CWA ICWA Question Papers Inter Group II
Applied Indirect Taxes December 2010
This Paper has 45 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 answers relate to the assessment year 2010–11 unless stated otherwise in the question.
1. (a) Fill in the blanks: 1×7=7
(i) Waste and Scrap will not be excisable unless it is specified in _____________ . (0)
(ii) In addition to departmental audit, C & AG carries out selective audits which is termed as __________ (0)
(iii) A passenger returning to India after stay in Germany for one week is entitled to bring goods up to Rs. _____________ without payment of any Custom duty. (0)
(iv) In case of imports other than imports by EOU the imported goods can be kept in Customs bonded ware¬house for _____________ days without paying any interest. (0)
(v) An out–door caterer is providing full and substantial meals. His invoice does not show breakup between value of food and value of service. He is liable to pay service tax on _____________ of the bill amount. (0)
(vi) _____________ is payable on inter state sales, while _____________ is payable on sale within the State. (0)
(vii) Central Sales Tax applies to the whole of India _____________ the State of Jammu & Kashmir. (0)
(b) State with reasons, whether the following statements are true or false (Answer without reasoning will not receive any credit): 2×5=10
(i) Repacking of an already manufactured product would amount to manufacture in Excise Law. (0)
(ii) Customs duty is not paid by an importer and it was found that such non–payment was on account of fraud committed by him. In such case, there is no time limit for issue of show cause notice demanding duty and penalty. (0)
(iii) A service provider is required to file return in form ST–4 on quarterly basis within 15 days from close of quarter. (0)
(iv) Appeal against an order passed by the Registration authority must be filed within 90 days of the service of order to the Central Sales Tax Authority. (0)
(v) Levy of VAT will have effect on retail price of goods. (0)
(c) (i) Define Excisable goods as mentioned in Central Excise Act, 1944. 2 (0)
(ii) A sub–contract or is a taxable service provider. Do you agree? Discuss. 2 (0)
(iii) Goods under CST includes all kinds of movable property. Comment. 1 (0)
(iv) Is it possible for a Trader to claim refund of special CVD from customs department? State your views. 1 (0)
(v) VAT is termed as ‘Consumption based’ Tax. Explain. 2 (0)
2. (a) Briefly discuss about the general exemption and concessions given to SSI units for excise duty purposes. 4 (0)
(b) Can an importer, exporter or ‘person in charge’ amend the documents submitted to customs authorities? If yes, from what date is the amendment effective? 3 (0)
(c) Explain briefly the provisions of CST Act, relating to Inter-State sale by transfer of document of title to goods. 4 (0)
(d) What is the “taxable event” in the case of export of goods under customs law? Is export duty payable in case of applicable goods where ship travels 40 nautical miles from Indian port and the title passes to the buyer, but the ship returns to India because of engine trouble? What is the relevant date for export duty? 4 (0)
3. (a) Who is liable to pay Excise Duty in case goods are produced or manufactured on Job Work? 2 (0)
(b) Discuss the includibility or otherwise to the assessable value under the Customs Act, 1962 of the following payments made by an importer to the overseas supplier of a second hand Plant in India: 2×2=4
(i) Dismantling charges for removing the second hand Plant at the supplier’s place and shipping to the Indian importer. (0)
(ii) Fees for supervision of erection and commissioning of plant in India. For this purpose the Foreign Supplier deputed their technicians in India. (0)
(c) What are the sources of Service Tax Law? 3 (0)
(d) Discuss the validity or otherwise of the following statements with reasons: 2×2=4
(i) Subsidy given by Government to manufacturer to compensate cost of production will form part of sale price. (0)
(ii) When goods arc sent by VPP, the sale is said to take place m the State from where the parcel is sent. (0)
(e) State briefly the basic distinction between VAT and Sales Tax. 2 (0)
4. (a) Explain steps involved in classifying a product under Central Excise Tariff Act. 5 (0)
(b) Calculate the net service tax payable under the provision of the rule 2A of the Service Tax (Determination of value) Rules 2006 relating to determination of value of services in the execution of a works contract from the following particulars:
(i) Gross amount for the works contract (excluding VAT) Rs.1,00,000.
(ii) Value of goods and materials sold in the execution of works contract Rs.70,000
(iii) CENVAT credit on (ii) above Rs.1,000.
(iv) Service tax paid on input services Rs.1,000.
(v) CENVAT credit on capital goods issued for works contract Rs.1,000.
(vi) Service tax rate for the relevant Assessment year is 10.30%. Make suitable assumptions and provide explanations where required.
(c) Which dealers are not eligible for composition scheme under VAT? 3 (0)
(d) Sales Tax payable on product ‘A’ is sold within State of Punjab is 10%. If the product is sold in inter–state sale, what will be the Central Sales Tax payable if:
(i) Buyer furnish ‘H’ form.
(ii) Buyer furnish ‘J’ form.
(e) An Importer imported a novel and new article. He was unable to classify his goods under any of the tariff heading or sub–heading and none matched with the goods under import. Even rules 1 to 3 of classification Rules could not find solution. Hence, no customs duty is payable on such product. Comment. 2 (0)
5. (a) What do you understand by advance ruling under Service TAX? Stare briefly the question on which “Advance Ruling” can be sought? 5 (0)
(b) How would you arrive at the assessable value for the purpose of levy of Excise Duty from the following particulars?
Cum–duty selling price exclusive of sales Tax Rs.20,000. Rate of Excise duty applicable to the product 10%; Trade discount allowed Rs.2,400, Freight Rs.1,500.
(c) A dealer purchased 22,000 kgs. of inputs on which VAT paid @ 4% was Rs.8,000. He manufactured 20,000 kgs. of finished product from the inputs. 2,000 kgs. was the process loss. The final product was sold at uniform price of Rs.10 per kg. as follows:
Good sold within State 8,000 kgs. Finished product sold in inter–state sale against ‘C’ Form 5.000 kgs. Goods sent on stock Transfer to consignment agents outside the State 4,000 kgs. Goods sold to Government departments outside the state 3,000 kgs. There was no opening or closing stock of inputs. WIP or finished products. The state VAT rate on the finished product of dealer is 12.5%. Calculate liability of VAT and CST. Find VAT credit available to dealer and tax required to be paid in cash.
6. (a) CIF value of imported goods is Rs.10,00,000. Basic Customs Duty payable is 10%. If the goods were produced in India. Excise Duty payable would have been 8%. Education cess is 2% and Special Education Cess is 1%. Spl. CVD is payable at appropriate rates. Find the Customs duty payable. What are the duty refunds/benefits available if the importer is (a) manufacturer (b) Service provider (c) Trader? 11 (0)
(b) Define ‘Works contract’ as per CST Act. Can Sales Tax is levied on activity of textile processing? 4 (0)
7. (a) M/s. P Ltd. used to label its products with a foreign brand and claimed exemption under a notification. The classification list was approved by the department after carrying out verifications and all returns were regularly filed. The invoice containing description of goods were also regularly approved by the department. The department denied the benefit of exemption to the assessee for previous period of five years, by invoking extended period of limitation under section 11A on the ground that it failed to declare the particulars regarding affixing of labels. Is the department justified? Discuss. 5 (0)
(b) Write note on ‘Input service’ for purpose of Cenvat Credit as applicable to a manufacturer. 6 (0)
(c) Name two situations where excise duty liability is not of the actual manufacturer but of the person who has supplied the raw material to the manufacturer. 2 (0)
(d) Write a brief note on categories of services for classifying a service as export of service. 2 (0)
8. (a) Explain provisions in respect of valuation for excise duty purposes determined when sales are generally through a related person. 5 (0)
(b) Explain how DEPB scheme helps in making exported products tax free. 5 (0)
(c) Discuss provisions relating to mandatory penalty equal to the amount to duty under the Central Excise Act and circumstances when such penalty shall be reduced. 5 (0)