The document discusses several proposed changes to indirect taxes in India for budget year 2011, including service tax and excise duty. Key points include: - Service tax payment rules changing from receipt of payment to provision of service, taking effect April 1, 2011. - New services like restaurants, hotels, diagnostic tests coming under service tax net of 3-5%. - Expansion of scope for existing services like insurance, commercial training, and health services. - Restrictions on cenvat credit for certain industries and exemption for SEZ. - Penalty rates for delayed tax payment and returns increased to discourage non-compliance. - Select excise duty changes for sectors like cement, text

1. Budget – 2011Indirect Tax ProposalsFICCI-Ahmedabad Chapter01.03.2011 CA Sandesh Mundra

2. vs Lets begin the game CA Sandesh Mundra

3. Whom do we have to meet on the way 30 Min CA Sandesh Mundra

4. Service Tax CA Sandesh Mundra

5. Rewriting the service tax Point of Taxation Rules, 2011 Service Tax Payment has been altered from receipt of payment to provision of service. Date of provision of service shall be earliest of:- Date on which service provided Date of Invoice Date of Payment Effective – 1.04.2011 CA Sandesh Mundra

6. New Services under the net Services provided by Restaurants if Air-conditioned License to serve alcohol Service Tax @ 3% Effective – After issue of Notification CA Sandesh Mundra

7. New Services under the net Service provided by Hotels, Inns, Guest Houses, Clubs Continuous period of stay < 3 Months Declared Tariff of Rooms > Rs. 1000 Service Tax @ 5% Effective – After issue of Notification CA Sandesh Mundra

8. Expanding the scope of existing services CA Sandesh Mundra

11. Rate – 1.5%, if paid on total premium

12. Exemption to General Insurance under RashtriyaSwashyaBimaYojanaCA Sandesh Mundra

16. Centrally AC

17. More than 25 beds at any time

18. Services related to diagnostic tests / investigative services.

19. Services by consultant doctors at hospitals

20. Service Tax @ 5%CA Sandesh Mundra

22. Exemption – Complex services - JNURM and Rajiv AwaasYojana

23. Exemption – Work Contract services - Specified port / AirportCA Sandesh Mundra

25. New Rule 2(b) for valuationCA Sandesh Mundra

26. SSI No Service Tax Audit < Rs. 60 Lacs Interest Rate – Normal (-) 3% . CA Sandesh Mundra

27. SEZ Provisions with regard to Cenvat Credit Amended CA Sandesh Mundra

28. Penal Provisions Waiver from penalty if intention found to be ok Delay in return filing – From Rs. 2K to Rs. 20K Interest on delayed Payment – From 13% to 18% (1.4.11) Prosecution provisions introduced – Delay > 6 Mnths No concession from Penalty for cases involving Fraud CA Sandesh Mundra

29. Central Excise & Customs CA Sandesh Mundra

30. Basic rate of Excise remains unchanged Concessional rate of excise duty of 4% changed to 5% - Cakes, Drugs, Medical devices Excise Duty @ 1% without Cenvat imposed on 130 items earlier exempt – FMCG - Specs, Lenses, Cycles Concessional rate of 5% on exempted items like micro processors, storage media Branded Textile – ED @ 10% Major Proposals CA Sandesh Mundra

31. Sector Specific Exemption Cement – Other than a mini plant Impact on prices likely to be Rs.5-10/- per bag. CA Sandesh Mundra

33. For non-branded products, old regime to continue

34. Liability to pay of brand owners in case of jobworking

35. Excise duty on 5% on automatic looms and projectile looms

36. BCD on raw silk reduced from 30% to 5%.

37. Various other products reduced by 2.5%.

38. Reduction in BCD on acrylon and pulp to 2.5%CA Sandesh Mundra

40. Agr – Hort – Dairy – Poultry – Marine

42. Excise - Taxi Refund Scheme extended to vehicles = 13 passengers

43. Full exemption to parts of power tillers.

45. Concessional rate of 5% - Corrugated boxes

46. Reduction in BCD on waste paper to 2.5%CA Sandesh Mundra

51. Further exemption from CVD on import also continues.

53. Reduction in customs duty on steel scrap and ferro alloysCA Sandesh Mundra

55. Input services – Construction services excluded

56. Rule 5B – Asset written off – Cenvat Reversal

57. Rule 6

58. Exempt Services to be paid at 5%

59. Option to maintain separate books for goods and prop for services

60. Credit restricted to 50% for banking

61. Credit restricted to 80% for insurance

62. 6(5) omitted

63. Exemption for services given to SEZ

64. Concept of Trading serviceCA Sandesh Mundra

65. CA Sandesh Mundra

66. I have enough money to last me the rest of my life, unless I buy something." — Jackie Mason CA Sandesh Mundra