This issue of "Tax Amicus" covering major changes brought by Budget 2012 also discusses the features of new Service Tax regime based on Negative List. While Central Excise and Service Tax rates have been raised across the board to 12%, various new rules are being proposed in Service Tax. Cenvat credit Rules have been amended to introduce simplified scheme for refund of credit in case of exports; to provide for transfer of SAD, and to state that interest is only payable only if credit taken wrongly is utilized. Service Tax Rules have been amended to increase the period for issuance of invoice from 14 days to 30 days. Newly amended rules also provide for adjustment of excess amount of Service Tax paid without limit.
Under Customs, new jumbo notification has been issued while exemption has been granted from Education Cess and Secondary and Higher Education Cess payable on CVD in case of imports. Finance Bill, 2012 also proposes to bring provisions for recovery of duty from persons who had obtained duty credit scrips fraudulently before selling the same to somebody else who used them for paying duty. On the Income Tax front, the Bill proposes to bring provisions for General Anti-Avoidance (GAAR), extension of transfer pricing regulations to domestic transactions and other retrospective amendments expanding scope of the terms 'royalty' and 'capital asset'.
