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TMI BlogUnion Budget 2025:- Proposes substantial amendments to the Customs Act, Central Excise Act, and CGST Act, including revisions to customs duties, exemptions, and GST provisionsX X X X Extracts X X X X X X X X Extracts X X X X ..... 025 Customs Duty No.4/2025-Customs to No.13/2025- Customs 1st February, 2025 Central Excise No.1/2025-Central Excise 1st February, 2025 Non-Tariff Customs No.7/2025 -Customs (NT) 1st February, 2025 A declaration has been made under the Provisional Collection of Taxes Act, 2023 in respect of Clause 98 (a) of the Finance Bill, 2025 and accordingly, changes proposed therein takes effect from the midnight of 1st February / 2nd February, 2025. The other changes proposed in the Bill would come into effect on the enactment of the Bill or from 1stMay, 2025 or the date specified in the Finance Bill. 2. Important changes in respect of Customs and Central Excise duty rates and legislative changes are briefly summarised in the five Annexures appended to this letter: 1) Annexure I: Chapter wise changes relating to customs tariff rates and HSN changes; 2) Annexure II: Legislative changes in Customs Act, 1962, Customs Tariff Act, 1975, Central Excise Act 1944; Central Excise duty and Service Tax Exemption 3) Annexure III: Review of customs conditional exemptions/concessional rates 4) Annexure IV: Other changes in Customs Notifications 5) Annexure V: Legislative changes in CG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... June, 2017 as amended by Notification No.5/2025 Customs, dated 1st February, 2025 refers]. Chapters 4 to 9: No change Chapter 10: 1) W.e.f 1.5.2025, a Supplementary Note is being inserted for the purposes of tariff items 1006 30 11 and 1006 30 91. 2) W.e.f 1.5.2025, in heading 1006, for sub-heading 1006 30, tariff items 1006 30 10 to 1006 30 90 and the entries relating thereto are being substituted [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. Chapters 11 to 14: No change Chapter 15: 1) The tariff rate is being reduced from 30% to 20% on glycerol falling under tariff item 1520 00 00. This will be effective from 1st May, 2025 [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, no change is being made to the existing effective rates under S. Nos 81 and 81A of Notification No. 50/2017-Customs dated 30th June, 2017. Chapters 16 to 19: No change Chapter 20: 1) W.e.f. 1.5.2025, tariff items 2008 19 20 to 2008 19 90 and their entries are being substituted and three new tariff items 2008 19 21, 2008 19 22 and 2008 19 29 are being created for 'Makhana'. [Clause 98(b) of the Finance Bill, 2025 read with Third S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 5%, on LPG (for non-automotive purpose) classified under tariff item 2711 19 10, LPG (for automotive purpose) classified under tariff item 2711 19 20 and other liquified petroleum gas classified under tariff item 2711 19 90. This change will be effective from 1st May,2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, no change is being made to the existing effective rates. Chapter 28: 1) The tariff rate is being reduced from 20% to 7.5% on Phosphoric Acid classified under tariff item 2809 20 10. This change will be effective from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, no change is being made to the existing effective rate. 2) The tariff rate is being reduced from 27.5% to 7.5% on Boric acid classified under tariff item 2810 00 20. This change will be effective from 1st May, 2025 [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, no change is being made to the existing effective rate. 3) W.e.f. 1.5.2025, in heading 2812, the tariff item 2812 19 30 is being substituted. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, no change is being made to existing effective rates. 2) The tariff rate is being reduced from 30% to 20% on Sorbitol classified under sub heading 3824 60. This change will come into effect from 1st May, 2025 [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025 these goods will attract 20% BCD +10% SWS. [S. No.5 of Notification No.4/2025 Customs, dated 1st February, 2025 refers]. 3) The tariff rate is being reduced from 17.5% to 7.5% on Other - Prepared Binders, chemical products and preparations of chemical or allied industries classified under tariff item 3824 99 00. This change will come into effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, these goods will continue to attract 7.5% BCD [S. No.6 of Notification No. 4/2025 Customs, dated 1st February, 2025 refers]. 4) W.e.f 1st May 2025, in headings 3808, 3813, 3814, Supplementary Notes 1, 2, 5, 7 and 8 are being amended, 6 new Supplementary Notes are being inserted, and some tariff items are being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 6405. These changes will come into effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025 these goods will attract 20% BCD and 18.5% AIDC + Nil SWS [S. No.8 of Notification No. 4/2025 Customs, dated 1st February, 2025 and S. No.14A of Notification No. 6/2025-Customs dated 1st February, 2025 and S.No. I(ii) of Notification No. 7/2025-Customs, dated 1st February, 2025 refers]. Chapters 65-67: No change Chapter 68: 1) The tariff rate is being reduced from 40% to 20% on worked monumental or building stone classified under heading 6802 except tariff item 6802 99 00. This change will come into effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025 marble slabs falling under tariff items 6802 10 00, 6802 21 10, 6802 21 20, 6802 21 90, 6802 91 00 and 6802 92 00 will attract 20% BCD + 20% AIDC [S. No.9 of Notification No. 4/2025 -Customs, dated 1st February, 2025 and S. No. 14B of Notification No. 6/2025-Customs dated 1st February, 2025 refers]. However, no change is being made to the existing effective rate. Chapters 69 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act Nil BCD [S.No.12 of Notification No. 4 /2025-Customs dated 1st February, 2025 refers] Chapters 75 to 77: No change Chapter 78: 1) The tariff rate is being reduced from 5% to Nil on Lead waste and scrap classified under heading 7802. W.e.f 2nd February, 2025, these goods will attract Nil BCD [S. No. 381A of Notification No. 50/2017-Customs dated 30th June, 2017 as amended by Notification No.5/2025 Customs, dated 1st February, 2025 refers]. Chapter 79: 1) The tariff rate is being reduced from 5% to Nil on Zinc waste and scrap classified under heading 7902. W.e.f 2nd February, 2025, these goods will attract Nil BCD.[S. No.381B of Notification No. 50/2017-Customs dated 30th June, 2017 as amended by Notification No.5/2025- Customs, dated 1st February, 2025 refers]. Chapter 80: 1) The tariff rate is being reduced from 5% to Nil on unwrought Tin classified under heading 8001 to tariffise the existing effective rates. This change will come into effect from 1st May, 2025 [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. 2) The tariff rate is being reduced from 5% to Nil on Tin, waste and scrap classified under heading 8002. This change will come into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uary, 2025 refers] 3) BCD is being reduced from 5% to Nil on Cobalt Powder classified under tariff item 8105 20 30 S.No. 390B of Notification No.50/2107 -Customs dated 30th June, 2017 as amended by Notification No. 5/2025-Customs dated 1st February,2025. 4) W.e.f 1st May, 2025, the description of the heading in heading 8112 is being amended. Chapters 82 to 83: No change Chapter 84: 1) The following capital goods in Table A below are being added in the existing list of capital goods exempted from BCD for manufacture of Lithium Ion Battery of mobile phones. [S. No. 69 of Notification No. 25/2002-Customs dated 1st March, 2002 as amended by Notification No.11/2025-Customs, dated 1st February, 2025 refers.] Table A S.No. Name of Capital Goods HSN S.No. Name of Capital Goods HSN 1. Auto-taping machine 84659990 / 84798999 15. Film / Myler tearing machine 84798999 2. Auto-packing machine 84224000 16. Auto unloading Machine 84289090 3. Mylar sticking machine 84798999 17. Mylar slitting machine 84798999 4. Auto magazine load machine 84798999 18. Foil slitting machine 84623900 / 84649000 5. Constant temperature capacity machine 84798999 19. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ap welding 84682010 14. Laser Notching & Winding 84798999 31. Fibre temperature Detection System 73089000 15. Ultrasonic welding 85158090 32. Water sprinkler system 84248999 16. Load in Can 84798999 33. Rack 73089000 17. Top cover laser welding 85158090 34. Tape Coding 84798999 35. Wire filling and welding machine 84798999 Chapter 85: 1) BCD is being increased from 10% to 20% on Interactive Flat Panel Displays (CBU) classified under tariff item 8528 59 00. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. By virtue of declaration under the Provisional Collection of Taxes Act, 2023, this increase will come into force with effect from midnight of 1st February/2nd February, 2025. [Clause 98(a) of the Finance Bill, 2025 read with Second Schedule refers]. However, all goods classified under tariff item 8528 59 00, other than Interactive Flat Panel Display (CBU) will continue to attract 10% BCD under S.No 515C of Notification No. 50/2017-Customs dated 30 June, 2017 amended by Notification No. 5/2025 - Customs dated 1st February, 2025 2) BCD is being reduced to 5% on Open Cell with or without touch classified under heading 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No. 57/2017 -Customs dated 30th June 2017 as amended by Notification No.10/2025 -Customs dated 1st February 2025 refers] 8) The tariff rate is being reduced from 25% to 20% on Solar cells classified under tariff item 8541 42 00. This change will come into effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025 these goods will attract 20% BCD and 7.5 % AIDC + Nil SWS [S. No. 24 of Notification No. 4/2025 -Customs dated 1st February, 2025; S. No. 16AA of Notification No. 6/2025-Customs, dated 1st February, 2025 and S.No. III (8B) of Notification No.7/2025 -Customs dated 1st February, 2025 refers]. 9) BCD is being reduced from 5% to Nil on Lithium-Ion Battery waste and scrap classified under tariff item 8549 13 00, 8549 14 00 and 8549 19 00. [S. No. 518A of Notification No. 50/2017 -Customs dated 30th June, 2017 as amended by Notification No. 5/2025- Customs, dated 1st February, 2025 refers]. 10) S.No. 6D of Notification No. 57/2017-Customs dated 30th June 2017 is being amended to incorporate 'any chapter' in column (2). 11) S. No 5E of the Notification No. 57/2017-Customs dated 30th J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escription BCD Rate From To 1. (i) Engine capacity not exceeding 1600 CC (CBU) (ii) Semi-knocked down (SKD) (iii) Completely knocked down (CKD) 50% 25% 15% 40% 20% 10% 2. (i) Engine capacity 1600 CC & above (CBU) (ii) Semi-knocked down (SKD) (iii) Completely knocked down (CKD) 50% 25% 15% 30% 20% 10% 4) The tariff rate is being reduced from 35% to 20% on bicycles classified under tariff item 8712 00 10. This change will come into effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025, used bicycles will attract 20% BCD + 15% AIDC [S. No. 29 of Notification No. 4/2025 -Customs dated 1st February, 2025 and S. No.16AI of Notification No. 6/2025-Customs, dated 1st February, 2025 refers]. Chapters 88: No change Chapters 89: 1) The tariff rate is being reduced from 25% to 20% on yachts and other vessels for pleasure or sports classified under heading 8903. This change will come into effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025 these goods will attract 20% BCD + 7.5% AIDC + Nil SWS [S. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 1st February, 2025, S. Nos 16E and 16F of Notification No. 6/2025-Customs, dated 1st February, 2025 and S.No. I (iv) of Notification No. 7/2025-Customs dated 1st February, 2025 refers]. Chapters 96 to 97: No change Chapter 98 1) The tariff rate is being reduced from 150 % to 70% on Laboratory Chemicals This change will come into effect from 1st May 2025 [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025, these goods will attract 70% BCD + 70% AIDC + Nil SWS. [S. No. 34 of Notification No. 4/2025-Customs dated 1st February, 2025, S. No. 16G of Notification No. 6/2025-Customs, dated 1st February, 2025 and S.No III (8E) of Notification No. 7/2025-Customs, dated 1st February, 2025 refers]. There is no change in the existing rate of 10% BCD + 10% SWS on Lab Chemicals imported on actual user condition. 2) The tariff rate is being reduced from 100% to 70% on all dutiable articles, imported by a passenger or a member of a crew in his baggage classified under tariff item 9803 00 00. This change will come into effect from 1st May,2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self- assessment and allow payment of duty or treat the revised entry as a refund claim under Section 27. It also provides for certain cases where this section will not apply. 3) Amendment of Section 27 of the Customs Act, 1962 A new explanation is being inserted in sub-section 1 of Section 27 to clarify that the period of limitation of the claim of refund consequent to the revised entry under Section 18A or amendment under Section 149 of the Customs Act, 1962, shall be one year from the date of payment of duty or interest 4) Amendment of Section 28 of the Customs Act, 1962 A new clause is being inserted in Explanation 1 of Section 28 to provide that the relevant date in case where duty is paid under the revised entry under Section 18A is the date of payment of duty or interest. 5) Amendment of Section 127A of the Customs Act, 1962 A new clause is being inserted after clause (d) and (e) of Section 127A of the Customs Act, 1962, to define Interim Board, Member of the of Interim Board and pending applications. 6) Insertion of new sub- section (5) in Section 127B of the Customs Act, 1962 A new sub-section (6) is being inserted in Section 127B, of the Customs Act, 1962 to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dual-use chemical for non-pesticidal use in chapter 28 e) create new tariff items and supplementary notes for identification of certain dual-use chemical for non-pesticidal use and certain goods covered by international conventions in chapter 29 f) create new tariff items and supplementary notes for identification of certain technical-grade pesticides and certain goods covered by international conventions in chapter 38 g) create new tariff lines to distinguish precious metals - containing 99.9% or more by weight of silver, containing 99.5% or more by weight of gold, containing 99% or more by weight of platinum under headings 7106, 7108 and 7110 respectively h) changes in heading 8112 to align with WCO HS 2022 i) changes in sub-heading note 2 to chapter 85 to align with WCO HS 2022 III. Amendments in Customs (Import of Goods at Concessional Rates or For Specified End Use) Rules, 2022. Rules 6 and 7 are being amended to increase the time limit for fulfilling end use from current six months to one year and to provide for filing of quarterly statement instead of monthly statement. B. CENTRAL EXCISE Note: "Basic Excise Duty" means the excise duty set forth in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Settlement Commission under these sections shall be exercised by the Interim Boards. C. SPECIAL PROVISION FOR EXEMPTION FROM SERVICE TAX IN CERTAIN CASES: Services provided or agreed to be provided by insurance companies by way of reinsurance services under the Weather Based Crop Insurance Scheme (WBCIS) and the Modified National Agricultural Insurance Scheme (MNAIS) are proposed to be exempted from service tax retrospectively for the period commencing from 1st April, 2011 and ending with 30th June, 2017 vide Clause 130 of the Finance Bill, 2025. Annexure III REVIEW OF CUSTOMS DUTY CONDITIONAL EXEMPTIONS/ CONCESSIONAL RATES Notification No. 50/2017-Customs dated 30th June, 2017 A comprehensive review has been undertaken in respect of 25 conditional exemptions/concessional rate entries in Notification No. 50/2017-Customs dated 30th June, 2017 whose validity is expiring by 31.3.2025. After review, 24 entries are being continued for varying periods with modification in few entries and 1 entry is being lapsed. The changes are briefly summarised below with the end dates: S.No Description Entry No End date 1 Ships and vessels for breaking up S. No. 555A 31.3.203 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dated 13.07.1994 is being amended to extend the time limit from six months to one year, further extendable by one year in respect of railway goods classified under chapter 86. [Notification No. 13/2025-Customs dated 1st February, 2025 refers] 2. Amendment of Notification No. 50/2017- Customs dated 30.6.2017 (i) The entry at S.No.257A is being amended to add 9 groups of items in the list of goods which can be imported duty free for use in the manufacture of handicrafts goods for exports. In addition the time period for export of goods is being extended from six months to one year which may be extended by jurisdictional Commissioner for a period of three months. (ii) The entry at S.No.539 is being amended to include ground installation for satellites including its spares and consumables. (iii) The entry at 539A is being amended to fully exempt goods used in the building of launch vehicles and launching of satellites [Notification No. 5/2025-Customs dated 1st February, 2025 refers] 3. Amendment of Notification No. 16/2017-Customs dated 20.04.2017 Notification No. 16/2017-Customs dated 20.04.2017 is being amended to add 37 more drugs /medicines along with 13 new patient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (1) of section 20. The amendment will be effective from 1st April, 2025. 5. Amendments in Section 34 of the CGST Act, 2017 The Proviso to sub-section (2) is being amended to explicitly provide for requirement of reversal of corresponding input tax credit in respect of a credit-note, if availed, by the registered recipient, for the purpose of reduction of tax liability of the supplier in respect of the said credit note. 6. Amendments in Section 38 of the CGST Act, 2017 a) Section 38(1) is being amended to omit the expression "auto-generated". b) Section 38(2) is being amended to omit the expression "auto-generated" and to insert the expression "including" after the words "by the recipient" in clause (b) to make the said clause more inclusive c) Section 38(2) is also being amended to insert a new clause (c) to provide an enabling clause to prescribe other details to be made available in statement of input tax credit 7. Amendments in Section 39 of the CGST Act, 2017 Section 39(1) is being amended to provide an enabling clause to prescribe certain conditions and restriction for filing of return 8. Amendments in Section 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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