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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 ..... ceeding 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 unchanged. The tariff rates in general are being amended accordingly. Since the reduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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% to 10%. 11.6 Customs duty on industrial (denatured) ethyl alcohol has been reduced from 15% to 10%. 12. Capital Goods: 12.1 Customs duty of 5% on mono or bi-pola ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 embossed on the article of jewellery itself. The process of such fixing or embossing the brand name has been deemed to amount to 'manufacture' by a Chapter Note. 18.2 Whether a particular article of jewellery is branded or not is a matter of fact and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of the determination. The date of payment would be the same as the due date for paying excise duty i.e. 5th of a month. (vi) An assessee can pay up the entire dues or a part thereof, before the due dates. Non-payment of any instalment resulting in any arrears would debar him fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so 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 Excise duty on imitation jewellery has been reduced from 16% to 8%. 22.7 Excise duty has been reduced from 16% to 8% on cakes and pastries. 22.8 Parts manufactured and used captively for production of power tillers (of heading No. 84.32) have been exempted from excise duty. 22.9 Excise duty on electronic milk fat and solid no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the existing rates for specified goods, for which the exemptions were built in the tariff but not in the amended tariff schedule. 29. Amendments in Customs and Central Excise Act and Rules: 1) Rule 57CC, Rule 57AD of the Central Excise Rules and Rule 6 of the CENVAT Credit Rules are being amended retrospectively to provide a mechanism for recovery of amount due from a manufacturer when he is required to pay an amount of 8% or 10%, on his exempted clearances because of his failure to maintain separate account for common inputs used in both exempted and dutiable products. It is proposed to give retrospective effect to this provision with effect from 1st August, 1996. 2) Sections 128 and 157 and the Fourth Schedule of Finance Act, 2003 are being omitted consequent to exemption from the addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 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. The Central Government is also being empowered to notify any class or category of persons as eligible for availing of the benefit of Advance Ruling. 13) Section 28F of the Customs Act, 1962, is being amended so as to rename "Authority for Advance Ruling" as "Authority for Advance Ruling (Customs, Central Excise and Service Tax)". 14) Section 127MA of the Customs Act, 1962 is being amended so as to make a provision for sending back a case by the Settlement Commission to the Tribunal in the event of non-cooperation by the applicant. 15) The power of the Central Board of Excise and Customs (CBEC) to review orders passed by Commissioner of Customs is being vested in a Committee of two Chief Commissioners as may be notified by the CBEC. Similarly, the power of the Commissioner to review the orders of Commissioner (Appeal) is being vested in a Committee of two Chief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction 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 specified installation services. (3) Maintenance or repair services to include: (i) maintenance or management of immovable properties. (ii) maintenance or repair including reconditioning or restoration undertaken as part of any contract or agreement. (4) Broadcasting services to include charges recovered by broadcasting agencies from multisystem operator (MSO) and provision of direct to home (DTH) signals to the customers. (5) Sound recording to include recording of sound on any media and includes post production services such as sound mixing or re-mixing. (6) Video-tape production to include recording of any programme, event or function on any media and includes post production services. (7) Taxable services provided by authorised service station to include reconditioning or restoration of motor-cars, two-wheeled and light motor vehicles. (8) Beauty parlours Service to include all services provided by beauty parlours. (9) Manpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise 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 matters also. 11) Section 96A of Finance Act, 1994 is being amended to allow any existing joint venture in India to avail the benefit of advance ruling and empowering the Central Government to notify any class or category of persons to avail the benefit of advance ruling. 12) Rule 2 is amended to shift the liability to pay service tax from mutual fund distributor or agent to mutual funds. 13) Rule 4 is amended to facilitate more than one registration by a person having centralized account and billing system. 14) Rule 4A(1) prescribes the requirement of issue of invoice within 14 days from date of completion of provision of service of receipt of payment. 15) Rule 6 changes the due date for payment of service tax from 25th of the following month or quarter to 5th of the following month or quarter. 31. General 31.1 Commissioners of Central Excise, Customs and Service Tax may study these changes carefully and indicate their views, comments and suggestions on implementation of the proposed changes. A survey may be under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Date Description of Goods Heading/ subheading No. Ex-factory Price(Rs.) Excise Duty Paid Wholesale price inclusive of all taxes (Rs.) Retail Price Remarks 28.2.2005 15.3.2005 31.3.2005 15.4.2005 30.4.2005 Notes: 1. Description should be specific and should indicate the brand name and unit of sale, e.g. 'X' brand refined oil - weight 'Y' grams. Subsequent report should refer to this brand name only. New brands, if any, can be added in any subsequent report by mentioning similar details. 2. Information should be confined to goods manufactured in the jurisdiction of the Commissionerate. Retail price should be obtained from market survey along with printed retail price list, if any. 3. In remarks column, kindly indicate in broad terms the average percentage of input duty which would be available as credit. 4. First report should give the position as on 28.2.20035 and should be sent so as to reach latest by 8.3.2005. Subsequent report should give the position as on 15.3.2005, 31.3.2005, 15.4.2005 & 30.4.2005 and should reach within 5 days after the expiry of the specified date. 5. While submitting the reports for the period subsequent to 15.3.2005, the detail submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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