Following is the summary of the decisions taken on indirect tax issues by the Forum Chaired by Dr. Parthasarathi Shome, Adviser to the Finance Minister for Exchange of Views Between Industry Groups and Government on Tax Related Issues or Tax Related Disputes
1. Refunds under Rule 5 of the unutilized CENVAT Credit
Issue - Matching of FIRC with Export Invoices
Decision - Instruction has been issued to the field formation on 04.09.2013 for acceptance of self-certification submitted by the claimant for such refund claim
Issue - Problem in establishing nexus of input services with exports
Decision - The procedure for calculating the refund on the basis of the ratio of export turnover to total turnover that was introduced in 2012 will be applied for pending refund cases. Instructions will be issued accordingly
2. Valuation of goods sold at a price below the cost of production
Issue - Hon'ble Supreme Court in the case of Fiat India Private Limited held that where the products are sold for less than cost of production for an unduly long period of time for the purpose of market penetration, the transaction value cannot be accepted for the purpose of levy of excise duty. Basis this decision, excise authorities are asking cost records of excise assessee for the past years
Decision - A Circular will be issued by January 15, 2014 to provide clarity on the modality to be adopted for implementing this decision
3. Apart from the above, various other issues were discussed including - Reversal of CENVAT credit on removal of capital goods after use by considering transaction value (and not the depreciated value calculated at 2.5% per quarter), proposal to amend Input Service Distribution related provisions, availment of CENVAT credit on endorsed bill of entry. The entire text of the decisions taken by the Forum could be downloaded by following this link
Issue - Matching of FIRC with Export Invoices
Decision - Instruction has been issued to the field formation on 04.09.2013 for acceptance of self-certification submitted by the claimant for such refund claim
Issue - Problem in establishing nexus of input services with exports
Decision - The procedure for calculating the refund on the basis of the ratio of export turnover to total turnover that was introduced in 2012 will be applied for pending refund cases. Instructions will be issued accordingly
2. Valuation of goods sold at a price below the cost of production
Issue - Hon'ble Supreme Court in the case of Fiat India Private Limited held that where the products are sold for less than cost of production for an unduly long period of time for the purpose of market penetration, the transaction value cannot be accepted for the purpose of levy of excise duty. Basis this decision, excise authorities are asking cost records of excise assessee for the past years
Decision - A Circular will be issued by January 15, 2014 to provide clarity on the modality to be adopted for implementing this decision
3. Apart from the above, various other issues were discussed including - Reversal of CENVAT credit on removal of capital goods after use by considering transaction value (and not the depreciated value calculated at 2.5% per quarter), proposal to amend Input Service Distribution related provisions, availment of CENVAT credit on endorsed bill of entry. The entire text of the decisions taken by the Forum could be downloaded by following this link
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