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ICWA Intermediate New Syllabus effective from
December 2008
ICWAI Intermediate - Applied Indirect Taxation December 2009 Answer question No. 1 which is compulsory and any five from the rest. Q1 (a) State with reasons whether the following is true or false. (i) Parts used for repair or replacement during warranty period are excisable (ii) the conveyances are not allowed to leave India without written permission from the customs authorities. (iii) Central excise authorities cannot raise demands contrary to the approved classification/price list retrospectively (iv) There are common provisions in Customs/Central Excise/ST (v) Delay in filing appeal can be condoned but condonation is not a matter of right (3 x 5 = 15 marks) Q1(b) Fill up the blanks: (i) Appeals under Central Excise and Customs must be filed within _____ days from the date of communication of order (ii) Exclusive economic zone extends to _____ nautical miles from the base line under the Customs Act. (iii) Compressing and bottling gas ______ (is/is not) manufacture. (iv) Erection of civil structure _______ (is/is not) taxable services. (v) At present deduction _______ (is/is not) available on the basis of equalized freight and Central Excise (vi) Laptop Computer (Note Book Computer) brought as baggage by person above 18 years of age ______ (is/is not) fully exempt from customs duty. (vii) Captive consumption is _______ to duty, value is determined on the basis of cost + _______ %. (viii) Job work is not ________. (ix) Show cause notice issued by an officer beyond his power will be ________. (10 marks) Q2 (a) Briefly examine the significance of the levy of “anti Dumping” duty under the Customs Tariff Act. (b) Sakti has imported certain goods by AIR. FOB value of goods is $ 2,000, freight $ 500 and insurance $ 50. Rate of Exchange is $ 1 = Rs. 50. Landing charges is 1% of CIF value. Calculate the assessable value for Customs Duty (7+8 = 15 marks) Q3 Write short notes on any three of the following. (a) Related person under the Central Excise Act. (b) Determination of value when goods are manufactured on job work basis. (c) Transaction value under the Central Excise Act. (d) Special Audit or Cenvat Credit Audit under section 14AA of the Central Excise Act (3 x 5 = 15 marks) Q4 (a) Explain the provisions of interest on delayed payment under Central Excise and Customs (b) Explain the provisions of the Central Excise Act, 1944 which empower the Central Government not to recover the duties of excise not levied or short levied as a result of general practice. If the duty has been paid despite such practice, is it refundable? (7+8 = 15 marks) Q5. (a) State briefly whether sales tax will be levied on the following: (i) Shares and Debentures (ii) Sale of newspapers (b) Write notes on – e-payment of excise duty and state whether it is compulsory or not (6+9 = 15 marks) Q6. (a) State how the VAT system operates (b) What will be the consequences in case the ‘subject goods’ are not used by manufacturer for the purpose specified in the notification? When will the subject goods be deemed as not been used for intended purpose? (c) Discuss the validity or otherwise of the following statements with reasons – (i) Input cleared as such to a job worker on 1.10.2008 was not returned in 180 days, assessable value being Rs. 20,000, Excise duty @ 16.48%, 50% of the inputs were received on 1.04.2009. In this situation no Cenvat will be allowed in the year ending on 31.03.2009 (ii) Purchased a plant for Rs. 1,16,480 cum-duty (excise duty rate 16.48%) on 12.12.2008 and received the plant into factory on 5.4.2009. Cenvat allowed will be only Rs. 8,240 for the year ended on 31.03.2009 (5+5+5 = 15 marks) Q7. (a) A dealer effected following interstate sales during the quarter January-March 2009. (i) Invoice No. 1 dt. 01.01.09 Rs. 1,02,000 inclusive of tax (ii) Invoice No. 2 dt. 31.01.09 Rs. 50,000 exclusive of tax CST Rs. 1,000 Total Rs. 51,000 (iii) Invoice No. 3 dt. 01.02.09 Rs. 40,800 inclusive of CST (iv) Invoice No. 4 dt. 15.02.09 Rs. 25,500 inclusive of CST (v) Invoice No. 5 dt. 01.03.09 Rs. 2,00,000 exclusive of tax. - - Following further information is given - All registered dealers gave form ‘C’ except purchase of goods of invoice No. 5. 50% of goods pertaining to invoice No. 1 are returned on 21.3.09. 10% of goods pertaining to invoice No. 2 is rejected. CST is 2%, State Sales Tax is 8%. Compute the taxable turnover and tax payable (8 marks) Q7(b) CST is single point tax. Elucidate. A Sells goods worth Rs. 1,00,000 in Delhi to ‘B’ a registered dealer in Madras. B gives ‘C’ form and pays CST of Rs. 2,000/- B sells it to ‘D’ for Rs. 1,10,000 a registered dealer by delivery of R/R and endorsing it on the back of R/R. Is there any CST liability to ‘D’? Q7(c) What is deemed sale in CST? Q7(d) Why certificate in form ‘H’ is necessary to a penultimate exporter? (8+4+2+1 = 15 marks) Q8. Describe, in brief, the procedure for export of goods under bond as per Rule 13 of C.E. Rules, 1944 (15 marks).
Applied Indirect Taxation – June 2009Answer question No. 1 which is compulsory and any five from the rest. Q 1 (a) Fill in the blanks : (i) Goods under Central Excise must be _________ (movable/immovable) and _______ (marketable/packaged). (ii) CETA specifies some ____ (process/operations) as amounting to manufacture. This will be said to be manufactured ______(even if/unless) as per court decisions they do not amount to manufacture. (iii) Processing can amount to manufacture if a _______ (new/existing) and ____ (identifiable/similar) product known in the market emerges (iv) Exclusive economic zone extends to _____ (200/300) nautical miles from the base line of the coast. Beyond ________(100/200) nautical miles is High Seas. (v) General Free Allowance (GFA) under Customs Act is _________(allowed/not allowed) on unaccompanied baggage; GFA is _____ (allowed/not allowed) on alcoholic liquor or wines up two litres (10 marks) Q 1 (b) State with reasons, whether true or false; (i) Brand owner is considered as manufacturer under Central Excise. (ii) Under Central Sales Tax Act, for an activity to be classified as business, profit motive is immaterial. (iii) The concession under Customs Act for person who is transferring his residence to India whereby he is eligible to bring used personal and household articles to India without duty is applicable to Indian residents returning from overseas after 2 years but not available to foreigners (15 marks) Q2 (a) What do you understand by transit and transshipment of goods? Under what conditions do they enjoy exemptions from duty under the Customs Act, 1962? (b) The assessable value of an imported item is Rs. 1,00,000. Basic customs duty is 20%, additional duty of customs is 2% and secondary and higher education cess is 1% on duty. No additional duty of customs is chargeable on such goods u/s 3(5) of the Act. Compute the amount of customs duty payable. Also state the amount of credit available to the importer (10+5 = 15 marks) Q 3 Write short notes on any three of the following: (a) Appeals to appellate authority under CST Act (b) Meaning of “accessory” for excise duty purpose (c) Duty Entitlement Pass Book (DEPB) scheme (d) Special Audit as per S. 14A of Central Excise Act, 1944 (5 x 3 = 15 marks) Q 4 (a) Who is a job worker? State how is value determined when the goods are manufactured on job work basis. (b) A Ltd. supplies raw material to a job worker J Ltd. After completing the job-work, the finished product of 5, 000 packets are returned to A Ltd. putting the retail sale price as Rs. 20 on each packet. The product in the packet is covered under MRP provisions and 40% abatement is available on it. Determine the assessable value under Central Excise Law from the following details.: Cost of raw material supplies – Rs 28,000, Job worker’s charges including profit – Rs. 9,000/- Transportation charges for sending raw material to the job worker – Rs. 4,000/- Transportation charges for returning the finished packets to A Ltd. – Rs. 4,000/- (9+6 = 15 marks) Q 5 (a) Outline the provisions relating to registration under service tax. (b) Explain ‘Export of Services’ under service tax. What is the exemption available to exporter of service from service tax? (7+8 = 15 marks) Q 6 (a) A dealer effected following inter-state sales during the quarter July, 2008-September,2008. (a) Invoice No. 25 dated 5th July, 2008: Rs. 1,12,400 (tax not shown separately), (b) Invoice No. 26, dated 13th August, 2008: Rs. 50,000 plus tax @ 4% i.e. Rs. 2,000, Total Rs. 52,000, (c) Invoice No. 27 dated 18th September, 2008: Rs. 20,000 plus tax @ 4% Rs. 800 i.e. Total Rs. 20,800, (d) Invoice No. 28 dated 27th September, 2008: Rs. 31,200. Tax not shown separately. Goods returned within 6 months were Rs. 8,400 (inclusive of taxes). Sales Tax rate is 4% if goods are sold within the State. What is the turnover and what is tax payable, if the buyers did not issue C Form? (b) What is the impact of VAT on CST? (8+7 = 15 marks) Q 7 (a) Explain the provisions relating to Cenvat credit on goods, services and capital goods under Central Excise (b) An assessee cleared various manufactured final products during June, 2008. The duty payable for June, 2008 on his final products was as follows: Basic Rs. 2,00,000, Education Cesses-as applicable. During the month, he received various inputs on which total duty paid by suppliers of inputs was as follows: Basic duty Rs. 50,000, Education Cess Rs. 1,000, SAH education Cess Rs. 500. Excise duty paid on capital goods received during the month was as follows: Basic duty Rs. 12,000, Education Cess Rs. 240, SAH Education Cess Rs. 120. Service Tax paid on input services was as follows: Service Tax Rs. 10,000, Education Cess Rs. 200, SAH Education Cess Rs. 100. How much duty the assessee will be required to pay by GAR-7 challan for the month of June 2008, if assessee had no opening balance in PLA account? What is last date for payment? (8+7 = 15 marks) Q 8 (a) Mention briefly any five illustrative cases under the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, where all industry Drawback rate will not apply. (b) Write notes on Special Brand Rate. (c) ABC Co. Ltd. provided services valuing Rs. 8 lakhs during the financial year 2007-08. During 2008-09, it has provided taxable services valuing Rs. 10 lakhs and has received payments towards payable services Rs. 8.5 lakhs. It has also received services in the nature of transport of goods by road valuing Rs. 50,000, in respect of which it is the person liable to pay service tax. Compute the service tax, if any, payable by ABC Co. Ltd. for the financial year 2008-09. It is given that goods transport service is exempt to the extent of 75% of value thereof (6+4+5 = 15 marks). Applied Indirect Taxation – December 2008Answer question No. 1 which is compulsory and any five from the rest. Q 1(a) Fill in the blanks: (i) Goods covered by Central Excise Tariff but fully exempt from duty are ______ (excisable/not excisable) (ii) SSI units whose turnover exceeds Rs. ______ per annum have to furnish declaration in prescribed form for Central Excise purposes. (iii) Basic Customs duty is levied under section _______ of the Customs Act. (iv) Compressing and bottling gas ________ (is/is not) manufacture. (v) A secondary and higher education cess of ______ (1%/2%) has been imposed on services liable to service tax under the Finance Act, 2007. (vi) Affixing brand name, labelling or re-labelling and repacking from bulk pack to small pack of readymade garment ________ (is/is not) manufacture. (vii) Cenvat credit ______ (can/can not) be utilised for payment of service tax on output service. (viii) In case of Central Excise and Customs, appeals must be filed within ______ days from the date of communication of order. (ix) Job work done under Cenvat provisions _____ (is/is not) exempt from service tax. (x) Finance Act, 1994 which contains provisions relating to service tax ______ (does/does not) provide for criminal liability in service tax matter [1 x 10 = 10 marks] Q1 (b) State with reasons, whether True or False: (i) Cenvat credit on capital goods can be availed in full in the year of purchase. (ii) Security demanded from dealer under the Central Sales Tax Act, 1956 can be satisfied in the form of Security Bond. (iii) Wastes and scrap are always treated as excisable goods. (iv) In case of delayed payment of service tax the assessee has to pay simple interest @ 13% for the period for which the payment is delayed. (v) Excise duty is payable on all sample, even if given free [3 x 5 = 15 marks] Q 2(a) Briefly explain the procedure for assessment and clearance of imported goods through a customs sea port under the Customs Act, 1962. (b) Customs value (Assessable value of imported goods) is Rs. 4,00,000. Basic customs duty payable is 10%. If the goods were produced in India, excise duty would have been 16%. Education cess is as applicable. Special CVD is at appropriate rates. Find the customs duty payable. How much Cenvat can be availed of by importer if he is manufacturer? [8+7 = 15 marks] Q 3(a) Distinguish ‘Zero rated sale’ and ‘exempt sale’ with reference to VAT. (b) Write notes on - (i) Doctrine of unjust enrichment in case of refunds under Central Excise and Customs. (ii) Appeals under service tax [5 + 5x2 = 15 marks] Q 4(a) State the provisions relating to general exemption available to small service providers. (b) State briefly the provisions for valuation of taxable services for charging Service Tax [7+8 = 15 marks] Q 5(a) State with reasons whether sales tax will be levied on the following (any two): (i) Sale of newspapers (ii) Development of software for marketing (iii) Shares and debentures (b) Write short note on taxable turnover [5x2 + 5 = 15 marks] Q 6(a) What is special Audit under section 14AA of CEA? (Cenvat credit Audit) (b) Who can conduct such audit? (c) Who can order such audit? (d) What is the time limit for submission of report? [4+3+4+4 = 15 marks] Q 7(a) Determine the value of a product and excise duty payable on the basis of following data (i) Goods sold at Depot Price 20,000, Fright from factory to Depot 500, Insurance 500, Octroi 1200, State VAT 800, CE 16%, Education Cess 2% SAH Cess 1% (ii) Complete AV2CE if the goods are used for captive consumption. Assume cost of production is 80% of the invoice price in above question. (b) Write short note on Exemption to Small Scale Industry units [6+4+5 = 15 marks] Q8(a) A Dealer effected following inter state sales during 2nd quarter of 2008. Invoice No. 1 Dt.1st August,08 – Rs. 20,000 + C.S.T. 3%, Invoice No. 2 Dt. 15th August, 08 – Rs. 70,000 + T. 3%, Invoice No. 3 Dt. 31st August, 08 – Rs. 51, 500 tax not shown, Invoice No. 4 Dt. 15th October, 08 – Rs. 15,000 + 3% S.T., Invoice No. 5 dt. 31st October, 08 – Rs. 20,000 + 3% S.T. Goods worth 5,000 exclusive of Tax were returned from Invoice No. 4 within 6 months. Compute turn over and C.S.T. making necessary assumption. (b) Offences under C.S.T. are cognizable mention a few. (c) Ability to pay is one of the most important cannons of Taxation [8+3+4 = 15 marks]
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