May-2015

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ECONOMY UPDATES mer¬chandise exports with different kinds of duty scrips with vary¬ing conditions (sector specific or actual user only) attached to their use. Now all these schemes have been merged into a single scheme, namely Merchandise Export from India Scheme (MEIS) and there would be no conditionality attached to the scrips issued under the scheme. (b) Rewards for export of notified goods to notified markets under ‘Merchandise Exports from India Scheme (MEIS) shall be payable as percentage of realized FOB value (in free foreign exchange). The debits towards basic customs duty in the transferable reward duty credit scrips would also be allowed adjustment as duty drawback. At present, only the additional duty of customs / excise duty / ser¬vice tax is allowed adjustment as CENVAT credit or drawback, as per Department of Revenue rules. 2. Service Exports from India Scheme (SEIS) (a) Served From India Scheme (SFIS) has been replaced with Ser¬vice Exports from India Scheme (SEIS). SEIS shall apply to ‘Service Providers located in India’ instead of ‘Indian Service Providers’. Thus SEIS provides for rewards to all Service providers of notified services, who are providing services from India, regardless of the constitution or profile of the service provider. (b) The rate of reward under SEIS would be based on net foreign exchange earned. The reward issued as duty credit scrip, would no longer be with actual user condition and will no longer be restrict¬ed to usage for specified types of goods but be freely transferable and usable for all types of goods and service tax debits on procure¬ment of services / goods. Debits would be eligible for CENVAT credit or drawback. 3. Incentives (MEIS & SEIS) to be available for SEZs It is now proposed to extend Chapter -3 Incentives (MEIS & SEIS) to units located in SEZs also. 4. Duty credit scrips to be freely transferable and usable for payment of custom duty, excise duty and service tax (a) All scrips issued under MEIS and SEIS and the goods imported against these scrips would be fully transferable. (b) Scrips issued under Exports from India Schemes can be used for the following:- (i) Payment of customs duty for import of inputs / goods includ¬ing capital goods, except items listed in Appendix 3A. (ii) Payment of excise duty on domestic procurement of inputs or goods, including capital goods as per DoR notification. (iii) Payment of service tax on procurement of services as per DoR notification. (c) Basic Customs Duty paid in cash or through debit under Duty Credit Scrip can be taken back as Duty Drawback as per DoR Rules, if inputs so imported are used for exports. 5. Status Holders Business leaders who have excelled in international trade and have successfully contributed to country’s foreign trade are proposed to be recognized as Status Holders and given special treatment and privileges to facilitate their trade transactions, in order to reduce their transaction costs and time. B. BOOST TO “MAKE IN INDIA” 6. Reduced Export Obligation (EO) for domestic procurement under EPCG scheme: Specific Export Obligation under EPCG scheme, in case capital goods are procured from indigenous manufacturers, which is cur¬rently 90% of the normal export obligation (6 times at the duty saved amount) has been reduced to 75%, in order to promote do¬mestic capital goods manufacturing industry. 7. Higher level of rewards under MEIS for export items with high domestic content and value addition. It is proposed to give higher level of rewards to products with high domestic content and value addition, as compared to products with high import content and less value addition. 8. Online filing of documents/ applications and Paperless trade in 24x7 environment: (a) DGFT already provides facility of Online filing of various applications under FTP by the exporters/importers. However, certain documents like Certificates issued by Cost Accountants/ Chartered Accountants/ Company Secretary etc. have to be filed in physical forms only. In order to move further towards paperless processing of reward schemes, it has been decided to develop an online procedure to upload digitally signed documents by Cost Accountants/Chartered Accountant / Company Secretary. In the new system, it will be possible to upload online documents like annexure attached to ANF 3B, ANF 3C and ANF 3D, which are at present signed by these signatories and submitted physically. Read more at: http://dgft.gov.in/exim/2000/ highlight2015.pdf Central Excise CENVAT Credit (Second Amendment) Rules, 2015 Credit of Education Cess and Secondary and Higher Education Cess paid on inputs or capital goods received in the factory of manufacture of final product on or after the 1st day of March, 2015 can be utilized for payment of the duty of excise leviable under the First Schedule to the Excise Tariff Act. Also the credit of balance fifty per cent Education Cess and Secondary and Higher Education Cess paid on capital goods received in the factory of manufacture of final product in the financial year 2014-15 100 the MANAGEMENT ACCOUNTANT MAY 2015 www.icmai.in
can be utilized for payment of the duty of excise specified in the First Schedule to the Excise Tariff Act: The credit of Education Cess and Secondary and Higher Education Cess paid on input services received by the manufacturer of final product on or after the 1st day of March, 2015 can be utilized for payment of the duty of excise specified in the First Schedule to the Excise Tariff Act.” Source: Notification No. 12/2015 - Central Excise (N.T.) dated: 30th April, 2015 Govt. exempts excise duty on goods cleared against Post Export EPCG duty credit scrip vide Notification No.18/2015-C.E dated 1-4-2015 The exemption shall be subject to the following conditions, name¬ly:- (a) that the conditions (1) to (14) specified in paragraph 2 of the Notification No. 17/2015 – Customs, dated the 1st April, 2015 are complied and the said scrip has been registered by the Customs authority at the specified port of registration (hereinafter referred as the said Customs authority); (b) that the holder of the scrip, who may either be the person to whom the scrip was originally issued or a transferee-holder, presents the said scrip to the said Customs authority along with a letter or proforma invoice from the supplier or manufacturer indicating details of its jurisdictional Central Excise Officer (hereinafter referred as the said Officer) and the description, quantity. Read more at: http://gst.taxmann.com/ topstories/104010000000044665/govtexempts-excise-duty-on-goods-clearedagainst-post-export-ep¬cg-duty-creditscrip.aspx Service Tax Implementation of Service Export from India Scheme (SEIS) under FTP 2015-2020 Central Government exempts the taxable services provided or agreed to be provided against a scrip by a person located in the taxable territory from the whole of the service tax leviable thereon under section 66B of the said Act.This notification shall be applicable to the Service Exports from India Scheme duty credit scrip issued by the Regional Authority in accordance with paragraph 3.10 read with paragraph 3.08of the Foreign Trade Policy vide Notification No. 11 / 2015– Service Tax dated: 8th April, 2015. Read more at: http://www.servicetax.gov. in/st-notfns-home.htm Implementation of Merchandise Export from India Scheme (MEIS) under FTP 2015-2020 Central Governmentexempts the taxable services provided or agreed to be provided against a scrip by a person located in the taxable territory from the whole of the service tax leviable thereon under section 66B of the said Act.This notification shall be applicable to the Merchandise Exports from India Scheme duty credit scripissued to an exporter by the Regional Authority in accordance with paragraph 3.04 read with paragraph 3.05of the Foreign Trade Policy vide Notification No. 10/ 2015– Service Tax dated: 8th April, 2015. Read more at: http://www. servicetax.gov.in/st-notfns-home. htm SEBI Fine structure for non-compliance with the requirement of Clause 49(II)(A)(1) of Listing Agreement The Stock Exchanges are advised to impose the following fine on listed entities for noncompliance with the requirement of Clause 49(II)(A)(1) of Listing Agreement. (See table below). Banking Export of Goods and Services – Project Exports With a view to further liberalising the procedure and as the Working Group structure has been dismantled, it has been decided to withdraw the limit of USD 20 million for Buyer’s credit which may be extended to foreign buyers in connection with export of goods on deferred payment terms and turn key projects from India Circular No.93 (RBI/2014-15/534) dated: 1st April 2015. Memorandum of Instructions on Project and Service Exports (PEM) has been revised accordingly. Provisioning pertaining to Fraud Accounts In reference to the guidelines compiled in paragraph 4.2.9 of Master Circular on Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated July 1, 2014, in terms of which, in accounts where there are potential threats for recovery on account of erosion in the Compliance Status Fine Structure Fine Structure Listed entities complying be¬tween April 1, Rs. 50,000 2015 and June 30, 2015 Listed entities complying between July 1, Rs 50,000 + Rs 1000/- per day w.e.f. July 1, 2015 and September 30, 2015 2015 till the date of compliance Listed entities complying on or after October Rs 1,42,000/- + Rs 5000/- per 1, 2015 day from October 1, 2015 till the date of compliance Source: Circular CIR/CFD/CMD/1/2015 April 08, 2015 www.icmai.in MAY 2015 the MANAGEMENT ACCOUNTANT 101
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SPECIAL FOCUS INSIDE ‘CMAs can id
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May 2015 Inside COVER STORY MAY 201
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FROM THE EDITOR’S DESK Greetings!
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PRESIDENT’S COMMUNIQUE Certificat
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PRESIDENT’S COMMUNIQUE a “Pract
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ICAI-CMA SNAPSHOTS PP and CCM, ICAI
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COVER PRESIDENT’S STORY COMMUNIQU
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COVER STORY “Business is the main
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COVER STORY COMMUNICATING VALUE TO
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INTERVIEW 'CMAs CAN IDENTIFY BUSINE
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TAXATION OF HOLOGRAMS, FREE WARRANT
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TAXATION present case, we are addre
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TAXATION WIDENING THE TAX BASE Indi
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TAXATION formation about foreign cu
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TAXATION Non-resident taxation has
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TAXATION are inter-connected throug
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Page 93 and 94: pected to grow at 10-15% annually.
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Page 99: ECONOMY UPDATES Income Tax CBDT Not
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Page 107 and 108: ELECTIONS 2015 www.icmai.in MAY 201
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May-2015

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