Budget 2018-19 related changes in ICES - Customs - PUBLIC NOTICE NO. 08/2018

GOVT. OF INDIA MINISTRY OF FINANCE, DEPARTMENT OF REVENUE OFFICE OF THE PRINCIPAL COMMISSIONER OF CUSTOMS COMMISSIONERATE VII (AIR CARGO) NEW CUSTOM HOUSE, MEENAMBAKKAM, CHENNAI-600 027. F. No.: S.Misc.01/2017-18-EDI-ACC Dated: 05.02.2018 PUBLIC NOTICE NO. 08/2018 Sub: Budget 2018-19 related changes in ICES - reg. Attention of all the importers, exporters, customs brokers and all trade formations is invited towards changes made in ICES after presentation of the Budget 2018-19 in Parliament. Union Budget 2018-19 announced on 1st Feb 2018 has introduced some key changes on the customs front. While some legislative changes like duty ledger, system release of goods etc. shall come into effect from a date to be notified, changes in the duty structure and introduction of new levies has come into effect from the midnight of 01.02.2018. All the notifications on rate changes have been updated in ICES. The two major changes in the duty structure are: 1. Introduction of Social Welfare Surcharge on imports vide clause 108 of the Finance Bill 2018 in place of Education/Secondary and Higher Education Cess. 2. Introduction of Road and Infrastructure Cess vide clause 109 of the Finance Bill 2018 on goods specified in the Sixth Schedule of the Bill. Social Welfare Surcharge (SWS) SWS has been levied on the aggregate of all duties of customs, except those listed in sub-clause 3 of clause 108. The assessable value for SWS shall therefore be the same as that of the Education/Secondary and Higher Education Cess. The rate of SWS has been fixed at 10%. Finance Bill Notifications 11/2018-Cus and 12/2018-Cus, both dated 02.02.2018 exempt SWS on the listed items partially or fully. ICES has been updated with all the rates and notifications. The system shall levy the default surcharge rate of 10% automatically on all goods. To claim exemption, the notification details can be entered in item table at 37 and 38 positions (of the BE message format), i.e. in lieu of erstwhile Education/Secondary and Higher Education cess on CVD. Road and Infrastructure Cess (R I Cess) The R I Cess is levied at a specific rate of ₹ 8 per Litre of Motor Spirit and High Speed Diesel. Under clause 109 of the Finance Bill, the cess has been levied as an additional duty of Customs. The cess levied under Clause 110 as an additional duty of excise has been exempted from C VD vide Notification 21/2018 - Cus. The new R I Cess has come in lieu of the erstwhile Road Cess applicable on the scheduled goods. Correspondingly, the basic excise duty on Motor Spirit and High Speed Diesel has been reduced so as to keep the overall duty on these products (both excise as well as customs) unchanged. ICES has been updated to automatically apply the Cess of ₹ 8 per Litre on the scheduled goods. A sample comparative calculation is given below for better understanding of the changes. Item Duty rates applicable prior upto 01.02.2018 [Rs. Per Iitre] Duty rates applicable with effect from 02.02.2018[Rs. Per Iitre] Product Basic Excise Duty (BED) AED (Road Cess) SAED Total Excise Duty Basic Excise Duty (BED) Road and Infrastructure Cess SAED Total Excise Duty Petrol (unbranded) 6.48 6 7 19.48 4.48 8 7 19.48 Petrol (branded) 7.66 6 7 20.66 5.66 8 7 20.66 Diesel (unbranded) 8.33 6 1 15.33 6.33 8 1 15.33 Diesel (branded) 10.69 6 1 17.69 8.69 8 1 17.99 Thus, total excise duty on motor spirit commonly known as petrol and high speed diesel oil remains unchanged. In view of the above, importers, exporters, customs brokers and all trade formations are advised to make note of the above changes and file Bills of Entry accordingly. (K. RAGHU N. CHARY) PRINCIPAL COMMISSIONER OF CUSTOMS COMMISSIONERATE VII (AIR CARGO)