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TMI BlogClarification on proposal made by the Finance Bill, 2006X X X X Extracts X X X X X X X X Extracts X X X X ..... h was imposed last year only on ITA goods and their parts/components, has been extended in general to all imports. It will apply to both agricultural and industrial products. This additional duty will not be included in the assessable value for levy of education cess on imported goods. Manufacturers will be able to take credit of this additional duty for payment of excise duty on their finished products. Articles of jewellery will, however, attract a lower rate of special CVD at 1%. 2.2 Some categories of imports, however, have been exempted from this special CVD. These are: (a) Goods exempt from VAT; (b) Goods exempted both from basic and CV duty (including CV duty exemption by way of excise duty exemption); (c) Petroleum crude, kerosene for PDS, LPG for domestic supply, petrol, diesel, coal, coke and petroleum gases and fuels of Chapter 27; (d) Passenger baggage ; (e) Fertilizers and inputs for fertilizers; (f) DTA clearances of EOUs/EHTP/STP/SEZ units, provided such goods are not exempted from VAT/sales tax; (g) Gold concentrate; (h) Gold silver, rough and cut diamonds, precious metals, precious and semi- precious stones; and other goods of Chapter 71 excluding articles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preparations of edible grade, falling under headings 1516, 1517 or 1518. 7.4 Customs duty has been reduced on Atlantic salmon from 30% to 10%. 8. Information Technology: 8.1 Customs duty on Set Top Boxes, whether or not covered under ITA (Information Technology Agreement), has been unified at Nil customs duty plus 16% CV duty plus 4% special additional duty of customs. 8.2 CVD under Section 3(3) of the Customs Tariff Act on computers has been withdrawn consequent to imposition of excise duty at 12% on computers. 8.3 Customs duty on MP3 Players and MPEG4 Players has been reduced from 15% to 5%. 9. Petroleum Products: 9.1 Customs duty has been reduced from 10% to 5% on naphtha and Petroleum Coke. 9.2 Customs duty on propane, butanes and natural gas, in any form, has been unified at 5%. 10. Chemicals and Petrochemicals : 10.1 Customs duty on basic inorganic chemicals such as halogens, sulphur, carbon, hydrogen, falling under headings 2801 to 2805, has been reduced from 15% to 10%. 10.2 Customs duty on organic chemicals falling under headings 2901 to 2904, except chloromethanes and trichloroethylene, has been reduced from 10% to 5%. 10.3 Customs duty on methanol has been r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses issued under 1997-2002 Exim Policy. 8) Plant, machinery, equipment imported for setting up of Currency Note/Bank Note Press at Salbony, Mysore, Nasik and Dewas. 9) Exemption from CVD on gold concentrate. This exemption will continue by way of excise duty exemption on gold concentrate. 10) Specified goods for manufacture of capital goods for setting up of a unit with an investment of Rs 5 crore or more. 14. Miscellaneous : 1) Customs duty has been reduced on: (a) Non-edible grade industrial oils having Free Fatty Acid content of 20% or above, used for manufacture of soaps, industrial fatty acids and fatty alcohols, from 20% to 12.5%. (b) Vinyl acetate monomer from 15% to 10%. (c) Butyl rubber from 15% to 10%. (d) Crude glycerine from 30% to 12.5%. (e) 2-Vinyl pyridine from 15% to 10%. (f) Metallurgical grade silicon from 15% to 10%. (g) Borax/boric acid from 15% to 10%. (h) Cullet (broken glass) from 15% to 5%. (i) Parts of pens under heading 9608 from 15% to 5 %. (j) Potassium chloride from 15% to 10%. (k) Bisphenol- A and Epichlorohydrin, for the manufacture of Epoxy Resin, from 10% to 5%. (l) Phenol/acetone, for manufacture of bisphenol, from 15% to 5%. (m) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books, receipt books, letter pads, memorandum pads, dairies, binders, folders, file covers, etc. (excluding note books and exercise books); 4) Paper labels; 5) Paper pulp moulded trays; 6) Articles of mica; 7) Goods containing at least 25% by weight of fly ash/phospho gypsum; 8) Roofing tiles; 9) Raw, tanned or dressed fur skins; 10) Portable receivers for calling, alerting or paging; 11) Henna powder, not mixed with any other ingredient; 12) 100% wood free plain or pre- laminated particle or fiberboard, made from sugarcane bagasse or other agro-waste; 13) Parts of walking-sticks, seat-sticks, whips, riding-crops and the like; 14) Parts of drawing and mathematical instruments; 15) Frames and mountings for spectacles, goggles or the like, of value below Rs. 500 per piece. 16.2 Excisedutyof16%hasbeenimposedon: 1) Umbrellas and sun umbrellas, and their parts; 2) Food preparations intended for free distribution subject to end use certification (Food products, in general, are exempted unconditionally from excise duty); 3) Soap manufactured under a scheme for sale of Janata soap; 4) Strips and tapes of polypropylene used in the factory of its production in the manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kaged food, texturised vegetable protein (soya bari) and instant mixes has been reduced from 40% to 37% consequent to reduction in excise duty from 16% to 8%. 19.5 Existing rate of abatement of 50% will apply to all varieties of pan masala, which are subject to RSP based assessment. 20. Tobacco product including Pan Masala : 20.1 Pan masala (containing tobacco), pan masala (not containing tobacco) and pan masala (containing not more than 15% betel nut by weight) attract aggregate excise duty at 66%, 60.5% and 21.5% respectively. Excise duty rates have been unified at 66% for all types of pan masala. 20.2 Tariff values have been fixed for all types of pan masala as under: S. No. Contents Proposed tariff value (Rs.) 1. If MRP is not printed on packs containing- (a) Not more than 2 grams per pack (b) More than 2 grams but less than 4 grams (c) More than 4 grams but less than 10 grams 1.50 3.00 Rs.3 + Rs.1.25 per gram or part thereof beyond 4 grams 2. If MRP is printed on the pack containing less than 10 grams 50% of MRP 20.3 Specific rates of excise duty on cigarettes ha ve been revised as under: S. No. Description Present rate Proposed rate Non-Filter Ciga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a thickness not exceeding 6 mm. 15) Wood (including strips and friezes for parquet flooring, not assembled) continuously shaped along any of its edges or faces. 16) Biscuits 17) Marble slabs and tiles 18) Sugar 24. Withdrawal of exemption from excise duty on unbranded goods : Exemption from excise duty has been withdrawn in the case of following unbranded goods: 1) Wadding, gauges. 2) Protein concentrates and textures protein substances. 3) Churan for paan. 4) Custard powder. 5) Food items of tariff line 2106 90 99. 6) Food flavouring matter. 7) Sugar syrups containing added flavouring or colouring matter (excluding preparations for lemonades or other beverages intended for use in aerated waters). 8) Mineral water. 9) Waters other than aerated and mineral waters, ice and snow, not containing sugar or other sweetening matter or flavour (2201 90 90). 10) Waters other than aerated and mineral waters, ice and snow containing sugar or other sweetening matter or flavour other than aerated waters or lemonade (2202 10 90). 11) Beverages containing milk (2202 90 30). 12) Other waters (2202 90 90). 13) Edible mixtures or preparations of animal vegetable or fats and oils ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 28. Revenue foregone statements : 28.1 I would like to invite your attention to the document titled 'Receipt Budget' which is part of the Budget documents. If you go to the end of this document, there is a chapter on tax expenditure of Central Taxes. This is a statement on revenue foregone. So far as revenue foregone from customs and excise duties are concerned, these have been prepared with the help of data made available by Directorate of Systems. But the data quality leaves much to be desired particularly in respect of excise duties. The Board desires that Commissioners should ensure that data on excise duties being furnished to Directorate of Systems are sent in time, and are correct, comprehensive and complete in all respects. I would request you to kindly ensure this as we propose to make the revenue-foregone statement more comprehensive and meaningful in the coming years. 29. Manufacture 29.1 Amendments have been made in the Central Excise Tariff Act to provide that certain processes carried out in respect of certain goods will amount to manufacture. These changes are indicated below. It may be noted that these changes come into force immediately. 1) A Note has been i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion value as per the Customs Valuation Law. However, in respect of certain licences, while fixing the export obligation, which is a multiple of CIF value of imports, instead of taking into account the actual Customs assessed value, the corresponding value of new capital goods was taken. Notification No.160/92-Customs dated 20.4.1992 is being amended retrospectively to provide that in respect of these licenses, the export obligation would be refixed based on actual CIF value assessed by Customs instead of the notional value of corresponding new capital goods. 4) Notification No.96/2004-Customs dated 17.9.2004 issued under DEPB Scheme expired on 30.9.2005 and subsequently, a new notification (No.89/2005-Customs date 4.10.2005) was issued to allow imports under DEPB Scheme without payment of customs duty upto 31.12.2005. There was a gap of three days between the expiry of the earlier notification and issue of the new one. Notification No.96/2004 -Customs, issued under DEPB Scheme, is being amended so as to retrospectively permit benefit of DEPB Scheme to goods imported during the period 1.10.2005 to 3.10.2005 (both days inclusive). 5) First Schedule to the Customs Tariff Act, 1975 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the taxpayers. Special efforts should be made to guide the taxpayers to understand and adopt these changes. The Departmental Officers should also be appropriately briefed on these changes. 32.2 In a number of cases, excise duty rates have been altered. It has been decided to collect data on the price behaviour and revenue implications. The information about the prices may kindly be supplied in the proforma at Annexure-I to this letter. You may kindly ensure that the information furnished is accurate since reliance will be placed on this data at the time of discussion of the Finance Bill in Parliament. The first report in this regard may be sent by 15th March, 2006 and subsequently at an interval of 15 days. 32.3 Apart from the price behaviour data mentioned in para 32.2, we also need details of clearances and of duty paid in respect of certain commodities. The list of such commodities is given below: (a) Filament yarn (Polyester, Viscose and Nylon separately) (in metric tonne). (b) Fibre (Polyester, Viscose, Acrylic separately) (in metric tonne). (c) Petrol driven cars of engine capacity not exceeding 1200 mm and length not exceeding 4 metre (in number). (d) Diesel driven ..... X X X X Extracts X X X X X X X X Extracts X X X X
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