Budget Blues


I.                   CBEC  PROJECTED COLLECTIONS for the financial year 2014-15:

1.      Service Tax  : Rs. 2,15,973  crore

2.      Central excise:  Rs. 2,06,356 crore

3.      Customs Duty:  Rs, 2,01,819       crore

So from this financial year onwards, service tax collection is projected to exceed customs and excise duties.

Out of the governments proposed gross tax revenue of Rs. 13,64,524 crore for the current fiscal, the revenue from CBEC is expected to be around Rs.6,24,902 crores i.e. around 45%

II.                Individual Income Tax Rates:


1.      Exemption limit has been increased to Rs. 2.5. lakh from the present Rs. 2 lakhs and for senior citizens from Rs. 2.5 lakh to Rs. 3 lakh

2.      Section 80C deuction has been increased from Rs. 1 lakhs to Rs. 1.5 lakh

3.      Interest on Housing Loan has been increased from Rs. 1.5 lakh to Rs. 2 lakhs.

4.      Annual limit for investment under PPF is increased from Rs. 1 lakh to Rs. 1.5 lakh


III.             Important changes in Central Excise and Service Tax:

1.      Rule 4(1) (for input credit) and Rule 4(7) (for input service credit) of CCR,2004 are being amended in order to fix a time limit of six months for availment of the CENVAT Credit.

2.      CE valuation Rules are amended to provide that in cases where excisable goods are sold at a price below the manufacturing cost and there is no additional consideration flowing from the buyer to the seller directly or from a third person on behalf of the buyer, this price shall be the assessable value thus negating the Hon’ble Supreme Courts judgement in FIAT India Pvt. Ltd.

3.      Section 35F of CEA is proposed to be replaced to make it mandatory to pay Pre-deposit of 7.5% of tax or penalty or both for first appeal and 10%  CESTAT,

4.      Baggage allowance is increased from Rs 35K to Rs. 45K.

5.      Incremental interest rates for delayed payment of service tax for first six months 18%, above 6 months but upto 12 months 24% and above one year 30%.

6.      Service tax credit of service tax paid on hire a car is allowed.

7.      Extension of service on advertisement on  sale of slots or space online, theatres, mobile etc., is taxable

8.      The concept of auxiliary educational services is omitted and a new list of exempted services received by eligible educational institutions is introduced and renting of immovable property for educational institutions may henceforth be taxable.

9.      SEZ units should obtain Form A-2 containing list of exempted services from excise officers within 15 days from submission of A-1 and if it is not issued within 15 days, authorization shall be deemed to be valid from date of application in A-1. However, if authorization is not given to service providers within three months by SEZ unit, service tax shall become payable.

10.  In certain cases, the benefit of waiver of penalty which was earlier available for bona fide cases is now removed.

Government clears expansion of DGCEI across the country

The FM has cleared creation of new intelligence units across the country and appointment of over 8000 personnel to check any leakage in its earnings from the indirect tax. Anticipating increase in service tax revenue, the ministry  has also decided to restructure DGCEI – a body tasked with checking excise duty and service tax evasion, official sourses said.

 There will be three more zonal units of the DGCEI in Lucknow, Bhopal and Hyderabad. These three zonal units will have three regional units each as well, they said. “The government has approved total nine zonal units and 27 regional units of the DGCEI to check leakage of excise duty and service tax evasion” a Finance Ministry official said.  At present DGCEI has six zonal units and 18 regional units.

 The move has come in the wake of the government witnessing a growth in the service sector and increase in the service sector and increase in the number of taxable services. Although service tax has shown tremendous potential as an area of tax collection, it still remains a largely untapped and unexplored sector. The contribution of service tax to the gross tax revenue at a mere 13 percent is not commensurate with the contribution of service sector to the DDP of our country which was more than 60 per cent in the last financial year. It is, therefore, essential to provide more manpower for service tax related matters”, according to a intra-ministry communication on the issue.

 It is pertinent to mention that strengthening and expansion of the existing DGCEI formations is a better solution, in the long run, to effectively curb the ever increasing menace of central excise duty and service tax evasion than bifurcating it into two, the communication said. The DGCEI has, over the period of time, developed requisite expertise in cultivation and nurturing of a credible informer base and therefore enjoys an edge in gathering information, developing them into actionable intelligence and investigating cases of service tax evasion leading to recovery of government dues, it said. 

 The DGCEI , as the apex intelligence organization as far as central excise duty and service tax evasion matters are concerned, is well known and trusted by the informers. “Informers, who work on trust, may not start giving information to a newly created intelligence organisaition from day one, thereby creating a kind of vacuum,”, the communication reads.

 The DGCEI has detected RS. 8,000 crore of service tax evasion during 2013-14. According to a Finance Ministry data, there has been an increase of over 300 times in revenue collection from service tax in the past two decades. The ministry had collected RS. 1.32 lakh crore as service tax revenue during 2012-13 as against Rs. 407 crore in 1994-95 it said.

 Source: zeenews.india.com



Board issues transers and postings order in Chief Commissioner cadre

Chief Commissioner of Hyderabad Zone Shri B.B.Prasad has been transferred as CC-Customs, Mumbai-II after rendering yeoman service in Hyderabad Zone as CC for the past two years.

Shri B.B.Prasad has got the distinction of serving in Hyderabad for nearly ten years  during the last twenty three years in different capacities as Asst/Dy Collector, Commissioner and Chief Commissioner.

We place on record Shri B.B.Prasad Sirs contribution to the betterment of welfare and service conditions of staff and for his administrative capabilities. While wishing him all the best in his new assignment to the prestigious post, we  do hope that Shri B.B.Prasad Sir will continue to see his career growth in the days to come.

We also welcome Ms.R.Shakunthala as new Chief Commissioner of Hyderabad Zone. It is wonderful to see a local Officer taking over as Hyderabad Zone CC.



DA from 1st July estimated to be 107%

DA from July 2014 estimated to be 107% – Dearness Allowance with effect from July 2014 can be fixed at 106% only if AICPIN decreases to the tune of 2 points or more which is unlikely

We have All India Consumer Price Index for the months of July 2013 to May 2014 declared officially by Labour Bureau. As GConnect predicted in the month of April 2014 (Scenario 1), the likely DA from July 2014 payable to all Central Government Employees and Pensioners is estimated to be 107%, viz., an increase of 7% from the present DA of 100%.

 This estimation is based on the presumption that AICPI (IW) / AICPIN for the month of June 2014 is either unchanged (compared to CPI for the month of May 2014 which is 244) or there is one point decrease viz., AICPI (IW) at 243.


ICT Orders of Superintendents of Hyderabad Zone

Hyderabad Zone ICT orders in Superintendent cadre today? Hyderabad CCA Inspectors IZT orders by this Friday?

It is learnt that the Hyderabad Zone ICT orders in the Superintendent cadre are expected to be issued today. It is also learnt that IZT Orders of Inspectors of Hyderabad CCA are expected to be issued by this Friday.

Government may hike tax exemption under Section 80C in this Budget

Seeking to boost household savings, the Finance Ministry is considering doubling the exemption limit for investments by individuals in financial instruments to Rs. 2 lakhs. Presently the limit is Rs. 1 lakh consisting of Principal Amount of Housing Loan, GPF, Children Education  Fees, LIC  and other Life Insurance Policies etc.  Sources said the Revenue Department was assessing the burden on the exchequer in case of increase in the benefit limit. 

The Economic Times

No Merger of DA



Income Tax 2014-15 (Assessment Year 2015-16) – Salaried Women to get higher Income Tax Exemption Limit

Good news for salaried women!  Government is considering higher income tax exemption limit for women in the budget for 2014-15.

Finance minister Arun Jaitley is restructuring tax slabs and is thus set to approve a proposal to raise the tax exemption limit to  Rs 3 lakh from existing Rs 2 lakh. The government will ease the tax burden on the middle class and impose a higher tax on the super rich in its first Budget to be presented by Union finance minister Arun Jaitley next month.

According to the proposal, under consideration of the new government, there would also be a tax on the super- rich bracket, comprising those earning Rs 10 crore or more of 35 per cent. This category would be above the  Rs 1 crore, class which currently pays an effective tax of 33 per cent inclusive of a surcharge that the earlier government had introduced.

India’s tax regime is being overhauled by Finance minster  

§  Women  will be offered a higher tax relief —the threshold income below which individuals are not liable to pay taxes—for women could be fixed at between Rs. 3,25,000 to Rs. 3,50,000.

§   Rs. 1 lakh annual tax deduction allowed under Section 80C of the Income-tax Act has not kept pace with the rising inflation and needs revision.

§  a separate deduction of at least Rs 1 lakh per year specifically for education  is being considered

§  Exemption on home loans:  To reduce the burden on households for the interest paid on housing loan for a self-occupied house property a deduction of up to Rs 1.5 lakh is allowed. It can be increased to Rs 5 lakh per year.

Moreover, a proposal to reduce the age for tax exemption for senior citizens to 60 years from 65 years is also under consideration.


Income of less than Rs. 2 lakh a year are exempt from paying taxes.

Earning between Rs. 2 lakh and Rs. 5 lakh annually are taxed at 10%,

Between Rs. 5 lakh and Rs. 10 lakh at 20%


Earning more than Rs. 10 lakh pays a tax of 30%.

Grant of Honorarium to Inquiry Officers (IO) / Presenting Officers (PO) for conducting inquiry in departmental proceedings would be outside the purview of the general delegation under FR 46 B – Such Honorarium is not limited to Rs. 5000

No. 142/15/2010-AVD.1

Government of India

Ministry of Personnel, Public Grievances and Pensions

Department of Personnel & Training

North Block, New Delhi

Dated 23rd June, 2014


Subject: Grant of Honorarium to Inquiry Officers (IO)/Presenting Officers (PO).

The undersigned is directed to refer to this Department’s OM of even number dated 31.7.2012 laying down the rates of honorarium payable to Inquiry Officer / Presenting Officer for holding departmental proceedings.

2. It has been brought to the notice of this Department that the condition mentioned in para 2.1 of the said OM, was in conflict with the provisions of FR 46 B which limits the maximum amount payable as honorarium to an individual in a financial year to Rs. 5,000/- creating confusion whether the same was within the delegated powers of the Ministry.

3. The matter has been considered and it is clarified that the honorarium payable to IO/Presenting Officer for conducting inquiry in departmental proceedings would be outside the purview of the general delegation under FR 46 B.

4. This issues with the concurrence of Department of Expenditure vide their I.D. No. 141412009-E.II(B) dated 16.5.2014.




Under Secretary to the Government of India