9911796707
TMI BlogFINANCE BILL, 2018 PROVISIONS RELATING TO DIRECT TAXESX X X X Extracts X X X X X X X X Extracts X X X X ..... 8-19. In respect of income of all categories of assessees liable to tax for the assessment year 2018-19, the rates of income-tax have been specified in Part I of the First Schedule to the Bill. These are the same as those laid down in Part III of the First Schedule to the Finance Act, 2017 for the purposes of computation of advance tax , deduction of tax at source from Salaries and charging of tax payable in certain cases. (1) Surcharge on income-tax The amount of income-tax shall be increased by a surcharge for the purposes of the Union,- (a) in the case of every individual or Hindu undivided family or every association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Act,- (i) at the rate of ten per cent. of such tax, where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds fifty lakh rupees but does not exceed one crore rupees, and (ii) at the rate of fifteen per cent. of such tax, where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds one crore rupees; (iii) surcharge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll cases. No marginal relief shall be available in respect of such cesses. II. Rates for deduction of income-tax at source during the financial year 2018-19 from certain incomes other than Salaries . The rates for deduction of income-tax at source during the financial year 2018-19 from certain incomes other than Salaries have been specified in Part II of the First Schedule to the Bill. The rates for all the categories of persons will remain the same as those specified in Part II of the First Schedule to the Finance Act, 2017, for the purposes of deduction of income-tax at source during the financial year 2017-18. However, in case of long-term capital gain referred to in section 112A of the Act, tax shall now be deducted at source at the rate of 10 per cent.. (1) Surcharge- The amount of tax so deducted, in the case of a non-resident person (other than a company), shall be increased by a surcharge,- (a) in case of an individual, Hindu undivided family, association of person, body of individual or artificial juridical person; (i) at the rate of ten per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following paragraphs- A. Individual, Hindu undivided family, association of persons, body of individuals, artificial juridical person. Paragraph A of Part-III of First Schedule to the Bill provides following rates of income-tax:- (i) The rates of income-tax in the case of every individual (other than those mentioned in (ii) and (iii) below) or Hindu undivided family or every association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Act (not being a case to which any other Paragraph of Part III applies) are as under:- Upto ₹ 2,50,000 Nil. ₹ 2,50,001 to ₹ 5,00,000 5 per cent.. ₹ 5,00,001 to ₹ 10,00,000 20 per cent.. Above ₹ 10,00,000 30 per cent.. (ii) In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the previous year,- Upto ₹ 3,00,000 Nil. ₹ 3,00,001 to ₹ 5,00,000 5 per cent.. ₹ 5,00,001 to ₹ 10,00,000 20 per cent.. Above ₹ 10,00,000 30 per cent.. (iii) in the case of every individual, being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome exceeding one crore rupees. However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees. D. Local authorities The rate of income-tax in the case of every local authority has been specified in Paragraph D of Part III of the First Schedule to the Bill. This rate will continue to be the same as that specified for the financial year 2017-18. The amount of income-tax shall be increased by a surcharge at the rate of twelve per cent. of such income-tax in case of a local authority having a total income exceeding one crore rupees. However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees. E. Companies The rates of income-tax in the case of companies have been specified in Paragraph E of Part III of the First Schedule to the Bill. In case of domestic company, the rate of income-tax sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or allotment of a Permanent Account Number (PAN). In order to use PAN as Unique Entity Number (UEN) for non-individual entities, it is proposed that every person, not being an individual, which enters into a financial transaction of an amount aggregating to two lakh and fifty thousand rupees or more in a financial year shall be required to apply to the Assessing Officer for allotment of PAN. In order to link the financial transactions with the natural persons, it is also proposed that the managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer or any person competent to act on behalf of such entities shall also apply to the Assessing Officer for allotment of PAN. This amendment will take effect from lst April, 2018. [Clause 42] Widening of scope of Accumulated profits for the purposes of Dividend Section 2 of the Act defines various terms used in the Act. Clause (22) of the said section defines dividend to include distribution of accumulated profits (whether capitalized or not) to its shareholders by a company, whether it is in the nature of,- (a) release of all or any of its assets, (b) issue of debentures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation to Chapter XII-D occurring after section 115Q of the Act so as to bring deemed dividends also under the scope of dividend distribution tax under section 115-O. Further, such deemed dividend is proposed to be taxed at the rate of 30 per cent. (without grossing up) in order to prevent camouflaging dividend in various ways such as loans and advances. This amendment relating to imposition of dividend distribution tax on deemed dividend will apply to transactions referred to in sub-clause (e) of clause (22) of section 2 of the Act undertaken on or after 1st April, 2018. [Clause 38 39] New regime for taxation of long-term capital gains on sale of equity shares etc. Under the existing regime, long term capital gains arising from transfer of long term capital assets, being equity shares of a company or an unit of equity oriented fund or an unit of business trusts , is exempt from income-tax under clause (38) of section 10 of the Act. However, transactions in such long term capital assets carried out on a recognized stock exchange are liable to securities transaction tax (STT). Consequently, this regime is inherently biased against manufacturing and has encouraged diversion of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deemed to be the higher of a) the actual cost of acquisition of such asset; and b) the lower of (I) the fair market value of such asset; and (II) the full value of consideration received or accruing as a result of the transfer of the capital asset. (iii) equity oriented fund has been defined to mean a fund set up under a scheme of a mutual fund specified under clause (23D) of section 10 and,- a) In a case where the fund invests in the units of another fund which is traded on a recognized stock exchange, (I) A minimum of 90 per cent. of the total proceeds of such funds is invested in the units of such other fund ; and (II) such other fund also invests a minimum of 90 per cent. of its total proceeds in the equity shares of domestic companies listed on recognized stock exchange; and b) in any other case, a minimum of 65 per cent. of the total proceeds of such fund is invested in the equity shares of domestic companies listed on recognized stock exchange. iv) Fair market value has been defined to mean a) in a case where the capital asset is listed on any recognized stock exchange, the highest price of the capital asset quoted on such exchange on the 31st day of January, 2018. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain securities, such capital gains shall be chargeable to tax at the rate of ten per cent. However, long term capital gains arising from transfer of long term capital asset being being equity shares of a company or a unit of equity oriented fund or a unit of business trusts, is exempt from income-tax under clause (38) of section 10 of the Act. Consequent to the proposal for withdrawal of exemption under clause (38) of section 10 of the Act, such long term capital gain will become taxable in the hands of FIIs also. As in the case of domestic investors, the FIIs will also be liable to tax on such long term capital gains only in respect of amount of such gains exceeding one lakh rupees. The provisions of section 115AD are proposed to be amended accordingly. This amendment will take effect from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-20 and subsequent assessment years. [Clause 32] Tax deduction at source and manner of payment in respect of certain exempt entities The third proviso to clause (23C) of section 10 of the Act provides for exemption in respect of income of the entities referred to in sub-clause (iv) or sub-clause (v) or sub-cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablishment (hereafter referred to as 'PE') under Article 5(5) of the DTAA, the person acting on the behalf of the non-resident, negotiates the contract but does not conclude the contract. Further, under paragraph 4 of Article 5 of the DTAAs, a PE is deemed not to exist when a place of business is engaged solely in certain activities such as maintenance of stocks of goods for storage, display, delivery or processing, purchasing of goods or merchandise, collection of information. This exclusion applies only when these activities are preparatory or auxiliary in relation to the business as a whole. The OECD under BEPS Action Plan 7 reviewed the definition of 'PE' with a view to preventing avoidance of payment of tax by circumventing the existing PE definition by way of commissionaire arrangements or fragmentation of business activities. In order to tackle such tax avoidance scheme, the BEPS Action plan 7 recommended modifications to paragraph (5) of Article 5 to provide that an agent would include not only a person who habitually concludes contracts on behalf of the non-resident, but also a person who habitually plays a principal role leading to the conclusion of contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts should be- (i) in the name of the non-resident; or (ii) for the transfer of the ownership of, or for the granting of the right to use, property owned by that non-resident or that thenon-resident has the right to use; or (iii) for the provision of services by that non-resident. This amendment will take effect from 1st April, 2019 and will, accordingly, apply in relation to assessment year 2019-20 and subsequent assessment years. [Clause 4] Business connection to include Significant Economic presence The oranges upon the trees in California are not acquired wealth until they are picked, not even at that stage until they are packed, and not even at that stage until they are transported to the place where demand exists and until they are put where the consumer can use them. These stages, upto the point where wealth reached fruition, may be shared in by different territorial authorities. (excerpts from a report on double taxation submitted to League of Nations in early 1920s) Accordingly, both the residence and source countries claim the right to taxation. Taxation of business profits on the basis of economic allegiance has always been the underlying basis of existing international ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icance economic presence'. The scope of existing provisions of clause (i) of sub-section (1) of section 9 is restrictive as it essentially provides for physical presence based nexus rule for taxation of business income of the non-resident in India. Explanation 2 to the said section which defines business connection is also narrow in its scope since it limits the taxability of certain activities or transactions of non-resident to those carried out through a dependent agent. Therefore, emerging business models such as digitized businesses, which do not require physical presence of itself or any agent in India, is not covered within the scope of clause (i) of sub-section (1) of section 9 of the Act. In view of the above, it is proposed to amend clause (i) of sub-section (1) of section 9 of the Act to provide that'significant economic presence' in India shall also constitute 'business connection'. Further, significant economic presence for this purpose, shall mean- (i) any transaction in respect of any goods, services or property carried out by a non-resident in India including provision of download of data or software in India if the aggregate of payments arising f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modification of the terms and conditions of any contract relating to its employment shall be taxable under section 56 of the Act. These amendments will take effect from 1st April, 2019 and will, accordingly, apply in relation to assessment year 2019-20 and subsequent assessment years. [Clause 3, 9 21] Presumptive income under section 44AE in case of goods carriage Section 44AE, inter alia provides that, the profits and gains shall be deemed to be an amount equal to seven thousand five hundred rupees per month or part of a month for each goods carriage or the amount claimed to be actually earned by the assessee, whichever is higher. The current presumptive income scheme is applicable uniformly to all classes of goods carriages irrespective of their tonnage capacity. The only condition which needs to be fulfilled is that the assessee should not have owned more than 10 goods carriages at any time during the previous year. Accordingly, the transporters who owns (less than 10) large capacity/ size goods carriages are also availing the benefit of section 44AE. It is necessary to mention here that the legislative intent of introducing this provision was to give benefit to small transporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed deduction to senior citizens for medical treatment of specified diseases Section 80DDB of the Act, inter-alia, provide that a deduction is available to an individual and Hindu undivided family with regard to amount paid for medical treatment of specified diseases in respect of very senior citizen upto ₹ 80,000/- and in case of senior citizens upto ₹ 60,000/- subject to specified conditions. It is proposed to amend the provisions of section 80DDB of the Act so as to raise this monetary limit of deduction to ₹ 1,00,000/- for both senior citizens and very senior citizens. This amendment will take effect, from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-20 and subsequent assessment years. [Clause 25] Deduction in respect of interest income to senior citizen At present, a deduction upto ₹ 10,000/- is allowed under section 80TTA to an assessee in respect of interest income from savings account. It is proposed to insert a new section 80TTB so as to allow a deduction upto ₹ 50,000/- in respect of interest income from deposits held by senior citizens. However, no deduction under section 80TTA shall be allowed in these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its business does not exceed twenty-five crore rupees in any of the previous years beginning on or after the 1st day of April, 2016 and ending on the 31st day of March, 2021; and (iii) it is engaged in the eligible business which involves innovation, development, deployment or commercialization of newproducts, processes or services driven by technology or intellectual property. In order to improve the effectiveness of the scheme for promoting start ups in India, it is proposed to make following changes in the taxation regime for the start ups:- (i) The benefit would also be available to start ups incorporated on or after the 1st day of April 2019 but before the 1st day of April, 2021; (ii) The requirement of the turnover not exceeding ₹ 25 Crore would apply to seven previous years commencing from the date of incorporation; (iii) The definition of eligible business has been expanded to provide that the benefit would be available if it is engaged ininnovation, development or improvement of products or processes or services, or a scalable business model with a high potential of employment generation or wealth creation. The amendment will take effect, from 1st April, 2018 and wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remain employed for the minimum period in subsequent year. This amendment will take effect, from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-20 and subsequent assessment years. [Clause 27] Tax treatment of transactions in respect of trading in agricultural commodity derivatives Clause (5) of section 43 defines speculative transaction. The proviso to the said clause, however, stipulates certain transactions to be non-speculative nature even though the contracts are settled otherwise than by the actual delivery or transfer of the commodity or scraps. The clause (e) to the said proviso provides that trading in commodity derivatives carried out in a recognised stock exchange, which is chargeable to commodity transaction tax is a non-speculative transaction. Commodity transaction tax (CTT) was introduced vide Finance Act 2013 to bring transactions relating to non-agricultural commodity derivatives under the tax net while keeping the agricultural commodity derivatives exempt from CTT. Since no CTT is paid, the benefit of clause (e) of the proviso to clause (5) of the section 43 is not available to transaction in respect of trading of agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Given the business exigencies of the National Technical Research Organisation (NTRO), it is proposed to amend section 10 so as to provide that the income arising to non-resident, not being a company, or a foreign company, by way of royalty from, or fees for technical services rendered in or outside India to, the NTRO will be exempt from income tax. Consequently, NTRO will not be required to deduct tax at source on such payments. This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to assessment year 2018-19 and subsequent assessment years. [Clause 5] E. FACILITATING INSOLVENCY RESOLUTION Relief from liability of Minimum Alternate Tax (MAT) Section 115JB of the Act, provides for levy of a minimum alternate tax (MAT) on the book profits of a company. In computing the book profit , it provides, inter alia, for a deduction in respect of the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account. Consequently, where the loss brought forward or unabsorbed depreciation is Nil, no deduction is allowed. This non-deduction is a barrier to rehabilitating companies seeking insolvency resolution. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner or Commissioner. This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to assessment year 2018-19 and subsequent assessment years. It is also proposed to amend section 140 of the Act so as to provide that during the resolution process under the Insolvency and Bankruptcy Code, 2016, the return shall be verified by an insolvency professional appointed by the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016. This amendment will take effect from 1st April, 2018 and will, accordingly apply to return filed on or after the said date. [Clause 22 43] F. IMPROVING EFFECTIVENESS OF TAX ADMINISTRATION New scheme for scrutiny assessment Section 143 of the Act provides for the procedure for assessment. Sub-section (3) of the said section empowers the Assessing Officer to make, by an order in writing, an assessment of total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment. It is proposed to prescribe a new scheme for the purpose of making assessments so as to impart greater transparency and accountability, by eliminating the interface between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption is exercised, shall be chargeable and such tax shall be payable by the purchaser. The existing section 118 of the Finance Act, 2013 provides the value of taxable commodities transactions, being commodity derivative and chargeable under section 117 of the Finance Act, 2013. It is proposed to amend the provisions of section 118 so as to include the value of taxable commodities transaction, being option on commodities, chargeable under section 117 of the Finance Act, 2013, in the said section. These amendments will take effect from lst April, 2018, and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. [Clause 215] Rationalisation of section 276CC relating to prosecution for failure to furnish return Section 276CC of the Act provides that if a person willfully fails to furnish in due time the return of income which he is required to furnish, he shall be punishable with imprisonment for a term, as specified therein, with fine. The sub-clause (b) of clause (ii) of proviso to the section 276CC further provides that a person shall not be proceeded against under the said section for failure to furnish return for any assessment year commencing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section so as to empower the Principal Director General or the Director General also to issue instructions or directions to the tax authorities under the said sub-section. It is also proposed to amend the marginal heading of the said section accordingly so as to include the reference of Principal Director General or Director General. These amendments will take effect from lst April, 2018. [Clause 216] Rationalisation of prima-facie adjustments during processing of return of income Sub-section (1) of the section 143 provides for processing of return of income made under section 139, or in response to a notice under sub-section (1) of section 142. Clause (a) of the said sub-section provides that at the time of processing of return, the total income or loss shall be computed after making the adjustments specified in sub-clauses (i) to (vi) thereof. Sub-clause (vi) of the said clause provides for adjustment in respect of addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return. With a view to restrict the scope of adjustments, it is proposed to insert a new proviso to the said clause to provide that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take effect retrospectively from the 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-18 and subsequent years. [Clause 53] Rationalisation of provision of section 115BA relating to certain domestic companies Section 115BA of the Act provides that the total income of a newly set up domestic company engaged in business of manufacture or production of any article or thing and research in relation thereto, or distribution of such article or thing manufactured or produced by it, shall, at its option, be taxed at the rate of 25 per cent. subject to conditions specified therein. This benefit is available from assessment year 2017-18. However, there are certain incomes which are subject to a scheduler tax at a rate which is lower or higher than 25 per cent. Consequently tax payers have been subjected to unintended hardship or unwarranted relief. Accordingly it is proposed to amend section 115BA so as to clarify that the provisions of section 115BA is restricted to the income from the business of manufacturing, production, research or distribution referred to therein; and income which are at present taxed at a scheduler rate will continue to be so taxed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the same area because of a variety of factors, including shape of the plot or location. In order to minimize hardship in case of genuine transactions in the real estate sector, it is proposed to provide that no adjustments shall be made in a case where the variation between stamp duty value and the sale consideration is not more than five percent of the sale consideration. These amendments will take effect from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-20 and subsequent assessment years. [Clause 14, 19 21] Rationalisation of provision relating to conversion of stock-in-trade into Capital Asset Section 45 of the Act, inter alia, provides that capital gains arising from a conversion of capital asset into stock-in-trade shall be chargeable to tax. However, in cases where the stock in trade is converted into, or treated as, capital asset, the existing law does not provide for its taxability. In order to provide symmetrical treatment and discourage the practice of deferring the tax payment by converting the inventory into capital asset, it is proposed to amend the provisions of - (i) section 28 so as to provide that any profit or gains arisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication Corporation Limited; or any other bond notified by the Central Government in this behalf. In order to rationalise the provisions of section 54EC of the Act and to restrict the scope of the section only to capital gains arising from long-term capital assets, being land or building or both and to make available funds at the disposal of eligible bond issuing company for more than three years, it is proposed to amend the section 54EC so as to provide that capital gain arising from the transfer of a long-term capital asset, being land or building or both, invested in the long-term specified asset at any time within a period of six months after the date of such transfer, the capital gain shall not be charged to tax subject to certain conditions specified in this section. It is also proposed to provide that long-term specified asset, for making any investment under the section on or after the 1st day of April, 2018, shall mean any bond, redeemable after five years and issued on or after 1st day of April, 2018 by the National Highways Authority of India or by the Rural Electrification Corporation Limited or any other bond notified by the Central Government in this behalf. This amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss arising onaccount of effects of changes in foreign exchange rates in respect of specified foreign currency transactions shall be treated as income or loss, which shall be computed in the manner provided in ICDS as notified under sub-section (2) of section 145. (iv) insert a new section 43CB in the Act to provide that profits arising from a construction contract or a contract for providing services shall be determined on the basis of percentage of completion method except for certain service contracts, and that the contract revenue shall include retention money, and contract cost shall not be reduced by incidental interest, dividend and capital gains. (v) amend section 145A of the Act to provide that, for the purpose of determining the income chargeable under the head Profits and gains of business or profession,- (a) the valuation of inventory shall be made at lower of actual cost or net realizable value computed in the manner provided in income computation and disclosure standards notified under (2) of section 145. (b) the valuation of purchase and sale of goods or services and of inventory shall be adjusted to include the amount ofany tax, duty, cess or fee actually paid or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axable) Bonds, 2003 with a new 7.75% GOI Savings (Taxable) Bonds, 2018. The interest received under the new bonds will continue to be taxed as in the case of the earlier once. The provisions of section 193 are proposed to be amended to allow for deduction of tax at source at the time of making payment of interest on such bonds to residents. However, no TDS will be deducted if the amount of interest is less than or equal to ten thousand rupees during the financial year. This amendment will take effect from 1st April, 2018. [Clause 46] H. MISCELLANEOUS Several amendments to the Act have been proposed with a view to rationalising the provisions. These amendments have been explained in the following paragraphs. Exemption to specified income of class of body, authority, Board, Trust or Commission in certain cases Clause 46 of section 10 of the Act empowers the Central Government to exempt, by notification, specified income arising to a body or authority or Board or Trust or Commission, if- (a) they are not engaged in any commercial activity; (b) they are established or constituted by or under a Central, State or Provincial Act or constituted by the Central Government or a State Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Chapter V of the Customs Act, 1962 from the date of appointment of Customs Authority for Advance Rulings under section 28EA of the Customs Act, 1962. It is further proposed that such Authority shall not admit any appeal against any ruling or order passed earlier by it in the capacity of Authority for Advance ruling after the date of appointment of Customs Authority for Advance Rulings under section 28EA of the Customs Act, 1962. In order to avoid overlapping, it is also proposed that where the Authority is dealing with an application seeking advance ruling in the matters of the Act, the Revenue Member shall be the Member referred to in sub-clause (i) of clause (c) of sub-section (3). These amendments will take effect from 1st April, 2018. [Clause 48 49] Appeal against penalty imposed by Commissioner (Appeals) under section 271J Section 253 of the Act inter-alia provides that any assessee aggrieved by any of the orders mentioned in sub-section (1) of the said section may appeal to the Appellate Tribunal against such order. It is proposed to amend clause (a) of the said sub-section so as to also make an order passed by a Commissioner (Appeals) under section 271J appealable before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough appropriate selection criteria; (c) extend the scope of re-assessment by omitting specific reference to valuation, classification and exemption or concessions of duty availed consequent to any notification issued therefor under this Act from sub-section (5); (d) omit sub-section (6), in view of the new dedicated Chapter for Audit; [58] 6. Section 18 is being amended so as to: (a) cover export consignments under provisional assessment of duty by amending sub-section (1); (b) insert a new sub-section (1A) to empower the Board to issue regulation for providing time-limit for the importer or exporter to submit the documents and information, if required, for finalization of provisional assessments and for the proper officer to finalize the provisional assessment; (c) substitute the reference to section 28AB [which does not exist] with the reference to section 28AA retrospectively; [59] 7. A new section 25A is being inserted, 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 se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed against the person to whom the demand notice has been issued, then the said notice shall be deemed to have been issued under subsection (1). (g) insert an explanation that a notice issued for non-levy, non-payment, short-levy or short payment of duty or erroneous refund after 14th May, 2015 but before the date on which the Finance Bill, 2018 receives the assent of the President, shall continue to be governed by the provisions of section 28 as it stood immediately before the date on which such assent is received.; [61] 10. Section 28E is being amended so as to, - (a) omit clause (a) defining activity as it is no longer relevant; (b) substitute the existing definition of advance ruling so as to cover subjects beyond mere determination of duty; (c) include a definition of appellate authority ; (d) substitute the definition of applicant in order to make it broad based; (e) define authority 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 empowers the Board to appoint officers of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce only when customs authority for advance ruling is appointed under section 28EA. [68] 17. Section 28L is being amended so as to substitute the word Authority with the words Authority or Appellate Authority [69] 18. Section 28M is being substituted so as to, - (a) provide that the procedure to be followed by the Authority shall be as prescribed. (b) provide that Appellate Authority shall, subject to provisions of this chapter, have power to regulate its own procedure in all matters arising out of the exercise of its powers under this act. [70] 19. Section 30 is being amended so as to: (a) include export goods in addition to imported goods as part of the information provided in the manifest; (b) provide for prescribing the manner of delivery of manifest through regulations. [71] 20. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing amended so as to have a provision for clearance of goods by Customs Automated System in addition to existing clearance by the proper officer. [80] 29. Section 68 is being amended so as to have a provision for clearance of goods by Customs Automated System in addition to existing clearance by the proper officer. [81] 30. Section 69 is being amended so as to have a provision for clearance of goods by Customs Automated System in addition to existing clearance by the proper officer. [82] 31. Clause (iii) of sub-section (1) of Section 74 is being amended so as to substitute 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; [83] 32. Sub-section (1) of Section 75 is being amended so as to substitute 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of this section shall not be applicable if the goods are not prohibited or restricted; (b) insert sub-section (3) to provide that where redemption fine has not been paid within a period of one hundred and twenty days from the date of option given under sub-section (1), then such option shall become void, except in cases where any appeal against such order is pending.; (c) insert an explanation that for an order passed under sub-section (1) before the date on which the Finance Bill, 2018 receives the assent of the President, and no appeal against such order is pending, such option may be exercised within one hundred and twenty days from the date on which such assent is received.; [93] 42. Section 128A is being amended to allow Commissioner (Appeals) to remand back the matters to original adjudicating authority 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Section.; (f) insert a definition of contracting state and corresponding law referred to in this section.; [96] 45. Section 153 is being substituted so as to align it with the provisions of the section 169 of the CGST Act to include Speed Post, Courier, and registered email as valid modes of delivery and in case of non-service by such means, to also provide for affixing it at some conspicuous place at the last known place of business or residence in addition to affixing it on the notice board of the Customs House etc. [97] 46. Section 157 is being amended so as to empower the Board to make regulations relating to: (a) manner to deliver or present, a bill of entry, shipping bill, bill of export, import manifest, import report, export manifest, export report, bill of transshipment, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tyres 10% 15% 8 8407, 8408, 8409, 8483 10 91, 8483 10 92, 8511, 8708, 8714 10 Specified parts/accessories of motor vehicles, motor cars, motor cycles 7.5%/10% 15% Footwear 9 6401, 6402, 6403, 6404, 6405 Footwear 10% 20% 10 6406 Parts of footwear 10% 15% Jewellery 11 7117 Imitation Jewellery 15% 20% Electronics / Hardware 12 8517 12 Cellular mobile phones 15% 20% 13 90 90, 99 99, 3926 90 91, 3926 90 99, 4016 99 90, 7318 15 00, 7326 90 99, 8504, 8506, 8507, 8517 70 90, 8518, 8538 90 00, 8544 19, 8544 42, 8544 49 Specified parts and accessories including lithium ion battery of cellular mobile phones 7.5%/10% 15% 14 8517 62 90 Smart watches / wearable devices 10% 20% 15 8529 10 99 8529 90 90 LCD/LED/OLED panels and other parts of LCD/LED/OLED TVs 7.5%/10% 15% Furniture 16 9401 Seats and parts of seats [other than aircraft seats and their parts] 10% 20% 17 9403 Other furniture and parts 10% 20% 18 9404 Mattresses supports; articles of bedding and similar furnishing 10% 20% 19 9405 Lamps and lighting fitting, illuminated signs, illuminated name plates and the like [except solar lanterns or solar lamps] 10% 20% Watches and Clocks 20 9101, 9102 Wrist watches, pocket watches and other watch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... somers it covers. *Will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. IV. AMENDMENT IN THE SECOND SCHEDULE TO THE CUSTOMS TARIFF ACT, 1975 S.No. Amendment A Amendments not affecting rates of Export duty Rate of Duty From To 1. To insert a new Note to specify Nil rate of duty in respect of all other goods which are not covered under column (2) of the Schedule. [ Clause 102 (a) of the Finance Bill, 2018] -- -- 2 Electrodes of a kind used for furnaces [ Clause 102 (b) of the Finance Bill, 2018]* [Introduction of 20% Tariff rate of Export Duty on Electrodes of a kind used for furnaces (8545 11 00). The effective rate of Export duty on such electrodes will, however, remain Nil] -- 20% *Will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. V. OTHER PROPOSALS INVOLVING CHANGES IN BASIC CUSTOMS DUTY RATES S.No. Heading, sub-heading tariff item Commodity From To Food processing 1 0801 31 00 Cashew nuts in shell [Raw cashew] 5% 2.5% 2 2009 11 00 2009 12 00 2009 19 00 Orange fruit juice 30% 35% 3 2009 81 00, 2009 90 00 Cranberry Juice 10% 50% 4 2106 90 Miscellaneous Food preparat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.5% 20 6901 Bricks, blocks, tiles and other ceramic goods of siliceous fossil meals or of similar siliceous earths 10% 7.5% 21 6902 Refractory bricks, blocks, tiles and similar refractory ceramic constructional goods, other than those of siliceous fossil meals or similar siliceous earths 5% 7.5% 22 6903 Other refractory ceramic goods 5% 7.5% VI. Levy of Social Welfare Surcharge, as a duty of Customs on imported goods [Clause 108 of the Finance Bill, 2018]: S.No. Heading, sub-heading tariff item Description From To 1 Any chapter Levy of Social Welfare Surcharge on imported goods to finance education, housing and social security [clause 108 of Finance Bill, 2018] -- 10% of aggregate duties of customs 2 Any chapter Abolition of Education Cess and Secondary and Higher Education Cess on imported goods [clause 106 of Finance Bill, 2018] 3% of aggregate duties of customs [2% + 1%] Nil 3 2710 Motor spirit commonly known as petrol and high speed diesel oil -- 3% of aggregate duties of customs 4 7106 Silver (including silver plated with gold or platinum), unwrought or in semi-manufactured form, or in powder form -- 3% of aggregate duties of customs 5 7108 Gold (including gold plated with p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been paid on petrol or diesel and appropriate GST has been paid on ethanol or bio-diesel used for making such blends -- Nil 5. Road and Infrastructure Cess on petrol and diesel manufactured in and cleared from 4 specified refineries located in the North-East -- ₹ 4 per litre SERVICE TAX A. Retrospective exemptions Clause of Finance Bill, 2018 1. Services provided or agreed to be provided by the Naval Group Insurance Fund by way of life insurance to personnel of Coast Guard, under the Group Insurance Schemes of the Central Government, are proposed to be exempted from service tax for the period commencing from the 10th September, 2004 and ending with the 30th June, 2017 [103] 2. Services provided or agreed to be provided by the Goods and Services Tax Network (GSTN) to the Central Government or State Governments or Union territories administration, are proposed to be exempted from service tax for the period commencing from 28th March, 2013 and ending with the 30th June, 2017. [104] 3. Consideration paid to the Government in the form of Government s share of profit petroleum in respect of services provided or agreed to be provided by the Government by way of grant of license or l ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
