Payment of Excise Duty with Old Notes?
MY friend and our columnist Shvetal Parikh writes in:
DDT 2993 dated 19.12.2016 published a clarification given by Hon'ble Finance Minister in the Parliament to the effect that the payment of Indirect Taxes has not been authorized by cash after demonetization of high value currency notes.
In this regard, it appears that as per the Notification No. SO 3408(E) dated 8.11.2016, as amended by Notification Nos. 3429(E) dated 10.11.2016 and 3448(E) dated 14.11.2016 published by Department of Economic Affairs, the demonetized currency notes of Rs.500 and Rs.1000 could be used for making payment towards any fees, charges, taxes or penalties payable to the Central or State Governments including Municipal and local bodies up to 24.11.2016.
As duties of Customs and Central Excise as well as Service Tax are taxes payable to Central Government, it is felt that the old notes of Rs.500 and Rs.1000 could be used for payment of these taxes up to 24.11.2016.
Bharuch Commissionerate has issued a Trade Notice No. 07/2016-17 dated 16.11.2016 to the effect that by virtue of aforesaid Notifications the demonetized currency / specified bank notes could be used for making payment towards any fees, charges, taxes (including Central Excise duties and Service Tax) or penalties payable to the Central or State Governments apart from utility charges from 9 th November to 24th November 2016. A copy of the said Trade Notice, as received through WhatsApp in personal capacity, is enclosed.
However, as per Rule 8(1B) of the Central Excise Rules, 2002, effective from 1.7.2014, every assessee has to pay duty electronically through internet banking except allowed by AC/DC for payment of duty by any other mode. Similar provisions have also been made for making payment of Service Tax electronically. So, it appears that if AC/DC has permitted any assessee to pay Central Excise duty or Service Tax by cash in old currency notes of Rs.500 and Rs.1000, he could have paid the same during the period from 10.11.2016 to 24.11.2016. However, there was no such official clarification, except the aforesaid Trade Notice of Bharuch Commissionerate.