We are producers of sugar located in Uttar Pradesh. We have been paying the applicable excise duty, including the sugar cess levied under the Sugar Cess Act, 1982, on the sugar produced. Upon our consultant?s advice, we had also been paying the education cess (EC) and the secondary and higher education cess (SHEC) on the sugar cess. Recently, we have engaged a new consultant who has informed us that EC and SHEC are not payable on the sugar cess. Kindly advise.
It was clarified vide Circular No.345/2/2004-TRU (Pt.) dated 10th August, 2004, that the education cess should be calculated only on such duties which are both levied and collected by the department of revenue. Further, recently it has been clarified by the CBEC vide Circular No.978/2/2014-CX dated 7 January 2014, that EC and SHEC are not leviable on ?cesses? levied under Acts which are not administered by the department of revenue, even if they are collected by it.
Sugar Cess being a cess levied by the Sugar Cess Act, 1982 (administered by the ministry of consumer affairs, food and public distribution), no EC and SHEC would be leviable on the same.
Delhi amnesty scheme extended till Feb 18
We are traders of electrical products in Delhi. Recently, during a self-review of our books of accounts and tax payments, we discovered that sales have been inadvertently under-reported in the VAT returns filed by us and consequently VAT has also not been paid on the same. Our consultant informed us about the DVAT amnesty scheme (Delhi Tax Compliance Achievement Scheme, 2013), wherein the outstanding tax can be paid off without interest, penalty or prosecution. However, we understand that declaration of tax dues under this scheme could be made only till 31 January 2014. Kindly suggest if there is any way we can still pay off the outstanding liability without interest, penalty or prosecution.
Recently, the Delhi government has extended the last date of filing declaration under DVAT Amnesty Scheme to 18 February 2014. Accordingly, you may still make the declaration of the outstanding tax amount.
The declaration has to be made in Form DSC-1 and payment of at least 50% of the tax dues has to be made. The proof of such payment has to be submitted along with the declaration. The balance amount has to be paid on or before the 21 March, 2014.
On furnishing the details of full payment of the declared tax, an acknowledgment of discharge of the tax dues shall be issued by the designated authority, within 15 days in Form DSC-3. For details of the amnesty scheme, please refer to Notification No. F.3(16)/Fin.(Rev-I)/2013-14/dsVI/786 dated the 20th September, 2013 issued by the Delhi VAT Authorities wherein Delhi Tax Compliance Achievement Scheme, 2013 was notified.
Cenvat credit on tax paid under VCES
We are a Delhi-based engineering consultancy firm providing consultancy services to projects in India. We also receive consultancy services from our group entities located outside India. However, no service tax under reverse charge was being paid by us on such services received, as we were not aware of any such provision in law.
Recently, as advised by our tax consultant, we declared our liability under reverse charge mechanism under the Voluntary Compliance Encouragement Scheme (VCES), 2013 and have also paid 60% of the service tax liability declared, on 23 December 2013. We have our doubts as to whether the first installment of tax dues paid under VCES would be available as Cenvat credit immediately after payment or it can be availed of only after payment of tax dues in full and on receipt of acknowledgment of discharge. Kindly advise.
Your concerns have been recently addressed by the CBEC vide its Circular No. 176/2/2014?ST dated 20 January 2014. It has been clarified that Cenvat credit of service tax paid under VCES shall be available only post-discharge of all tax dues, against discharge certificate received in Form VCES?3. As per VCES, a declaration of tax dues made under the scheme shall become conclusive only upon issuance of acknowledgment of discharge certificate in Form VCES?3. Further, it has been clarified that the eligibility of Cenvat credit would be governed by the Cenvat Credit Rules, 2004.
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