MISCELLANEOUS - Finance Bill, 2016

MISCELLANEOUS 1) The Oil Industry (Development) Act, 1974 is being amended so as to reduce the rate of Oil Industries Development Cess, on domestically produced crude oil, from ₹ 4500 PMT to 20% ad valorem OIDB Cess. The amendment in the Act will be effective from the date of assent to the Finance Bill, 2016. [Clause 222] 2) The Seventh Schedule to the Finance Act, 2005 is being amended so as to increase the excise duty across all lengths of non-filter and filter cigarettes as under: [Clause 231] Cigarettes From Rs. Per thousand To Rs. Per thousand Non filter not exceeding 65 mm 70 215 Non-filter exceeding 65 mm but not exceeding 70 mm 110 370 Filter not exceeding 65 mm 70 215 Filter exceeding 65 mm but not exceeding 70 mm 70 260 Filter exceeding 70 mm but not exceeding 75 mm 110 370 Other 180 560 3) The Clean Energy Cess is being renamed as Clean Environment Cess. Also, the Tenth Schedule to the Finance Act, 2010 dealing with Clean Energy Cess is being amended so as to increase the Scheduled rate of Clean Energy Cess from ₹ 300 per tonne to ₹ 400 per tonne. The effective rate of Clean Energy Cess is being increased from ₹ 200 per tonne to ₹ 400 per tonne [Clause 232] 4) Infrastructure Cess is being levied on motor vehicles, of heading 8703, as under: b) Petrol/LPG/CNG driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1200cc 1% c) Diesel driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1500cc 2.5% d) Other higher engine capacity motor vehicles and SUVs and bigger sedans 4%. Three wheeled vehicles, Electrically operated vehicles, Hybrid vehicles, Hydrogen vehicles based on fuel cell technology, Motor vehicles which after clearance have been registered for use solely as taxi, Cars for physically handicapped persons and Motor vehicles cleared as ambulances or registered for use solely as ambulance will be exempt from this Cess. No credit of this Cess will be available, and credit of no other duty can be utilized for payment of this Infrastructure Cess. [Clause 159] The changes at 2), 3) and 4) above will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. RULES AND REGULATIONS UNDER THE CUSTOMS ACT, 1962 1) The existing Baggage Rules, 1998 are being substituted with the Baggage Rules, 2016, so as to simplify and rationalize multiple slabs of duty free allowance for various categories of passengers. The new Rules are effective from 01.04.2016. 2) The existing Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 are being substituted with the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2016 with a view to simplify the rules, including allowing duty exemptions to importer/manufacturer based on self-declaration instead of obtaining permissions from the Central Excise authorities. Need for additional registration is also being done away with. The new Rules will be effective from 01.04.2016. 3) The Customs Baggage Declaration Regulations, 2013 is being amended so as to prescribe filing of Customs declaration only for those passengers who carry dutiable or prohibited goods. AMENDMENTS IN THE CENTRAL EXCISE RULES, 2002 AND THE CENVAT CREDIT RULES, 2004 1) The Central Excise Rules, 2002 are being amended so as to: (a) reduce the number of returns to be filed by a central excise assessee above a certain threshold from 27 to 13, that is, one annual and 12 monthly returns. Monthly returns are already being e-filed. CBEC will provide for e-filing of annual return also. This annual return will have to be filed by service tax assessees also, above a certain threshold, taking total number of returns to three in a year for them, (b) extend the facility for revision of return, hitherto available to a service tax assessees only, to manufacturers also. (c) provide that in cases where invoices are digitally signed, the manual attestation of copy of invoice, meant for transporter, is done away with. (d) provide that in case of finalization of provisional assessment, the interest will be chargeable from the original date of payment of duty. 2) The CENVAT Credit Rules, 2004 are being amended, so as to improve credit flow, reduce the compliance burden and associated litigations, particularly those relating to apportionment of credit between exempted and non-exempted final products / services. Changes are also being made in the provisions relating to input service distributor, including extension of this facility to transfer input services credit to outsourced manufacturers, under certain circumstances. The amendments in these Rules will also enable manufacturers with multiple manufacturing units to maintain a common warehouse for inputs and distribute inputs with credits to the individual manufacturing units. 3) Instructions are being issued to Chief Commissioners of Central Excise to file application to Courts to withdraw prosecution in cases involving duty of less than rupees five lakh and pending for more than fifteen years. 4) The existing Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable and Other Goods) Rules, 2001 are being substituted with the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable and Other Goods) Rules, 2016, so as to simplify the rules, including allowing duty exemptions to importer/manufacturer based on self-declaration instead of obtaining permissions from the Central Excise authorities. AMENDMENTS TO OTHER ACTS S. No. Amendment Clause of the Finance Bill, 2016 1. THE FINANCE ACT, 2001 (i) To amend the Seventh Schedule which provides for levy on NCCD of excise on specified goods so as to align the tariff lines with the First Schedule to the Central Excise Tariff Act, 1985. [228(i)] (ii) To amend the Seventh Schedule which provides for levy on NCCD of excise on specified goods so as to include 2017 Harmonized System of Nomenclature (HSN) editorial changes. These changes will be effective from 01.01.2017. [228 (ii)] 2. THE CENTRAL SALES ACT, 1956 Section 3 of the Central Sales Tax Act, 1956 is being amended so as to insert an explanation: Explanation .- Where the gas sold or purchased and transported through a common carrier pipeline or any other common transport distribution systems becomes co-mingled and fungible with other gas in the pipeline or system and such gas is introduced into the pipeline or system in one State and is taken out from the pipeline in another State, such sale or purchase of gas shall be deemed to be a movement of goods from one state to another. [221] 3. THE CENTRAL ROAD FUND ACT, 2000 Section 10 of the Central Road Fund Act, 2000 is being amended so as to substitute clause (viii) of sub-section (1) therein to provide a formula for redistribution of the cess for different purposes [227] 4. THE PREVENTION OF MONEY LAUNDERING ACT, 2002, THE SMUGGLERS AND FOREIGN EXCHANGE MANIPULATORS (FORFEITURE OF PROPERTY ACT, 1976 and NARCOTICS DRUGS AND PSYCHOTROPIC SUBSTANCES ACT, 1985 To merge the three Tribunals established under these Acts and to provide that Appellate Tribunal established under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 shall be the appellate Tribunal for hearing the appeals against the orders made under all these three Acts. [229, 223 224] 5. THE FOREIGN EXCHANGE MANAGEMENT ACT, 1999 To insert section 14A in the Foreign Exchange Management Act [FEMA], 1999 to incorporate provisions contained under the Second Schedule appended to the Income-tax Act, 1961, so as to empower an officer not below the rank of Assistant Director to recover arrears of penalty under the FEMA 1999 by exercising the powers conferred under the Income-tax Act, 1961. [225 226]