Indian Budget 2014-15 changes in Import Duties,Excise Duties and Service Tax
Friday, January 06, 2017     Category : Indian Budget 2014-15

 The information provided here is part of Import Export course online

 

 

 

Budget changes in customs import duty tariff,excise duty and service tax

Indian Union Budget, changes in import customs tax tariff, chapter wise

Indian Budget  Excise duty tariff changes, chapter wise

Changes in Service Tax as per Budget 

 

Click below to read latest update: 28th February, 2015. 

Indian Budget 2015-16, Import Customs Duty Changes, chapter wise

Indian Budget 2015-16, Central Excise Duty Changes, chapter wise

 

 

 

The following changes and update  took place in structure of import duties and sales tax related matters, a copy of circular is attached here with:

 

Indian Union Budget 2014-2015 Major changes on import and export duties

HS Codes (CTH codes) Chapter 01 to 07 no change

 

HS Codes (CTH codes) Chapter 08

Import duty changes for Raisins

 

HS Codes (CTH codes) Chapter 09 to 14 no change

 

HS Codes (CTH codes) Chapter 15,29 and 38

Changes of import duty on fatty acids, crude palm stearin etc.

 

 HS Codes (CTH codes) Chapter 16 to 21 no change

HS Codes (CTH codes) Chapter 22

Reduction of Import duty for Ethyl Alcohol

 

HS Codes (CTH codes) Chapter 23

Exemption of BCD to import de-oiled soya extract, groundnut oil cake/oil cake meal, sunflower oil cake/oil cake meal, canola oil cake/oil cake meal, mustard oil cake/oil cake meal, rice bran/rice bran oil cake and palm kernel cake

 

HS Codes (CTH codes) Chapter 24 and 25

Budget 2014, ITC Tariff item 2402 20 60 omitted

Basic duty reduced on steel grade dolomite and steel grade limestone

HS Codes (CTH codes) Chapter 26

Export duty of Bauxite increases

 

HS Codes (CTH codes) Chapter 27

Changes in Duty for Non-agglomerated coal, Metallurgical coke, Naphthalene, Coal tar pitch, Propane etc

 

 

 

HS Codes (CTH codes) Chapter 28 to 49

Changes in Duty for Ethylene, Propylene and Butadiene, Ortho-xylene, Methyl alcohol

 

HS Codes (CTH codes) Chapter 50, no change

 

HS Codes (CTH codes) Chapter 51 to 52

Benefits for industries of handicraft,textiles made ups etc

HS Codes (CTH codes) Chapter 53 to 70 no change

 

HS Codes (CTH codes) Chapter 51 to 52

Basic Duty changes for Diamonds, Pre-forms of precious and semi-precious stones

 

HS Codes (CTH codes) Chapter 72 and 73

Duty changes for Stainless steel flat products, Bearings of wind operated electricity generators and Flat copper wire

 

HS Codes (CTH codes) Chapter 75 to 83 no change

 

HS Codes (CTH codes) Chapter 84

Duty exemption for compressed biogas plant, of solar energy production and manufacture of wind operated electricity generators

 

HS Codes (CTH codes) Chapter 85

Reduction of import duties on LED,LCD,Television, Computer, Laptop,Tablets

 

HS Codes (CTH codes) Chapter 86 to 88 no change

 

HS Codes (CTH codes) Chapter 89

Reduction of BCD on Ships imported for breaking up, Indian Budget 2014

 

HS Codes (CTH codes) Chapter 90 to 98

Withdrawn CVD exemption on portable X-ray machine

 

Excise and Customs - Click here to read complete notification under Budget 2014

Service Tax - Click here to read complete notification under Budget 2014

 

 

 

 

  Changes in Customs and Central Excise law and rates of duty


Extract of Notification

Budget
Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit
*****
P. K. Mohanty
Joint Secretary (TRU-I)
Tel: 23092687, Fax: 23092031
Email: p.mohanty@nic.in
D.O.F.No.334/15/2014-TRU
New Delhi, the 10th July, 2014.
Dear Chief Commissioner/ Commissioner,
The Finance Minister has introduced the Finance (No.2) Bill, 2014 in Lok Sabha today, i.e., 10th of July, 2014. Changes in Customs and Central Excise law and rates of duty have been proposed through the Finance (No.2) Bill, 2014 (clauses 72 to 87 for Customs and clauses 88 to 105, 107 and 110 for Central Excise). In order to prescribe effective rates of duty and to carry out changes in the Rules made under the respective Acts, the following notifications are being issued:
CUSTOMS:
Notification Nos.
Date
Tariff
No.11/2014-Customs to No.25/2014-Customs
11th July, 2014
Non-Tariff
No.50/2014-Customs (NT) and No.51/2014-Customs (NT)
11th July, 2014
CENTRAL EXCISE
Tariff
No.8/2014-CE to No.20/2014-CE
11th July, 2014
Non-Tariff
No.17/2014-CE (NT) to No.22/2014-CE (NT)
11th July, 2014
Unless otherwise stated, all changes in rates of duty take effect from the midnight of 10th/11th July, 2014. A declaration has been made under the Provisional Collection of Taxes Act, 1931 in respect of clauses 86, 87 [(1) and (9)(ii)], 104, 105(1), 107, and 110 of the Finance (No.2) Bill, 2014 so that changes proposed therein also take effect from the midnight of 10th/11th July, 2014. The remaining legislative changes would come into effect only upon the enactment of the Finance (No.2) Bill, 2014. Retrospective amendments in the provisions of law or notification issued under the respective Acts shall have the force of law only upon the enactment of the Finance (No.2) Bill, 2014 but with effect from the date indicated in the relevant clause or Schedule. These dates may be carefully noted.
2. Important changes in respect of Customs and Central Excise duty and legislative changes are contained in the four Annexes appended to this letter. Annex I contains Chapter wise changes relating to Customs; Annex II contains Chapter wise changes relating to Central Excise. Annex III contains the clarifications being issued on various matters. Annex IV provides a bird?s eye view of legislative changes proposed in the Finance (No.2) Bill, 2014.
2
2.1 The Annexes provide a summary of the changes made and should not be used in any quasi-judicial or judicial proceedings, where only the relevant legal texts need to be referred to.
3. In order to achieve a sharper focus, I have alluded only to the key highlights of the budgetary changes in this communication. The details are contained in the Finance Bill and notifications which alone have legal force. My team and I have made every possible effort to avoid the occurrence of errors or mistakes in the Budget documents. However, given the scale of changes, inadvertent errors cannot be ruled out. I shall be grateful if the provisions of the Finance Bill and notifications are studied carefully and feedback on issues that may need clarification is provided urgently.
4. It may kindly be ensured that the changes are implemented in a smooth manner without causing any inconvenience to the taxpayers and other stakeholders. All possible efforts may be made to guide the taxpayers by holding interactive sessions/ seminars for their benefit. In case of any doubt or difficulty, I would request you to kindly bring it to my notice immediately or to the notice of Sh. Amitabh Kumar, Director (TRU) (Tel No.011-23092236; e-mail: amitabh.kumar@nic.in, Sh. G. G. Pai, Director (TRU) (Tel No. 011-23092753; e-mail: giridhar.pai@nic.in or Sh. Akshay Joshi, Budget Officer (TRU) (Tel No. 011-23094819); e-mail: akshay.joshi@nic.in. We can also be reached at budget-cbec@nic.in.
5. Copies of Finance (No.2) Bill, 2014, Finance Minister?s Budget Speech, Explanatory Memorandum to the Bill, relevant notifications can be downloaded directly from www.indiabudget.nic.in as well as www.cbec.gov.in.
6. To conclude, my team and I would like to express my gratitude to you for the valuable suggestions, feedback and support and would look forward to your comments/ suggestions.
With warm regards,
Yours sincerely,
(P. K. Mohanty)
Joint Secretary (TRU-I)
To,
All Chief Commissioners/ Directors General
All Commissioners of Customs
All Commissioners of Central Excise
All Commissioners of Customs and Central Excise
All Commissioners of Service Tax
Director DPPR/ Logistics/Legal Affairs/ Data Management
3
Annex I
CUSTOMS
Chapter 1 to 7: No change
Chapter 8
1) Description of the product “sun dried dark seedless raisins” which attracts concessional Basic Customs Duty of 30% is being changed to “dark seedless raisins”. S.No.29 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 refers.
Chapter 9 to 14: No change
Chapters 15, 29 and 38
1) Basic Customs Duty on fatty acids, crude palm stearin, RBD and other palm stearin and specified industrial grade crude oils is being reduced from 7.5% to Nil for manufacture of soaps and oelochemicals subject to actual user condition. Basic Customs Duty is also being reduced on crude glycerine from 12.5% to 7.5% in general and from 12.5% to Nil for manufacture of soaps subject to actual user condition. S.Nos.51 and 73 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 and new S.Nos.73A, 187B and 230A of notification No.12/2014-Customs, dated 11th July, 2014 refer.
Chapter 16 to 21: No change
Chapter 22:
1) Basic Customs Duty on denatured ethyl alcohol is being reduced from 7.5% to 5%. S.No.96 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 refers.
Chapter 23
1) Full exemption from basic customs duty is being granted to de-oiled soya extract, groundnut oil cake/oil cake meal, sunflower oil cake/oil cake meal, canola oil cake/oil cake meal, mustard oil cake/oil cake meal, rice bran/rice bran oil cake and palm kernel cake, up to 31.12.2014. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 [new S.No.104D] refers.
Chapter 24 and 25:
1) Tariff item 2402 20 60 is being omitted as a consequential change to the amendment in the First Schedule to the Central Excise Tariff Act, 1985. Tariff items related to cigarettes of
4
length exceeding 75 mm but not exceeding 85 mm and cigarettes of length exceeding 85 mm are being merged into a single tariff item i.e. others [2402 20 90]. A suitable amendment has been proposed in the Customs Tariff Act, 1975. Clause 87 of the Finance (No.2) Bill, 2014 refers.
2) Basic Customs Duty on steel grade dolomite and steel grade limestone is being reduced from 5% to 2.5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 [new S.Nos.110A and 111A respectively] refers.
Chapter 26
1) Export duty on bauxite is being increased from 10% to 20%. In this connection, S.No.24A and 24B of notification No.27/2011-Customs dated the 1st March, 2011 as amended by notification No.15/2014-Customs, dated 11th July 2014 refers.
Chapter 27
1) The duty structure on non-agglomerated coal of various types is being rationalized at 2.5% BCD and 2% CVD. Accordingly, the BCD on Coking coal is being increased from NIL to 2.5% and on steam coal and bituminous coal from 2% to 2.5%. The BCD on anthracite coal and other coal is being reduced from 5% to 2.5%. The CVD on Anthracite coal, Coking coal and other Coal is being reduced from 6% to 2%. S.Nos.122, 122A, 123 and 124 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 refer. New S.No.124A covers other coal (2701 1990).
2) Basic Customs Duty on metallurgical coke is being increased from Nil to 2.5%. S.No.125 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 refers.
3) Basic Customs Duty on crude naphthalene is being reduced from 10% to 5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 [new S.No.126A] refers.
4) Basic Customs duty on reformate and other goods under sub-heading 2707 50 00 is being reduced from 10% to 2.5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 [new S.No.126B] refers.
5) Basic Customs Duty on coal tar pitch is being reduced from 10% to 5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 [new S.No.126C] refers.
6) Exemption from Basic Customs Duty and CVD is being granted on re-gasified LNG for supply to Pakistan. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 [new S.No.138C] refers. Condition 8B may be referred for details.
5
7) Liquefied Propane and Butane mixture, Liquefied Propane, Liquefied Butane and Liquefied Petroleum Gases (LPG) imported by the Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited or Bharat Petroleum Corporation Limited, for supply to Non-Domestic Exempted Category (NDEC) customers is being fully exempted retrospectively w.e.f. 08.02.2013 and upto 10.07.2014. Clause 85 of the Finance (No.2) Bill, 2014 refers. The exemption shall continue w.e.f. 11.07.2014 vide S.No.141 of notification 12/2012-Customs dated 17th March, 2012 as amended by notification No.12/2014-Customs dated 11th July, 2014.
8) Basic Customs duty on propane is being reduced from 5% to 2.5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 [new S.No.142B] refers.
Chapter 28-49:
1) Basic Customs duty on ethane and other goods under sub-heading 2901 10 00, ethylene, propylene and butadiene is being reduced from 5% to 2.5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 [new S.Nos.173A to 173D] refers.
2) Basic Customs Duty on ortho-xylene is being reduced from 5% to 2.5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 [new S.No.173E] refers.
3) Basic Customs Duty on methyl alcohol is being reduced from 7.5% to 5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 [new S.No.178A] refers.
4) Basic Customs Duty on raw materials for manufacture of spandex yarn viz. Diphenylmethane 4,4 di-isocyanate (MDI) and Polytetramethylene ether glycol (PT MEG) is being reduced from 5% to Nil. S.No.185 and S.No.244 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014.
5) Full exemption from Basic Customs Duty is being provided on specified raw materials used in the manufacture of solar backsheet and EVA sheet for use in manufacture of solar PV cells or modules. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.211A] refers.
6) Full exemption of customs duty is being provided on security fibre, security threads and M-feature imported by Bank Note Paper Mill India Private Limited (BNPMIPL), Mysore. S.No.233 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 refers. Full exemption from BCD and CVD is also being provided for raw materials required for manufacture of security threads and security fibre subject to actual user condition. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 [new S.No.233A] refers.
6
7) S.No.169 of notification No.10/2008-Customs, dated 15th January, 2008 [India-Singapore Comprehensive Economic Co-operation Agreement (CECA)] relating to tariff item 3903 19 90 is being omitted. As a result, Basic Customs Duty on Polystyrene (other than moulding powder) is being increased from 1.15% to 7.5%. Notification No.17/2014-Customs, dated the 11th July 2014 refers.
Chapter 50: No change
Chapter 51 and 52:
1) The list of specified goods required by handicraft exporters is being expanded so as to include wire rolls in the same for the purpose of granting the facility of duty free import. S.No.206 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 refers.
2) Non-fusible embroidery motifs or prints are being included in the list of items eligible to be imported duty free for manufacture of garments for export. S.No.282 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by Notification No.12/2014-Customs, dated the 11th July 2014 refers.
3) The duty free entitlement for import of trimmings & embellishments and other goods used by the readymade textile garment sector for manufacture of garments for export is being increased from 3% to 5%. S.No.282 (condition No.24) of notification No.12/2012-Customs, dated 17th March, 2012 as amended by Notification No.12/2014-Customs, dated the 11th July 2014 refers.
4) Specified goods imported for use in the manufacture of textile garments for export are fully exempt from BCD and CVD subject to the condition that the manufacturer produces an entitlement certificate from the Apparel Export Promotion Council. In addition, Indian Silk Export Promotion Council (ISEPC) is being authorised to issue entitlement certificate. S.No.282 (condition No.24) of notification No.12/2012-Customs, dated 17th March, 2012 as amended by Notification No.12/2014-Customs, dated the 11th July 2014 refers.
5) Fusible embroidery motifs or prints, anti-theft devices like labels, tags and sensors, pin bullets for packing, plastic tag bullets, metal tabs, bows, ring and slider and rings are being included in the list of items eligible to be imported duty free for manufacture of handloom made ups or cotton made ups or manmade made ups for export. S.No.284 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 refers.
Chapter 53 to 70: No Change
Chapter 71
1) Full exemption from Basic Customs Duty is being granted to pre-forms of precious and semi-precious stones. S.No.312A of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 refer.
7
2) Basic Customs Duty on half-cut or broken diamonds is being increased from NIL to 2.5% and on cut & polished diamonds including lab-grown diamonds and colored gemstones from 2% to 2.5%. S.Nos.313, 314 and 315 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 refers.
3) The variation level and the parameter of measurement in respect of re-import of cut and polished diamonds after certification/grading from a foreign laboratory/agency are being increased as a trade facilitation measure. Henceforth, in the case of re-import of cut and polished diamonds, a variance not exceeding +_ 0.05mm in diameter for round shape diamonds and +_ 0.07mm in length and breadth for diamonds of other shapes shall be allowed. The allowable variance in weight remains unchanged. Notification No.9/2012-Customs, dated 9th March, 2012 as amended by notification No.16/2014-Customs, dated 11th July, 2014 refers.
Chapter 72
1) Basic Customs Duty on stainless steel flat products (CTH 7219 and 7220) is being increased from 5% to 7.5%. S.No.334 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 refers.
Chapter 73
1) Basic Customs Duty is being reduced from 10% to 5% on forged steel rings used in the manufacture of bearings of wind operated electricity generators. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.335A] refers.
Chapter 74
1) Full exemption from Basic Customs Duty is being provided on flat copper wire for use in the manufacture of PV ribbons (tinned copper interconnect) for solar PV cells or modules. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.335B] refers.
Chapter 75 to 83: No change.
Chapter 84
1) Basic customs duty at a concessional rate of 5% is being provided on machinery, equipments, etc. required for initial setting up of compressed biogas plant (Bio-CNG). Notification No.81/2005-Customs, dated 8th September, 2005 as amended by notification No.13/2014-Customs, dated 11th July, 2014 refers.
2) Basic customs duty and CVD on machinery, equipment, etc. required for initial setting up of solar energy production projects is being reduced to 5% and Nil respectively. Notification
8
No.1/2011-Customs, dated 6th January, 2011 as amended by notification No.14/2014-Customs, dated 11th July, 2014 refers.
3) Full exemption from Special Additional Duty is being provided on parts and raw materials required for use in the manufacture of wind operated electricity generators. Notification No.21/2012-Customs, dated 17th March, 2012 as amended by notification No.21/2014-Customs, dated 11th July, 2014 [new S.No.14C] refers.
Chapter 85
1) Basic Customs Duty is being reduced from 5% to 2.5% on electrolysers and their parts/spares required by caustic soda or caustic potash units and membranes and their parts/spares required by industrial plants based on membrane cell technology. The BCD on other parts (other than membranes and parts thereof) is also being reduced from 7.5% to 2.5%. S.No.417 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 refers.
2) Basic Customs Duty on LCD and LED TV panels of below 19 inches is being reduced from 10% to NIL. S.No.432 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 refers.
3) Basic Customs Duty on colour picture tubes for manufacture of cathode ray TVs is being reduced from 10% to NIL. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.432A] refers.
4) Basic Customs Duty is being exempted on specified parts of LCD and LED panels for TVs. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.432B] refers.
5) Basic Customs Duty is being reduced from 7.5% to NIL on E-Book readers. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.433A] refers.
6) Basic Customs Duty on battery waste and battery scrap is being reduced from 10% to 5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.433B] refers.
7) Basic Customs Duty on specified telecommunication products not covered under the ITA (Information Technology Agreement) is being increased from NIL to 10%. Clause 87 of the Finance (No.2) Bill, 2014 refers. Notification No.24/2005-Customs, dated 1st March, 2005 is being amended vide notification No.11/2014-Customs, dated 11th July, 2014 so as to exclude these specified tariff items, which will henceforth attract the tariff rate of basic customs duty of 10%. However, all goods required for the manufacture of the aforesaid telecommunication products would continue to enjoy the exemption from basic customs duty. Notification No.11/2014-Customs, dated 11th July, 2014 may be referred to for details.
8) Special Additional Duty (SAD) on all inputs/components used in the manufacture of Personal Computers (laptops/desktops) and tablet computers is being exempted, subject to
9
actual user condition. Notification No.21/2012-Customs, dated 17th March, 2012 as amended by notification No.21/2014-Customs, dated 11th July, 2014 refers.
9) The exemption from education cess and secondary and higher education (SHE) cess leviable on CVD is being withdrawn on certain electronic goods. Notifications No.13/2012-Customs and No.14/2012-Customs, both dated the 17th March, 2012 as amended vide notifications No.18/2014-Customs and notification No.19/2014-Customs, both dated 11th July 2014, respectively refer.
10) Full exemption from Special Additional Duty (SAD) is being provided on specified inputs (PVC sheet & Ribbon) used in the manufacture of smart cards. Notification No.21/2012-Customs, dated 17th March, 2012 as amended by notification No.21/2014-Customs, dated 11th July, 2014 refers.
Chapter 86 to 88: No change
Chapter 89
1) The BCD on ships imported for breaking up is being reduced from 5% to 2.5%. Sl. No.468 of notification No.12/2012-Customs, as amended by notification No.12/2014-Customs, dated the 11th July 2014 refers.
Chapter 90-98:
1) Director (Electrical) is being authorized to issue the requisite certificate to enable Delhi Metro Rail Corporation to avail of Nil BCD and Nil CVD benefits in respect of their Phase-1 and Phase-2 projects instead of Director (Rolling Stock, Electrical & Signalling) at present. S.No.354 (condition no.40) of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 refers.
2) CVD exemption on portable X-ray machine / system is being withdrawn. S.No.20 of notification No.39/96-Customs, dated 23rd July, 1996 as amended by notification No.20/2014-Customs, dated 11th July, 2014 and notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.490A] refer.
3) State Governments concerned are being notified as sponsoring authority for Metro Rail Projects covered under the Project Import Regulations, 1986. Notification No.23/86-Customs, dated 3rd April, 1986 as amended vide notification No.25/2014-Customs, dated 11th July, 2014 refers.
Miscellaneous:
1) Full exemption from customs duty is being provided on specified HIV/AIDS drugs and diagnostic kits imported under National AIDS Control Programme (NACP) funded by the Global Fund to Fight AIDS, TB and Malaria (GFATM). Notification No.23/2014-Customs, dated the 11th July 2014 refers.
10
2) Full exemption from Basic Customs Duty is being provided to goods imported by National Technical Research Organisation (NTRO). Notification No.39/96-Customs, dated 23rd July, 1996 as amended by notification No.20/2014-Customs, dated 11th July, 2014 refers.
3) Plants & Equipment imported prior to 2008 for use in projects financed by the UN or an international organization, which hitherto could not be transferred / sold / re-exported out of the project site, are now being allowed to be transferred / sold / re-exported from the project site subject to the conditions specified therein. Notification No.84/97-Customs, dated the 11th November, 1997 as amended vide notification No.22/2014-Customs, dated the 11th July 2014 refers.
4) The requirement of certification by Ministry of Road Transport (or NHAI) for availing of customs duty exemption on specified goods required for construction of roads is being done away with. Condition no.9 (c) corresponding to S.No.368 of notification No.12/2012-Customs, dated the 17th March, 2012 is being omitted. Notification No.12/2014-Customs, dated the 11th July 2014 refers.
5) A provision is being made for refund of Customs duty paid at the time of import of scientific and technical instruments, apparatus, etc. by public funded and other research institutions, subject to submission of a certificate of registration from the Department of Scientific & Industrial Research (DSIR). Notification No.51/96-Customs, dated 23rd July, 1996 as amended vide notification No.24/2014-Customs, dated the 11th July 2014 refers.
Baggage Rules
1) Baggage Rules are being amended to,-
(i) raise the free baggage allowance from Rs.35,000 to Rs.45,000.
(ii) reduce the duty free allowance of cigarettes from 200 to 100, of cigars from 50 to 25 and of tobacco from 250 gms to 125 gms.
Notification No.30/98-Customs (NT) dated 2nd June, 1998 as amended vide notification No.50/2014-Customs (NT), dated 11th July, 2014 may be referred to for details.
*****
11
Annex II
CENTRAL EXCISE
Chapter 1 to 20: No Change
Chapter 21 -24:
1) An additional duty of excise is being levied at the rate of 5% ad valorem on waters, including aerated waters, containing added sugar falling under chapter heading 2202 10 i.e. aerated waters [2202 10 10], lemonade [2202 10 20] and other [2202 10 90]. Clause 110 of the Finance (No.2) Bill, 2014 refers. By virtue of an entry in the Provisional Collection of Taxes Act, 1931, the levy will come into force with immediate effect.
2) Basic excise duty on cigarettes and other products of tariff heading 2402 is being increased. Clause 105 of the Finance (No.2) Bill, 2014 may be referred to for details. There is no change in NCCD leviable under the Seventh Schedule to the Finance Act, 2001 and Additional Duty (health cess) under the Seventh Schedule to the Finance Act, 2005. Tariff items related to cigarettes of length exceeding 75 mm but not exceeding 85 mm and cigarettes of length exceeding 85 mm are being merged into a single tariff item i.e. others [2402 20 90]. Accordingly, tariff item 2402 20 60 and the entries relating thereto are being omitted from the Seventh Schedule to the Finance Act, 2001 and from the Seventh Schedule to the Finance Act, 2005. By virtue of an entry in the Provisional Collection of Taxes Act, 1931, these changes will come into force with immediate effect. The changes in total excise duty rates are summarized below.
TARIFF
ITEM
DESCRIPTION
(length in mm)
Rs. per 1000 sticks
(Existing Rate)
Rs. per 1000 sticks
(New Rate)
24022010
Non filter not exceeding 65
669
1150
24022020
Non-filter exceeding 65 but not exceeding 70
2027
2250
24022030
Filter not exceeding 65
669
1150
24022040
Filter exceeding 65 but not exceeding 70
1409
1650
24022050
Filter exceeding 70 but not exceeding 75
2027
2250
24022060
Filter exceeding 75 but not exceeding 85
2725
Tariff item Omitted
24022090
Other
3290
3290
3) Basic Excise Duty is being increased from 12% to 16% on pan masala, from 50% to 55% on unmanufactured tobacco and from 60% to 70% on jarda scented tobacco, gutkha and
12
chewing tobacco. Clause 105 of the Finance (No.2) Bill, 2014 and S.No.35 of notification No.12/2012-Central Excise dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014, may be referred to for details.
These changes will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.
Accordingly, the duty leviable under the compounded levy scheme has been modified. In this regard, notification No.42/2008-Central Excise dated 01.07.2008 as amended by notification No.16/2014-Central Excise dated 11th July, 2014, notification No.16/2010-Central Excise dated 27.02.2010 as amended by notification No.17/2014-Central Excise dated 11th July, 2014, and notification No.30/2008-Central Excise (NT) dated 01.07.2008 as amended by notification No.22/2014-Central Excise (NT) dated 11th July, 2014 may be referred to for details.
There is no change in NCCD and Health Cess rates.
Chapter 25, 26: No Change
Chapter 27-29
1) The Tenth Schedule to the Finance Act, 2010 dealing with Clean Energy Cess is being amended so as to expand the scope of purposes of levy of the said cess to include clean environment initiatives and funding research in the area of clean environment. Clause 111 of the Finance (No.2) Bill, 2014 refers. The Clean Energy cess is being increased from Rs.50 per tonne to Rs.100 per tonne. Notification No.3/2010-CE dated 22.06.2010 which prescribes the effective rate of Rs.50 per tonne is being rescinded vide notification No.20/2014-Central Excise, dated 11th July, 2014. Henceforth, the rate of Clean Energy Cess will be the tariff rate i.e. Rs.100 per tonne.
2) Excise duty on Branded Petrol is being reduced from Rs.7.50 per litre to Rs. 2.35 per litre. S.No.70 of Notification 12/2012- Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 refers.
3) Full exemption from Central Excise duty is being provided to Liquefied Propane and Butane mixture, Liquefied Propane, Liquefied Butane and Liquefied Petroleum Gases (LPG) for supply to Non-Domestic Exempted Category (NDEC) customers by the Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited or Bharat Petroleum Corporation Limited retrospectively w.e.f. 08.02.2013. Clause 103 of the Finance (No.2) Bill, 2014 refers. The exemption shall continue w.e.f. 11.07.2014 vide S.No.81 of Notification 12/2012-Central Excise, dated 17th March, 2012 as amended vide Notification No.12/2014-Central Excise dated 11th July, 2014 refers.
Chapter 30 to 33: No Change
Chapter 34 -39:
13
1) Full exemption from excise duty is being provided to specified raw materials used in the manufacture of backsheet and EVA sheet for manufacture of solar photovoltaic cells or modules. Notification No.12/2012- Central Excise as amended vide Notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.133A] refers.
2) Semi-mechanized units manufacturing safety matches, which attract concessional excise duty of 6%, are being allowed to carry out the processes of „Pasting of labels? and „Packing? with the aid of power. S.No.142 of notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide Notification No.12/2014-Central Excise dated 11th July, 2014 refers.
3) Full exemption from excise duty is being provided to DDT manufactured by Hindustan Insecticides Limited for supply to the National Vector Borne Diseases Control Programme (NVBDCP) of the Ministry of Health & Family Welfare. Notification 12/2012- Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.144A] refers.
4) Full exemption from excise duty is being provided on plastic materials reprocessed out of the scrap or waste and cleared into the DTA by an EOU. This would bring EOU at par with domestic and SEZ Units. S.No.147 of Notification No.12/2012- Central Excise, dated 17th March, 2012 as amended vide Notification No.12/2014-Central Excise dated 11th July, 2014 refers.
5) Full exemption from excise duty is being provided to backsheet and EVA sheet used in the manufacture of solar photovoltaic cells or modules. Notification No.12/2012-Central Excise dated 17th March, 2012 as amended vide Notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.148A] refers.
Chapter 40-55:
1) Concessional excise duty of 2% without CENVAT credit and 6% with CENVAT credit is being extended to gloves specially designed for use in sports. Notification No.1/2011-Central Excise, dated 1st March, 2011 as amended vide notification No.8/2014-Central Excise, dated the 11th July 2014 [new S.No.51A] and notification No.2/2011-Central Excise, dated 1st March, 2011 as amended vide notification No.9/2014-Customs, dated the 11th July 2014 [new S.No.28A] refers.
2) Optional excise duty of 2% (without CENVAT) / 6% (with CENVAT) on writing and printing paper for printing of educational textbooks is being withdrawn and instead a uniform excise duty of 6% with CENVAT is being levied. S.No.63 is being omitted from notification No.1/2011- Central Excise, dated 1st March, 2011. Notification No.8/2014-Central Excise, dated the 11th July 2014 refers.
3) Full exemption from excise duty is being provided for security threads and security fibre supplied to Security Paper Mill, Hoshangabad and Bank Note Paper Mill India Private Limited (BNPMIPL), Mysore. Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.149A] refers.
14
4) Excise duty on Polyester Staple Fiber (PSF) and Polyester Filament Yarn (PFY) manufactured from plastic waste or scrap or plastic waste including waste polyethylene terephthalate (PET) bottles (which is already exempt w.e.f. 08.05.2012) is being exempted retrospectively w.e.f. 29.06.2010 to 07.05.2012. Clause 102 of the Finance (No.2) Bill, 2014 refers. Intermediate product „Tow? arising during the course of manufacture of such PSF/PFY is being exempted retrospectively w.e.f. 29.06.2010 to 10.07.2014 so as to provide relief to the manufacturers of such PSF/PFY. Clauses 102 and 103 of the Finance (No.2) Bill, 2014 refer.
5) Excise duty at the rate of 2% (without CENVAT) or 6% (with CENVAT) is being imposed on Polyester Staple Fiber and Polyester Filament Yarn manufactured from plastic waste or scrap or plastic waste including waste polyethylene terephthalate (PET) bottles w.e.f. 11th July, 2014. Notification No.1/2011- Central Excise, dated 1st March, 2011 as amended vide notification No.8/2014-Central Excise, dated the 11th July 2014 [new S.No.70A] and S.No.172A of notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 refer.
Chapter 56-63: No Change
Chapter 64:
1) Excise duty is being reduced from 12% to 6% on footwear of retail price exceeding Rs.500 per pair but not exceeding Rs.1,000 per pair. Footwear of retail price upto Rs.500 per pair will continue to remain exempted. S.No.180 of notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 refers.
Chapter 65 to 69: No Change
Chapter 70:
1) Full exemption from excise duty is being provided on solar tempered glass used in the manufacture of solar photovoltaic cells or modules, solar power generating equipment or systems and flat plate solar collectors. Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.187C] refers.
Chapter 71
1) Un-branded articles of precious metals are being exempted from excise duty retrospectively for the period 01.03.2011 to 16.03.2012. Clause 102 of the Finance (No.2) Bill, 2014 refers.
Chapter 72: No Change
15
Chapter 73
1) Excise duty is being reduced from 12% to Nil on forged steel rings used in the manufacture of bearings of wind operated electricity generators. Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.211A] refers.
Chapter 74
1) Full exemption from excise duty is being provided on flat copper wire used in the manufacture of PV ribbons (tinned copper interconnect) for use in the manufacture of solar cells or modules. Notification No.12/2012- Central Excise dated 17th March, 2012 as amended vide Notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.215A] refers.
2) Excise duty on winding wires of copper is being increased from 10% to 12%. S.No.346 of notification 12/2012- Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 refers.
Chapter 75-76: No Change
Chapter 77-84:
1) Excise duty on machinery for the preparation of meat, poultry, fruits, nuts or vegetables, and on presses, crushers and similar machinery used in the manufacture of wine, cider, fruit juices or similar beverages and on packaging machinery is being reduced from 10% to 6%. Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.241B, 245A and 245B] refers.
2) Full exemption from excise duty is being granted in respect of machinery, equipments, etc. required for initial setting up of solar energy production projects. Notification No.15/2010- Central Excise, dated 27th February, 2010 as amended vide notification No.15/2014-Central Excise dated 11th July, 2014 refers.
3) Full exemption from excise duty is being provided on machinery, equipments, etc. required for initial setting up of compressed biogas plant (Bio-CNG). Notification No.33/2005- Central Excise, dated 8th September, 2005 as amended vide notification No.14/2014-Central Excise dated 11th July, 2014 refers.
4) Excise duty on hand operated sewing machine (2% without CENVAT / 6% with CENVAT) is being rationalized by levying concessional excise duty on sewing machines other than those operated with electric motors (whether in-built or attachable to the body). S.No.97 of notification No.1/2011- Central Excise, dated 1st March, 2011 as amended vide notification No.8/2014-Customs, dated the 11th July 2014 and S.No.58 of notification No.2/2011- Central Excise, dated 1st March, 2011 as amended vide notification No.9/2014-Customs, dated the 11th July 2014 refer.
16
Chapter 85:
1) Excise duty on Metal Core PCB and LED driver for use in the manufacture of LED lights and fixtures and LED lamps is being reduced from 12% / 10% to 6%. Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.321A] refers.
2) Full exemption from excise duty is being provided to parts consumed within the factory of production for the manufacture of non-conventional energy devices, and when such use in elsewhere than in the factory of production, the exemption is being allowed subject to actual user condition. Notification No.12/2012- Central Excise dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No. 332A] refers.
3) Excise duty on recorded smart cards is being increased from 2% without CENVAT and 6% with CENVAT to a uniform rate of 12%. Accordingly, S.No.104 is being omitted from notification No.1/2011- Central Excise, dated 1st March, 2011 and S.No.63 from notification No.2/2011-Central Excise, dated 1st March, 2011. In this connection, notifications No.8/2014-Central Excise and No.9/2014-Central Excise, both dated the 11th July 2014 and S.No.346 of notification No.12/2012-Central Excise dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 refer.
Chapter 86: No Change
Chapter 87:
1) Excise duty is being exempted on parts of tractors removed from one or more factories of a tractor manufacturer to another factory of the same manufacturer for manufacture of tractors. S.No.340 of notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 refers.
Chapter 88-96: No Change
Miscellaneous:
1) Full exemption from excise duty is being provided to reverse osmosis (RO) membrane element for water filtration or purification equipment (other than household type filter). Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.239A] refers.
2) Excise duty on RO membrane element used in household type filters is being reduced from 12% / 10% to 6%. Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.241A] refers.
3) Director (Electrical) is being authorized to issue the requisite certificate to enable Delhi Metro Rail Corporation to avail of Nil excise duty benefit in respect of their Phase-1 and Phase-2 projects instead of Director (Rolling Stock, Electrical & Signalling) at present.
17
S.No.333 (ii) of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Central Excise, dated 11th July, 2014 refers. Condition 48 contains the change.
4) Full exemption from excise duty is being provided on specified HIV/AIDS drugs and diagnostic kits supplied under National AIDS Control Programme (NACP) funded by the Global Fund to Fight AIDS, TB and Malaria (GFATM). Notification No.13/2014-Central Excise dated 11th July, 2014 refers.
5) Full exemption from Excise Duty is being provided to goods supplied to National Technical Research Organisation (NTRO). Notification No.64/95-Central Excise, dated 16th March, 1995 as amended vide notification No.10/2014-Central Excise dated 11th July, 2014 refers.
6) Plants & Equipment supplied prior to 2008 for use in projects financed by the UN or an international organization, which hitherto could not be transferred / sold out of the project site, are now being allowed to be transferred / sold from the project site subject to the conditions specified therein. Notification No.108/95-Central Excise, dated the 28th August, 1995 as amended vide notification No.11/2014-Central Excise, dated the 11th July 2014 refers.
7) Intermediate goods manufactured and consumed captively for further manufacture of matches is being fully exempted. Notification No. 67/95-CE dated 16th March, 1995 as amended by Notification No.19/2014- Central Excise, dated the 11th July 2014 refers.
8) Education cess and secondary & higher education cess (customs component) is being exempted on goods cleared by an EOU into the DTA. Notification No.23/2003-Central Excise dated 31.03.2003 as amended by notification No.18/2014-Central Excise dated 11th July, 2014 [new S.Nos.1A and 1B] refers.
9) S.No.140 of notification No.49/2008-Central Excise (NT) dated 24th December, 2008 is being amended vide notification No.17/2014-Central Excise (NT) so as to specify the tariff item 8421 99 00 in column (2) relating to replaceable kits of water filters functioning without electricity.
10) Rule 8 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 is being amended with retrospective effect from 13.04.2010 to provide that where a manufacturer manufactures pouches of different RSPs on a single machine in a month, the duty liability for that month would be the duty applicable to the highest of the RSP so manufactured. This will align the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 with the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 with regard to manufacture of pouches of different RSPs on a single machine under the compounded levy scheme. Clause 101 of the Finance (No.2) Bill, 2014 refers.
18
Annex III
CLARIFICATIONS
CUSTOMS
1) Representations have been received regarding the eligibility of aircraft engines and parts thereof for customs duty exemption under S.No.454 of notification No.12/2012-Customs, dated 17th March, 2012. It is clarified that aircraft engines and parts thereof are eligible for customs duty exemption when imported for servicing, repair or maintenance of aircrafts used for scheduled operations subject to fulfilment of conditions specified therein.
2) A doubt has been raised as to whether road construction machinery imported under notification No.12/2012-Customs, dated 17.03.2012 [Sl.No.368] can be sold within 5 years of importation on payment of customs duty on depreciated value and whether individual constituents of the consortium whose names appear in the contract may import goods under the notification. It is reiterated that road construction machinery imported duty free can be sold within 5 years of importation subject to payment of customs duty on depreciated value subject to the conditions specified therein and that individual constituents of the consortium whose names appear in the contract can import goods under the said notification.
3) Under S.No.7 of notification No. 39/96-Cus dated 23.7.1996, paints, consumables, metallic and non-metallic materials etc. in any form and articles thereof conforming to aeronautical specification accompanied with certificate of conformance / release note / airworthiness certificate for development are exempt from BCD and CVD subject to conditions specified thereon. Representations have been received regarding the scope of the said exemption. It is clarified that the exemption is available to all materials in any form and articles thereof, subject to the overall condition that they conform to aeronautical specification accompanied with certificate of conformance/release note/airworthiness certificate for development.
CENTRAL EXCISE
1) In pursuance of discussions in the Tariff Conference of Chief Commissioners of Central Excise held on 16-17 September, 2013 at Pune, a clarification was sought regarding the exemption from education cess and secondary & higher education (SHE) cess on the clean energy cess leviable on coal vide notifications No.28/2010-CE and No.29/2010-CE, both dated 22.06.2010. It is clarified that the exemption from education cess and SHE cess under notifications No.28/2010-CE and No.29/2010-CE, both dated 22.06.2010 is applicable only in respect of the clean energy cess leviable on coal. Hence, education cess and SHE cess are not leviable on clean energy cess, but shall be leviable on excise duty on coal.
2) Doubts have been raised regarding the scope of the exemption from excise duty available for heena powder or paste under S.No.134 of notification 12/2012- Central Excise dated 17th March, 2012 in the context of the phrase “not mixed with any other ingredient”. It is clarified
19
that the exemption is available to heena powder mixed with a liquid, so far that the liquid is a medium to change the form of heena powder into paste but excludes products like heena dye and such other products which are cosmetics.
3) A reference has been received from the Railway Board in the context of S.No.106 of notification No.1/2011-CE dated 1st March, 2011 as to whether manufacturers of goods (including rolling stock) falling under headings 8601 to 8606 are eligible for CENVAT credit. It is clarified that all goods falling under headings 8601 to 8606 (except 8604) attract 2% (without CENVAT credit) under the notification referred to above or 6% (with CENVAT credit) by Tariff. Hence, manufacturers of such goods paying 6% excise duty are eligible for CENVAT credit. Prior to 17.03.2012, the duty was 5% with CENVAT benefit.
4) All goods falling under any Chapter supplied against International Competitive Bidding (ICB) are fully exempt from excise duty [Sl.No.336 of notification No. 12/2012-CE dated 17.3.2012], subject to the condition: “If the goods are exempted from the duties of customs leviable under the First Schedule to Customs Tariff Act 1975 and the additional duty leviable under Section 3 of the said Customs Tariff Act when imported into India”. A doubt has been raised whether the excise duty exemption under this notification is available to sub-contractors who supply goods to the main contractor who has won the ICB contract. It is clarified that the said exemption is also available to sub-contractors for manufacture and supply of goods for or on behalf of the main contractor (who has won the bid for the project through ICB) for execution of the said project, subject to compliance of conditions specified, if any.
****
20
Annex IV
LEGISLATIVE CHANGES
Amendments in the Customs Act, 1962
1) The Customs Act, 1962 is being amended so as to provide that a reference in that Act to a Chief Commissioner of Customs or a Commissioner of Customs may also include a reference to the Principal Chief Commissioner of Customs or the Principal Commissioner of Customs, as the case may be. It also seeks to provide for consequential amendments in the Act.
2) Section 3 is being amended so as to provide for inclusion of the Principal Chief Commissioner of Customs and Principal Commissioner of Customs in the class of officers of customs.
3) Section 15(1) is being amended to provide for determination of rate of duty and tariff valuation for imports through a vehicle in cases where the Bill of Entry is filed prior to the filing of Import Report (as the Manifest is called in case of imports by land).
4) Section 25 is being amended to provide that the customs duties on mineral oils including petroleum & natural gas extracted or produced in the continental shelf of India or the exclusive economic zone of India shall not be recovered for the period prior to 7th February, 2002.
5) Section 46(3) is being amended to allow the filing of a Bill of Entry prior to the filing of Import Report (as the Manifest is called in case of imports by land) for imports through land route.
6) Section 127A is being amended to change the name of the „Customs and Central Excise Settlement Commission? to the „Customs, Central Excise and Service Tax Settlement Commission?.
7) Section 127B(1) is being amended to replace the reference to section 28AB with a reference to section 28AA and to provide that an application for settlement of cases can also be filed in cases where a Bill of Export, Baggage Declaration, Label or Declaration accompanying the goods effected through Post or Courier have been filed.
8) Section 127B is also being amended so as to omit sub-section (2) since the same is redundant.
9) Section 127L is being amended so as to insert an Explanation that the concealment of particulars of duty liability relates to any such concealment made from the officer of customs and not from the Settlement Commission.
10) Section 129A(1) is being amended so as to increase the discretionary powers of the Tribunal to refuse admission of appeal from the existing Rs.50,000 to Rs.2 lakh.
11) Section 129A(1B) is being amended to substitute the words “by notification in the official gazette” with the words “by order” so as to enable the Board to constitute a Review Committee by way of an order instead of by way of a notification.
21
12) Section 129B(2A) is being amended to omit the first, second and third proviso in view of substitution of section 129E with a new section.
13) Section 129D is being amended to insert a proviso in sub-section (3) so as to vest the Board with powers to condone delay for a period of upto 30 days, for review by the Committee of Chief Commissioners of the orders in original passed by the Commissioner of Customs.
14) Section 129E is being substituted with a new section to prescribe a mandatory fixed pre-deposit of 7.5% of the duty demanded or penalty imposed or both for filing appeal with the Commissioner (Appeals) or the Tribunal at the first stage and another 10% of the duty demanded or penalty imposed or both for filing second stage appeal before the Tribunal. The amount of pre-deposit payable would be subject to a ceiling of Rs. 10 crore.
15) Section 131BA is being amended so as to enable the Commissioner (Appeal) to take into consideration the fact that a particular order being cited as a precedent decision on the issue has not been appealed against for reasons of low amount.
Amendments in the Customs Tariff Act, 1975
1) Section 8B of the Customs Tariff Act, 1975 is being amended so as to provide for levy of safeguard duty on inputs/raw materials imported by an EOU and cleared into DTA as such or are used in the manufacture of final products & cleared into DTA. This change will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. Clause 86 of the Finance (No.2) Bill, 2014 refers.
Amendment in the First Schedule to the Customs Tariff Act, 1975:
1) Tariff item 2402 20 60 is being omitted as a consequential change to amendment in the First Schedule to the Central Excise Tariff Act.
2) The tariff rate of basic customs duty on goods falling under tariff items 8517 62 90 and 8517 69 90 is being increased from Nil to 10%.
3) The unit quantity code against certain entries is being changed.
The changes at 1) and 2) will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. Clause 87 of the Finance (No.2) Bill, 2014 refers.
Amendments in the Central Excise Act, 1944
1) The Central Excise Act, 1944 or Finance Act, 1994 is being amended so that a reference in that Act to a Chief Commissioner of Central Excise or a Commissioner of Central Excise may also include a reference to the Principal Chief Commissioner of Central Excise or the Principal Commissioner of Central Excise, as the case may be. It also seeks to provide for consequential amendments in the Act.
2) Section 2(b) is being amended so as to provide for inclusion of Principal Chief Commissioner of Central Excise and Principal Commissioner of Central Excise in the definition of the Central Excise Officer.
22
3) Section 15A is being inserted so as to empower the Central Government to prescribe an authority or agency to whom the information return shall be filed by the specified persons such as Income Tax Authorities, State Electricity Boards, VAT or Sales Tax Authorities, Registrar of Companies. Information can be collected for the purposes of the Act, such as, to identify tax evaders or recover confirmed dues. It is also proposed to insert a new section 15B which provides for imposition of penalty if the information return is not submitted.
4) Section 31(g) and section 32(1) is being amended to change the name of the „Customs and Central Excise Settlement Commission? to the „Customs, Central Excise and Service Tax Settlement Commission?.
5) Section 32E(1) is being amended to replace the reference to section 11AB with a reference to section 11AA.
6) Section 32E(1) is also being amended to allow filing of applications of settlement before the Settlement Commission in cases where the applicant has not filed the returns after recording reasons for the same.
7) Section 32E is being amended to omit sub-section (2) since the same is redundant.
8) Section 32O(1) is being amended so as to insert an Explanation that the concealment of particulars of duty liability relates to such concealment made from the officer of central excise and not from the Settlement Commission.
9) Section 35B(1) is being amended so as to increase the discretionary powers of the Tribunal to refuse admission of appeal from the existing Rs.50,000 to Rs.2 lakh.
10) Section 35B(1B) is being amended to substitute the words “by notification in the official gazette” with the words “by order” so as to enable the Board to constitute a Review Committee by way of an order instead of by way of a notification.
11) Section 35C(2A) is being amended to omit the first, second and third proviso in view of substitution of section 35F with a new section.
12) Section 35E is being amended to insert a proviso in sub-section (3) to vest the Board with powers to condone delay for a period upto 30 days for review by the Committee of Chief Commissioners of the orders in original passed by the Commissioner of Central Excise.
13) Section 35F is being substituted with a new section to prescribe a mandatory fixed pre-deposit of 7.5% of the duty demanded or penalty imposed or both for filing appeal with the Commissioner (Appeals) or the Tribunal at the first stage and another 10% of the duty demanded or penalty imposed or both for filing second stage appeal before the Tribunal. The amount of pre-deposit payable would be subject to a ceiling of Rs.10 crore.
14) Section 35L is being amended so as to clarify that determination of disputes relating to taxability or excisability of goods is covered under the term „determination of any question having a relation to rate of duty? and hence, appeal against Tribunal orders in such matters would lie before the Supreme Court.
15) Section 35R is being amended so as to enable the Commissioner (Appeal) to take into consideration the fact that a particular order being cited as a precedent decision on the issue has not been appealed against for reasons of low amount.
23
16) The Third Schedule to the Central Excise Act, 1944 is being aligned with notification No. 49/2008-CE (NT) dated 24.12.2008 which specifies goods liable for assessment based on Retail Sale Price (RSP). This change will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.
Amendments in the First Schedule to the Central Excise Tariff Act, 1985:
1) Excise duty on cigarettes is being increased by 72% for cigarettes of length not exceeding 65 mm and by 11% to 21% for cigarettes of other lengths. Similar increases are proposed on cigars, cheroots and cigarillos.
2) Basic excise duty is being increased from 12% to 16% on pan masala, from 50% to 55% on unmanufactured tobacco and from 60% to 70% on jarda scented tobacco, gutkha and chewing tobacco.
3) Tariff items related to cigarettes of length exceeding 75 mm but not exceeding 85 mm and cigarettes of length exceeding 85 mm are being merged into a single tariff item i.e. others [2402 20 90]. Accordingly, tariff item 2402 20 60 and the entries relating thereto are being omitted.
4) The entry 2403 19 occurring against the description “Other than paper rolled biris, manufactured without the aid of machine” is being substituted with 2403 19 21.
5) The unit quantity code against certain entries is being changed.
The changes at 1) to 4) will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. Clause 105 of the Finance (No.2) Bill, 2014 refers.
Amendments in the CENVAT Credit Rules, 2004:
1) Rule 12A is being amended so as to disallow transfer of credit by a large taxpayer from one unit to another.
2) A new sub-rule (qa) is being inserted in Rule 2 to introduce the definition of „place of removal?.
3) Rule 4(1) (for input credit) and Rule 4(7) (for input service credit) are being amended in order to fix a time limit of six months for availment of the CENVAT Credit.
Notification No.23/2004-Central Excise (NT) dated 10th September, 2004 as amended vide notification No.21/2014-Central Excise dated 11th July, 2014 refers.
Amendments in the Central Excise Rules, 2002:
1) E-payment is being made mandatory for all assessees subject to certain exceptions.
2) Sub-rule (3A) of rule 8 is being substituted to provide that in case of default in payment of duty, the assessee shall on his own pay a penalty of 1% per month on the amount of duty not paid for each month or part thereof.
Notification No.4/2002-Central Excise (NT) dated 1st March, 2002 as amended vide notification No.19/2014-Central Excise dated 11th July, 2014 refers.
24
Amendments in the Central Excise Valuation Rules, 2004:
1) The Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 is being amended so as to provide that in cases where excisable goods are sold at a price below the manufacturing cost and profit and there is no additional consideration flowing from the buyer to the assessee directly or from a third person on behalf of the buyer, value for the assessment of duty shall be deemed to be the transaction value.
Notification No.45/2000-Central Excise (NT) dated 30th June, 2000 as amended vide notification No.20/2014-Central Excise dated 11th July, 2014 refers.
Authority for Advance Rulings
1) The Scheme of Advance Ruling is being extended to Resident Private Limited Companies. In this regard, notification No.18/2014-Central Excise (N.T.) and notification No.51/2014-Customs (N.T.), both dated 11th July, 2014 refers.
Unit Quantity Codes
1) The Schedules to the Customs and Central Excise Tariffs are being amended in respect of selected goods to match the Unit Quantity Codes prescribed therein with the ones that are actually used in trade and commerce. This would facilitate trade and improve data quality and compliance.
*****

 

 

Changes in Service Tax – Indian Union Budget 2014-15

 

 

Page 1 of 15
Government of India
Ministry of Finance
Department of revenue
Tax Research Unit
***
M. Vinod Kumar
Joint Secretary (Tax Research Unit)
Tel: 011-23093027; Fax: 011-23093037
e-mail: m.kumar58@nic.in
D.O.F. No. 334/15/2014-TRU
New Delhi, dated July 10, 2014.
Dear Madam/Sir,
Sub.: Union Budget, 2014-15: Changes in Service Tax - reg.
The hon?ble Finance Minister has, while presenting the Union Budget 2014-15, introduced the Finance (No.2) Bill, 2014 [hereinafter, the Bill] in the Lok Sabha on the 10th of July, 2014. Clause 106 appearing in Chapter V of the Bill covers the amendments made to Chapter V of the Finance Act, 1994. In addition, a set of notifications are also under issue.
1.2 After the introduction of the Negative List based tax regime in the services sector in July, 2012, the emphasis has been to ensure stability and continuity. To carry this further, this year, only a limited number of changes have been made in service tax. The main focus in service tax at the present juncture is to widen the tax base and enhance compliance.
1.3 The changes being made by amendments in notifications and rules can be categorized into two broad categories based on when they would come into effect: (i) changes which will have immediate effect; and (ii) changes which are proposed to be given effect to only from 1st October, so as to coincide with the Service Tax Return cycle. As far as statutory amendments are concerned, they would come into effect only from the date on which the Bill receives the assent of the President. Regarding certain amendments proposed for widening the tax base, they would come into effect on a date to be notified after the Bill receives the assent of the President. Entries in the Bill and the notifications may be carefully read, for this purpose.
Page 2 of 15
1.4 The changes being made are discussed below under three broad categories:
(i) Measures to widen the tax base; [Para 2]
(ii) Measures for compliance enhancement; [Para 3] and
(iii) Facilitation measures. [Para 4]
2. Measures to widen the tax base:
Broadening the tax base is a fiscal objective justified in itself. Primary objective of the negative list approach which came into effect from 1st July, 2012 was also to broaden the tax base.
Keeping this in view, the negative list and exemptions have been reviewed.
2.1 Review of the Negative List of services:
2.1.1 Service tax leviable currently on sale of space or time for advertisements in broadcast media, namely radio or television [section 66D (g) read with section 66B], is proposed to be extended to cover such sales on other segments like online and mobile advertising. The new levy would further extend to advertisements in internet websites, out-of-home media, on film screen in theatres, bill boards, conveyances, buildings, cell phones, Automated Teller Machines, tickets, commercial publications, aerial advertising, etc. Sale of space for advertisements in print media, however, would continue to be in the negative list and hence remain excluded from service tax. Print media is being defined in service tax law for the purpose. This change will come into effect from a date to be notified later, after the Finance (No.2) Bill, 2014 receives the assent of the President.
2.1.2 Service tax is proposed to be levied on services provided by radio taxis or radio cabs, whether or not air-conditioned [section 66D (o)(vi)]. The abatement presently available to rent-a-cab service would also be made available to radio taxi service, to bring them on par. A definition of radio taxi is being included in the exemption notification No.25/2012-ST. Service tax on radio taxi services will come into effect from
Page 3 of 15
a date to be notified later, after the Finance (No.2) Bill, 2014 receives the assent of the President.
2.2 Review of General Exemptions:
The following changes are being made as a result of the review of exemptions.
2.2.1: Exemptions being withdrawn [Notification 25/2012-ST]:
(i) Presently service of passenger transportation by a contract carriage other than for the purposes of tourism, conducted tour, charter or hire, is exempt from service tax [Sl.No.23 (b)]. The scope of exemption is being reduced by withdrawing the exemption in respect of air-conditioned contract carriages. As a result, any service provided for transport of passenger by air-conditioned contract carriage including which are used for point to point travel, will attract service tax, with immediate effect. Service tax will be charged at an abated value of 40% of the amount charged from service receiver; therefore, effective tax will be 4.944%. Services by non-air conditioned contract carriages for purposes other than tourism, conducted tour, charter or hire continue to be exempted.
(ii) Exemption to services by way of technical testing or analysis of newly developed drugs, including vaccines and herbal remedies on human participants by a clinical research organization approved to conduct clinical trials by the Drug Controller General of India [Sl.No.7] is being withdrawn. This would be taxable with immediate effect.
2.2.2 Rationalization of Exemptions:
(i) Education:
At present, all services provided by educational institutions [providing educational services specified in the negative list] to their students, faculty and staff are exempted [section 66 D (l) of the Finance Act, 1994]; this will continue. However, in respect of services received by such educational institutions, presently, exemption is being operated through the concept of „auxiliary educational services? [Sl.No.9]. Doubts have been raised and clarifications have been sought regarding the scope and meaning of
Page 4 of 15
„auxiliary educational services?. To bring clarity, it is proposed to omit the concept of „auxiliary educational services? and specify in the notification, the services which will be exempt when received by the eligible educational institutions. Accordingly, the following services received by eligible educational institutions are exempted from service tax: (i) transportation of students, faculty and staff of the eligible educational institution; (ii) catering service including any mid-day meals scheme sponsored by the Government; (iii) security or cleaning or house-keeping services in such educational institution; (iv) services relating to admission to such institution or conduct of examination. Further, for the purposes of this exemption, „educational institution? is being defined in the exemption notification 25/2012-ST as institutions providing educational services specified in the negative list.
It may be noted that the scope of exemption remains the same as earlier in the case of services provided by eligible educational institutions; in the case of services received by the eligible educational institutions, exemption will be available only in respect of the services specified as above. Further as a rationalization measure, the exemption hitherto available to services provided by way of renting of immovable property to educational institutions stands withdrawn, with immediate effect.
(ii) Services ordinarily provided by a Municipality:
For greater clarity, the exemption in respect of services provided to Government or local authority or governmental authority [in entry at Sl.No.25], has been made more specific. Services by way of water supply, public health, sanitation conservancy, solid waste management or slum improvement and up-gradation will continue to remain exempted but the exemption would not be extendable to other services such as consultancy, designing, etc., not directly connected with these specified services.
(iii) Services by a Hotel, Inn or Guest House:
According to the present entry at Sl. No. 18, “service by way of renting of a hotel, inn, guest house, club or campsite or other commercial places meant for residential or
Page 5 of 15
lodging purposes, having a declared tariff of a unit of accommodation below rupees one thousand per day or equivalent” is exempt from service tax. Some doubts appears to have arisen on account of use of the word “commercial” in the entry as to whether dharmashalas, ashram or any such entity which offer accommodation would be covered therein. It may be noted that this exemption, upto the specified threshold level, is available to any entity providing service by way of accommodation, including dharmashalas or ashram or such other entities. To remove any ambiguity, the word „commercial? is being omitted. Renting of vacant land or buildings for hotels would continue to be taxable irrespective of the hotel?s declared tariff.
Where the exclusions and exemptions are withdrawn to widen the tax base, if the aggregate value of taxable service provided by a person in a financial year does not exceed Rupees Ten Lakh, exemption will be available in terms of Notification 33/2012-ST.
2.3 Service tax on service portion in Works Contracts:
In Rule 2A of the Service Tax (Determination of Value) Rules, 2006, category „B? and „C? of works contracts are proposed to be merged into one single category, with percentage of service portion as 70%; this change will come into effect from 1st October, 2014. This rationalization by way of merger of categories has been made to avoid disputes of classification between these two categories. [Notification No.11/2014-ST].
3. Measures for compliance enhancement:
3.1 Variable rates of Interest:
To encourage prompt payment of service tax, it is being proposed to introduce interest rates which would vary on the extent of delay [Notification No.12/2014-ST]. Simple interest rates per annum payable on delayed payments under section 75, are prescribed as follows:
Extent of delay
Simple interest rate per annum
Up to six months
18%
Page 6 of 15
More than six months &
upto one year
18% for first six months, and 24% for the period of delay beyond six months
More than one year
18% for first six months, 24% for second six months, and 30% for the period of delay beyond one year
This new interest rate regime will become operational only on 1st October 2014. In other words, upto 1st October, 2014, the rate of interest of 18%, presently applicable, will continue to apply. The variable interest rates will apply only on or after 1st October, 2014.
As an illustration, assume a case where service tax became due, say, on the 6th of July, 2012 and the assessee pays the dues on 6th of December, 2014. In such a case, the interest to be charged would be as below:
(i) 18% simple interest upto September, 30th, 2014.
(ii) For the period from 1st October, 2014 to 6th December, 2014, the rate of interest will be 30% since the period of delay is beyond one year.
As specified in the proviso to section 75, three per cent concession on the applicable rate of interest will continue to be available to the small service providers.
3.2 E-payment:
E-payment of service tax is being made mandatory with effect from the 1st Oct 2014. Relaxation from e-payment may be allowed by the Deputy Commissioner/Asst. Commissioner on case to case basis [Notification 09/2014-ST].
4. Facilitation measures:
4.1.1 Section 67A in the Finance Act, 1994:
The Explanation to Section 67A is being amended to enable the Government to prescribe rules for determination of rate of exchange for calculation of taxable value in respect of certain services. Rules will be prescribed in due course, after the Bill receives the assent. This amendment has been proposed in view of requests from the trade and
Page 7 of 15
industry to delink the conversion from the notified Customs rates of exchange as at present. Any suggestions would be welcome before the Rules are notified.
4.1.2 Service Tax Rules: [changes to have immediate effect]:
Service provided by a Director to a body corporate is being brought under the reverse charge mechanism; service receiver, who is a body corporate will be the person liable to pay service tax. This is in view of requests by body corporates such as the Reserve Bank of India.
Services provided by Recovery Agents to Banks, Financial Institutions and NBFC is being brought under the reverse charge mechanism; service receiver will be the person liable to pay service tax. [Notification 9/2014 -ST and 10/2014-ST]
4.1.3 Place of Provision of Services Rules: [changes to take effect from 1st October, 2014].
(i) Provision for prescribing conditions for determination of place of provision of repair service carried out on temporarily imported goods is being omitted. The second proviso to rule 4(a) is being amended to prescribe that it would suffice for the purpose of exclusion of repair service from applicability of rule 4(a) that the goods imported for repair are exported after repair without being put to any use other than that which is required for such repair. It may please be noted that this exclusion does not apply to goods that arrive in the taxable territory in the usual course of business and are subject to repair while such goods remain in the taxable territory, e.g., any repair provided in the taxable territory to containers arriving in India in the course of international trade in goods will be governed by rule 4.
(ii) The definition of intermediary is being amended to include the intermediary of goods in its scope. Accordingly, with effect from 1.10.2014, an intermediary of goods, such as a commission agent or consignment agent shall be covered under rule 9(c) of the Place of Supply of Services Rules.
Page 8 of 15
(iii) Service consisting of hiring of Vessels (excluding yachts) and Aircraft is being excluded from rule 9(d). Accordingly, hiring of vessels, or aircraft, irrespective of whether short term or long term, will be covered by the general rule, that is, the place of location of the service receiver. Hiring of yachts would however continue to be covered by rule 9 (d). [Notification 14/2014-ST]
4.1.4 Point of Taxation Rules: [Notification No.13/2014-ST]
The first Proviso to rule 7 of the Point of Taxation Rules (POTR) is being amended to provide that point of taxation in respect of reverse charge will be the payment date or the first day that occurs immediately after a period of three months from the date of invoice, whichever is earlier. This amendment will apply only to invoices issued after 1st October, 2014. A transition rule is being prescribed (new rule 10 of POTR).
4.1.5 CENVAT Credit Rules: [Notification No.21/2014-CE (N.T.)]
(i) A manufacturer or a service provider shall take credit on inputs and input services within a period of six months from the date of issue of invoice, bill or challan w.e.f. 1st September,2014 [ newly inserted proviso to rule 4 (1) and fifth proviso to rule 4(7) refer]
(ii) In case of service tax paid under full reverse charge, the condition of payment of invoice value to the service provider for availing credit of input services is being withdrawn. However, there is no change in respect of partial reverse charge. [Refer amended proviso to rule 4(7)].
(iii) Re-credit of CENVAT credit reversed on account of non-receipt of export proceeds within the specified period or extended period, to be allowed, if export proceeds are received within one year from the period so specified or extended period. This can be done on the basis of documents evidencing receipt of export proceeds [Refer the newly inserted proviso to rule 6(8)].
4.1.6 Notification 26/2012- ST prescribing Taxable Portion: [Notification No. 8/2014-ST]
(i) The condition for availing abatement in case of GTA service is being amended with immediate effect to clarify that the condition for non- availment of credit is required to
Page 9 of 15
be satisfied by the service providers only. Service recipient will not be required to establish satisfaction of this condition by the service provider [Sl. No. 7 refers].
(ii) Service of transportation of passenger by air-conditioned contract carriages is taxable with immediate effect, as stated earlier. Hence, an entry has been inserted at Sl. No. 9A providing that the taxable portion of such service shall be 40% with the condition that CENVAT credit of inputs or capital goods or input services has not been taken.
(iii) The condition against entry No. 9 is amended with effect from 1st October 2014, to allow the credit of input service of renting of a motor cab if such services are received from a person engaged in the similar line of business i.e. a sub-contractor providing services of renting of motor cab to the main contractor. The whole of the CENVAT credit has been allowed with respect to input service of renting of any motor cab, received from a person who is paying service tax on 40% of the value of services. The CENVAT credit eligibility will be restricted to 40% of the credit of the input service of renting of any motor cab if service tax is paid or payable on full value of the services i.e. no abatement is availed.
(iv) Tour operator service providers are also being allowed to avail CENVAT credit on the input service of another tour operator, which are used for providing the taxable service. This is being provided to avoid cascading of taxes. (Sl. No. 11 refers). [Change to be effective from 1st October, 2014]
(v) Taxable portion in respect of transport of goods by vessel is being reduced from 50% to 40%. Effective service tax will decrease from the present 6.18% to 4.944%, with effect from 1st October, 2014.
4.1.7 Simplification of Partial Reverse Charge mechanism: [Notification No.10/2014-ST]
In renting of motor vehicle, where the service provider does not take abatement the portion of service tax payable by the service provider and service receiver will be modified as 50% each. This change will come into effect from 1st of October 2014.
Page 10 of 15
4.1.8 Advance Ruling:
The resident private limited company is being included as a class of persons eligible to make an application for Advance Ruling in service tax [Notification No.15/2014-ST]. This change will come into effect immediately.
4.1.9 SEZ – procedural simplification: [changes to have immediate effect]
Certain changes are being made in Notification No 12/2013-ST dated 1st July 2013 [vide amending Notification No.07/2014-ST] as follows:
(i) It is being provided that the Central Excise Officer would issue authorization in Form A-2, within fifteen working days from the date of receipt of Form A-1 by the Central Excise Officer.
(ii) Authorization will have validity from the date on which Form A-1 is verified by the Specified Officer of SEZ. However, if Form A-1 is furnished after a period of 15 days from the date of its verification by the Specified Officer, the authorization shall have validity from the date of furnishing of Form A-1 to the Central Excise Officer.
(iii) SEZ Units or the Developer will, pending issuance of Form A-2, be entitled to avail upfront exemption on the basis of Form A-1. However, in such a case, the SEZ Unit/Developer would be required to furnish a copy of authorization issued by the Central Excise Officer within 3 months from the date of receipt of specified services. If a copy of authorization is not provided within the said period of three months, the service provider shall pay service tax on the service so provided availing the exemption.
(iv) As regards services covered under full reverse charge, it is being mentioned specifically in Form that there would be no requirement of furnishing service tax registration number of service provider.
(v) It is being provided that a service shall be treated as exclusively used for SEZ operations if the recipient of service is SEZ unit or developer, invoice is in the name of such unit/developer and the service is used exclusively for furtherance of authorized operations in SEZ.
Page 11 of 15
(vi) Certain doubts have been raised by field formations as regards the jurisdiction for the purposes of granting refunds under notification No. 12/2013-ST to the SEZ Units and SEZ Developers. It is clarified that the jurisdictional Deputy Commissioner / Assistant Commissioner of Central Excise for all purposes under the said notification would be the authority with whom SEZ Units or the Developers are registered for taking upfront exemption or for the purposes of Chapter V of the Finance Act, 1994. In this context, attention is also invited to Circular No. 105/08/2008-ST, dated 16.9.2008. If SEZ units have obtained a centralized registration under the Service Tax Rules, it will have option to file a common service tax refund in respect of all units covered under the Centralized Registration or file a unit-wise refund at its option, to the authority having jurisdiction over centralized registration.
4.1.10 Input Service Distributor:
Rule 7 of the CENVAT Credit Rules, 2004, provides for the manner of distribution of common input service credit by the Input Service Distributor. This was amended vide notification No. 05/2014-CE (N.T.) amending, inter-alia, rule 7(d), to provide for distribution of common input service credit among all units in their turnover ratio of the relevant period. Some interpretational issues were raised regarding the amendment such as: (i) due to the use of the term „such unit? in rule 7(d), the distribution of the credit would be restricted to only those units where the services are used, and (ii) the credit available for distribution would also get reduced by the proportion of the turnover of those units where the services are not used.
These issues are being clarified vide Circular No. 178/04/2014-ST, dated 10.7.2014 illustrating the effect of the amendment carried out vide notification No. 05/2014-CE (N.T.). It clarifies that the amended rule 7 allows distribution of input service credit to all units (which are operational in the current year) in the ratio of their turnover of the previous year/previous quarter as the case may be.
4.2 Exemptions to the social sector: [changes to have immediate effect]
4.2.1 All life micro-insurance schemes approved by the Insurance Regulatory Development Authority (IRDA), where sum assured does not exceed Fifty Thousand
Page 12 of 15
Rupees are being exempted from service tax [entry at Sl. No.26A of Notification 25/2012-ST amended by Notification No.06/2014-ST].
4.2.2 Transport of organic manure by vessel, rail or road (by GTA) is being exempted by amending entries at Sl.No. 20 and 21. Therefore, organic manure will be on par with fertilizer which is already exempted.
4.2.3 Services by way of loading, unloading, packing, storage or warehousing, transport by vessel, rail or road (GTA), of cotton, ginned or baled, is being exempted [amendment of entry at Sl. No. 20 & 21 and 40].
4.2.4 Services provided by Common Bio-medical Waste Treatment Facility operators by way of treatment, disposal of bio medical waste or processes incidental to such treatment or disposal are being exempted [new entry at Sl. No.2B].
4.2.5 Service provided by Employees? State Insurance Corporation (ESIC) during the period prior to 1.7.2012 is proposed to be exempted from service tax. This exemption for services by ESIC would come into effect from the date the Finance (No.2) Bill, receives the assent of the President. It may be noted that any service provided by ESIC to persons governed under the Employees? Insurance Act, 1948 is already exempt for the period commencing from 1.7.2012 [Sl. No. 36].
4.3 Technical exemptions: [changes to have immediate effect]
4.3.1 Specialized financial services received by RBI from outside India, in the course of management of foreign exchange reserves, e.g. external asset management, custodial services, securities lending services, are being exempted [new entry at Sl. No. 41 of 25/2012-ST].
4.3.2 Services provided by the Indian tour operators to foreign tourists in relation to tours wholly conducted outside India are being exempted. This exemption is available to Indian tour operators in cases where they organize tours for a foreign tourist wholly outside India, e.g., service provided to a Sri Lankan for a tour conducted in Bhutan. It may be noted that service provided by a tour operator in relation to an inbound or an outbound tours continue to be leviable to service tax [new entry at Sl. No.42].
Page 13 of 15
5. Amendments in Chapter V of the Finance Act, 1994:
The amendments proposed vide the Bill in Chapter V of the Finance Act, 1994 would come into effect on the date the Bill receives the assent. In some cases, the amendments would be given effect from a date to be notified after the assent [section 65B, 66D and 67A]
5.1 Central Excise provisions made applicable to service tax:
Section 83 is being amended to prescribe that the provisions of following sections of the Central Excise Act shall apply, mutatis mutandis, to service tax,-
(i) Section 5A(2):This section prescribes that any explanation inserted in a notification or special order at any time within one year of issue of notification or order, for clarifying the scope or applicability thereof, shall have effect from the date of issue of such notification or order.
(ii) Section 15 A: This new section is being inserted in the Central Excise Act to stipulate that third party sources shall furnish periodic information, as specified, in the manner as may be prescribed.
(iii) Section 15B: This new section is being inserted in the Central Excise Act to prescribe that failure to provide information under section 15A of the Act would attract penalty as specified.
(iv) Section 35F: Section 35F of the Central Excise Act has already been made
applicable to Service Tax. This section is being substituted with a new section to prescribe a mandatory fixed pre-deposit of 7.5% of the duty demanded or penalty imposed or both for filing of appeal before the Commissioner(Appeal) or the Tribunal at the first stage, and 10% of the duty demanded or penalty imposed or both for filing second stage appeal before the Tribunal. The amount of pre-deposit payable would be subject to a ceiling of Rs 10 Crore. All pending appeals/stay application would be governed by the statutory
Page 14 of 15
provisions prevailing at the time of filing such stay applications/appeals. This new provisions would, mutatis mutandis, apply to Service Tax.
5.2 Other Amendments:
5.2.1 Section 73 is being amended to prescribe time limits for completion of adjudication as already exists in Central Excise. This time limit would need to be followed, as far as possible.
5.2.2 Section 80 is being amended to exclude the reference of first proviso to section 78. This amendment, in effect, removes the power to waive the 50% penalty imposable in cases where service tax has not been levied, not paid or short levied or short paid on account of suppression of facts or willful misstatement but details of transactions are available in the specified record.
5.2.3 Section 82(1) is being amended, along the lines of section 12F (1) of the Central Excise Act, so that Joint Commissioner or Additional Commissioner or any other officer notified by the Board can authorize any Central Excise Officer to search and seize.
5.2.4 Sub-section (6A) of section 86 is being amended to omit the words “for grant of stay or”.
5.2.5 Section 87 is being amended to incorporate power to recover dues of a predecessor from the assets of a successor purchased from the predecessor as it is presently provided for in section 11 of the Central Excise Act, 1944.
5.2.6 Section 94 is being amended to obtain rule making powers (a) to impose upon assessees, inter alia, the duty of furnishing information, keeping records and making returns and specify the manner in which they shall be verified; (b) for withdrawal of facilities or imposition of restrictions (including restrictions on utilization of CENVAT credit) on service provider or exporter, to check evasion of duty or misuse of CENVAT credit; and (c) to issue instructions in supplemental or incidental matters.
Page 15 of 15
6.1 Changes explained above are not intended to be exhaustive and the analysis of changes does not have legal validity; analysis of changes wherever provided is merely meant to highlight certain aspects of these changes. The text of the statutory provisions and the wordings of the notifications should be read carefully for interpreting the law.
6.2 Field formations are requested to go through the changes made in the Budget carefully. Any issues or doubts which may arise or any omission/error observed may kindly be brought to the notice of the undersigned, Shri J. M. Kennedy, Director, TRU at jm.kennedy@nic.in or Shri G.D.Lohani, Director, TRU, at gd.lohani@nic.in as soon as possible.
I would like to express my thanks for the pre-budget suggestions and inputs which have been received from certain field formations. I would request that similar inputs be continued to be forwarded in future also.
With regards,
Yours sincerely,
(M. Vinod Kumar)
To:
All Chief Commissioners/ Directors General
All Commissioners of Service Tax
All Commissioners of Central Excise

 

Read www.howtoexportimport.com to know more  - Click here

 


The above information is a part of Online Export Import course 


 

Posts about overseas trade online 

How to start Export Business?,How to get Export Orders?,What are the risks and solutions in Export Business?,How to overcome negative thinking in Exports Business?,How to send samples?,How to prepare Export Invoice?,How to get certificate of origin?,How does letter of credit work?,What are the terms of Payment in Export Import Trade?,Terms of Delivery in International Business,How to settle dispute in Exports and Imports?,Central Excise Procedures under Exports in India,How to get RCMC?,What are the legal documents in Exports?,Why does Documentation require in Exports and Imports?,Difference between Demurrage and Detention in import,Difference between Proforma Invoice and Commercial Invoice,How to protect Buyer and Seller in Triangular Exports and Imports?,How does High Sea Sales work in Exports and Imports?,Difference between Mother vessel and Feeder vessel

 

Also read;

How to export your product?
How to import your product?
Click here to know HS code of your product
What is the ITC code (Indian Tariff Code) of your product?
12 Major risks and solutions in Imports and Exports
Dimension of export containers





Comments

 
Lalit Patil Says :
Sunday, July 13, 2014
pl give clarity in amendment in chapter 85 vide notification no. 12/2014 dt. 11.07.2014 mostly for Sr. no.346
Shivaji Jadhav Says :
Tuesday, March 24, 2015
What is the procedure for supply of material under excise notification 33/2012
R. L. Dhingra Says :
Thursday, May 21, 2015
the SACVD charged on Chapter head 2702.5000 is available for credit to industry
bhoopendra singh Says :
Saturday, July 04, 2015
sir i want buy a power amplifier online shopping in USA , PLZ tall meindias import duty & taxes charges if shopping amount RS 25000 or RS 50000
SURESH NAIR Says :
Wednesday, July 08, 2015
We are representing a company from Japan and we import and sell their products in India since last 5 years. Now there is one requirement from Bangladesh for the same product. Could you please advise us the possibilities of the following: 1 Is it possible for us to take the payment from the Bangladesh party in USD in India. 2 Is it possible for us to advise the company in Japan to make drop shipment to Bangladesh 3 Will this transaction attracts Customs duty in India. I would seek your best advise on this transaction as paying Custom duty in India will make this transaction non viable for us.
Manish Sahgal Says :
Wednesday, July 08, 2015
I would like to export Herbal soaps / Ayurvedic soaps / Oils/ Shampoos to European countries and Japan. Please let me know the formalities on the same , how should be my approach?
bypp patel Says :
Tuesday, July 21, 2015
I found your email address on http://howtoexportimport.com and i badly need your guidance as i imported first time and having problems to release my consignment.I hope you can guide me as you are the only ray of hope for me this time. Firstly,I ordered Pvc resin sg5 from Chinese supplier and i paid them by T/T payment.My supplier sent me B/L(scan copy) with some information blurred on it than i made the final payment to supplier and after that there's no contact with my supplier.i try contact by email,phone and Skype but no response than i sent plenty of emails to happag-LLyodd(Shipping company) weather this B/L is real or not but i have n't heard anything from them so i think i scammed by Chinese supplier but before few days i received letter from happag-llyod that your consignment is waiting for release since 15/05/2015.I attached the copy of B/L and notice from shipping company please kindly look at it.So basically,I don't have original B/L and I only had sale contract and product write up on supplier's letter head but unsigned.If you can guide me, i will be grateful.I am newbie in this,i really need your guidance that is there any way i can release my consignment and I am first time importer so IEC number is not registered with custom.
lalit kumar Says :
Friday, October 23, 2015
hiii is there any excise duty on used electronic product in india . if it is than how much is that thanks in advance
 

Discussion Forum


You can also share your thoughts about this article.
Any one can answer on question posted by Readers



  Your Name - required  
  Email ID will not be published - Required  
   
(Enter above code)  


 

   
Track Your Air Shipment Here 
Track Your Sea Shipment Here 
   
   
   
   
   
 
Most Recent Articles
» Help for GST Migration, a simple demo from cbec
» More Information about Migration to GST for existing tax payers in India
» PAN,Provisional ID, Migration to GST; Guidelines to existing tax payers
» Legal provisions on Migration of existing tax payers to GST
» Information to Tax payers on Migration to GST
» Migration procedures to GST, guidelines to dept officers
» GST Invoice format
» GST Invoice in India
» How to prepare GST tax Invoice?
» GST Invoice for Export purpose
  Import  |
  Export  |
  For Beginners  |
  Track Your Shipment  |
  Abbreviations  |
  Inco Terms  |
  Export India  |
  Import India  |
  Import US  |
  Export Import Terms  |
  Export incentives and benefits  |
  FAQ  |
  Bill of Lading  |
  Foreign Trade Policy 2015-20  |
  Start your own Export Import Business  |
  HS code  |
  Indian Budget 2014-15  |
  Banking (India)  |
  India Trade Classification (ITC)  |
  How to Import  |
  Containers  |
  Indian Budget 2015-16  |
  Income Tax  |
  Forms  |
  How to export  |
  Foreign Trade Policy 2014-19  |
  Freight forwarding Terms  |
  Business Terms  |
  Terms in Banking  |
  Shipping Terms  |
  Import Terms  |
  Export Terms  |
  Customs Terms  |
  Excise Terms  |
  International Business Terms  |
  Notifications  |
  GST  |
  SVB  |
  Indian Budget 2016-17  |
  Income Tax 2016-17  |
  HS Codes  |
  GST Law  |
  GST,FAQ  |
  HSN Codes for GST  |
  SAC for GST  |
  Me  |  Privacy policy  |  Terms and conditions  
Designed and Hosted by Adsin Media