by the employees or their family members. Further, as per the provisions of the proposed section, the fringe benefits shall be deemed to have been provided if the employer has incurred any expense or made any payment for the purposes of (a) entertainment; (b)festival celebrations; (c)gifts; (d) use of club facilities; (e) provision of hospitality of every kind to any person whether by way of food and beverage or in any other manner, excluding food or beverages provided to the employees in the office or factory; (f) maintenance of guest house; (g)conference; (h) employee welfare;(i) use of health club, sports and similar facilities,(j) sales promotion including....
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....he employer in case of delay in making such payment. Section 115WK provides for the charging of interest for default in furnishing return of income and section 115WL provides for the application of all other provisions of the Income-tax Act in relation to fringe benefits as well, save as otherwise provided. A new section 271FB is proposed to be inserted to provide for the levy of penalty for the failure to furnish a return of fringe benefits. Consequential amendments have also been proposed in section 2, section 17, section 40, section 119, section 124, section 139A, section 140, section 140A, section 142, section 153, section 238, section 239, section 244A, section 246A, section 271,, section 273B, section 276CC and section 278 to include a reference to the provisions of this Chapter. The proposed amendments will take effect from 1st April, 2006 and will, accordingly, apply in relation to the assessment year 2006- 2007 and subsequent years. [ Clause 37 ] website: http://indiabudget.nic.in 6 WIDENING OF TAX BASE Obligation to furnish a Return of income Section 139 of the Income tax Act provides for furnishing of a return of income. Under the existing provisions....
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.... by him in the previous year by way of repayment of loan, or interest on such loan, taken from any financial institution or any approved charitable institution for the purpose of pursuing higher education. In order to encourage the pursuit of higher studies, it is proposed to allow without any limit, the entire amount of interest paid by an individual during the previous year on such loan taken from any financial institution or any approved charitable institution for the purposes of pursuing higher education, as a deduction from the total income. However, no deduction shall be allowed for repayment of the principal loan amount. The deduction shall be allowed for eight years beginning from the year in which payment of interest on the loan begins. The proposed amendment shall take effect from 1st April, 2006 and will, accordingly, apply in relation to the assessment year 2006- 2007 and subsequent years. [Clause 25 ] MEASURES TO PROMOTE REGIONAL DEVELOPMENT Extension of time limit for setting up of industries in the State of Jammu and Kashmir for the purpose of tax holiday under section 80-IB Under the existing provisions contained in sub-section (4) of section 80-IB, i....
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....ear is less than seven and one-half per cent. of its book profit such book profit is deemed to be the total income of the company and it is liable to pay income-tax at the rate of seven and one-half per cent. No credit of such tax paid by the company under this section is allowed against the tax liability which arises in subsequent years under the other provisions of the Act. It is proposed to amend section 115JAA to provide that where any amount of tax is paid under sub-section (1) of section 115JB by a company for any assessment year beginning on or after the 1st day of April, 2006, credit in respect of the taxes so paid for such assessment year shall be allowed on the difference of the tax paid under section 115JB and the amount of tax payable by the company on its total income computed in accordance with the other provisions of the Act. The amount of tax credit so determined shall be allowed to be carried forward and set off in a year when the tax becomes payable on the total income computed under the regular provisions. However, no carry forward shall be allowed beyond the fifth assessment year immediately succeeding the assessment year in which the tax credit becomes allow....
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....of a lease of an aircraft or an aircraft engine by the Government of a foreign state or a foreign enterprise from an Indian company engaged in the business of operation of aircraft. This exemption is available subject to the condition that the agreement for such lease is entered into prior to 1st April, 2005. In other words, the tax exemption is not available in respect of lease rent payments under an agreement entered in or after 1st April, 2005. Further clause (6BB) of section 10 also provides for exemption from tax on tax paid by the Indian company in such lease rents. It is proposed to provide that the exemption for lease payments shall continue with regard to agreements entered into on or before 30th September, 2005. However, the benefit of exemption from tax on tax will be available in respect of lease payments made in pursuance of agreements entered on or after 1st October, 2005. These amendments will take effect from 1st April, 2006, and will, accordingly, apply in relation to the assessment year 2006-2007 and subsequent years. [Clause 4] Reduction in rate of tax on royalty and fees for technical services in the case of a non-resident from 20% to 10% The existin....
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....ntaining any infrastructure facility, which commences such operation and maintenance on or after 1st April, 1995, is eligible for a hundred per cent. deduction of profits for a period of ten years. Sub-clause(a) provides that the enterprise should be owned by a company registered in India or by a consortium of such companies. It is proposed to amend the above condition so as to enable an authority or a board or a corporation or any other body established or constituted under a Central or State Act which is not incorporated under the Companies Act, 1956 to take advantage of the benefits provided under the said section. The proposed amendment will take effect from 1st April, 2006 and will, accordingly, apply in relation to assessment year 2006- 07 and subsequent years. [Clause 26] Rationalisation of rates of depreciation and enhancement of additional depreciation on new machinery and plant. Under the existing provisions of section 32, depreciation on capital assets is allowed as a deduction at the accelerated rates specified in the Appendix to Income-tax Rule, 1962. The accelerated rate of depreciation on general machinery and plant is 25 per cent. Further, section 32 ....
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....ny sells or transfers the ship after the three years' lock-in period and the sale proceeds are not utilised for the purpose of acquiring a new ship within a period of one year from the end of the previous year in which such sale or transfer took place, the sale proceeds are deemed to be the profits of the assessment year immediately following the previous year in which the ship was sold or transferred. As stated above, a new ship is acquired by a shipping company by utilising both the reserves and borrowed capital. The existing law provides that if a ship is sold or transferred, the whole of the sale proceeds would be subject to tax. This implies that both borrowed capital and amount withdrawn from reserves would bear the burden of tax. The real intent is to restrict the incidence of the tax on the amount utilised from the reserve account for acquiring the ship. The proposed amendment seeks to clarify this real intent whereby website: http://indiabudget.nic.in 9 only so much of the sale proceeds which represent the amount credited to the reserve account and utilised for acquisition of the ship would be deemed to be the profits. This amendment will take retrospective ....
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....d to be a "speculative transaction", if it is settled otherwise than by actual delivery. However, certain categories of transactions are excluded from the purview of the said provision. Further the unabsorbed speculation losses are allowed to be carried forward for eight years for set-off against speculation profits in subsequent years. These restrictions were essentially designed as an anti-evasion measure to prevent claims of artificially generated losses in the absence of an appropriate institutional infrastructure. Recent systemic and technological changes introduced by stock markets have resulted in sufficient transparency to prevent generating fictitious losses through artificial transactions or shifting of incidence of loss from one person to another. The screen based computerised trading provides for an excellent audit trail. Therefore, the present distinction between speculative and non-speculative transactions, particularly relating to derivatives is no more required. The proposed amendment, therefore, seeks to provide that an eligible transaction carried out in respect of trading in derivatives in a recognised stock exchange shall not be deemed to be a speculative ....
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....amend the provisions of section 199 to provide that credit for TDS upto assessment year 2006-07 will only be given on production of TDS certificates. It is also proposed to amend section 203 to provide that the deductor will be required to issue TDS certificates in respect of TDS before 1st April, 2006. However, the requirement of filing TDS certificates along with the return and claiming credit on the basis of such certificates will be dispensed with from assessment year 2007-08. Similarly, the deductor will not be required to issue TDS certificates in respect of TDS on or after 1st April, 2006. Similar amendments are also being proposed in respect of tax collection at source under Chapter XVII-BB of the Income-tax Act. This amendment will take effect from 1st April, 2005. [Clauses 40, 50, 51 and 53] Truck operators owning upto two trucks exempted from TDS Under the existing provisions contained in sub-section (3) of section 194C, tax is required to be deducted where the amount of any sum credited or paid or likely to be credited or paid exceeds twenty thousand rupees or the aggregate of the payments made by one single deductor exceed fifty thousand rupees. The amen....
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....) responsible for paying to a resident any income liable for deduction of tax at source under Chapter XVII, to prepare and deliver or cause to be delivered quarterly returns in the prescribed form and verified in such manner and within such time as may be prescribed, to the prescribed income-tax authority or the person authorised by such authority on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media. [Clause 52] This amendment will take effect from 1st June, 2005. Penalty for not furnishing quarterly returns by banks, co-operative societies and public sector companies of non-deduction of tax The proposed amendment seeks to insert a new clause (l) in sub-section (2) in section 272A to provide for penalty in cases of failure to deliver or cause to be delivered the quarterly return within the time specified in the newly inserted sub-section (1) of section 206A. The penalty will be one hundred rupees for every day of default. This amendment will take effect from 1st June, 2005. [Clause 60] New provision to provide for set off of losses of a banking company against the profit of a banking institution under a scheme of amalgamat....
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....3B confer powers upon the Assessing Officer to make an order of assessment or reassessment of total income of six assessment years preceding the assessment year relevant to the previous year in which search under section 132 is conducted or requisition under section 132A is made, within a period of two years from the end of the financial year in which the last of the authorisations for search, or for requisition was executed. Clause (b) of the said sub-section confers power upon the Assessing Officer to make an order of assessment or reassessment of total income of the assessment year relevant to the previous year in which search is conducted or requisition is made, within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or requisition under section 132A was executed. The time-limit provided in the aforesaid clause (a) and clause (b) is also applicable for making assessment or reassessment in case of other person referred to in section 153C. With a view to rationalizing the provisions, it is proposed to insert a proviso to sub-section (1) of the said section 153B so as to provide that in case of such....
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....n 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving of books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person for such assessment year in the manner provided in section 153A. The provisions of the proposed new sub-section (2) would apply where books of account or documents or assets seized or requisitioned referred to in sub-section (1) has been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A. These amendments will take effect retrospectively from 1st June, 2003 and will, accordingly, apply in relation to a search initiated under section 132 or in relation to books of account, other documents or any assets requisitioned under section 132....
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....no deduction with regard to such expenditure incurred shall be allowed after 31st March, 2005. With a view to encourage the indigenous development of in-house scientific research, it is proposed to extend the time limit for availing the weighted deduction under the said sub-section by two more years i.e. up to 31.3.2007. The proposed amendment will take effect from 1st April, 2006 and will, accordingly, apply in relation to assessment year 2006- 07 and subsequent years. [ Clause 10] Extension of the time limit for the purpose of tax holiday under section 80-IB to any company carrying on scientific re- search and development. Under the existing provisions of sub-section (8A) of section 80-IB, a company carrying on scientific research and development is allowed a hundred per cent deduction of the profits of such business for a period of ten assessment years, if such company is approved by the Secretary, Department of Scientific and Industrial Research, Ministry of Science & Technology, before 1st April, 2005. With a view to promote scientific research and development in the country, it is proposed to allow the deduction to companies carrying on scientific research and ....
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....ler, (iv) @ 0.0133%, on the value of transactions of derivatives being option or future, entered in a recognised stock exchange, (v) @ 0.2% on the value of transactions of sale of units of an equity-oriented fund to the mutual fund. The proposed amendment will take effect from the 1st June, 2005. [ Clause 124] website: http://indiabudget.nic.in 13 MEASURES TO CHECK TAX EVASION New provisions for levy of Banking Cash Transaction Tax Chapter VII of the Finance Bill, 2005, contains provisions relating to Banking Cash Transaction Tax. This proposed new Chapter shall be applicable to the whole of India except the State of Jammu and Kashmir. This Chapter shall come into force with effect from 15 June, 2005. Clause 94 of the Bill proposes to define person to have the same meaning as assigned in clause (31) of section 2 of the Income- tax Act and also includes an office or establishment of the Central Government or the Government of a State. The aforesaid clause also proposes to define the taxable banking transactions as follows :- (i) a transaction of withdrawal of cash exceeding ten thousand rupees on any single day by a person from any scheduled bank; or ....
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.... calendar month. The said section also provides that any scheduled bank that fails to collect the tax shall be liable to pay the tax to the credit of the Central Government in accordance with the provisions of the said Chapter. Clause 98 of the Bill proposes to provide that every scheduled bank shall within the prescribed time after the end of each financial year, furnish a return to the Assessing Officer or any other authority or agency authorised by the Board, in such form and verified in such manner as may be prescribed by the Board, in respect of all taxable securities transactions entered into during any financial year. The proposed clause 98 also provides that the Assessing Officer may issue a notice to any assessee who is responsible for collection of banking cash transaction tax and has not furnished the return within the prescribed time, asking the assessee to furnish the return within the time specified in the notice. It is also proposed to provide for furnishing of a revised return before the assessment is made in cases where the assessee has not furnished a return within the time allowed or on discovery of any omission or wrong statement in the return furnished earli....
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.... tax within the prescribed time, he shall be liable to pay a sum of one hundred rupees for every day during which the failure continues by way of penalty. Clause 104 of the proposed Chapter provides that any assessee who fails to comply with a notice issued under sub- clause (2) of clause 100 of the proposed Chapter shall be liable to pay by way of penalty a sum of hundred rupees for every day during which the failure continues. Clause 105 of the proposed Chapter provides that no penalty will be imposable under any of the above sections if the assessee proves that there was reasonable cause for the failure to comply with the provisions of the said clause. It is also proposed that no order imposing a penalty under the proposed Chapter shall be made unless the assessee has been given a reasonable opportunity of being heard. Clause 106 of the proposed Chapter provide that sections 120, 131, 133A, 156, 178, 220 to 227, 229, 232, 260A, 261, 262, 265 to 269, 278B, 282 and 288 to 293 of the Income-tax Act, shall apply in relation to banking cash transaction tax. Clause 107 of the proposed Chapter provides that where the assessee is aggrieved by any assessment order passed by t....
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....oftware. This additional duty will not be included in the assessable value for levy of education cess on imported goods. Manufacturers will be able to take credit of this additional duty for payment of excise duty on their finished products. B. PEAK RATE OF AD VALOREM CUSTOMS DUTY REDUCED: (a) Peak rate of customs duty on non-agricultural products has been reduced from 20% to 15% with a few exceptions. (b) Ad valorem component of customs duty on textile fabrics and garments has been reduced from 20% to 15%. There has, however, been no change in specific component of customs duty. C. METALS AND THEIR INPUTS: (I) Customs duty has been reduced from 15% to 10% on primary and semi-finished forms of following metals :- (a) Stainless steel, other alloy steel and ferro-alloys, (b) Aluminium, (c) Copper, (d) Zinc, (e) Tin, (f) Base metals of Chapter 81 (such as, Tungsten, Magnesium, Cobalt, Titanium, etc.) (II) Customs duty on lead has been reduced from 15% to 5%, on articles of lead from 20% to 10% and on battery separators from 20% to 5% . (III) Customs duty on calcined alumina has been reduced from 20% to 10%. D. INPUTS FOR MANUFACTURE OF STEEL: ....
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....on presently available to specified telecom network equipment and parts thereof upto 31.3.2005, when imported by telecom service providers, has been continued without any time limit. J. PETROLEUM PRODUCTS: 1) Customs duty on crude petroleum and petroleum products has been reduced as follows: (a) Crude petroleum from 10% to 5%; (b) Kerosene for public distribution system from 5% to Nil; (c) LPG for domestic use from 5% to Nil; (d) Motor Spirit (Petrol) from 15% to 10%; (e) High Speed Diesel oil from 15% to 10%; and (f) Other petroleum products from 20% to 10%. 2) Additional duty of customs on motor spirit and high speed diesel oil has been increased from Re.1.50 per litre to Rs.2 per litre. K. CHEMICALS AND PETROCHEMICALS: 1) Customs duty has been reduced from 15% to 10% on Polymers of Ethylene (LDPE, LLDPE, HDPE, LHDPE, LMDPE), Polypropylene and Propylene copolymers, Polymers and copolymers of Styrene and Polymers of Vinyl Chloride; 2) Customs duty has been reduced on Ethylene, Propylene, Butylene, Butadiene, Benzene, Toluene, O-Xylene, Styrene, Ethylbenzene, Ethylene Dichloride, Vinyl Chloride Monomer and Acrylonitrile, from 10% to 5%. 3) Cus....
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....ied parts of battery operated road vehicles has been reduced from 20% to 10%. website: http://indiabudget.nic.in Document 3 17 EXCISE Note :- (a) SED means Special Excise duty. (b) AED (GSI) means Additional Excise Duty (Goods of Special Importance) Act. Major Proposals about Central Excise duty are the following : A. SURCHARGE ON PAN MASALA AND TOBACCO PRODUCTS: An additional excise duty, by way of surcharge, is being levied on pan masala and certain specified tobacco products to finance the National Rural Health Mission. This additional duty will be charged at prescribed specific rates on cigarettes, and at a rate equal to 10% of the aggregate of normal rates of excise duties payable on pan masala and other tobacco products. This surcharge has not been levied on biris. B. IMPOSITION AND INCREASE IN DUTY: (I) Imposition 1) Excise duty of 8% with CENVAT credit has been imposed on mosiac tiles. SSI exemption is available. 2) Excise duty of 16% has been imposed on road tractors (of engine capacity more than 1800 cc) for road trailers. 3) Excise duty of 2% has been imposed on branded articles of jewellery. The process of affixing or embossing the b....
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.....1.25/litre (c) Kerosene for public distribution 12% Nil (d) LPG for domestic use 8% Nil (e) Light Diesel Oil 16% +Rs.1.50/litre 16% +Rs.2.50/litre 2) Additional duty of excise on motor spirit and high speed diesel oil has been increased from Re.1.50 per litre to Rs.2 per litre. This amount goes to Central Road Fund. 3) There is no change in special additional excise duty of Rs.6.00 per litre on motor spirit. website: http://indiabudget.nic.in 18 NATIONAL CALAMITY CONTINGENT DUTY (NCCD): H. For replenishment of the National Calamity Contingent Fund, duty on following items was imposed by the Finance Act 2003: 1) 1% on polyester filament yarn, motor cars, multiutility vehicles, and two-wheelers; 2) Rs.50 per metric tonne on domestic crude oil. This levy was valid for one year (upto 29.2.2004) and subsequently was extended upto 31.3.2005. It is proposed to extend this levy without any time limit. I. MISCELLANEOUS: 1) Excise duty exemption available to wind operated electricity generators and parts has been extended to cover rotor and wind turbine controller. 2) Excise duty on cement clinkers has been increased from Rs.250 per metric ton....
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....ral Board of Excise and Customs (CBEC) to review orders passed by Commissioner of Central Excise is being vested in a Committee of two Chief Commissioners as may be notified by the CBEC. Similarly, the power of the Commissioner to review the orders of Commissioner (Appeal) is being vested in a Committee of two Chief Commissioners of Central Excise. For this purpose suitable amendments are being made in sections 35A, 35B and 35E of the Central Excise Act. 10) CENVAT Credit rules have been amended so as to provide that credit of Additional Excise Duty, on pan masala and certain tobacco products (by way of surcharge) would be available for utilization of payment of this Additional excise duty only. Credit of no other duty can be utilized for paying this Additional excise duty. 11) The Schedule under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 is being amended so as to align the entries with the new Excise Schedule introduced in the Central Excise Tariff (Amendment) Act, 2005. 12) The Schedule under the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 is being amended so as to align the entries with the new Excise Schedule intro....
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....the States within the ambit of the definition of "sales tax law" and "general sales tax law" under the Central Sales Tax Act, 1956. (c) define the expression "works contract". (d) make submission of Form 'H' compulsory to enjoy the benefit under Section 5(3) of the Central Sales Tax Act, 1956. (e) empower the Central Government to make rules relating to the manner of determination of sale price and to prescribe the deductions to be allowed from the total consideration for a "Works Contracts". (f) provide for exemption from Central Sales Tax on sale of goods made in the course of inter-State trade or commerce, to officials, personnel, consulars or diplomatic agents of any diplomatic mission/consulate or United Nations Organization (UNO) and other similar international bodies. (g) declare sale of Aviation Turbine Fuel to any designated Indian carrier for its international flight as deemed export. This would enable designated Indian carriers to purchase Aviation Turbine Fuel for their international flights without payment of sales tax. 3) Indian Stamp Act, 1899: It has been decided to segregate ownership from management and governance of stock exchanges by converting....
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....onstruction service to: (i) include renovation of such building or civil structure; website: http://indiabudget.nic.in 20 (ii) include post construction completion and finishing services for such building or civil structure; (iii) include construction, repair, alteration, renovation or restoration of pipeline or conduits; (2) Erection, commissioning or installation services to include specified installation services. (3) Maintenance or repair services to include: (a) maintenance or management of immovable properties. (4) (b) maintenance or repair including reconditioning or restoration undertaken as part of any contract or agreement. Broadcasting services to include charges recovered by broadcasting agencies from multisystem operator (MSO) and provision of direct to home (DTH) signals to the customers. (5) Sound recording to include recording of sound on any media and includes post production services such as sound mixing or re-mixing. (6) Video-tape production to include recording of any programme, event or function on any media and includes post production services. (7) Taxable services provided by authorised service station to include recondit....