9911796707
TMI BlogChanges in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021.X X X X Extracts X X X X X X X X Extracts X X X X ..... ms (ADD) 05/2021 -Customs (ADD) to 07/2021 Customs (ADD ) 1 st February, 2021 Customs (CVD) 01/2021-Customs (CVD) to 02/2021-Customs (CVD) 1 st February, 2021 2. Unless otherwise stated, all changes in rates of duty take effect from the midnight of 1st February/ 2nd February, 2021. A declaration has been made under the Provisional Collection of Taxes Act, 1931 in respect of clauses 95 (i), 115 and 116 of the Finance Bill, 2021 so that changes proposed therein take effect from the midnight of 1st February/2nd February, 2021. The remaining legislative changes would come into effect only upon the enactment of the Finance Bill, 2021. 3. Important changes in respect of Customs and Central Excise duty (including cesses) are contained in the Annexure to this letter as detailed below. (i) Customs duty rate changes: The change in the rates of duty, SWS, tariff rates, omission of certain exemption and amendments in certain exemptions, conditions to exemptions are at Annexure A. (ii) Central Excise Changes: The changes in Central Excise Act and duty rates are at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of a sum equal to twenty-five per cent. of penalty imposed [The details are at Annexure E] 4. This letter only summarizes the key highlights of the budgetary changes. It should not be used in any quasi-judicial or judicial proceedings. The relevant legal texts contained in the Finance Bill and notifications alone have legal force. We have taken every possible care in making the changes error free. However, inadvertent errors cannot be ruled out given the scale of the exercise. I shall be grateful if the provisions of the Finance Bill and notifications are studied carefully and feedback is provided urgently, including the issues that may need clarification. 5 It is requested that all possible efforts may be made to guide the taxpayers by holding interactive sessions/seminars for their benefit. In case of any doubt or difficulty, I would request you to kindly bring it to my notice immediately at js-tru01@ gov.in or to the notice of Shri Gaurav Singh, Deputy Secretary (TRU) (Tel: 011-23092753, email: gaurav.singh80nic.in), Sh. J. S. Kandhari, Deputy Secretary (TRU) (Tel: 011-23095526, email: [email protected]) or Sh. Abhishek Verma, Budget Officer (TRU) (Tel: 011- 23095 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 021- Customs, dated 1st February, 2021 refers] Chapter 8 (1) S. No. 32A, 32B of notification No. 50/2017-Customs are being amended. AIDC is being imposed on Apples, falling under tariff item 0808 10 00. Simultaneously, BCD on this item has been reduced. For the revised rates, refer to the Table in Annexure-C. [S. Nos. 4, 5 of notification No. 02/2021-Customs dated 1st February, 2021 refers] Chapter 9-11: No Change Chapter 12 (1) S. No. 44 of notification No. 50/2017-Customs is redundant. Hence, it is being omitted along with clause (b) of first proviso of the notification [S. No. 6 of notification No. 2/2021- Customs dated 1st February, 2021 refers] Chapter 13-14: No Change Chapter 15 (1) S. Nos. 57, 61, 70 of notification No. 50/2017-Customs are being amended. AIDC is being imposed on Crude Soya-bean Oil, falling under tariff heading 1507 10 00, Crude Palm Oil, falling under tariff heading 1511 10 00 and Crude Sunflower Seed Oil, falling under tariff heading 1512 11 10. Simultaneously, BCD on these items has been reduced. For the revised rates, refer to the Table in Annexure-C. [S. No. 7 of notification No. 02/2021-Customs dated 1st Feb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 5% vide S. No. 120 of the said notification. [S. No. 13 of notification No. 02/2021-Customs dated 1st February, 2021 refers] Chapter 26: No change Chapter 27 (1) S. No. 140 and 141 of notification No. 50/2017-Customs are being merged into one entry. Consequently S. No. 140 is being omitted. AIDC is being imposed on Coal, Lignite and Peat falling under tariff headings 2701, 2702 and 2703 respectively. Simultaneously, BCD on these items have been reduced. For the revised rates, refer to the Table in Annexure-C. [S. Nos. 13 and 14 of notification No. 02/2021-Customs dated 1st February, 2021 refers] (2) S. No. 147A of notification No. 50/2017-Customs is being amended to decrease BCD on Naphtha from 4% to 2.5%. [S. No. 15 of notification No. 02/2021-Customs dated 1st February, 2021 refers] Chapter 28 (1) BCD on Carbon blacks (Tariff item 2803 00 10) is being increased from 5% to 7.5%, by increasing the tariff rate [Clause 95 (i) of the Finance Bill, 2021 refers]. By virtue of the declaration under Provisional Collection of Taxes Act, 1931 , this increase will come into force with immediate effect. Chapter 29 (1) S. No. 202 and 203 of notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st February, 2021 refers] (4) BCD on Nylon chips is being reduced from 7.5% to 5% by amending the entry at S. No. 273 of notification No. 50/2017-Customs dated 30th June, 2017 . [S. No. 28 of notification No. 02/2021-Customs dated 1st February, 2021 refers] (5) S. No. 10 of notification No. 57/2017-Customs is being omitted. This entry provided effective BCD rate of 10% on items of plastics falling under tariff item 3920 99 99 except specified parts of cellular mobile phones like back cover, battery cover etc. The specified parts of mobile under the said tariff item were attracting 15% BCD by tariff. Consequently, with this omission, these goods will now attract 15% BCD. [S. No. (viii) of the notification No. 03/2021- Customs dated 1st February, 2021 refers]. Chapter 40 (1) An explanation is being added to S. No. 284 of notification No. 50/2017-Customs so as to explicitly clarify that the said exemption entry does not include toy balloons made of natural rubber latex . Toy balloons are classified under customs tariff heading 9503 and attract a basic customs duty of 60%. [S. No. 29 of notification No. 2/2021-Customs, dated 1st February, 2021 refers] Chapter 41 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, 2021 and S. No. (iii) of notification No. 15/2021- Customs, dated 1st February, 2021 refers] Chapter 53: No change Chapter 54 and 55 (1) The BCD on Nylon fibre and yarn is being reduced from 7.5% to 5%. To give effect to this change S. Nos. 318 and 321 notification No. 50/2017-Customs is being amended and S. No. 319 and 322 of notification No. 50/2017-Customs is being omitted. Consequently, BCD on all goods falling under CTH 5402 to 5406 and CTH 5501 to 5510 would be uniform 5%. [S. No 37 38 of notification No. 02/2021-Customs, dated 1st February, 2021 refers] Chapter 56-69: No Change Chapter 70 (1) Tariff rate on all goods falling under heading 7007 is being increased from 10% to 15% [Clause 95 (i) of the Finance Bill, 2021 refers]. By virtue of declaration under the Provisional Collection of Taxes Act, 1931 , this increase will come into force from 02.02.2021. (2) BCD on all goods under heading 7007, other than those used in motor vehicles, is being retained at 10% [S. No. 42 of notification No. 2/2021-Customs dated 02.02.2021 refers]. Consequently, goods falling under heading 7007 when used for motor vehicles will attract the tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uce the BCD rate on Gold or Silver findings from 20% to 10%. [S. No. 51 notification No. 2/2021-Customs dated 1st February, 2021 refers]. Chapter 72 (1) Duty rate structure on tariff items under chapter 72 is being reduced and rationalized. In the following manner: - HSN Description Rate S. No. of Notfn. No. 02/2021 Customs, dated 1st February, 2021 7204 Scrap of iron or steel including stainless steel and alloy steel Nil (up to 31.03.2022) 54 7206, 7207 Primary/Semi-finished products of iron or non-alloy steel 7.5% 62 7208, 7209, 7210, 7211, 7212, 7225 (except 7225 11 00), 7226 (except 7226 11 00) Flat Products of iron or nonalloy steel and alloy steel 7.5% 62 7213, 7214, 7215, 7216, 7217, 7221, 7222, 7223, 7227, 7228 Long Products of iron or nonalloy steel, stainless steel and alloy steel 7.5% 62 7225 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [ S. Nos. 63 and 64 of notification No. 02/2021-Customs, dated 1st February, 2021 refers]. Chapter 74 (1) BCD on copper waste and scrap under heading 7404 is being reduced to 2.5% by amending Sl. No. 382 of notification No. 50/2017 Customs. [ S. No. 66 of notification No. 02/2021-Customs, dated 1st February, 2021 refers]. Chapter 75-83: No Change Chapter 84 (1) BCD exemption on tunnel boring machines (TBMs) (heading 8430) has been withdrawn. Consequently, it will now attract BCD of 7.5 %. Also, parts components for manufacture of TBMs falling under heading 8431 will now attract 2.5% BCD with actual-user conditions. S. No. 446 of notification No. 50/2017-Customs has been amended accordingly [ S. No. 74 of notification No. 02/2021-Customs, dated 1st February, 2021 refers]. (2) Tariff rate on all goods falling under sub-heading 8414 40 and 8414 80 is being increased to 15% [Clause 95 (i) of the Finance Bill, 2021 refers]. However, the effective BCD on all goods under these sub-headings, except for tariff item 8414 80 11, is being retained at 7.5% [ S. No. 75 of notification No. 02/2021 Customs dated 1st February, 2021 refers]. (3) BCD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff rate on all goods falling under tariff items 8536 41 00 and 8536 49 00 is being increased from 10% to 15% [Clause 95 (i) of the Finance Bill, 2021 refers]. By virtue of declaration under the Provisional Collection of Taxes Act, 1931 , this increase will come into force from 02.02.2021. However, the effective BCD on all goods under tariff items 8536 41 00 and 8536 49 00 is being retained at 10% [S. No. 83 of notification No. 02/2021 Customs dated 1st February, 2021 refers]. Consequently, goods falling under sub-headings 8501 10 to 8501 53 will attract the effective BCD rate of 10%. (6) S. Nos. 471 and 472 of notification No. 50/2017- Customs, dated 30th June, 2017 are being amended. Consequently, all parts for use in the manufacture of LED lights, fixtures including LED lamps, LED drivers and MCPCB of LED lights, will attract 10% BCD. [ S. No. 76 of the notification No. 02/2021-Customs dated 1st February, 2021 refers]. (7) S. No. 491 of notification No. 50/2017-Customs is being amended. Consequently, all goods falling under heading 8544 (except USB Cable and goods falling under tariff item 8544 30 00 and sub-heading 8544 70) will attract 10% BCD. [ S. No. 78 of no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ix) Side Key, (xii) Screw, (xiii) Microphone rubber case, (xiv) Sensor rubber case/sealing gasket including sealing gaskets/cases from rubbers like SBR, EPDM, CR, CS, Silicon and all other individual rubbers or combination/combination of rubbers, (xv) PU case/ sealing gasket14 Other articles of polyurethane foam like sealing gaskets/case, (xvi) sealing gaskets/cases from PE, PP, EPS, PC and all other individual polymers or combination/combinations of polymers, (xvii) SIM sockets/Other Mechanical items (Metal), (xviii) SIM sockets/Other Mechanical items (Plastic), (xix) Back Cover, (xx) Conductive cloth, (xxi)Heat Dissipation sticker Battery cover, (xxii) Sticker battery slot, (xxiii) Protective Film for main lens, (xxv) LCD Conductive Foam, (xxvii) LCD Foam, (xxviii) BT Foam, (xxx) Key Pad Consequently, inputs and raw-materials of above stated items shall attract the applicable BCD rate. [S.No. (iv) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (13) S. No. 7A of notification No. 57/2017-Customs is being omitted. Consequently, inputs or raw materials [other than PCBA and Moulded Plastics] for use in the manufacture of charger or adapter of cell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary, 2021 and S. No. (xi) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (20) S. No. 8 of the notification No. 57/2017-Customs, dated the 30th June, 2017, is being amended to:- (i) omit Base stations (8517 61 00), all goods falling under tariff item 8517 62 90 and 8517 69 90 from the entry. Consequently, the inputs or raw materials of said items will attract BCD as applicable; (ii) increase BCD from Nil to 2.5% with effect from 1st April, 2021, on the inputs or raw materials of the goods mentioned against item nos. (i), (ii), (iii) and (iv) in column (3) of the said entry. [S. No. (vii) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (21) S. No. 20 of notification No. 57/2017-Customs, is being amended to clarify the scope of the item (h) under the said entry. Consequently, item (h), i.e. Multiple Input/Multiple Output (MIMO) and Long Term Evolution (LTE) products is being separately mentioned in two different items (h) Multiple Input/Multiple Output (MIMO) products and (i) Long Term Evolution (LTE) products. These amendments are only clarificatory in nature. These items continue to attract 20% BCD, as before. Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing increased from 10% to 15% by increasing the tariff rate [Clause 95 (i) of the Finance Bill, 2021 refers. By virtue of declaration under the Provisional Collection of Taxes Act, 1931 , this increase will come into force from 02.02.2021. Chapter 92-93: No Change Chapter 94 (1) S. No. 587 of notification No. 50/2017- Customs is being amended. Consequently, solar lanterns or solar lamps will now attract 15% BCD. [ S. No. 91 of the notification No. 02/2021- Customs dated 1st February, 2021 refers]. Chapter 95 (1) S. Nos. 591 and 592 of notification No. 50/2017- Customs are being amended. Consequently, parts of electronics toys for manufacture of electronic toys falling under heading 9503 (as per the chapter Note 3 of chapter 95), will now attract 15% BCD subject to the end use condition. [ S. Nos. 92 and 93 of the notification No. 02/2021-Customs dated 1st February, 2021 refers]. Chapter 96-97: No Change Chapter 98 (1) High Speed Rail Projects are being included in the list of projects eligible for benefit under Project Imports Scheme [notification No. 09/2021-Customs, dated 2nd February, 2021 refers]. National High Speed Rail Corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out under the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 (IGCR Rules, 2017). To provide uniformity of enforcement of end-use provisions, the condition of IGCR Rules is being provided for the entries listed below in the manner as specified in the column (3) of the Table below: - S.No. S. No. of Notfn Description (1) (2) (3) 1. 237 (a) Existing condition 22 for the entry is being amended so as to remove the requirement of furnishing an undertaking to Deputy Commissioner/Assistant Commissioner of Customs as per part (b) of the said condition. (b) In addition, with the existing condition (as amended), IGCR Rules, 2017 is being prescribed to avail the concession under said entry 2. 254, 255, 380, 406 and 497 (a) Existing condition 24 for the entry is being amended so as to remove the requirement of furnishing an undertaking to Deputy Commissioner/Assistant Commissioner of Customs as per part (b) of the said condition. (b) In addition, with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in addition with the condition 60 as amended. (c) In addition, Deputy Commissioner of Customs or Assistant Commissioner of Customs having jurisdiction under IGCR Rules, 2017, is also being empowered to issue the end use certificate for the past period after due verification as per the rules. 10. 431 (a) Existing condition 61 for the entry is being amended to remove the requirement of furnishing the end use certificate regarding use of imported goods to the Deputy Commissioner/Assistant Commissioner of Customs at the Port of import. (b) IGCR Rules, 2017 is also being prescribed in addition with the condition 61 as amended. (c) In addition, Deputy Commissioner of Customs or Assistant Commissioner of Customs having jurisdiction under IGCR Rules, 2017, is also being empowered to issue the end use certificate for the past period after due verification as per the rules. 11. 534 IGCR Rules, 2017 is being prescribed in addition with the Condition 74 for the entry. 12. 559 The Explanation in the said entry is bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2404 19 00 Products intended for inhalation without combustion, Other Kg. 25% Chapter 27 (1) Agriculture Infrastructure and Development Cess (AIDC) is being imposed on Petrol and High speed diesel falling under CETH 2710 at the rate of ₹ 2.5 per litre and ₹ 4 per litre respectively. Simultaneously, Basic Excise Duty and Special Additional Excise Duty on Petrol and High speed diesel is being calibrated. The details of these changes are given in Annexure-C. [notification Nos. 01/2021-Central Excise and 02/2021-Centrral Excise, both dated 1st February, 2021 refer] (2) Exemptions from Special Additional Excise Duty (SAED) and Road and Infrastructure Cess (RIC) is being provided to new category of blended fuels namely, 15% Methanol blended Petrol (M-15 fuel) and 20% ethanol blended Petrol (E-20 fuel), provided appropriate excise duty on Petrol and appropriate GST on ethanol/methanol and cosolvents has been paid. [notification Nos. 04/2021-Central Excise, 05/2021-Centrral Excise and 06/2021-Central Excise, all dated 1st February, 2021 refer] (2) Exemption from Agriculture Infrastructure and Developm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed oil 15% 20% 5. 0713 10 Peas (Pisum sativum) 10% 40% 6. 0713 20 10 Kabuli Chana 10% 30% 7. 0713 20 20 Bengal Gram (desichana) 10% 50% 8. 0713 20 90 Chick Peas (garbanzos) 10% 50% 9. 0713 40 00 Lentils (Mosur) 10% / 30%* 20% 10. 2204 All goods (Wine) 50% 100% 11. 2205 Vermouth and other wine of fresh grapes, flavoured 50% 100% 12. 2206 Other fermented beverages for example, Cider, Perry, Mead, sake, mixture of fermented beverages or fermented beverages and nonalcoholic beverages 50% 100% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II. Excise: An agriculture Infrastructure and Development Cess (AIDC) of ₹ 2.5 per litre has been imposed on petrol and ₹ 4 per litre on diesel as an additional duty of excise [Clause 116 of the Finance Bill, 2021 refers]. Accordingly, Basic Excise Duty and the Special Additional Excise Duty have been calibrated so that there would be no additional burden on the consumer. The table below summarizes the change in various duties applicable to Petrol and Diesel: Commodity Duty rates applicable with effect from 02.02.2021 (Rs. per litre) BED SAED RIC AIDC Total Petrol (unbranded) 1.40 11 18 2.5 32.90 Petrol (branded) 2.60 11 18 2.5 34.10 Diesel (unbranded) 1.80 8 18 4.0 31.80 Diesel (branded) 4.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any person has obtained any invoice by fraud, collusion, willful misstatement or suppression of facts to utilize Input Tax Credit on the basis of such invoice for discharging any duty or tax on goods that are entered for exportation under claim of refund of any duty or tax. (g) Explanation to section 139 of Customs Act is being amended so as to include inventories, photographs and lists certified by the Commissioner (Appeals) under the new sub-section (1D) to the documents within the meaning of that section to give evidentiary value to such documents. (h) Section 149 is being amended so as to- i. introduce a second proviso which would allow amendments to be done through the customs automated system on the basis of risk evaluation through appropriate selection criteria. ii. introduce a third proviso so that certain amendments, as may be specified by the Board, may be done by the importer or exporter on the common portal. (i) Section 153 is being amended so as to insert a new clause (ca) under sub section (1) thereof so as to enable service of order, summons, notice, etc. by making it available on the common portal. (j) Chapter XVII is being amended so as to inse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in ADD/CVD Rules; viii. manner of application of safeguard measure, including tariff-rate quota in the Safeguard Duty (name changed to Safeguard Measures) Rules. ANNEXURE E Amendments in CGST, IGST and UTGST Acts, 2017: Amendments carried out in the Finance Bill, 2021 will come into effect from the date when the same will be notified, as far as possible, concurrently with the corresponding amendments to the similar Acts passed by the States and Union territories with Legislature. I. AMENDMENTS IN THE CGST ACT, 2017: a. A new clause (aa) in sub-section (1) of Section 7 of the CGST Act is being inserted, retrospectively with effect from the 1st July, 2017, so as to ensure levy of tax on activities or transactions involving supply of goods or services by any person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. b. A new clause (aa) to sub-section (2) of the section 16 of the CGST Act is being inserted to provide that input tax credit on invoice or debit note may be availed only when the details of such invoice or debit note have been furnished by the supplier in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any matter dealt with in connection with the Act. l. Section 152 of the CGST Act is being amended so as to provide that no information obtained under sections 150 and 151 shall be used for the purposes of any proceedings under the Act without giving an opportunity of being heard to the person concerned. m. Section 168 of the CGST Act is being amended to enable the jurisdictional commissioner to exercise powers under section 151 to call for information. n. Consequent to the amendment in section 7 of the CGST Act paragraph 7 of Schedule II to the CGST Act is being omitted retrospectively, with effect from the 1st July, 2017. II. AMENDMENTS IN THE CGST ACT, 2017: Section 16 of the IGST Act is being amended so as to: (i) zero rate the supply of goods or services to a Special Economic Zone developer or a Special Economic Zone unit only when the said supply is for authorised operations; (ii) restrict the zero-rated supply on payment of integrated tax only to a notified class of taxpayers or notified supplies of goods or services; and (iii) link the foreign exchange remittance in case of export of goods with refund. - Circular - Trade Notice - Public Notic ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
