CWA ICWA Question Papers Inter Group II
Applied Indirect Taxes June 2010
This Paper has 40 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 2010–11 unless stated otherwise in the question.
1. (a) Fill in the blanks: 1×11=11
(i) E–payment of service tax is mandatory where the service tax paid in the immediate preceding year is not less than Rs.______________ . (0)
(ii) Taxes and duties are ___________ in arriving at the assessable value for customs duty purposes. (0)
(iii) VAT rate applicable within Gujarat State for gold is 1%; if gold is sold to an unregistered buyer in Delhi, the CST is chargeable at _________ %. (0)
(iv) EOU can sell a portion of their production in Domestic Tariff are (DTA) upto ___________ % of their ____________ value of exports in earlier year. (0)
(v) A service provider ______________ avail CENVAT credit of special CVD paid u/s 3(9)of Customs Tariff Act. (0)
(vi) The adjudicating authority _____________ review the order passed by it earlier. (0)
(vii) An importer who knowingly mis–declares assessable value can be imprisoned for a period up to __________ years. (0)
(viii) An assessee can claim refund of excise duty within ______________ from relevant date u/s 11B of the Central Excise Act, 1994. (0)
(ix) EOUs has to issue ____________ certificate for obtaining inputs without payment of excise duty. (0)
(x) Margin of dumping means the difference between __________ and ___________ . (0)
(xi) First appellate authority can condone delay up to ____________ days in filing the CST appeal if proper cause is shown. (0)
(b) State with reasons, whether the following statements are true or false (Answers without reasoning will not receive any credit): 2×7=14
(i) VAT helps in checking tax evasion and in achieving neutrality. (0)
(ii) Installation/use of capital goods is a pre–requisite for taking CENVAT credit. (0)
(iii) According to Central Excise Act, 1944, ‘Assessment’ includes self assessment of duty and also provisional assessment. (0)
(iv) There is provision for payment of Central Excise Duty ‘under protest’. (0)
(v) Customs officer should pass an adjudication order in all situations where an assessment is done more than the claim of importer/exporter. (0)
(vi) The Commissioner of Central Excise is empowered to review the service tax orders passed by the officers subordinate to him and re–adjudicate it, in case he finds the order to be legally inappropriate. (0)
(vii) The person providing both taxable and non–taxable services and not maintaining separate books of accounts, wishing to avail Cenvat credit is required to reverse 6% of the value of exempted services. (0)
2. (a) State the powers of Central Government in the area of taxation, as per the Constitution of India. 7 (0)
(b) Bopara & Co., Which has heavy indirect taxes outlay, wishes to know the situations in which it can file a revision application with the Central Government. Please outline the various situations. 8 (0)
3. (a) Briefly discuss the provisions of Section 14A of the Central Excise Act, 1944 relating to special audit. 5 (0)
(b) Will the quantum of goods manufactured relating to printed laminated rolls with brand name, be considered for SSI exemption limit? 3 (0)
(c) Is it correct to say that the concept of Input Service Distributor is a facility and not a compulsion for availing CENVAT credit? 4 (0)
(d) Who are the persons liable to pay Central excise duty? 3 (0)
4. (a) From the following data, you are required to compute the customs duty payable by Sukbhir & Co:
FOB value of textile machinery
Expenses incurred by seller for improving the design, at buyer–importer’s request
Exchange rate 1 Euro=Rs.60
Basic duty 25% Rate of CVD 16%Rate of SAD 3% 1,00,000
The price offered to the importer is a special discounted price. The buyer–importer has been specifically directed not to disclose this price to any buyer in India. Seller’s normal selling price is 1,20,000 Euro.
(b) Briefly discuss the aspects relating to self assessment by an importer on the basis of ‘Risk Management System’. State the categories of eligible and ineligible persons who can make use of this scheme. 7 (0)
5. (a) Arun of Tamil Nadu sells his land along with the standing crops and trees for Rs.20 lakhs to David of Kerala. Central Sales Tax Officer wants to assess to tax the value of standing crops and trees in the said land. Comment. 4 (0)
(b) The following items relating to inter–State sales have been recoded separately in the books of account of Nathan&Co., dealer in CST:
Sales as per bills(excluding CST)
Labour charges for packing goods.
Insurance charges incurred by Nathan & Co.for goods transported
(charged separately in invoices)
Freight charges incurred:
For moving goods from factory to depot
From depot to buyers(incidental to sale)
Design charges incurred for manufacturing goods as per buyer’s design 1,420
You are required to compute the taxable turnover of Nathan & Co. and the CST payable. Brief treatment of each item should be given.
(c) What is ‘Acquisition fraud’ in the context of VAT? 3 (0)
6. Write Short notes on any three: 5×3=15
(a) CENVAT credit where inputs are partially used for manufacture of dutiable goods/taxable services; (0)
(b) Deemed manufactures as per excise law is legal fiction; (0)
(c) Reverse charge in VAT and service tax; (0)
(d) Simplified Brand Rate Fixation scheme; (0)
(e) Monetary limits of adjudicating authorities, Officers of Central Excise, Customs andService Tax. (0)
7. (a) Mr. Suresh Raina, who is rendering taxable services, wants to know what he should do, if he discovers a mistake after 90 days from the date of filing service tax return, resulting in short/excess payment of tax. Can he file a revised return? 4 (0)
(b) Is there any obligation to file service tax return, even if no service tax is payable? 3 (0)
(c) Discuss briefly the provisions conferring general exemption to small service providers in the context of levy of service tax. 8 (0)
8. (a) What are the methods of valuation of customs duty? Is it mandatory that they should be applied sequentially? 4 (0)
(b) Mr. Ram, the assessee, has purchased goods from Mr. Rahim, on high sea sales basis. Mr. Rahim has imported the same from Mr. Antony of Malaysia for an invoice value of 10,000 USD. Mr. Rahim has charged the assessee for 11,000USD. The assessee contends that while arriving at the assessable value for customs, the price charged by the foreign supplier to Mr. Rahim should be taken as the basis. Is the same correct? 3 (0)
(c) Mrs. Bose is rendering taxable services, which were brought into the service tax net w.e.f.1.5.2009.
The following information are made available to you:
(i) Amount received on 10.5.2009 for services provided in April, 2009 2,00,000
(ii) Advance received from one client on 10.5.2009. 3,39,000
(iii) For balance services of Rs.7,00,000 bill was raised on 12.3.2010 and the amount due was received from the above client on 15.3.2010.
(iv) Other taxable services billed and received during 1.5.2009 to 31.3.2010. 4,00,000
(v) Value of free services rendered in October, 2009. 1,50,000
Compute the value of taxable services and service tax payable for the year ended 31.3.201