Tiêu đề 6.Paper 18.pdf ✅

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Suggested Answer_ Syl2016_June2017_Paper 18 Academics Department, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 1 FINAL EXAMINATION GROUP - IV (SYLLABUS 2016) SUGGESTED ANSWERS TO QUESTIONS JUNE - 2017 Paper-18 : INDIRECT TAX LAWS AND PRACTICE Time Allowed : 3 Hours Full Marks : 100 The figures in the margin on the right side indicate full marks. All questions are compulsory. In Question No. 1, all sub-questions are compulsory. In Question Numbers 2 to 8, student may answer any 5 questions. Wherever necessary, you may make suitable assumptions and state them clearly in your answer. Working notes should form part of the answer. Section – A 1. Comment on the following questions along with valid reasons: 2x10=20 (a) JK Engineering Co. manufactured a machinery on 20-01-2017, when excise duty was 8%. These were entered in Daily Stock Account on 20-01-2017. These were sold from factory on 16-02-2017. On that date, rate of excise duty was 12.50%. At what rate excise duty is payable? (b) A provider of service did not pay service tax due to ignorance. During audit, the mistake was pointed out. He paid the service tax along with interest on his own before receiving any notice from department. What is the penalty that can be imposed on him? (c) A manufacturer has head office in Kolkata and factories at Raurkela, Nagpur and Raipur. He is receiving services at his Kolkata office, on which service tax has been charged by the service provider. He is not providing any service from Kolkata. Can he utilize the credit of service tax paid on the various input services received by him at Kolkata? Advise him. (d) Service provided from India with respect to immovable property situated abroad is called export of services. (e) The directors of a private company in liquidation are jointly and severally liable personally for any sales liability of the company in liquidation. (f) A demand of ` 8,50,000 of excise duty plus penalty was confirmed by Joint Commissioner, Assesse filed appeal and the demand was set aside by Commissioner (Appeals). Department is of the view that order of Commissioner (Appeals) is not proper. Advise department on action that can be initiated by them. (g) Deepak Finance Company is engaged in sale and purchase of foreign exchange. He received 1,000 US dollars from a foreign tourist on 7-11-2016 and paid him ` 67,600 in exchange. The RBI reference rate on that day was 1USD = ` 69.40. Calculate value of service on which service tax is payable and service tax payable if service tax rate is 15%. Ignore cesses. (h) Subsidy given by Government to manufacturers to compensate cost of production will form part of sale price. (i) It is necessary to specify the heading under which the service being provided is falling. (j) An importer imported machinery. At the time of imports, he paid following duties— Basic customs duty, Countervailing duty, Special countervailing duty, Anti dumping duty and Customs education cess. He sells the imported machinery in India. Is he eligible to get any refund of import duties if he resales the goods in India?
Suggested Answer_ Syl2016_June2017_Paper 18 Academics Department, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 2 Answer: 1. (a) The excise duty is payable @ 12.50%. The date on which goods are cleared from factory is relevant for payment of excise duty. (b) No penalty can be imposed as matter stands closed if tax with interest is paid before show cause notice, as per section 73(3) of Finance Act, 1994. (c) He can utilize the credit. He should register his Kolkata office as Input Service Distributor. He can take credit of service tax and then transfer the Cenvat credit to his factories by issuing monthly invoice. (d) Yes. Service provided from India with respect to immovable property situated abroad is called export of services. (e) If a private company is wound up and any tax assessed on the company cannot be recovered, then every person who was a director of the private company at any time during the period for which tax is due shall be jointly and severally liable for the payment of such tax, unless he proves that the non recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company. (f) Usually the Department can file appeal with Tribunal against the order of Commissioner (Appeals), if it is of the view that the order is not proper. However, if the excise duty involved is less than rupees ten lakhs, Department cannot file appeal before Tribunal against the order of Commissioner (Appeals), as per the litigation policy of the Government of India. (g) Value of service = (` 69.40 – ` 67.60) × 1,000 USD = ` 1.80 × 1,000 USD = ` 1,800 Service tax @15% = ` 270. (h) Government subsidy does not constitute amount payable to the dealer (by his customer) as consideration for the sale of goods. Hence, it is not includible in sale price. (i) Specify the heading under which the service being provided is fallen, is necessarily for the purpose of classification. (j) He is entitled to get refund of special CVD of 4% pad by him at the time of imports. Section – B Answer any five questions out of seven questions given. Each question carries 16 marks. 2. (a) Mahesh Chemicals Ltd. furnished the following information for the month of October, 2016: (i) Input chemical Alpha - Invoice dated 12-07-2015- Excise duty paid - ` 4,50,000 (ii) Input chemical Beta —Invoice dated 21-03-2016 - Excise duty paid— ` 3,50,000 (iii) Input Gama—Original excise invoice not available but Xerox copy duly certified by excise officer available — Excise duty paid— ` 2,30,000 (iv) Security Services—Invoice dated 12-10-2016— Service tax paid— ` 53,200 (v) Machinery falling under chapter heading 84 —Invoice dated 3-07-2014— Excise duty paid on machinery by supplier— ` 5,00,000 (vi) Invoice of Goods Transport Agency (GTA) for bringing raw materials to the factory was dated 21-07-2016. Service tax was paid by Mahesh Chemicals Ltd. ` 24,000 under reverse charge in the return of September, 2016. However, payment of freight was made to the Goods Transport Agency till December, 2016. (vii) Taxi was hired by purchase manager to visit supplier for discussions on price. The service tax charged by taxi operator was ` 1,200. (viii) Spare parts for machinery were imported on which duty paid was as follows— Basic customs duty ` 1,000; Countervailing duty (CVD) ` 1,375; Education cess 47.50; Secondary and Higher Education cess ` 23.75; Special CVD under section 3(5)—500; Anti-dumping duty- ` 300. Determine the Cenvat credit that can be availed by access during the month of October 2016. 8 (b) Some articles have been specifically excluded from definition of 'input' in Cenvat
Suggested Answer_ Syl2016_June2017_Paper 18 Academics Department, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 3 Credit Rules even if they have relation with manufacture. What are those items? 8 Answer: 2. (a) (i) Cenvat credit is not eligible as invoice date is beyond one year. (ii) Cenvat credit of ` 3,50,000 on input goods available (iii) Cenvat credit is not available on basis of Xerox copy of invoice. (iv) Cenvat credit of input service of ` 53,200 is available. (v) Time limit of one year for taking Cenvat credit is not applicable in respect of capital goods. Hence, Cenvat credit of 50% of excise duty i.e. 2,50,000 [50% of ` 5,00,000] is available. (vi) Cenvat credit of GTA input service of ` 24,000 available, even if payment of bill amount is not made to service provider. (vii) These services are not eligible for Cenvat Credit. (viii)Cenvat credit of CVD (` 1,375) and special CVD (` 500) is available i.e. total credit of ` 1,875 is available. Thus, total Cenvat credit available is as follows - 3,50,000 + 53,200 + 2,50,000 + 24,000 + 1,875 = ` 6,79,075. (b) Following items have been excluded from definition of input in Cenvat Credit Rules. (A) light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol; (B) any goods used for - (a) construction or execution of works contract of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, - - except for the provision of service portion in the execution of a works contract or construction service as listed under clause (b) of section 66E of the Act (C) Capital goods except when used as parts or components in the manufacture of a final product and if the value of such capital goods is upto ` 10,000 per piece. (D) motor vehicles (E) any goods, such as food items, goods used in a guesthouse, residential colony, club or a recreation facility and clinical establishment, when such goods are used primarily for personal use or consumption of any employee; and (F) any goods which have no relationship whatsoever with the manufacture of a final product. 3. (a) Calculate the Assessable Value of raw material Zeeta imported from USA by air and total customs duty payable, on basis of following details: (i) FOB Value of Zeeta— 5,000 US dollars (ii) Air freight paid— 1,400 US dollars (iii) Insurance for transit of machine— not ascertainable (iv) Commission paid to Indian Local Agent— ` 30,000 (v) Cost of transport of goods from port to godown of importer in India— ` 17,000. (vi) Exchange rate is One US dollar as notified by CBE&C= ` 68.80. RBI reference rates = ` 68.70. Exchange rate at which actually payment was made to Bank— ` 69.10. (vii)Customs duty rate —10%. Excise duty on similar product if manufactured in India— 12.50%. 12 (b) What are the various Scope of FTP? 4 Answer: 3. (a) FOB Value of Zeeta 5,000 US Dollars Air freight restricted to 20% of FOB value 1,000 US Dollars Insurance @ 1.125% of FOB value 56.25 US Dollars Total value 6056.25 US Dollars Value in Indian Rupees @ ` 68.80 ` 4,16,670