Central Excise duty changes for tobacco as per Budget 2017-18

Indian Budget 2017-2018 changes in Excise tariff for tobacco
 

Central Excise duty changes for tobacco as per Budget 2017-18Major changes in Indian Budget 2017-18 is being introduced based on the introduction of GST before September 2017 by redefining Indian Tax system.  The budget is presented along with Railway Budget and after demonetization in country. The Central Excise tax charges for tobacco is described below according to Indian Union Budget 2017-18.

 Changes or customs rates as per Budget 2017-18 under this HSN Code list:  

1)      The additional duty of excise levied under the Seventh Schedule to the Finance Act, 2005 [commonly known as health cess] on non-filter and filter cigarettes of sub-heading 2402 20 is being increased. Clause 146 of the Finance Bill, 2017 refers. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, these increases will come into force with immediate effect. There is no change in the Basic Excise Duty leviable under the First Schedule to the Central Excise Tariff Act, 1985 and the NCCD leviable under Seventh Schedule to the Finance Act, 2001. The changes in additional duty of excise rates on cigarettes are summarized below.

 

Click here to read government notification on changes in Excise tax tariff rate under Indian Budget 2017-18, HSN code chapter wise.  

Tariff Item

 

 

Description

Additional

Duty of

 

 

 

 

Excise

 

 

 

 

(Rs. per 1000 sticks)

 

 

 

 

 

 

 

 

 

 

 

Existing

 

New

 

 

 

 

Rate

 

Rate

 

 

 

 

 

 

2402 20 10

Non filter

not exceeding 65mm

215

 

311

 

 

 

 

 

 

2402 20 20

Non-filter

exceeding 65mm but not exceeding 70mm

370

 

541

 

 

 

 

 

2402 20 30

Filter not exceeding 65mm

215

 

311

 

 

 

 

 

 

 

 

 

 

 

2402 20 40

Filter

exceeding 65mm but not exceeding 70mm

260

 

386

 

 

 

 

 

 

2402 20 50

Filter

exceeding 70mm but not exceeding 75mm

370

 

541

 

 

 

 

 

 

 

2402 20 90

Other

 

 

560

 

811

 

 

 

 

 

 

 

 

2)   Basic Excise Duty on other tobacco products falling under heading 2402 is being increased as under:

 

Tariff Item

Description

Basic Excise Duty rate

 

 

 

 

 

 

From

To

 

 

 

 

2402 10 10

Cigar and cheroots

12.5% or Rs.3755 per

12.5% or Rs.4006 per

 

 

thousand, whichever  is

thousand whichever  is

 

 

higher

higher

 

 

 

 

2402 10 20

Cigarillos

12.5% or Rs.3755 per

12.5% or Rs.4006 per

 

 

 

 

 

11

 

Tariff Item

 

Description

Basic Excise Duty rate

 

 

 

 

 

 

 

 

 

 

From

To

 

 

 

 

 

 

 

 

 

 

thousand, whichever  is

thousand whichever

is

 

 

 

higher

higher.

 

 

 

 

 

 

2402 90 10

Cigarettes

of tobacco substitutes

Rs. 3755 per thousand

Rs. 4006 per thousand

 

 

 

 

 

2402 90 20

Cigarillos

of tobacco substitutes

12.5% or Rs.3755 per

12.5% or Rs.4006 per

 

 

 

thousand,  whichever  is

thousand whichever

is

 

 

 

higher

higher.

 

 

 

 

 

2402 90 90

Others of tobacco substitutes

12.5% or Rs.3755 per

12.5% or Rs.4006 per

 

 

 

thousand, whichever  is

thousand whichever

is

 

 

 

higher

higher.

 

 

 

 

 

 

Clause  118  of  the  Finance  Bill,  2017  refers.  By  virtue  of  declaration  under  the  Provisional

 

Collection of Taxes Act, 1931, these increases will

come into force with immediate  effect.

 

 

3)   The effective basic excise duty rate on Handmade Paper rolled biris and Machine made Paper rolled biris [ both falling under tariff item 2403 19 29] is being increased from Rs. 21 per thousand to Rs. 28 per thousand and from Rs. 21 per thousand to Rs. 78 per thousand respectively. However, there is no change in basic excise duty rate on other goods falling under tariff item 2403 19 29, which will continue to be Rs.21 per thousand. Notification No. 12/2012 -Central Excise dated 17.03.2012 as amended by notification No.6/2017-Central Excise dated 02.02.2017 [S.No.48 and new S.Nos.48A and 48B] refers.

 

4)      The additional duty of excise levied under the Seventh Schedule to the Finance Act, 2005 [commonly known as health cess] on jarda scented tobacco, gutkha and chewing tobacco is being increased from 6% to 12%. Clause 146 of the Finance Bill, 2017 and notification No. 6/2005-Central Excise, dated the 1st March, 2005 as amended by notification No.3/2017-

 

Central Excise dated 02.02.2017 [S.Nos.13, 15 and 20 are being omitted] refers. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, these changes will come into force with immediate effect. Further, the effective rate of additional duty of excise levied under the Seventh Schedule to the Finance Act, 2005 on pan masala and unmanufactured tobacco, is being increased from 6% to 9% and 4.2% to 8.3% respectively. Notification No. 6/2005-Central Excise, dated the 1st March, 2005 as amended by notification No.3/2017-Central Excise dated 02.02.2017 [S.Nos.1 and 2] refers. There is no change in the Basic Excise Duty leviable under the First Schedule to the Central Excise Tariff Act, 1985 and the NCCD leviable under Seventh Schedule to the Finance Act, 2001.

 

5)      The excise duty payable per machine per month under the Compounded Levy Scheme applicable to these products is being modified accordingly. Notification No. 16/2010-Central Excise, dated the 27th February, 2010 as amended by notification No.7/2017-Central Excise dated 02.02.2017, notification No. 42/2008-Central Excise, dated the 01.07.2008 as amended

 

 

12

 

by  notification  No.4/2017-Central

Excise  dated  02.02.2017,  Chewing

Tobacco  and

Unmanufactured  Tobacco Packing

Machines  (Capacity  Determination  and  Collection  of

Duty)   Rules, 2010 published vide

notification No.11/2010-Central Excise (N.T.), dated the

 

27.02.2010 as amended by notification No.3/2017-Central Excise (N.T.), dated 02.02.2017 and Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Rules, 2008 published vide notification No.30/2008-Central Excise (N.T.), dated the 01.07.2008 as amended by notification No.2/2017-Central Excise (N.T.), dated 02.02.2017 refers. The changes in additional duty of excise rates on smokeless tobacco products as mentioned above are summarized below:

 

Commodity

CETH

Present

Proposed

 

Health Cess (%)

Health Cess (%)

 

 

 

 

 

 

 

 

 

Pan Masala

2106 90 20

6

9

 

 

 

 

 

 

Gutkha

2403 99 90

6

12

 

 

 

 

 

 

Unmanufactured Tobacco

2401

4.2

8.3

 

 

 

 

 

 

Chewing Tobacco

2403 99 10

6

12

 

 

 

 

 

 

Zarda Scented Tobacco

2403 99 30

6

12

 

 

 

 

 

 


 

EXCISE RATE CHANGES AS PER BUDGET 2017-18

 

 

 

Commodity

Rate of Duty

 

 

 

From

To

I.

Public Health

A.

Tobacco and Tobacco Products

 

  1.  

Cigar and cheroots

12.5% or Rs.3755 per thousand, whichever is higher

12.5% or Rs.4006 per thousand, whichever is higher

 

  1.  

Cigarillos

12.5% or Rs.3755 per thousand, whichever is higher

12.5% or Rs.4006 per thousand, whichever is higher

 

  1.  

Cigarettes of tobacco substitutes

Rs.3755 per thousand

Rs.4006 per thousand

 

  1.  

Cigarillos of tobacco substitutes

12.5% or Rs.3755 per thousand, whichever is higher

12.5% or Rs.4006 per thousand, whichever is higher

 

  1.  

Others of tobacco substitutes

12.5% or Rs.3755 per thousand, whichever is higher

12.5% or Rs.4006 per thousand, whichever is higher

 

  1.  

Paper rolled biris – handmade

Rs.21 per thousand

Rs.28 per thousand

 

  1.  

Paper rolled biris – machine made

Rs.21 per thousand

Rs.78 per thousand

II.

Incentivizing domestic value addition, ‘Make in India’

A.

Renewable Energy

 

  1.  

All items of machinery required for balance of systems operating on biogas/ bio-methane/ by-product hydrogen

12.5%

6%

B.

Miscellaneous

 

  1.  

Membrane Sheet and Tricot/Spacer for use in the manufacture of RO membrane element for household type filters, subject to actual user condition

12.5%

6%

 

  1.  

All parts for use in the manufacture of LED lights or fixtures, including LED lamps, subject to actual user condition

Applicable duty

6%

 

  1.  
    1. Waste and scrap of precious metals or metals clad with precious metals arising in course of manufacture of goods failing in Chapter 71
    2. Strips, wires, sheets, plates and foils of silver
    3. Articles of silver jewellery, other than those studded with diamond, ruby, emerald or sapphire
    4. Silver coin of purity 99.9% and above, bearing a brand name when manufactured from silver on which appropriate duty of customs or excise has been paid
 

 

 

 

Nil

Nil, subject to the condition that no credit of duty paid on inputs or input services or capital goods has been availed by manufacturer of such goods

III.

Promotion of cashless transactions and promote domestic manufacturing of devices used therefor

 

  1.  

a)        Miniaturized POS card reader for m-POS (not including mobile phones or tablet computers),

b)       micro ATM as per standards version 1.5.1,

c)        Finger Print Reader / Scanner, and

d)       Iris Scanner

Applicable duty

Nil

 

  1.  

Parts and components for manufacture of:

a)        Miniaturized POS card reader for m-POS (not including mobile phones or tablet computers),

b)       Micro ATM as per standards version 1.5.1,

c)        Finger Print Reader / Scanner, and

d)       Iris Scanner

Applicable duty

Nil

 

Note:    “Basic Excise Duty” means the excise duty set forth in the First Schedule to the Central Excise Tariff Act, 1985.

CHANGES IN RATE OF ADDITIONAL DUTY LEVIED UNDER SECTION 85 OF THE FINANCE ACT, 2005

 

 

 

Commodity

Rate of duty

 

 

 

From

To

A.

Pan Masala

 

  1.  

Pan Masala

6%

9%

B.

Tobacco and Tobacco Products

 

  1.  

Unmanufactured tobacco

4.2%

8.3%

 

  1.  

Non-filter Cigarettes of length not exceeding 65mm

Rs.215 per thousand

Rs.311 per thousand

 

  1.  

Non-filter Cigarettes of length exceeding 65mm but not exceeding 70mm

Rs.370 per thousand

Rs.541 per thousand

 

  1.  

Filter Cigarettes of length not exceeding 65mm

Rs.215 per thousand

Rs.311 per thousand

 

  1.  

Filter Cigarettes of length exceeding 65mm but not exceeding 70mm

Rs.260 per thousand

Rs.386 per thousand

 

  1.  

Filter Cigarettes of length exceeding 70mm but not exceeding 75mm

Rs.370 per thousand

Rs.541 per thousand

 

  1.  

Other Cigarettes

Rs.560 per thousand

Rs.811 per thousand

 

  1.  

Chewing tobacco (including filter khaini)

6%

12%

 

  1.  

Jarda scented tobacco

6%

12%

 

  1.  

Pan Masala containing Tobacco (Gutkha)

6%

12%

 

 

Customs duty tariff rate changes as per Indian Budget 2017-18

Central Excise Duty changes as per Indian Budget 2017-18

Service Tax rate Changes under Indian Budget 2017-18

GST rate for tobacco also is expected to declare once after introduction of GST this year, before September, 2017.

 

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