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TMI BlogTo prescribe effective rates of duty and to carry out changes in the Rules made under the respective Acts.X X X X Extracts X X X X X X X X Extracts X X X X ..... s 101(a), 102(b), 108, 109 and 110 of the Finance Bill, 2018, so that changes proposed therein take effect from the midnight of 1st February / 2nd February, 2018. The remaining legislative changes would come into effect only upon the enactment of the Finance Bill, 2018. 2. Important changes in respect of Customs and Central Excise duties rates and legislative changes are contained in the five Annexures appended to this letter: 1) Annex I contains details of Chapter wise changes in Basic Customs Duty, Social Welfare Surcharge [Clause 108 of the Finance Bill, 2018] and Road and Infrastructure Cess [Clause 109 of the Finance Bill, 2018]; 2) Annex II contains details of Chapter wise changes relating to Central Excise Duty and Road and Infrastructure Cess [Clause 110 of the Finance Bill, 2018]; 3) Annex III contains details of amendments proposed in the Customs Act, 1962: 4) Annex IV contains details of other amendments proposed in the Customs Tariff Act, 1975; and 5) Annex V Miscellaneous provisions in the Finance Bill, 2018. 2.1 The above stated Annexures provide a summary of the changes made and should not be used in any quasi-judicial or judicial proceedings, where only the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Provisional Collection of Taxes Act, 1931. Chapter 1 to 7: No change Chapter 8: 1) BCD on cashew nuts in shell (raw cashew) falling under tariff item 0801 31 00 is being reduced from 5% to 2.5%. S. No.22 of notification No.50/2017-Customs, dated 30th June, 2017, as amended by notification No. 6/2018-Customs, dated 2nd February 2018 refers. Chapter 9 to 14: No change Chapter 15: 1) BCD on crude edible vegetable oils like Ground nut oil, Olive oil, Cotton seed oil, Safflower seed oil, Saffola oil, Coconut oil, Palm Kemel/Babassu oil, Linseed oil, Maize corn oil, Castor oil, Sesame oil, other fixed vegetable fats and oils is being increased from 12.5% to 30%. S. No. 63 of notification No.50/2017-Customs, dated 30th June, 2017, as amended by notification No. 6/2018-Customs, dated 2nd February 2018 refers. 2) BCD on refined edible vegetable oils like Ground nut oil, Olive oil, Cotton seed oil, Safflower seed oil, Saffola oil, Coconut oil, Palm Kernel/Babassu oil, Linseed oil, Maize corn oil, Castor oil, Sesame oil, fixed vegetable fats and oils, edible margarine, Sal fat, modified Linseed oil, modified Castor oil; specified goods of heading 1518 is being increased from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018-Customs dated 02.02.2018. 1) Further, the Additional Duty of Customs (Road Cess), at the rate of ₹ 6 Per litre, leviable on imported motor spirit commonly known as petrol and high speed diesel oil, are being abolished, by omitting the relevant sections in Finance (No.2) Act, 1998 and Finance Act, 1999, respectively. [Clause 106 of the Finance Bill, 2018 refers]. Till the enactment of the Finance Bill, 2018, the Additional Duty of Customs (Road Cess) leviable on imported motor spirit commonly known as petrol and high speed diesel oil are being fully exempted. [Notification No. 19/2018-Customs and 20/2018-Customs both dated 02.02.2018 refer.] Consequently, notification Nos 57/98-Customs, dated 01-08-1998, 59/99- Customs, dated 11-05-1999, 06/2015-Customs, dated 01-03-2015, 07/2015-Customs, dated 01-03-2015 related to Additional Duty of Customs [Road Cess] are being rescinded vide notification Nos 15/2018-Customs, 16/2018-Customs, 17/2018-Customs, 18/2018-Customs all dated 2nd February, 2018. 3) Education Cess and Secondary & Higher Education Cess levied on imported goods, including motor spirit commonly known as petrol and high speed diesel oil [at the rate of 2% and 1% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 30th June, 2017, as amended by notification No.22/2018-Customs, dated 2nd February, 2018 [new S. No. 9 refers]. 2) BCD on specified parts or sub-parts or accessories of cellular mobile phones, namely, Battery Cover, Front Cover, Front Cover (with Zinc Casting), Middle Cover, Back Cover, Main Lens, Camera Lens, falling under tariff item 3920 99 99, is being increased from 10% to 15% by increasing the tariff rate. [Clause 101 (a) of the Finance Bill, 2018 refers]. However, BCD on goods, other than these specified parts or sub-parts or accessories of cellular mobile phones, falling under tariff item 3920 99 99 is being retained at 10%. Notification No.57/2017Customs, dated 30th June, 2017, as amended by notification No.22/2018-Customs, dated 2nd February, 2018 [new S. No. 10 refers]. 3) BCD on specified parts or sub-parts or accessories of cellular mobile phones, namely, PU case, Sealing Gasket, falling under tariff item 3926 90 91, is being increased from 10% to 15% by increasing the tariff rate. [Clause 101 (a) of the Finance Bill, 2018 refers]. However, BCD on goods, other than these specified parts or sub-parts or accessories of cellular mobile phones, falling under tariff ite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... item 4823 90 90 is being increased from 10% to 20% by increasing the tariff rate. [Clause 101 (a) of the Finance Bill, 2018 refers]. However, BCD on all goods other than kites, falling under tariff item 4823 90 90, is being retained at 10%. notification No.50/2017-Customs, dated 30th June, 2017, as amended by notification No. 6 /2018-Customs, dated 2nd February, 2018 [new S. No. 297A] refers. Chapter 49: No Change Chapter 50: 1) BCD on silk fabrics falling under heading 5007 is being increased from 10% to 20%, by amending Notification No. 82/2017-Customs dated 27th October, 2017, vide notification No. 14/2018-Customs, dated the 2nd February, 2018 [new S.No.2A refers]. Chapter 51-63: No Change Chapter 64: 1) BCD on all goods falling under heading 6401 is being increased from 10% to 20% by increasing the tariff rate. [Clause 101 (a) of the Finance Bill, 2018 refers] 2) BCD on all goods falling under heading 6402 is being increased from 10% to 20% by increasing the tariff rate [Clause 101 (a) of the Finance Bill, 2018 refers] 3) BCD on all goods falling under heading 6403 is being increased from 10% to 20% by increasing the tariff rate. [Clause 101 (a) of the Finance Bill, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notification No. 6 /2018-Customs, dated 2nd February, 2018 refers. 2) BCD on diamonds including lab grown diamonds-semi processed, half-cut or broken falling under chapter 71 is being increased from 2.5% to 5%. S.No.350 of notification No.50/2017-Customs, dated 30th June, 2017, as amended by notification No. 6 /2018-Customs, dated 2nd February, 2018 refers. 3) BCD on non-industrial diamonds including lab-grown diamonds (other than rough diamonds) falling under chapter 71 is being increased from 2.5% to 5%. S.No.351 of notification No.50/2017-Customs, dated 30th June, 2017, as amended notification No. 6 /2018-Customs, dated 2nd February, 2018 refers. 4) Silver (including silver plated with gold or platinum), unwrought or in semi-manufactured form, or in powder form is being exempted from the newly imposed Social Welfare Surcharge in excess of an amount calculated at 3% of the aggregate of duties of customs. [Notification No. 12/2018-Customs dated 02.02.2018 refers.] 5) Gold (including gold plated with platinum), unwrought or in semi-manufactured form, or in powder form is being exempted from the newly imposed Social Welfare Surcharge in excess of an amount calculated at 3% of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... New S. Nos. 448 C of notification No. 50/2017-Cus, dated the 30th June, 2017, as amended by notification No. 6 /2018-Customs, dated 2nd February, 2018 refers]. 3) BCD on parts falling under heading 8409 and suitable for use solely or principally with the engines, of heading 8407 or 8408, of a kind used in motor vehicles, falling under heading 8702 or 8704, motor cars falling under heading 8703, or motor cycles falling under heading 8711 is being increased from 7.5% to 15%, by increasing the tariff rate. [Clause 101(a) of the Finance Bill, 2018 refers]. However, BCD of 7.5% for all other parts [other than parts of engines of said motor vehicles/ motor cars/ motor cycles] falling heading 8409 shall continue [New S. No. 448 D of notification No. 50/2017-Cus, dated the 30th June, 2017, as amended by notification No. 6 /2018-Customs, dated 2nd February, 2018 refers]. 4) BCD on Crank shaft falling under tariff items 8483 10 91 and 8483 10 92 for engines falling under headings 8407 and 8408 respectively and used in motor vehicles falling under headings 8702, 8703 8704 and 8711 is being increased from 7.5% to 15% by increasing the tariff rate. [Clause 101(a) of the Finance Bill, 2018 ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07 (other than tariff item 8507 60 00 and sub-heading 8507 90). [Clause 101 (a) of the Finance Bill, 2018 refers]. Further, effective rate of BCD on goods [other than battery pack of cellular mobile phones], falling under heading 8507, is being retained at 10%. Notification No.57/2017Customs, dated 30th June, 2017, as amended by notification No. 22/2018-Customs, dated 2nd February, 2018 [new S. Nos. 15 refer]. 10) BCD on Lithium-ion battery falling under tariff item 8507 60 00 is being increased from 10% to 20% by increasing the tariff rate. [Clause 101(a) of the Finance Bill, 2018 refers]. The effective rate on lithium ion battery of cellular mobile phones is being increased from 10% to 15%. However, the effective rate of BCD on goods, other than lithium ion battery of cellular mobile phones, falling under tariff item 8507 60 00, is being retained at 10%. Notification No.57/2017-Customs, dated 30th June, 2017, as amended by notification No. 22/2018-Customs, dated 2nd February, 2018 [New S. Nos. 16, 17 refer]. 11) BCD on microphone, wired headset, receiver of cellular mobile phones is being increased from 10% to 15% by increasing the tariff rate on goods falling under tariff item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... falling under tariff item 8517 62 90, is being retained at 10%. Notification No.57/2017-Customs, dated 30th June, 2017, as amended by notification No. 22/2018-Customs, dated 2nd February, 2018 [new S. No. 20 refers]. 16) Concessional 5% BCD on parts of Cellular Phones under S. No 499 of notification No 50/2017 is being withdrawn. Consequently, parts of Cellular Phones will attract applicable BCD. S.No.499 of notification No.50/2017-Customs, dated 30th June, 2017, as amended by notification No. 6/2018-Customs, dated 2nd February, 2018, refers. 17) Exemption from BCD on Printed Circuit Board Assembly (PCBA) falling under tariff item 8504 90 90 for manufacture of charger or adapter of cellular mobile phone is being withdrawn, and they will now attract at tariff rate of 10% BCD, without any actual user condition. S.No.7 and 7A of notification No.57/2017-Customs, dated 30th June, 2017, as amended by notification No. 22/2018-Customs, dated 2nd February, 2018 refer. 18) Exemption from BCD on moulded plastics falling under tariff items 3926 90 99 or 8504 90 90 for manufacture of charger or adapter of cellular mobile phone is being withdrawn, they will now attract 10% of BCD without actu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under headings 8456 to 8463, subject to actual user condition. S. No. 462, 463 and 464 of notification No.50/2017-Customs, dated 30th June, 2017, as amended by notification No. 6/2018-Customs, dated 2nd February, 2018 refers. 24) The Second Schedule (Export Tariff) to the Customs Tariff Act, 1975, is being amended so as to prescribe a tariff rate of export duty of 20% for 'Carbon Electrodes of a kind used for furnaces' falling under tariff item 8545 11 00. [Clause 102(b) of the Finance Bill, 2018 refers]. The effective rate of Export duty on Carbon Electrodes of a kind used for furnaces' falling under tariff item 8545 11 00, however, will be Nil. Notification No. 27/2011 -Customs, dated 1st March, 2011, as amended by notification No.23/2018-Customs, dated 2nd February, 2018 [new S. No. 62A refers]. Chapter 86: No Change Chapter 87: 1) BCD on CKD (completely Knocked Down) imports of motor vehicles falling under headings 8702, 8704 is being increased from 10% to 15% [S. No. 524 of notification No. 50/2017-Customs, dated 30th June, 2017, as amended by notification No. 6/2018-Customs, dated 2nd February, 2018 refers]. 2) BCD on CBU (Completely Build Unit) imports of mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers]. Other medical devices falling under 9018, 9019, 9020, 9021 or 9022 will also continue to attract 7.5% effective rate of BCD. Notification No. 50/2017 -Customs, dated 30th June, 2017, as amended by notification No.6/2018-Customs, dated 2nd February, 2018 [new S. No. 563A refers]. There is no change in effective rate of BCD for other goods falling under these headings also. 2) BCD on raw materials, parts or accessories for the manufacture of Cochlear Implants, is being reduced from 2.5% to Nil, subject to actual user condition. Notification No.50/2017-Customs, dated 30th June, 2017, as amended by notification No.6/2018-Customs, dated 2nd February, 2018 [New S. No 578A of refers]. 3) BCD rate on sunglasses, falling under tariff item 9004 10 is being increased from 10% to 20% by increasing the tariff rate. [Clause 101(a) of the Finance Bill, 2018 refers] Chapter 91: 1) BCD on all goods falling under heading 9101 is being increased from 10% to 20% by increasing the tariff rate. [Clause 101(a) of the Finance Bill, 2018 refers]. 2) BCD on all goods falling under heading 9102 is being increased from 10% to 20% by increasing the tariff rate. [Clause 101(a) of the Finance Bill, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nge, all goods falling under heading 9505 will attract BCD of 20% (Balloons falling under this heading already attract 20% BCD). S. No. 284 of notification No.50/2017-Customs, dated 30th June, 2017, as amended by notification No.6/2018-Customs, dated 2nd February, 2018 refers. 4) BCD on all goods falling under heading 9506 is being increased from 10% to 20% by increasing the tariff rate. [Clause 101(a) of the Finance Bill, 2018 refers]. However, effective rate of BCD on articles and equipment for general physical exercise, gymnastics or athletics falling under sub-heading 9506 91 is being retained at 10%. Notification No.50/2017Customs, dated 30th June, 2017, as amended by notification No.6/2018-Customs, dated 2nd February, 2018 [new S. No. 594A refers]. 5) BCD on all goods falling under heading 9507 is being increased from 10% to 20% by increasing the tariff rate. [Clause 101(a) of the Finance Bill, 2018 refers]. 6) BCD on all goods falling under heading 9508 is being increased from 10% to 20% by increasing the tariff rate. [Clause 101(a) of the Finance Bill, 2018 refers]. Chapter 96: 1) BCD on all goods falling under heading 9611 is being increased from 10% to 20% by increas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lver plated with gold or platinum), unwrought or in semi-manufactured form, or in powder form is being exempted from the newly imposed Social Welfare Surcharge in excess of amount calculated at 3% of the aggregate of duties of customs [Notification No. 12/2018-Customs dated 02.02.2018 refers.] 7) Gold (including gold plated with platinum), unwrought or in semi-manufactured form, or in powder form is being exempted from the newly imposed Social Welfare Surcharge in excess of amount calculated at 3% of the aggregate of duties of customs [Notification No. 12/2018-Customs dated 02.02.2018 refers.] ANNEXURE - II EXCISE Chapter 24: No change. Chapter 27: 1) A Road and Infrastructure Cess, as an Additional Duty of Excise, is being imposed on motor spirit commonly known as petrol and high speed diesel, falling under heading 2710, at the rate of ₹ 8 per litre. [Clause 110 read with the Sixth Schedule of the Finance Bill, 2018 refers.] This levy of Road and Infrastructure Cess will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. 2) Simultaneously, the Basic Excise Duty on motor spirit commonly known as petrol (both branded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. 6) Table below summarizes the changes in various duties applicable to petrol and diesel: Item Duty rates applicable prior upto 01.02.2018 [RS. per litre] Duty rates applicable with effect from 02.02.2018 [Rs. Per litre] 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 17.69 Thus, total excise duty on motor spirit commonly known as petrol and high speed diesel oil remains unchanged. ANNEXURE - III AMENDMENTS IN THE CUSTOMS ACT, 1962: S.No. Amendment Clause of the Finance Bill, 2018 1. Reference to import manifest and export manifest, wherever they occur in the Customs Act, to include Arrival Manifest and Departure Manifest respectively. [54] 2. Section 1 is being amended so as to expand the scope of the Customs Act to any offence or contravention committed thereunder outside India by any person. [55] 3. Section 2 is being amended so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, so as to empower the Central Government to exempt goods imported for repair, further processing or manufacture ['Inward Processing of Goods'] from payment of whole or any part of duty of customs, leviable thereon subject to certain conditions. [60] 8. A new section 25B is being inserted so as to empower Central Government to exempt goods re-imported after export for repair, further processing or manufacture ['Outward Processing of Goods'] from payment of whole or any part of duty of customs, leviable thereon subject to certain conditions. [60] 9. Section 28 is being amended so as to: (a) insert a proviso in clause (a) of sub-section (1) to provide pre-notice consultation in cases not involving collusion, willful mis-statement, suppression etc. before issue of demand notice. The manner of pre-notice consultation shall be provided in the regulations; (b) insert a new sub-section (7A) to provide for issuance of supplementary show cause notice in circumstances and in such manner as may be prescribed within the existing time period; (c) amend the existing sub-section (9) to: a. provide a definite time frame of six months and one year for adjudication of demand notices d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority' as Customs Authority for Advance Ruling as referred to in section 28EA; (f) substitute "Appellate Authority" in place of "authority" in clause (f) and (g). [62] 11. A new section 28EA relating to 'Customs Authority for Advance Rulings' is being inserted, which provides for the Board to appoint officers of the rank of Principal Commissioner of Customs or Commissioner of Customs as Customs Authority for Advance Rulings by way of notification. Till such appointment by the Board, existing Authority shall continue to pronounce Advance Rulings. [63] 12. Section 28F is being amended so as to substitute the word "Authority" with the words "Appellate Authority" and to provide that on appointment of Customs Authority for Advance Rulings, the applications and proceedings pending before the erstwhile Authority shall stand transferred to Customs Authority for Advance Rulings. [64] 13. Section 28H is being amended so as to, - (a) amend clause (d) of sub-section 2 to include the word "tax" in addition to "duty" mentioned therein; (b) insert clause (f) in sub-section 2 to enable Central Government to notify any other matter on which advance ruling can be sought by an applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. Section 41 is being amended so as to: (a) include imported goods in addition to export goods as part of the information provided in the manifest; (b) provide penalty provisions for late filing of manifest; (c) provide for prescribing the manner of delivery of manifest through regulations. [72] 21. Section 45 is being amended so as to provide for clearance of goods by other ways as may be prescribed in addition to existing system of clearance by the proper officer. [73] 22. Section 46 is being amended so as to: (a) amend sub-section (1) to insert a reference to Customs Automated System and the manner of presentation of bill of entry; (b) amend the proviso to sub-section (1) to insert a reference to Customs Automated System; and (c) clarify the time limit for the prior presentation of bill of entry, by substituting the words, 'within thirty days of' with the words, 'at any time not exceeding thirty days prior to' in first proviso to sub-section (3); (d) provide for such other documents, as may be prescribed in addition to invoice, by necessary insertion to that effect in subsection (4); (e) insert a new sub-section (4A) so as to provide for observance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubstitute the reference to section 82 with the reference to clause (a) of section 84, as section 82 stands omitted vide section 104 of Finance Act, 2017; [84] 33. Nomenclature of Chapter XI is being amended so as to include reference to courier. [85] 34. Section 83 is being amended so as to include reference to goods imported or exported by courier through the authorized courier. The extant provisions in the section relate to goods imported or exported by post only. [86] 35. Section 84 is being amended so as to empower the Board to make regulations in relation to goods imported or exported by courier. The extant provisions in the section relate to goods imported or exported by post only. [87] 36. A new Chapter XIIA and section 99A thereunder, is being inserted relating to provisions relating to Audit. [88] 37. A new section 109A relating to 'Controlled Delivery' is being inserted, which seeks to authorize the proper officer or any other officer authorized by him to undertake Controlled Delivery of any consignment of goods to any destination in India or a foreign country. The section also provides, through an explanation, definition of controlled delivery. It also see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority in specified categories of cases, namely: i. where an order or decision has been passed without following the principles of natural justice; or ii. where no order or decision has been passed after re-assessment under section 17; or iii. where an order of refund under section 27 has been issued crediting the amount to the Fund without recording any finding on the evidence produced by the applicant.; [94] 43. A new section 143AA is being inserted to empower the Board to prescribe trade facilitation measures or separate procedure or documentation for a class of importers or exporters or for categories of goods or on the basis of the modes of transport of goods for: (a) maintenance of transparency in import and export documentation and procedure; or (b) expeditious clearance or release of goods entered for import or export; or (c) reduction in the transaction cost of clearance of importing or exporting goods; or (d) maintenance of balance between customs control and facilitation of legitimate trade.; [95] 44. A new section 151B on reciprocal arrangement for exchange of information is being inserted so as to: (a) authorize the Central Government to enter i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shipment, declaration for transshipment, boat note and bill of coastal goods; (b) time and manner of finalization of provisional assessment; (c) manner of conducting pre-notice consultation; (d) circumstances under which, and the manner of issuing supplementary notice; (e) form and manner in which an application for advance ruling or appeal shall be made, and the procedure for the authority, under Chapter VB; (f) manner of clearance or removal of imported or export goods; (g) documents to be furnished in relation to imported goods; (h) conditions, restrictions and the manner for deposits in electronic cash ledgers, the utilization and refund therefrom and the manner of maintaining such ledger; (i) manner of conducting audit; (j) goods for controlled delivery and the manner thereof; (k) measures and the simplified or different procedures or documentation for a class of importers or exporters or categories of goods or on the basis of the modes of transport of goods. [98] ANNEXURE IV OTHER AMENDMENTS IN THE CUSTOMS TARIFF ACT, 1975 S.No. Amendment Clause of the Finance Bill, 2018 1. Section 3 is being amended so as to: (a) amend sub-section (7) to include ..... X X X X Extracts X X X X X X X X Extracts X X X X
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