CWA ICWA Inter - Group II : Applied Indirect Taxes - December 2011
This Paper has 42 answerable questions with 0 answered.
Time Allowed : 3 Hours Full Marks : 100
The figures in the margin on the right side indicate full marks.
Answer Question No. 1 which is compulsory and any five from the rest.
Wherever required the candidate may make suitable assumptions and state them clearly in the answers.
All Questions relate to the assessment Year 2011–12 unless stated otherwise in the question.
1. (a) Fill in the blanks: 1x7=7
(i) Where goods are not _____________________ Excise Duty cannot be charged. (0)
(ii) As per Rule 6 of the Central Excise Rules, 2002, an Assessee is to make ___________________ of duty and pay the same. (0)
(iii) Under the Customs Act, where refund becomes due in the final assessment, interest will be payable if refund is not granted within _______________. (0)
(iv) A dealer has made inter State sale of goods to a Buyer who has exported the goods. The Dealer is not liable to pay Central Sales Tax if the Buyer issues ______________ Form to the Dealer. (0)
(v) An EOU Unit is required to execute ________________ Bond. (0)
(vi) If Service Tax Return is filed late by one day, the late fee payable of Rs. ________________. (0)
(vii) In case of __________________ Excise Duty is payable by Procurer (Buyer) of the manufactured goods. (0)
(b) State with reasons, whether the following statements are True or False (Answers without reasoning will not receive any credit): 2x5=10
(i) CEA, Customs Act, S.T. Act etc. have to be consistent with Constitution of India. (0)
(ii) There is no provision under the Customs Act for remission of Customs Duty on goods lost, damaged or pilfered. (0)
(iii) Commission received by distributors for distribution of Mutual Fund units are not liable to Service Tax. (0)
(iv) Excise Department cannot challenge the reasonability of MRP printed on the package. (0)
(v) Lottery ticket is not goods under the CST Act. (0)
(c) (i) State briefly the basic distinction between sales tax and Excise. 2 (0)
(ii) what are non‐Vat goods? 2 (0)
(iii) Goods already exported cannot be confiscated under Customs Act. —Explain. 2 (0)
(iv) A, an individual has not provided any service in the half year period of April to September. Should he file any return for the period? Give your opinion. 1 (0)
(v) Can Sales tax be levied if furniture is hired for one day for marriage functioned and returned after the function is over? 1 (0)
2. Write brief notes on following: 5x3=15
(a) Refund of Cenvat credit in cash. (0)
(b) Indian Customs Waters under the Customs Act, 1962. (0)
(c) Tax payer’s identification number (State level VAT). (0)
3. (a) BMK services, a partnership firm, gives the following particulars relating to the services provided to various clients by them for the half–year ended on 30–09–2010.
(i) Total bills raised for Rs. 14,90,000 (inclusive of service tax). this amount includes a bill for Rs. 30,000 was raised on an United Nations Organisation. Further, payments of bills for Rs. 2,00,000 were not received till 30–09–2010.
(ii) Amount of Rs. 1,00,000 was received as an advance from Gupta Business service Ltd. on 25–09–2010 to whom the services were to be provided in October, 2010.
You are required to work out:
(1) taxable value of service;
(2) amount of service tax payable. Service tax rate is 10.30%.
(b) Dealers whose turnover is below specified limits are eligible for simplified composition scheme under VAT. What is the turnover limit as specified in White Paper on VAT? State which dealers are not eligible for composition scheme under State VAT even if their annual turnover is below specified limit. 4 (0)
(c) Explain provisions of ‘rectification of order’ under service tax. 5 (0)
(d) Define exempted goods with reference to the provisions of Cenvat Credit Rules, 2004. 2 (0)
4. (a) Calculate the VAT liability for the month and input tax credit from following details:
(i) Input tax rate 5% and output tax rate is 15% in the state.
(ii) Inputs purchased in the month from within the State Rs. 30,00,000.
(iii) Output sold to buyers within the state during the month Rs. 20,00,000.
(iv) Output sold during the month to buyers as inter–state sales Rs. 4,00,000 (CST rate 2% against C form).
(v) Inputs purchased from other states as inter–state purchases against C form @ 2% Rs. 1,00,000.
(b) Compute the amount of Service Tax in the following cases assumig the applicable rate of service tax to be 10.3%:
(i) A goods carriage carrying 10 (ten) consignments (All Belonging to different persons) at fare of Rs. 500 each.
(ii) A goods carriage carrying 5 (five) consignments (Booked by five different persons but addressed to the same consignee) at fare of Rs. 300 each.
(c) The goods manufactured by P Q & Co. have been used for the purpose of further manufacture of some other goods. The cost of production of goods so used captively is Rs. 1,00,000. Compute the assessable value of the captively used goods and duty chargeable thereon at 14% plus 3% education cess. 3 (0)
(d) Ramesh, a Registered dealer in the state of Orissa furnishes the following data:
Total Inter-State sales (C.S.T. not shown separately) during October to December, 2010
Included in the above sales: Excise Duty
Freight (Out of which Rs. 30,000 is not shown separately in invoice)
Insurance charges incurred prior to delivery of goods
Installation and commissioning charges shown separately in invoice
Incentive on sales received from manufacturer 72,50,000
Calculate turnover and C.S.T. payable assuming that all transactions were covered by valid ‘C’ forms. 4 (0)
5. (a) What is anti–dumping duty? Explain meaning ‘margin of dumping’, normal value and injury margin. 5 (0)
(b) State the situations in which the proper officers is authorised to issue show–cause notice under section 28 of the Customs Act, 1962 and also the time limit. 4 (0)
(c) Enumerate various categories of sale of goods, indicating when State VAT is payable, when Central Sales Tax is payable and when no VAT/CST is payable. Also indicate relevant entries in the constitution under which the State VAT/CST is levied. 4+2 (0)
6. (a) Explain provisions relating to abatement of customs duty on damaged goods. 5 (0)
(b) Mr.R. Venkata Rao, an Indian resident, had gone to UK for business purposes. He brought following goods while returning to India (i) His personal effects like cloth etc. valued at Rs. 73,000, (ii) Two liter of liquor of Rs. 4,200, (iii) New Camera of Rs. 38,500, (iv) One laptop of Rs. 58,000. What is the customs duty payable? 5 (0)
(c) Explain provisions relating to ER–4 return. 5 (0)
7. (a) Pren Industries Ltd. manufactured components for a lathe. The component was supplied to J.M. Star Services, who were manufacturers of the lathe. J.M. Star services supplied dies free of cost for manufacture of the component to Prem Industries Ltd. Cost of dies was Rs. 10,00,000. As per technical estimate, 20,000 components could be manufactured out of the tooling. In addition, Prem Industries Ltd. purchased tools on their own at Rs. 1,00,000 for manufacture of the components. estimated life of the tool was 25,000 component. These tools were capitalized by Prem Industries Ltd. in their books of account. Prem Industries Ltd. supplied 5,000 components to J.M. Star Industries for Rs. 190 per piece exclusive of taxes and duties, during first year of production. In addition, they charged Dharmada (charity) of Rs. 10 per piece separately. This Dharmada amount was given by Prem Industries Ltd. for donation to a Charitable Organisation. Excise Duty rate was 10% and education cess was as applicable. Calculate the assessable value and the excise duty payable for the year. 5 (0)
(b) JVK electronics Ltd. imported parts of Colour television (CTV) Components were imported in 94 consignments over a period of 22 months. The components imported were such that by assembly, a CTV could be manufactured, though all components were not imported in equal numbers. The components were independently usable as spares or sold in market. As per Rule 2(a) of GIR, any reference in a heading to goods shall be taken to include a reference to those goods complete or finished, removed unassembled or disassembled. customs Department clubbed all these consignments and by applying rule 2(a), claimed that assessee imported CTV in un–assembled condition and not components of CTV. Accordingly, show cause notice was issued to JVK Electronics Ltd. Advice JVK Electronics Ltd. you may take help of any decided case law. 5 (0)
(c) An SSI unit is not eligible for exemption from excise duty if it manufactures goods with brand name belonging to other person. However, SSI exemption is available if the goods bearing brand name of other person are manufatured in a specified area. Explain provisions relating to that area. Is there any limit to the exemption? 5 (0)
8. (a) CENVAT Credit is available only if the specified duty paying document is available with manufacturer or service provider availing the CENVAT Credit. List any six of the documents eligible for availing CENVAT Credit. 3 (0)
(b) State the powers of Superintendent of Central Excise relating to adjudication and remission of Excise Duty. 3 (0)
(c) CUM duty price of a product (Excluding Sales Tax) is Rs. 1000. The manufacturer is allowing trade discount of Rs. 50. The Excise Duty rate is 10% plus education cess as applicable. Calculate the Excise Duty payable per piece. 3 (0)
(d) Write brief note on All Industry Duty Drawback Rates. 3 (0)
(e) (i) When does an advance rulling on service tax become void AB–Initio? 2+1 (0)
(ii) Who has the powers to appoint public warehouse at places notified under the Customs Act, 1962? (0)