EXCISE - Finance Bill, 2016

EXCISE Note: Basic Excise Duty means the excise duty set forth in the First Schedule to the Central Excise Tariff Act, 1985. AMENDMENTS IN THE CENTRAL EXCISE ACT, 1944 : S. No. Amendment Clause of the Finance Bill, 2016 1. Section 5A is being amended so as to omit the requirement of publishing and offering for sale any notification issued, by the Directorate of Publicity and Public Relations of CBEC. [139] 2. Section 11A is being amended so as to increase the period of limitation from one year to two years in cases not involving fraud, suppression of facts, willful mis-statement, etc. [140] 3. Section 37B is being amended so as to empower the Board for implementation of any other provision of the said Act in addition to the power to issue orders, instructions and directions. [141] 4. The Third Schedule is being amended so as to: a) make some editorial changes, consequent to 2017 Harmonized System of Nomenclature. b) include therein: All goods falling under heading 3401 and 3402; Aluminium foils of a thickness not exceeding 0.2 mm; Wrist wearable devices (commonly known as smart watches ); and Accessories of motor vehicle and certain other specified goods. Changes at (b) above will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. [142(ii)] [142(i)] AMENDMENTS IN THE FIRST SCHEDULE TO THE CENTRAL EXCISE TARIFF ACT, 1985 S. No. Amendment Clause of the Finance Bill, 2016 Amendments not affecting rates of duty 1. Editorial changes in the Harmonized System of Nomenclature (HSN) in certain chapters are being incorporated in the First and Second Schedules, to be effective from 01.01.2017. [143 (ii)] 2. To: a) Amend supplementary notes (e) and (f) Chapter 27 so as to change the reference: (i) from IS:1460:2000 to IS:1460:2005 for high speed diesel (HSD) and (ii) from IS:1460 to IS: 15770:2008 for light diesel oil (LDO) b) Substitute Tariff line 5801 39 10 with description Warp pile fabrics, uncut in place of tariff line 5801 37 11 [with description Warp pile fabrics epingle uncut velvet] and 5801 37 19 [with description Warp pile fabrics epingle uncut other]; c) Prescribe separate tariff lines for laboratory created or laboratory grown or manmade or cultured or synthetic diamonds; d) Delete Tariff line 8525 50 50, relating to Wireless microphone. [143(i)] From To Amendments involving change in the rate of duty Aerated Beverages 1 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured 18% 21% Tobacco and Tobacco Products 2 Cigar and cheroots 12.5% or ₹ 3375 per thousand, whichever is higher 12.5% or ₹ 3755 per thousand, whichever is higher 3 Cigarillos 12.5% or ₹ 3375 per thousand, whichever is higher 12.5% or ₹ 3755 per thousand, whichever is higher 4 Cigarettes of tobacco substitutes Rs.3375 per thousand Rs.3755 per thousand 5 Cigarillos of tobacco substitutes 12.5% or Rs.3375 per thousand, whichever is higher 12.5% or Rs.3755 per thousand, whichever is higher 6 Others of tobacco substitutes 12.5% or Rs.3375 per thousand, whichever is higher 12.5% or Rs.3755 per thousand, whichever is higher 7 Gutkha, chewing tobacco (including filter khaini) and jarda scented tobacco 70% 81% 8 Unmanufactured tobacco 55% 64% 9 Paper rolled biris [whether handmade or machine made] and other biris [other than handmade biris] However, the effective rate of basic excise duty of ₹ 21 per thousand shall remain unchanged. Rs.30 per thousand Rs.80 per thousand 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. OTHER PROPOSALS INVOLVING CHANGES IN DUTY RATES: From To Food processing 1 Refrigerated containers 12.5% 6% Fertilizers 2 Micronutrients which are covered under Sr. No. 1(f) of Schedule 1 Part (A) of the Fertilizer Control Order, 1985 and are manufactured by the manufacturers which are registered under FCO, 1985 12.5% 6% 3 Physical mixture of fertilizers manufactured by Co-operative Societies, holding certificate of manufacture for mixture of fertilizers under the Fertiliser Control Order 1985, made out of chemical fertilizers on which duty of excise has been paid and no credit of duty paid on such chemical fertilizers has been taken under rule 3 of the CENVAT Credit Rules, 2004 and which are intended for supply to the members of such Co-operative Societies 1% [without CENVAT credit] or 6% [with CENVAT credit] Nil Textiles 4 To increase Tariff Value of readymade garments and made up articles of textiles 30% of retail sale price 60% of retail sale price 5 Branded readymade garments and made up articles of textiles of retail sale price of ₹ 1000 or more Nil [without CENVAT credit] or 6%/12.5% [with CENVAT credit] 2% [without CENVAT credit] or 12.5% [with CENVAT credit] 6 PSF / PFY, manufactured from plastic scrap or plastic waste including waste PET bottles 2% [without CENVAT credit] or 6% [with CENVAT credit] 2% [without CENVAT credit] or 12.5% [with CENVAT credit] Footwear 7 Rubber sheets resin rubber sheets for soles and heels 12.5% 6% 8 Increase the abatement from retail sale price (RSP) for the purposes of excise duty assessment for all categories of footwear 25% 30% Metals 9 To change excise duty structure on disposable containers made of aluminium foils. 2% [without CENVAT credit] or 6% [with CENVAT credit] 2% [without CENVAT credit] or 12.5% [with CENVAT credit] Precious metals Jewellery 10 Refined gold bars manufactured from gold dore bar, silver dore bar, gold ore or concentrate, silver ore or concentrate, copper ore or concentrate. Prospectively, the excise duty exemption under the existing area based exemptions on refined gold is being withdrawn. 9% 9.5% 11 Refined silver manufactured from silver ore or concentrate, silver dore bar, or gold dore bar. Prospectively, the excise duty exemption under the existing area based exemptions on refined silver is being withdrawn. 8% 8.5% 12 Articles of Jewellery [excluding silver jewellery, other than studded with diamonds or other precious stones namely, ruby, emerald and sapphire] with a higher threshold exemption upto ₹ 6 crore in a year and eligibility limit of ₹ 12 crore, along with simplified compliance procedure. Nil 1% [without CENVAT credit] or 12.5% [with CENVAT credit] Renewable Energy 13 Unsaturated Polyester Resin (polyester based infusion resin and hand layup resin), Hardeners/Hardener for adhesive resin, Vinyl Easter Adhesive (VEA) and Epoxy Resin used for manufacture of rotor blades and intermediates, parts and sub parts of rotor blades for wind operated electricity generators Nil 6% 14 Carbon pultrusion used for manufacture of rotor blades and intermediates, parts and sub-parts of rotor blades for wind operated electricity generators 12.5% 6% 15 Solar lamp 12.5% Nil 16 To prescribe valid agreement between importer / producer of power with urban local body for processing of municipal solid waste for not less than ten years from the date of commissioning of project as an alternative to the condition of production of valid power purchase agreement between the importer/producer of power and the purchaser, for the sale and purchase of electricity generated using non-conventional materials for availing concessional customs/excise duty benefits in case of power generation project based on municipal and urban waste - - Civil Aviation 17 Aviation Turbine Fuel [ATF] other than for supply to Scheduled Commuter Airlines (SCA) from the Regional Connectivity Scheme airports 8% 14% Maintenance, repair and overhaul [MRO] of aircrafts 18 Tools and tool kits when procured by MROs for maintenance, repair, and overhauling [MRO] of aircraft subject to a certification by the Directorate General of Civil Aviation Applicable excise duty Nil 19 To simplify the procedure for availment of exemption from excise duty on parts, testing equipment, tools and tool-kits for maintenance, repair and overhaul of aircraft based on records - - 20 To remove the restriction of one year for utilization of duty free parts for maintenance, repair and overhaul of aircraft - - Electronics IT hardware 21 Charger / adapter, battery and wired headsets / speakers for supply to mobile phone manufacturers as original equipment manufacturer Nil 2% [without CENVAT credit] or 12.5% [with CENVAT credit] 22 Inputs, parts and components, subparts for manufacture of charger / adapter, battery and wired headsets / speakers of mobile phone, subject to actual user condition. 12.5% / Nil Nil 23 Routers, broadband Modems, Set-top boxes for gaining access to internet, set top boxes for TV, digital video recorder (DVR) / network video recorder (NVR), CCTV camera / IP camera, lithium ion battery [other than those for mobile handsets] 12.5% 4% [without CENVAT credit] or 12.5% [with CENVAT credit] 24 Parts and components, subparts for manufacture of Routers, broadband Modems, Set-top boxes for gaining access to internet, set top boxes for TV, digital video recorder (DVR) / network video recorder (NVR), CCTV camera / IP camera, lithium ion battery [other than those for mobile handsets] 12.5% Nil Machinery 25 Electric motor, shafts, sleeve, chamber, impeller, washer required for the manufacture of centrifugal pump 12.5% 6% Automobiles 26 Specified parts of Electric Vehicles and Hybrid Vehicles 6% Upto 31.03.2016 6% Without time limit 27 Engine for xEV (hybrid electric vehicle) 12.5% 6% Miscellaneous 28 Excise duty on sacks and bags of all plastics is being rationalized at 15%. 12.5%/15% 15% 29 Unconditionally exempt improved cook stoves including smokeless chulhas for burning wood, agrowaste, cowdung, briquettes, and coal Nil Nil 30 Disposable sterilized dialyzer and micro barrier of artificial kidney 12.5% Nil 31 Ready Mix Concrete manufactured at the site of construction for use in construction work at such site 2% [without input tax credit] / 6% [with input tax credit] Nil 32 Parts of railway or tramway locomotives or rolling stock and railway or tramway track fixtures and fittings, railway safety or traffic control equipment, etc. 12.5% 6% 33 Remnant kerosene, presently available for manufacture of Linear alkyl Benzene [LAB] and heavy alkylate [HA] to N-paraffin. At present, exemption is restricted to manufacturers of LAB and HA. 14% Nil 34 Clean Energy Cess / Clean Environment Cess on coal, lignite or peat produced or extracted as per traditional and customary rights enjoyed by local tribals without any license or lease in the State of Nagaland Rs.200 per tonne Nil 35 To extend Retail Sale Price [RSP] based assessment of excise duty to: a) all goods falling under heading 3401 and 3402 [with abatement rate of 30%], b) aluminium foils of a thickness not exceeding 0.2 mm [with abatement rate of 25%], c) wrist wearable devices (commonly known as smart watches ) [with abatement rate of 35%], and d) accessories of motor vehicle and certain other specified goods [with abatement rate of 30%].