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TMI BlogBudget changes in Excise and Customs-DO of JS(TRU)X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh clause 111 have been given immediate effect through a declaration under the Provisional Collection of Taxes Act, 1931, the other changes proposed in the Bill would come into effect only upon its enactment or, in one case, from a date to be notified. 2. Changes in excise and customs duties have been made through Notification Nos.77/2009- Customs to 80/2009-Customs and 7/2009-CE to 22/2009-CE all dated 7th July, 2009. These changes in rates of duty take effect from the midnight of 6th July/ 7th of July, 2009. Changes in CENVAT Credit Rules, 2004 and the Central Excise Rules, 2002 have been carried out through notification nos. 16/2009-CE (NT) and 17/2009-CE (NT) also dated 7th July, 2009. Rates of abatement on certain items covered under RSP based levy have been revised through Notification No. 18/2009-CE (NT) dated 07.07.2009. 3. The salient features of these changes in respect of excise and customs duties are discussed below: I. CENTRAL EXCISE I.1 Rate structure As a consequence of changes in the ad valorem rates of Central Excise duty for non-petroleum products on the 24th of February, 2009, a dual rate structure - with rates of 4% and 8% ad valorem was put in place. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... natural fibres other than cotton such as silk, wool, flax etc. would now bear an optional levy of 8% ad valorem instead of 4% beyond the fibre stage. The enhanced rate of 8% would also apply to blended fabrics and products. iv. Corresponding changes have also been made in the rates of duty applicable to Export Oriented Units (EOU) that use only indigenous raw materials when they make clearances of textile items into the Domestic Tariff Area (DTA). v. Full exemption from excise duty has been provided to tops manufactured from duty paid tow of manmade fibre using the tow-to-top process on the condition that the manufacturer availing of this exemption does not have the facility to manufacture tow in his factory. vi. Excise duty on some important textile intermediates has also been enhanced from 4% to 8% ad valorem. These are: a. Polyester chips b. Di-methyl terephthalate (DMT) c. Pure Terephthalic Acid (PTA); and d. Acrylonitrile As far as possible, the enhanced rates are being prescribed through the Tariff Schedule. In many cases, however, these rates have been prescribed by notification as the tariff rates are higher. I.3 Packaged or canned software: Partial exemption from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... changes have also been made: i. Full exemption from excise duty has been provided to goods falling under Chapter 68 manufactured at the site of construction for use in construction work at such site. ii. Recorded smart card and tags are exempt from excise duty. A condition has been added to this exemption so that it would be available only if the manufacturer does not avail of Cenvat credit of the duty paid on inputs for these goods. iii. Articles of jewellery on which brand name or trade name is indelibly affixed or embossed (branded jewellery), have been fully exempted from excise duty. iv. Full exemption has also been provided to EVA compound manufactured on job-work basis for further manufacture of footwear. I.7 SSI Exemption: There is no change either in the exemption limit or the eligibility limit for the small scale exemption. Under para 4(e) of Notification No. 8/2003-CE dated 01.03.2003, specified items that are in the nature of packaging material are excluded from the purview of the brand name restriction. One more item viz. 'printed laminated rolls' has been added to this list with immediate effect. As a consequence, manufacturers of printed laminated rolls bearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 has been amended to prescribe that a manufacturer of both dutiable and exempted goods, who does not maintain separate accounts of inputs, shall now pay an amount equal to 5% of the total price of exempted goods. ix. Rule (2) of Cenvat Credit Rules, 2004 has been amended to clarify that 'input' should not include cement, angles, channels, CTD/TMT bars etc. used for construction of shed, building or structure for support of capital goods. x. The Central Excise Rules, 2002 have been amended to provide that seized records that have not been relied upon should be returned to the party within 30 days of issue of a show cause notice. II. CUSTOMS II.1. Rate Structure: There is no change in the overall rate structure of customs duties. As such, the peak rate for industrial goods has been retained at 10% and the major ad valorem rates of 5% and 7.5% have also been retained. Changes in the rate of duty on specific items are discussed in subsequent paras. II.2. Precious Metals Rates of basic customs duty on gold and silver have been increased as under:- S. No. Item From To 1. Gold bars, other than tola bars, bearing Manufacturer's or refiner's engraved serial number and weight ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom 7.5% to 5% with Nil CVD by way of excise duty exemption. Similarly, basic customs duty on Artificial Heart (left ventricular assist device) is being reduced from 7.5% to 5%. This device already attracts nil excise duty/CVD. II.7. Textiles: Basic customs duty on cotton waste and wool waste has been reduced from 15% to 10%. II.8. Miscellaneous: II.8.1 Basic customs duty on rock phosphate has been reduced from 5% to 2%. II.8.2 CVD exemption on Aerial Passenger Ropeway Projects has been withdrawn. Such projects will now attract applicable CVD. II.8.3 Basic customs duty exemption on "concrete batching plants of capacity 50 cum per hour or more" available by virtue of exemption on specified machinery for construction of roads has been withdrawn. Such plants will now attract basic duty of 7.5%. II.8.4 Basic customs duty on inflatable rafts, snow-skis, water skis, surf-boats, sail-boards and other water sports equipment has been fully exempted. II.8.5 Basic customs duty on bio-diesel has been reduced from 7.5% to 2.5% II.9 IT Software On packaged or canned software, CVD exemption has been provided on the portion of the value which represents the consideration for transfer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n article exported by an exporter or producer shall be determined on the basis of records maintained by such exporter or producer and on the basis of information available in the case of non-cooperating exporter or producer. viii. Para (A) in Note 2 of Section XI of the Customs Tariff Act has been amended so as to align it with the parallel provision in the Central Excise Tariff Act. ix. Notification No. 40/2006-Customs dated 01.05.2006 is sought to be amended retrospectively from its date of issue so as to allow the facility of rebate in respect of locally procured materials used in the manufacture of goods exported under the Duty Free Import Authorisation Scheme and to carry out other related changes. x. Notification No. 27/2009-Customs (NT) dated 17.03.2009 appointing officers of DGCEI as officers of customs with all India jurisdiction is sought to be given retrospective effect from 09.05.2000. 4. You may kindly study the budgetary changes carefully and indicate your views, comments and suggestions on their implementation. It is necessary to ensure that the implementation of the proposed changes is smooth and causes no inconvenience to the taxpayers. Special efforts should b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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