UNION BUDGET 2017: CHANGES IN EXCISE AND CUSTOMS: Changes in Customs and Central Excise law and rates of duty have been proposed thro...
UNION BUDGET 2017: CHANGES IN EXCISE AND CUSTOMS:
Changes in Customs and Central Excise law and rates of duty have been proposed through the Finance Bill, 2017. 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
|
|
02.02.2017
| |
CENTRAL EXCISE
| |||
Tariff
|
|
02.02.2017
| |
Non-Tariff
|
|
02.02.2017
|
Unless otherwise stated, all changes in rates of duty take effect from the midnight of 1st February / 2nd February, 2017. A declaration has been made under the Provisional Collection of Taxes Act, 1931 in respect of clauses 109 (a), 110, 118 and 146 of the Finance Bill, 2017 so that changes proposed therein take effect from the midnight of 1stFebruary / 2ndFebruary, 2017. The remaining legislative changes would come into effect only upon the enactment of the Finance Bill, 2017.
UNDER EXCISE:
Amendments in the Central Excise Act, 1944 (“the Excise Act”):
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- A. Legislative changes regarding Authority for Advance Ruling:
Changes in Section 23A of the Excise Act:
Section 23A of the Excise Act contains various definitions for Advance Ruling. Clause (e) of Section 23A has been amended so as to substitute the definition of “Authority” to mean the Authority for Advance Ruling as constituted under Section 28E of the Customs Act, 1962.
Section 28E of the Customs Act, 1962, has also been amended so as to substitute the definition of “Authority” to mean the Authority for Advance Ruling as constituted under Section 245-O of the Income Tax Act, 1961.
Changes in Section 23B of the Excise Act:
Section 23B of the Excise Act provides that no proceeding before, or pronouncement of advance ruling by, the Authority shall be questioned or shall be invalid on the ground merely of the existence of any vacancy or defect in the constitution of the Authority.
Section 23B relating to vacancies not to invalidate proceedings has been omitted.
Changes in Section 23C of the Excise Act:
Section 23C of the Excise Act contains provisions regarding application for Advance Ruling.
Sub-section (3) of Section 23C has been amended so as to increase the application fee for seeking advance ruling from Rs. 2,500/- to Rs. 10,000/- on the lines of the Income Tax Act, 1961.
Changes in Section 23D of the Excise Act:
Section 23D of the Excise Act contains the procedure of Advance Ruling after receipt of application.
Sub-section (6) of Section 23D has been amended so as to extend the existing time limit of 90 days to 6 months by which time the Authority shall pronounce its ruling, on the lines of the Income Tax Act, 1961.
Insertion of New Section 23-I after Section 23H of the Excise Act:
A new Section 23-I, providing transition provisions, has been inserted, after Section 23H, so as to provide for transferring of the pending applications before the Authority for Advance Rulings (Central Excise, Customs and Service Tax) to the Authority constituted under Section 245-O of the Income Tax Act, 1961, from the stage at which such proceedings stood as on the date on which the Finance Bill, 2017 receives the assent of the President.
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Changes in Section 32E of the Excise Act:
Section 32E of the Excise Act contains the provisions regarding application for settlement of cases.
Section 32E has been amended so as to insert a new sub-section (5) therein to enable any person, other than assessee, referred to in sub-section (1) to make an application to the Settlement Commission.
Changes in Section 32F of the Excise Act:
Section 32F of the Excise Act contains the provisions regarding procedure on receipt of an application for settlement of cases
Sub-section (3) of Section 32F has been amended so as to substitute certain words therein. It further seeks to insert a new sub-section (5A) therein to enable the Settlement Commission to amend the order passed by it under sub-section (5), torectify any error apparent on the face of record.
Amendments in the First Schedule to the Central Excise Tariff Act, 1985:
A. Amendments involving change in the duty rates which will come into effect immediately:
S.
No.
|
Commodity
|
Rate
of duty
|
|
From
|
To
|
||
A.
|
Tobacco and Tobacco
Products
|
||
1.
|
Cigar
and cheroots
|
12.5% or
Rs.3755 per thousand, whichever is higher
|
12.5% or
Rs.4006 perthousand, whichever is higher
|
2.
|
Cigarillos
|
12.5% or
Rs.3755 per thousand,whicheveris higher
|
12.5% or
Rs.4006 per thousand, whichever is higher
|
3.
|
Cigarettes of tobacco substitutes
|
Rs.3755 per
thousand
|
Rs.4006 per
thousand
|
4.
|
Cigarillos of tobacco substitutes
|
12.5% or
Rs.3755 per thousand, whichever is higher
|
12.5% or
Rs.4006 per thousand, whichever is higher
|
5.
|
Others of tobacco substitutes
|
12.5% or
Rs.3755 per thousand, whichever is higher
|
12.5% or
Rs.4006 per thousand, whichever is higher
|
B. Amendments involving change in the duty rates - Other:
S.
No.
|
Commodity
|
Rate
of duty
|
|
From
|
To
|
||
A.
|
Tobacco and
Tobacco Products
|
||
1.
|
Paper rolled biris – Handmade
|
Rs.21 per
thousand
|
Rs.28 per
thousand
|
2.
|
Paper rolled biris – Machine made
|
Rs.21
perthousand
|
Rs.78 per
thousand
|
C. Retrospective Amendment involving change in the duty rates:
Amendment has been made to retrospectively [i.e. with effect from 01.01.2017] specify a tariff rate of Excise duty of 12.5% [as against present tariff rate of 27%] on motor vehicles for transport of more than 13 persons falling under tariff items 8702 90 21 to 8702 90 29 of theFirst Schedule to the Central Excise Tariff Act, 1985.
Amendments in the Seventh Schedule to the Finance Act, 2005:
A. Amendments involving change in the duty rates which will come into effect immediately:
S.
No.
|
Commodity
|
Rate
of duty
|
|
From
|
To
|
||
A.
|
Tobacco and
Tobacco Products
|
||
1.
|
Non-filter
Cigarettes of length not exceeding 65mm
|
Rs.215 per
thousand
|
Rs.311 per
thousand
|
2.
|
Non-filter Cigarettes of length
exceeding 65mm but not exceeding 70mm
|
Rs.370 per
thousand
|
Rs.541 per
thousand
|
3.
|
Filter Cigarettes of length not
exceeding 65mm
|
Rs.215 per
thousand
|
Rs.311 per
thousand
|
4.
|
Filter Cigarettes of length exceeding
65mm but not exceeding 70mm
|
Rs.260 per
thousand
|
Rs.386 per
thousand
|
5.
|
Filter Cigarettes of length exceeding
70mm but not exceeding 75mm
|
Rs.370 per
thousand
|
Rs.541 per thousand
|
6.
|
Other Cigarettes
|
Rs.560 per
thousand
|
Rs.811 per
thousand
|
7.
|
Chewing tobacco (including filter
khaini)
|
10%
|
12%
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8.
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Jarda scented tobacco
|
10%
|
12%
|
9.
|
Pan Masala containing Tobacco
(Gutkha)
|
10%
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12%
|
B. Amendments involving change in the duty rates - Other:
S.
No.
|
Commodity
|
Rate
of duty
|
|
From
|
To
|
||
A.
|
Pan Masala
|
6%
|
9%
|
B.
|
Tobacco and
Tobacco Products
|
||
1.
|
Unmanufactured tobacco
|
4.2%
|
8.3%
|
Amendment in the Central Excise Rules, 2002:
Rule 21 Ã Time limit for granting remission of duty has been prescribed:
Rule 21 of the Central Excise Rules, 2002 contains the provision regarding remission of duty.
Sub-rule (2) has been inserted in Rule 21 of the Central Excise Rules, 2002 so as to provide for a time limit of three (3) months [further extendable by 6 months] for granting remission of duty.
Changes in duty rates regarding commodity falling under ‘Renewable Energy’:
S.
No.
|
Commodity
|
Rate
of duty
|
|
From
|
To
|
||
1.
|
Solar
tempered glass for use in solar photovoltaic cells/ modules, solar power
generating equipment or systems, flat plate solar collector, solar
photovoltaic module and panel for water pumping and other applications,
subject to actual user condition
|
Nil
|
6%
|
2.
|
Parts/raw materials for manufacture
of solar tempered glass for use in solar photovoltaic cells/modules, solar
power generating equipment or systems, flat plate solar collector, solar
photovoltaic module and panel for water pumping and other applications,
subject to actual user condition
|
12.5%
|
6%
|
3.
|
Resin and catalyst for manufacture of
cast components for Wind Operated Energy Generators [WOEG], subject to actual
user condition
|
12.5%
|
Nil
|
4.
|
All items of machinery required for
fuel cell based power generating systems to be set up in the country or for
demonstration purposes
|
12.5%
|
6%
|
5.
|
All items of machinery required for
balance of systems operating on biogas/ bio-methane/ by-product hydrogen
|
12.5%
|
6%
|
Clarification regarding applicability of Section 5A of the Excise Act in respect of inputs imported or exported by EOU
Section 5A of the Excise Act provides that unless specifically provided in a notification, no exemption therein shall apply to excisable goods which are produced or manufactured by an Export Oriented Units (“EOU”)and cleared to the Domestic Tariff Area (“DTA”).
It has been clarified that non-applicability of exemptions under notifications issued under Section 5A is only in respect of excisable goods produced or manufactured by an EOU and cleared to DTA and not in respect of inputs/raw materials procured by them domestically and utilised for production/manufacture of goods which are cleared by them to DTA.
Thus, EOU will also be eligible to import or procure raw materials/inputs at other concessional/Nil rate of Basic Customs Duty (“BCD”), Excise duty/Additional Duty of Customs (“CVD”) or Special Additional Duty (“SAD”), as the case may be, provided they fulfill all conditions for being eligible to such concessional or Nil duty. For these purposes, if an EOU is already registered with the jurisdictional Central Excise Authority, it will not be required to take any fresh registration under the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2016 or the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable and Other Goods) Rules, 2016, as the case may be. Further, there will be no need for an EOU to separately comply with the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2016 for availing the CVD exemption, if the procedure under the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rule, 2016 is followed by it for availing exemption / concession from BCD on imports of inputs/raw materials.
Ø Miscellaneous:
S.
No.
|
Commodity
|
Rate
of duty
|
|
From
|
To
|
||
1.
|
Membrane
Sheet and Tricot / Spacer for use in manufacture of RO membrane element for
household type filters, subject to actual user condition
|
12.5%
|
6%
|
2.
|
All parts for manufacture of LED
lights or fixtures, including LED lamps, subject to actual user condition
|
Applicable duty
|
6%
|
3.
|
Miniaturized POS card reader for
m-POS (not including mobile phones, or tablet computers), micro ATM as per
standards version 1.5.1, Finger Print Reader / Scanner or Iris Scanner
|
Applicable duty
|
Nil
|
4.
|
Parts and components for manufacture
of miniaturized POS card reader for m-POS (not including mobile phones, or
tablet computers), micro ATM as per standards version 1.5.1, Finger Print
Reader / Scanner or Iris Scanner, subject to actual user condition
|
Applicable duty
|
Nil
|
5.
|
(a) Waste and scrap of precious metals or
metals clad with precious metals arising in course of manufacture of goods
falling in Chapter 71
(b) Strips, wires, sheets, plates and
foils of silver c. Articles of silver jewellery, other than those studded
with diamond, ruby, emerald or sapphire
(c) Silver coin of purity 99.9% and
above, bearing a brand name when manufactured from silver on which appropriate
duty of customs or excise has been paid
|
Nil
|
Nil, subject
to the condition that no credit of duty paid on inputs or input services or
capital goods has been availed by manufacturer of such goods
|
UNDER CUSTOMS:
Amendments in the Customs Act, 1962 (“the Customs Act”):
Changes in Section 2 of the Customs Act:Section 2 of the Customs Act contains various definitions.
Section 2 has been amended to:
- Insert clause (3A) to define a beneficial owner as any person on whose behalf the goods are being imported or exported or who exercises effective control over the goods being imported or exported;
- Include Foreign Post Office and International Courier Terminal is included in the definition of a Customs Station in clause (13);
- Omit certain words are omitted in clause (13) to align with the proposed omission of Section 82;
- Provide that the existing definition of exporter in clause (20) includes the beneficial owner;
- Provide that the existing definition of importer in clause (26) includes the beneficial owner;
- Insert clause (30B) so as to define passenger name record information;
- Define Foreign Post Office and International Courier Terminal.
Changes in Section 7 of the Customs Act:
Section 7 of the Customs Act contains provisions regarding appointment of customs ports, airports etc.
Section 7 has been amended to empower the Board to notify Foreign Post Offices and International Courier Terminals.
Changes in Section 17 of the Customs Act:
Section 17 of the Customs Act contains provisions regarding assessment of duty.
Section 17 has been amended to rationalize the requirement of documents for verification of self assessment.
Changes in Section 27 of the Customs Act:
Section 27 of the Customs Act contains provisions regarding claim for refund of duty.
Sub-section (2) of section 27 has been amended so as to keep outside the ambit of unjust enrichment, the refund of duty paid in excess by the importer before an order permitting clearance of goods for home consumption is made, where-
- (i) such excess payment is evident from the bill of entry in the case of self assessed bill of entry or
- (ii) the duty actually payable is reflected in the reassessed bill of entry in the case of reassessment.
Legislative changes regarding Authority for Advance Ruling:
o Changes in Section 28E of the Customs Act:
Section 28E of the Customs Act contains various definitions for Advance Ruling.
Clause (e) of Section 28E has been amended so as to substitute the definition of “Authority” to mean the Authority for Advance Ruling as constituted under Section 245-O of the Income Tax Act, 1961.
o Changes in Section 28F of the Customs Act:
Section 28F of the Customs Act contains provisions regarding Authority for Advance Rulings.
Section 28F has been amended so as to provide that the Authority for Advance Rulings constituted under Section 245-O of the Income Tax Act, 1961 shall be the Authority for giving advance rulings for the purposes of the Customs Act.
It is further provided that the Member of the Indian Revenue Service (Customs and Central Excise), who is qualified to be a Member of the Board, shall be the revenue Member of the Authority for the purposes of the Customs Act.
It is also provided for transferring the pending applications before the Authority for Advance Rulings (Central Excise, Customs and Service Tax) to the Authority constituted under Section 245-O of the Income Tax Act, 1962 from the stage at which such proceedings stood as on the date on which the Finance Bill, 2017 receives the assent of the President.
o Changes in Section 28G of the Customs Act:
Section 28G of the Customs Act provides that no proceeding before, or pronouncement of advance ruling by, the Authority shall be questioned or shall be invalid on the ground merely of the existence of any vacancy or defect in the constitution of the Authority.
Section 28G relating to vacancies not to invalidate proceedings has been omitted.
o Changes in Section 28H of the Customs Act:
Section 28H of the Customs Act contains provisions regarding application for Advance Ruling.
Sub-section (3) of Section 28H has been amended so as to increase the application fee for seeking advance ruling from Rs. 2,500/- to Rs. 10,000/- on the lines of the Income Tax Act, 1961.
o Changes in Section 28I of the Customs Act:
Section 28I of the Customs Act contains the procedure of Advance Ruling after receipt of application.
Sub-section (6) of Section 28I has been amended so as to extend the existing time limit of 90 days to 6 months by which time the Authority shall pronounce its ruling, on the lines of the Income Tax Act, 1961.
· Insertion of Section 30A in the Customs Act:
A new Section 30A has been introduced so as to make it obligatory on the person-in-charge of a conveyance that enters India from any place outside India or any other person as may be specified by the Central Government by notification in the Official Gazette, to deliver to the proper officer the passenger and crew arrival manifest before arrival in the case of an aircraft or a vessel and upon arrival in the case of a vehicle; and passenger name record information of arriving passengers in such form, containing such particulars, in such manner and within such time as may be prescribed. The said section also intends to provide for imposition of a penalty not exceeding Rs. 50,000/- as may be prescribed, in the case of delay in delivering the information.
· Insertion of Section 41A in the Customs Act:
A new Section 41A has been introduced so as to make it obligatory on the person-in-charge of a conveyance that departs from India to a place outside India or any other person as may be specified by the Central Government by notification in the Official Gazette, to deliver to the proper officer the passenger and crew departure manifest and passenger name record information of departing passengers before the departure of the conveyance in such form, containing such particulars, in such manner and within such time as may be prescribed. The section also intends to provide for a penalty not exceeding Rs. 50,000/- as may be prescribed in the case of delay in delivering the information.
· Changes in Section 46 of the Customs Act:
Section 46 of the Customs Act contains the provisions regarding entry of goods on importation.
Sub-section (3) of Section 46 has been substituted so as to make it mandatory to file the bill of entry before the end of the next day following the day (excluding holidays) on which the vessel or aircraft or vehicle carrying the goods arrives at a customs station at which such goods are to be cleared for home consumption or warehousing and to provide for imposition of such charges for late presentation of the bill of entry as may be prescribed.
· Changes in Section 47 of the Customs Act:
Section 47 of the Customs Act contains the provisions regarding clearance of goods for home consumption.
Sub-section (2) of Section 47 has been amended so as to provide the manner of payment of duty and interest thereon in the case of self-assessed bills of entry or, as the case may be, assessed, reassessed or provisionally assessed bills of entry.
· Changes in Section 49 of the Customs Act:
Section 49 of the Customs Act contains the provisions regarding storage of imported goods in warehouse pending clearance.
Section 49 has been amended to extend the facility of storage under Section 49 to imported goods entered for warehousing before their removal.
· Changes in Section 69 of the Customs Act:
Section 69 of the Customs Act contains the provisions regarding clearance of warehoused goods for exportation.
Section 69 has been amended to align it with the proposed omission of Section 82.
· Changes in Section 82 of the Customs Act:
Section 82 of the Customs Act contains the provisions regarding label or declaration accompanying goods to be treated as entry.
Section 82 has been omitted.
· Changes in Section 84 of the Customs Act:
Section 84 of the Customs Act contains the provisions of regulations regarding goods imported or to be exported by post.
Section 84 has been amended to empower the Board to make regulations to provide for the form and manner in which an entry may be made in respect of goods imported or to be exported by post.
· Legislative changes regarding Settlement of Cases:
o Changes in Section 127B of the Customs Act:
Section 127B of the Customs Act contains the provisions regarding application for settlement of cases.
Section 127B has been amended so as to insert a new sub-section (5) therein to enable any person, other than applicant, referred to in sub-section (1) to make an application to the Settlement Commission.
o Changes in Section 127C of the Customs Act:
Section 127C of the Customs Act contains the provisions regarding procedure on receipt of an application for settlement of cases
Sub-section (3) of Section 127C has been amended so as to substitute certain words therein. It further seeks to insert a new sub-section (5A) therein to enable the Settlement Commission to amend the order passed by it under sub-section (5), to rectify any error apparent on the face of record.
· Changes in Section 157 of the Customs Act:
Section 157 of the Customs Act contains the provisions regarding general power to make regulations.
Section 157 has been amended so as to empower Board to make regulations for specifying the form, particulars, manner and time of providing the passenger and crew manifest for arrival and departure and passenger name record information and penalty in the case of delay in delivering the information.
Ø Amendments in the Customs Tariff Act, 1975:
· Changes in Section 9 of the Customs Tariff Act
Section 9 of the Customs Tariff Act contains the provisions regarding Countervailing duty on subsidized articles.
Clause (c) of sub-section (3) of Section 9 has been substituted so as to withdraw the exemption to three categories of non-actionable subsidies specified therein from the scope of anti-subsidy investigations.
Ø Amendment in the First Schedule to the Customs Tariff Act, 1975 (“the Customs Tariff Act”):
A. Amendments not affecting rates of duty:
o Amendments have been made to:
(i) Delete tariff items 1302 32 10 and 1302 32 20 and entries relating thereto and create new tariff items 1106 10 10 and 1106 10 90, in relation to Guar meal and its products to harmonize the Customs Tariff with HS Nomenclature.
(ii) Create new tariff item 1511 90 30 for Refined bleached deodorised palm stearin” to harmonize the Customs Tariff in accordance with WCO classification decision.
(iii) Substitute tariff items 3823 11 11 to 3823 11 90 and entries relating thereto with tariff item 3823 11 00.
(iv) Substitute tariff items 3904 10 10 to 3904 22 90 with tariff items 3904 10 10 to 3904 22 00 in relation to the PVC Resin
o Chapter Note (4) of Chapter 98 has been amended so as to remove the non-applicability of headings 9803 and 9804 to goods imported through courier service. Also, to amend heading 9804 so as to extend the classification of personal imports by courier, sea, or land under this heading.
B. Amendments affecting rates of BCD:
S.
No.
|
Commodity
|
Rate
of duty
|
|
From
|
To
|
||
1.
|
Cashew nut, roasted, salted or roasted and salted
|
30%
|
45%
|
2.
|
RO membrane element for household type filters
|
7.5%
|
10%
|
The amendments involving increase in the duty rates will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.
S.
No.
|
Commodity
|
Rate
of duty
|
|
From
|
To
|
||
Amendments
affecting rates of Export duty
|
|||
Ores
and concentrates
|
|||
1.
|
Other aluminium ores and concentrates
|
Nil
|
30%
|
The above amendment increasing the export duty rate will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.
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COMMENTS