Dear All,

Please find below the “Updates that Matter (UTM # 5)”,

Ø  Service Tax: – Audit can be conducted only by CA/CMA. Deptt. Personnel not authorised

Ø  Service Tax : Change in Definition of Govt. Authority

Ø  DVAT: – Abolishment of VAT Audit Report AR-1(for dealers with Turnover above 10 Cr)likely. Final notification yet to be released. Ø  HVAT :- Draft notification – Regarding exemption from VAT on shoes and chappals having MRP up to Rs. 500.

Ø  CE :- Implementation of Fiat India Judgement of SC

  1. a)Service tax: – Recently Hon’ble Allahabad High Court in case of M/S A.C.L. Education Centre (P) Ltd. & Others V/s. Union Of India Thr. Secy. Deptt. of Revenue, New Delhi & Others held that as per Section 72A of the Finance Act, 1994 only a CA/CMA appointed by Commissioner can conduct audit under Service Tax. Rule 5A of Service Tax Rules, 1994 authorize Departmental Personnel’s to demand the documents just to facilitate the correctness of books of accounts and ultimately, the audit will be conducted by the Audit Party headed by the CA/CMA deputed by the Commissioner.
  1. b)Service Tax:  Ministry of Finance amends definition of ‘governmental authority’ under Mega Exemption Notification No. 25/2012-ST dated June 20, 2012; As per amendment, ‘Governmental Authority’ means board / authority set up either by Act of Parliament / State Legislature or established by Govt, with 90% equity control; Earlier, such authority was required to be set by Govt and Act of Parliament / State Legislature.


  1. c)DVAT: – Delhi government may soon announce scrapping of Audit Report 1 (AR1) for Value Added Tax (VAT). Chief Minister Arvind Kejriwal made a number of announcements, while interacting with the various traders and market organisations of the city in Delhi Secretariat.”The Delhi government announces scrapping of the cumbersome Audit Report 1 (AR1),” an official statement said. “This lengthy and unproductive report running into multiple pages was mandatory for traders with an annual turnover exceeding Rs 10 crore.

Official notification on the same is yet awaited and currently AR1 is applicable unless final notification is released to this effect.

  1. d)HVAT: – Draft Notification by Haryana State Revenue released on exemption of Shoes and Chappals upto MRP Rs 500.


  1. e)CE: – CBEC has released on circular on the implementation of Landmark ruling of Hon’ble SC in case of Fiat India. The same also discusses about limitation period invocation is cases prior to and after the date of judgement i.e. 29-8-2012.



CA.Ankit Gulgulia (Jain)|B.COM(H), C.A, C.IFRS, C.B.V

Direct|+9811653975 |011-27356431|011-23642055|


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