Words of Wisdom:

"One of the most difficult things to give away is kindness.For is usually returned" - Pinkbabiix18

Iron and Steel

  • Date Submitted: 12/11/2010 05:27 AM
  • Flesch-Kincaid Score: 55.5 
  • Words: 24854
  • Essay Grade: no grades
  • Report this Essay
Report No. PA 24 of 2009-10 - Union Government (Indirect Taxes)

Executive summary
A review of 457 units manufacturing Iron and Steel and articles of Iron and Steel was conducted in audit to evaluate at the macro level the adequacy of provisions of the Act, Rules and instructions issued by the Ministry of Finance/Central Board of Excise and Customs (CBEC) in ensuring proper assessment, collection and allocation of revenue from these commodities and further whether the applicable Valuation Rules, Cenvat Credit Rules, existing instructions and orders of the department relating to the manufacture, classification and service tax on services provided/received by these manufacturers, were complied with. Audit review has revealed a few system as well as compliance weaknesses relating to the assessment and collection of duty from Iron and Steel sector. The payment of duty through cenvat rather than by cash is excessive indicating possible misuse of cenvat credit facility. This is an area of concern, which the Ministry needs to address after investigating the reasons for such excessive cenvat credit use by these sectors and include this criterion (cenvat to PLA ratio) as a risk factor for investigation/internal audit of the assessees. Furthermore, while many products are cleared from stockyards (and not factory gates where duty is paid) after undergoing value addition through customisation, this value addition escapes duty as ‘cutting and bending’ has not been declared as ‘manufacture’. Accordingly, there is a need to amend the chapter notes appropriately. Absence of a restrictive clause on the quantity of inputs cleared ‘as such’ vis-à-vis procured and used in the manufacture of final products could lead to misuse of the cenvat scheme as some manufacturers could buy/procure huge quantities of inputs after availing quantity discounts, much in excess of their own requirement for manufacturing finished...


Express your owns thoughts and ideas on this essay by writing a grade and/or critique.

  1. No comments