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TMI BlogChanges in excise, customs and service tax through Finance Bill, 2005X X X X Extracts X X X X X X X X Extracts X X X X ..... Enabling power has been taken to levy an additional duty of customs not exceeding 4% on all items imported into India. For this purpose, section 3 of the Customs Tariff Act, 1975 , has been substituted. This additional duty is being put in place to counterbalance various internal taxes like Sales Tax and VAT leviable on goods on their sale or purchase in India. To begin with, this additional duty will be charged only on imports of ITA (Information Technology Agreement) bound items and on specified inputs/raw materials, for manufacture of electronics/information technology items, which are exempted from customs duty. This duty will not be charged on information technology software. 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. 3. Peak rate of Duty 3.1 Peak rate of customs duty on non-agricultural goods has been reduced from 20% to 15% with a few exceptions. As regards textiles, only the ad valorem component has been reduced to 15%, the specific component, wherever applicable, remaining un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms duty on crude petroleum and petroleum products has been reduced as follows: (a) Crude petroleum from 10% to 5%; (b) Kerosene for public distribution system from 5% to Nil; (c) LPG for domestic use from 5% to Nil; (d) Motor Spirit (Petrol) from 15% to 10%; (e) High Speed Diesel oil from 15% to 10%; and (f) Other petroleum products from 20% to 10%. 10.2 Additional duty of customs on motor spirit and high speed diesel oil has been increased from Re.1.50 per litre to ₹ 2 per litre. 11. Chemicals and Petrochemicals: 11.1 Customs duty has been reduced from 15% to 10% on Polymers of Ethylene, Polypropylene and Propylene copolymers, Polymers and copolymers of Styrene and Polymers of Vinyl Chloride; 11.2 Customs duty has been reduced on Ethylene, Propylene, Butylene, Butadiene, Benzene, Toluene, O-Xylene, Styrene, Ethylbenzene, Ethylene Dichloride, Vinyl Chloride Monomer and Acrylonitrile, from 10% to 5%. 11.3 Customs duty on other organic chemicals falling under headings 2901 to 2904, has been reduced to 10%. 11.4 Customs duty on Ethyl Vinyl Acetate has been reduced from 20% to 10%. 11.5 Customs duty on molasses has been reduced from 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a and certain specified tobacco products (Clause 85 of the Finance Bill, 2005). The surcharge will be levied at prescribed specific rates on cigarettes, and at specified ad valorem rates on other tobacco products. Units in North Eastern Region will also attract this surcharge. This surcharge will not apply to biris and cigarettes made of tobacco substitutes. 17. Imposition and Increase in Duty 17.1 Excise duty of 8% with CENVAT credit has been imposed on mosiac tiles. 17.2 Excise duty on molasses has been increased from ₹ 500 per metric tonne to ₹ 1000 per metric tonne. 17.3 Excise duty on cement clinkers has been increased from ₹ 250 per metric tonne to ₹ 350 per metric tonne. 17.4 Excise duty has been raised on iron and steel and on ships for breaking up, from 12% to 16%. 17.5 Excise duty of 16% has been imposed on road tractors (of engine capacity exceeding 1800 cc) for semi trailers. 18. Branded articles of jewellery 18.1 A duty of 2% is being imposed on branded articles of jewellery of heading 7113 of the Central Excise Tariff. The duty will be leviable only if the brand name or the trade name is indelibly affixed or emboss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is required to furnish the details by the 31st May 2005 failing which he would be debarred from the scheme, and the credit and interest would be recovered in the manner , as existed prior to this amendment. (iii) The interest payable would be @ 13% for the period between each date of utilization of wrongly availed credit and 10th September 2004. It has been deemed that the wrongly availed credit has been utilized first before utilizing the credit of AED (GSI) paid after 1st April 2000. (iv) The Central Excise Officer would determine the total credit with interest, and inform the assessee, in writing, the EMI with bifurcation of amounts of credit and the interest, by 15th June 2005. For example, for assessee A , (a) if the total credit availed of AED (GSI) availed prior to 01.04.2000 =Rs. 10 crores; and (b) if the interest calculated as per above method is =Rs. 1.2 crores. Then the total dues would be ₹ 10 crores + ₹ 1.2 crores= ₹ 11.2 crores and the EMI would be ₹ 11.2/36= ₹ 31.11 lakhs (Rs.27.77 lakhs credit +Rs.3.34 lakhs interest) (v) The payment of monthly instalments would commence from the month following the month o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )}. At present, rural area for the purpose of this notification is defined as having the same meaning assigned to it in clause (ff) of Section 2 of the Khadi and Village Industries Act, 1956. 21.2 Amendment to Notification No.88/88-CE is proposed so as to provide that this definition of rural area will also be applicable from 21st Feburary, 2000 to 28th February, 2003. This has been done by replacing clause (a) of the Explanation during the period 21.2.2000 to 28.2.2003. Show cause notices, if any, issued in this context will have to be decided in the light of the above amendments. 22. Relief Measures: 22.1 Excise duty of Re. 1 per kg. on refined edible oils and ₹ 1.25 per Kg. on vanaspati, bakery shortening and inter-esterfied, re-esterified, elaidnised fats, has been exempted. 22.2 Tea and tea waste have been exempted from additional duty of excise of Re. 1 per kg. 22.3 Excise duty has been reduced from 24% to 16% on air conditioners. 22.4 Excise duty has been reduced from 24% to 16% on tyres, tubes and flaps. 22.5 Excise duty has been reduced from 16% to 12% (with Cenvat credit) on matches made by mechanized and semi-mechanized sectors. 22.6 E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lamity Contingent Duty (NCCD): NCCD was imposed on following items by the Finance Act 2003 : 1) 1% on polyester filament yarn, motor cars, multiutility vehicles, and two-wheelers; 2) ₹ 50 per metric tonne on domestic crude oil. This levy, which was valid upto 31.3.2005, has been extended without any time limit. 27. Retail Sale Price (RSP) based assessment: Abatement from retail price for levy of excise duty on air conditioners has been reduced from 35% to 30%, consequent to reduction in excise duty from 24% to 16%. 28. Central Excise Tariff (Amendment) Act, 2005 As you would be aware, the Central Excise Tariff (Amendment) Act, 2005 has been brought into effect from 28th February, 2005. The new 8 digit tariff replaces the earlier 6 digit tariff. To ensure that the existing rates by notification are continued, and are not denied merely on the ground of change in chapter, heading, sub heading, 3 notifications No. 5/2005-CE (NT), 6/2005-CE(NT) and 7/2005-CE(NT) all dated 24th February, 2005 effective from 28.2.2005 have been issued in this regard. Another notification No.3/2005-CE dated 24.2.2005 was also issued effective from 28.2.2005 to continue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise duty. 8) The Schedule under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 is being amended so as to align the entries with the new Excise Schedule introduced in the Central Excise Tariff (Amendment) Act, 2005. 9) The Schedule under the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 is being amended so as to align the entries with the new Excise Schedule introduced by the Central Excise Tariff (Amendment) Act, 2005. 10) The Third Schedule under the Central Excise Act, 1944 is being amended so as to align the entries with the new Excise Schedule introduced by the Central Excise Tariff (Amendment) Act, 2005. 11) The Seventh Schedule under the Finance Act, 2001 is being amended so as to align the entries with the new Excise Schedule introduced by the Central Excise Tariff (Amendment) Act, 2005. 12) Sections 28E and 28H of the Customs Act, 1962 are being amended so as to provide that advance ruling may also be sought in respect of determination of Rules of Origin of goods and matters relating thereto. It is also proposed to allow an existing Joint Venture in India to avail the benefit of Advance Ruling. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... development. 3) Dredging services of rivers, ports, harbours, backwater and estuaries. 4) Survey and map making other than by Government Departments. 5) Cleaning services other than in relation to agriculture, horticulture, animal husbandry or dairying. 6) Membership of Clubs or Associations (religious forum, political organizations will be excluded). 7) Packaging services. 8) Mailing list compilation and mailing; and 9) Construction of residential complexes having more than twelve residential houses or apartments together with common areas and other appurtenances. These services will be leviable to service tax only from the date to be notified after the enactment of the Finance Bill, 2005. (c) Scope of certain existing services is being extended as follows: (1) Commercial or industrial construction service to: (i) include renovation of such building or civil structure. (ii) include post construction completion and finishing services for such building or civil structure. (iii) include construction, repair, alteration, renovation or restoration of pipeline or conduits. (2) Erection, commissioning or installation services to include specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for registration and filing of returns e.g. certain category of small service providers, and input service distributors within the exemption limit. 4) Section 73 of Finance Act, 1994 is being amended to facilitate issue of show cause notice and adjudication of cases by all central excise officers. 5) Section 74 of Finance Act, 1994 is being amended to facilitate rectification of mistakes of orders passed by officers subordinate to Commissioner of Central Excise. 6) Section 78 of Finance Act, 1994 is being amended to facilitate voluntary payment relating to orders passed by officers of Central Excise. 7) Section 84 of Finance Act, 1994 is being amended to enable revision of orders passed by officers subordinate to Commissioner of Central Excise. 8) Sections 85 and 86 of Finance Act, 1994 are being amended to provide filing of appeal against the orders passed by the central excise officers. 9) A new Section 83A is being inserted similar to that of Section 33 of Central Excise Act to provide power of adjudication. 10) Adjudication procedure prescribed under Section 33A of Central Excise Act is adopted for the purpose of service tax ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... every care has been taken to reflect the intention of the Government clearly in all these documents, the chances of human error cannot be ruled out. I would, therefore, request you to kindly go through the explanatory notes, notifications and Finance Bill carefully and bring to our notice at the earliest any omission/error that might have crept in. If there is any doubt or difficulty on any point, you are requested to bring it immediately to my notice or to the notice of Shri R. Sekar, Joint Secretary (TRU-II) (Tel No.23093027), Shri Alok Shukla, Director, TRU (Tel No.23092753) or Shri V. Sivasubramanian, Deputy Secretary, TRU (Tel No. 23092236). Copies of the FM s speech, notifications, Finance Bill etc, are forwarded herewith. These will also be available on the department s website soon after the conclusion of FM s speech. With regards, Yours sincerely, (Gautam Ray) To All Chief Commissioners/Director Generals/ Commissioners of Customs, Central Excise and Service Tax Annexure-I PRICE DATA Report for the period Commodity Chapter No. Date Description of Goods Heading/ subheading No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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