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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 ..... ect 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 Annexure B. (iii) Agriculture Infrastructure and development Cess (AIDC): This new cess is being imposed on imports of certain items at specified rate. Simultaneously, basic customs duty is being reduced on the items being brought under new cess. This new cess is also being imposed as additional duty of excise on petrol and diesel. At the same ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are 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- 23095547, email: [email protected]. We can also be reached at [email protected]. 6. Copies of Finance Bill, 2021, Finance Minister's Budget Speech, Explanatory Memorandum to the Bill and relevant notifications can be downloaded directly from www.indiabudget.gov.in as well as www.cbic.gov.in. 7. To conclude, my team and I would like to express our gratitude to you for the va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification 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 February, 2021 refers] Chapter 16-21: No Change Chapter 22 (1) New S. Nos. 104A of notification No. 50/2017-Customs is being created. AIDC is being imposed on alcoholic beverages and spirits, falling under tariff headings 2204, 2205, 2206 and 2208. Simultaneously, BCD on these items has been reduced. For the revised rates, refer to the Table in Annexure-C. [S. No. 8 of notification No. 02/2021-Customs dated 1st February, 2021 refers] (2) S. No. 107 of notification No. 50/2017-Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 notification No. 50/2017-Customs are being omitted. Consequently, Bis-phenol A and Epichlorohydrin will now attract 7.5% BCD vide S. No. 185 of the said notification. [S. No. 17 of notification No. 2/2021-Customs dated 1st February, 2021 refers] (2) S. No. 209 of notification No. 50/2017-Customs is being omitted. Consequently, with omission of the end use exemption, all Diphenylmethane 4,4-diisocyanate (MDI) will now attract 7.5% BCD vide S. No. 185 of the said notification. [S. No. 17 of notification No. 2/2021- Customs dated 1st February, 2021 refers] (3) BCD on Caprolactam is being reduced from 7.5% to 5% by amending the entry at S. No. 210 of notification No. 50/2017-Customs. [S. No. 18 of notification No. 2/2021-Customs dated 1st February, 2021 refers] Chapter 30: No chang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (1) S. No. 285 of notification No. 50/2017-Customs is being omitted. Consequently, with omission of the said exemption, 'wet blue chrome tanned leather, crust leather, finished leather of all kinds, including splits and sides of the aforesaid' falling under Chapter 41 will now attract 10% BCD. [S. No. 30 of notification No. 2/2021-Customs, dated 1st February, 2021 refers] Chapter 42-47: No change Chapter 48 (1) Entry at S. No. 293A and S. No. 293B of notification No. 50/2017-Customs are being merged. These entries provide concessional rate to Newsprint and other uncoated paper. The merged entry is for providing clarity to the scope of this exemption that exemption is available to newsprint and other uncoated paper conforming to the specifications of newsprint (other than its surface roughness). Consequently S. No. 293 B has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 rate of 15%. Chapter 71 (1) Tariff rate on all goods falling under tariff item 7104 90 90 (cut and polished synthetic stones) 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 with immediate effect]. (2) S. No. 349 of notification No. 50/2017-Customs is being amended to exclude cut and polished synthetic stones from the said entry. Consequently, cut and polished synthetic stones falling under tariff item 7104 90 90 will now attract 15% BCD. [S. Nos. 43 of notification No. 2/2021-Customs dated 1st February, 2021 refers]. (3) S. No. 362 of notification No. 50/2017-Customs is being omitted to increase BCD rate on cut and polished cubic zirconia from 7.5% to 15%, at par with other cut and polished synthetic stones. [S. Nos. 49 of notification No. 2/2021-Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Customs dated 30.06.2017 Nil (subject to end use condition and up to 31.03.2023) 59 and 60 (2) The following notifications imposing anti-dumping duty or countervailing duty on certain products of steel are being temporarily revoked for the period 02.02.2021 to 30.09.2021: S. No. Notification No. Product/ Exporting Country 1 54/2018- Cus (ADD) dated 18.10.2018 Straight length Bars and Rod of alloy Steel China PR, 2 38/2019-Cus (ADD) dated 25.09.2019 High Speed Steel of Non Cobalt Grade China PR, Brazil, Germany, 3 16/2020 - Cus (ADD) dated 23.06.2020 Flat rolled prdcts of steel, (Al or Zinc coated) China PR, Vietnam, and Korea RP, 4 1/2017-Cus (CVD) dated 07.09.2017 Hot rolled and cold rolled stainless steel flat products China PR [Notification Nos. 05/2021-Customs (ADD), 06/2021-Customs (ADD), 07/2021-Customs (ADD), and 02/2021- Customs (CVD), all dated 1st February, 2021 refers] (3) Provisional countervailing duty imposed vide notification No. 02/2020-Cus(CVD) dated 09.10.2020 on Flat rolled products of stainless steel originating in or exported from Indonesia, is being revoked. [Notification No. 01/2021-Customs (CVD), dated 1st February, 2021 refers] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 these sub-headings (8501 10 to 8501 53), is being retained at 10% [S. No. 77 of notification No. 2/2021 - 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%. (2) Basic customs duty on Solar Inverters (sub-heading 8504 40) is being raised to 20%. For this purpose, S. No. 13 of the notification No. 57/2017-Customs is being amended. Simultaneously, notification No. 1/2011-Customs, dated 6th January, 2011 is being rescinded. [S. No. (ix) of the notification No. 03/2021-Customs dated 1st February, 2021 and, notification No. 07/2021-Customs, dated 1st February, 2021 refer]. (3) Notification No. 1/2011-Customs, dated 6th January, 2011 is being rescinded. Consequently, all items of machinery, including prime movers, instruments, apparatus and appliances, control gear and transmission equipment and auxiliary equipment (including those required for testing and quality control) and components, required for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d raw materials of following specified parts of cellular mobile phone, is being increased as detailed below: - S. No. of notification No. 57/2017-Customs Description From To Effective date 6A Printed circuit board assembly (PCBA) Nil 2.5% 1.4.2021 6B Camera Module Nil 2.5% 1.4.2021 6C Connectors Nil 2.5% 1.4.2021 7 Items mentioned against the said entry such as wired headset, USB Cable, microphone and receiver, etc Nil 2.5% 1.4.2021 [S. Nos. (i), (ii), (iii) and (iv) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (10) S. No. 6A of the notification No. 57/2017-Customs is being amended to exclude "Metal Shield" from the scope of the said entry. Consequently, Metal Shield will now attract BCD as applicable. [S. No. (i) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (11) S. No. 6B of the notification No. 57/2017-Customs is being amended to exclude "Camera Lens" from the scope of the said entry. Consequently, Camera Lens will now attract BCD as applicable. [S. No. (ii) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (12) S. No. 7 of the notification No. 57/2017-Customs is being a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or parts of PCBA and Moulded Plastic of charger or adapter of cellular mobile phone will now attract applicable BCD. [S .No. (v) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (17) BCD on inputs or raw materials [other than Lithium-Ion Cell and PCBA] for use in manufacture of Lithium-ion battery and battery pack, is being increased from Nil to 2.5% with effect from 1.4.2021. [S. No. 80 of the notification No. 02/2021-Customs dated 1st February, 2021 and S. No. (v) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (18) BCD on inputs, parts or sub-parts for use in manufacture of PCBA of Lithium-ion battery and battery pack, is being increased from Nil to 2.5% with effect from 1.4.2021. [S. No. 81 of the notification No. 02 /2021-Customs dated 1st February, 2021 and S. No. (vi) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (19) BCD rate on Lithium-ion battery and battery pack, Lithium-ion cell, PCBA of Li-ion battery and parts thereof, is prescribed through various entries of notification No. 57/2017- Customs and notification No. 50/2017-Customs. All such entries are being consolidated in notification No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f such aircrafts by Public Sector Units under Ministry of Defence, is being reduced to Nil (subject to specified conditions). [S. Nos. 88 of notification No. 02/2021-Customs, dated 1st February, 2021 refers]. Chapter 89: No Change Chapter 90 (1) Notification No. 8/2020-Customs, dated 2nd February, 2020, is being amended to provide Health Cess exemption on medical devices imported by international/diplomatic organization. [notification No. 06/2021, dated 1st February, 2021 refers]. (2) Tariff rate on all goods falling under tariff item 9031 80 00 (other measuring or checking instruments, appliances and machines) 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 item 9031 80 00, is being retained at 7.5% [S. No. 90 of notification No. 2/2021 - Customs dated 1st February, 2021 refers]. Consequently, goods falling under tariff item 9031 80 00 will attract the effective BCD rate of 7.5%. Chapter 91 (1) BCD on Instrument panel clocks and clocks of a similar type f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ridges, ribbon assembly, ribbon gear assembly, ribbon gear carriage, for use in printers for computer, will now attract BCD as applicable. [S. No. 23 of the notification No. 02/2021- Customs dated 1st February, 2021 refers]. (6) Review of Exemption Notifications: Certain miscellaneous exemption notifications have been reviewed and these notifications have either been merged with other exemption notifications or rescinded as these have outlived their utility. The list of notifications that are being rescinded are as follows: S. No. Notification No. Notification Subject 1. 34/2017-Customs dated 30th June, 2017 Exemption to tags, labels and printed bags imported for fixing on articles for export or for the packaging of such articles. 2. 75/2017-Customs dated 13th September, 2017 Exemption for goods imported for organizing FIFA Under-17 World Cup, 2017. (6) At present, there are certain end-use based exemptions in notification No. 50/2017- Customs which are presently being administered without the need to follow the procedure set out under the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 (IGCR Rules, 2017). To provide uniformity of enforcement of end-us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt c.(iii) 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. 9. 430 (a) Existing condition 60 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 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 juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Development Cess (AIDC) is being provided to blended fuels namely 5% ethanol blended petrol, 10% ethanol blended petrol, 20% bio-diesel blended High speed diesel, and new category of blended fuels namely, 15% Methanol blended Petrol (M-15 fuel) and 20% ethanol blended Petrol (E-20 fuel). [notification Nos. 03/2021-Central Excise, dated 1st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her or not agglomerated 1% 1.5% 17. 3102 10 00 Urea Nil 5% 18. 3102 30 00 Ammonium nitrate 2.5% 5% 19. 31 Muriate of potash, for use as manure or for the production of complex fertilisers Nil 5% 20. 3105 30 00 Diammonium phosphate, for use as manure or for the production of complex fertilisers Nil 5% 21. 5201 Cotton (not carded or combed) 5% 5% 22. 7106 Silver (including imports by eligible passengers) 7.5% 2.5% 23. 7106 Silver Dore 6.1% 2.5% 24. 7108 Gold (including imports by eligible passengers) 7.5% 2.5% 25. 7108 Gold Dore 6.9% 2.5% * All goods originating in or exported from the United States of America. (2) For the purpose of calculating the AIDC, the import value of such goods shall be calculated in the same manner as the value of goods is calculated under the provisions of section 14 of the Customs Act, 1962. (3) Social Welfare Surcharge (SWS) would be levied on AIDC. However, exemption from SWS on AIDC has been given to gold and silver. (4) Further, goods imported under customs duty exemptions available under FTA and EOU as well as under advance authorization schemes are being exempted from AIDC. II. Excise: An agricult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s prescribed, before the disposal of the gold in a manner as may be determined by the Central Government. Other consequential amendments to give effect to this provision are also being carried out. (e) Sub-section (ja) is being added to section 113 to provide for the confiscation of any goods entered for exportation under claim of remission or refund of any duty or tax or levy, so as to make a wrongful claim in contravention of the provisions of the Customs Act, 1962 or any other law for the time being in force. (f) A new section 114AC is being inserted in Customs Act to prescribe penalty in specific case where 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ADD/CVD on account of inputs (attracting ADD or CVD) used by EoUs and SEZs for manufacture of goods that are cleared to Domestic Tariff Area; v. whenever any particular ADD or CVD is temporarily revoked, such temporary revocation shall not exceed one year at a time; vi. final findings are to be issued in ADD/CVD, in investigation in review proceedings, by the designated authority, at least three months prior to expiry of the ADD under review (with effect from the 1st Jul, 2021); vii. provisional assessment in anti-circumvention investigation and make some other technical changes 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 bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eyances in transit, from the proceedings under section 130 relating to confiscation of goods or conveyances and levy of penalty. j. Section 130 of the CGST Act is being amended to delink the proceedings under that section relating to confiscation of goods or conveyances and levy of penalty from the proceedings under section 129 relating to detention, seizure and release of goods and conveyances in transit. k. Section 151 of the CGST Act is being substituted to empower the jurisdictional commissioner to call for information from any person relating to 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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