Central Excise - Proposals involving changes in rates of duty - THE FINANCE (No. 2) BILL, 2014

Proposals involving changes in rates of duty:

I. AGRICULTURE/AGRO PROCESSING/PLANTATION SECTOR:

     1) Excise duty on machinery for the preparation of meat, poultry, fruits, nuts or vegetables, and on presses, crushers and similar machinery used in the manufacture of wine, cider, fruit juices or similar beverages and on packaging machinery is being reduced from 10% to 6%.

II. AUTOMOBILES:

     1) Excise duty is being exempted on parts of tractors removed from one or more factories of a tractor manufacturer to another factory of the same manufacturer for manufacture of tractors.

III. METALS:

     1) Excise duty on winding wires of copper is being increased from 10% to 12%.

IV. PRECIOUS METALS

     1) Un-branded articles of precious metals are being exempted from excise duty for the period 01.03.2011 to 16.03.2012.

V. TEXTILES:

     1) Excise duty on Polyester Staple Fiber (PSF) and Polyester Filament Yarn (PFY) manufactured from plastic waste or scrap or plastic waste including waste polyethylene terephthalate (PET) bottles (which is already exempt w.e.f. 08.05.2012) is being exempted retrospectively w.e.f. 29.06.2010 to 07.05.2012 and intermediate product ‘Tow’ arising during the course of manufacture of such PSF/PFY is being exempted retrospectively w.e.f. 29.06.2010 to 10.07.2014.

     2) Excise duty at the rate of 2% (without CENVAT) or 6% (with CENVAT) is being imposed on Polyester Staple Fiber and Polyester Filament Yarn manufactured from plastic waste or scrap or plastic waste including waste polyethylene terephthalate (PET) bottles w.e.f. 11th July, 2014.

VI. HEALTH:

     1) Full exemption from excise duty is being provided to DDT manufactured by Hindustan Insecticides Limited for supply to the National Vector Borne Diseases Control Programme (NVBDCP) of the Ministry of Health & Family Welfare.

    2) Full exemption from excise duty is being provided for HIV/AIDS drugs and diagnostic kits supplied under National AIDS Control Programme (NACP) funded by the Global Fund to Fight AIDS, TB and Malaria (GFATM).

     3) Excise duty on cigarettes is being increased by 72% for cigarettes of length not exceeding 65 mm and by 11% to 21% for cigarettes of other lengths. Similar increases are proposed on cigars, cheroots and cigarillos.

     4) Basic excise duty is being increased from 12% to 16% on pan masala, from 50% to 55% on unmanufactured tobacco and from 60% to 70% on jarda scented tobacco, gutkha and chewing tobacco.

VII. ELECTRONICS/HARDWARE:

    1) Excise duty on recorded smart cards is being increased from 2% without CENVAT and 6% with CENVAT to a uniform rate of 12%.

    2) Full exemption from Excise Duty is being provided to reverse osmosis (RO) membrane element used in water filtration or purification equipment (other than household type filter). Excise duty on RO membrane element used in household type filters is being reduced from 12%/10% to 6%.

     3) Excise duty on Metal Core PCB and LED driver for use in the manufacture of LED lights and fixtures and LED lamps, is being reduced from 12%/10% to 6%.

VIII. RENEWABLEENERGY

     1) Excise duty is being reduced from 12% to Nil on forged steel rings used in the manufacture of bearings of wind operated electricity generators.

     2) Full exemption from excise duty is being provided for solar tempered glass used in the manufacture of solar photovoltaic cells/modules, solar power generating equipment/system, and flat plate solar collectors.

     3) Full exemption from excise duty is being granted in respect of machinery, equipments, etc. required for setting up of solar energy production projects.

    4) Full exemption from excise duty is being provided to backsheet and EVA sheet used in the manufacture of photovoltaic cells/modules and specified raw materials used in their manufacture.

    5) Full exemption from excise duty is being provided to parts consumed within the factory of production for the manufacture of non-conventional energy devices [Sl.No.332 of notification No.12/2012-CE, dated 17.03.2012].

    6) Full exemption from Excise Duty is being provided on flat copper wire used in the manufacture of PV ribbons (tinned copper interconnect) for use in the manufacture of solar cells/modules.

    7) Full exemption from excise duty is being provided on machinery, equipments, etc. required for setting up of compressed biogas plant (Bio-CNG).

IX. CONSUMER GOODS

    1) The scope of the phrase “not mixed with any other ingredient” in the context of excise duty exemption on “heena powder or paste, not mixed with any other ingredient” is being clarified so as to provide that the exemption is available to heena powder mixed with a liquid, so far that the liquid is a medium to change the form of heena powder into paste but excludes products like heena dye and such other products which are cosmetics and have no ceremonial or traditional value.

    2) Excise duty is being reduced from 12% to 6% on footwear of retail price exceeding ₹ 500 per pair but not exceeding ₹ 1,000 per pair. Footwear of retail price upto ₹ 500 per pair will continue to remain exempted.

    3) Excise duty on hand operated sewing machine (2% without CENVAT / 6% with CENVAT) is being rationalized by levying concessional excise duty on sewing machines other than those operated with electric motors (whether in-built or attachable to the body)

    4) Semi- mechanized units manufacturing safety matches, which attract concessional excise duty of 6%, are being allowed to carry out the processes of ‘Pasting of labels’ and ‘Packing’ with the aid of power.

    5) Concessional excise duty of 2% without CENVAT credit and 6% with CENVAT credit is being extended to gloves specially designed for use in sports.

    6) An additional duty of excise is being levied at the rate of 5% ad valorem on aerated waters containing added sugar.

X. ENERGY SECTOR

    1) Central Excise duty on Branded Petrol is being reduced from ₹ 7.50 per litre to ₹ 2.35 per litre.

    2) Full exemption from Central Excise duty is being provided to Liquefied Propane and Butane mixture, Liquefied Propane, Liquefied Butane and Liquefied Petroleum Gases (LPG) for supply to Non-Domestic Exempted Category (NDEC) customers by the Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited or Bharat Petroleum Corporation Limited retrospectively from 08.02.2013.

    3) The rate of Clean Energy Cess levied on coal, lignite and peat is being increased from ₹ 50 per tonne to ₹ 100 per tonne.

XI. SECURITY AND STRATEGIC PURPOSES:

    1) Full exemption from Excise Duty is being provided to goods supplied to National Technical Research Organisation (NTRO).

    2) Full exemption from excise duty is being provided for security threads and security fibre supplied to Security Paper Mill Corporation of India Limited (SPMCIL) and Bank Note Paper Mill India Private Limited (BNPMIPL).

XII. MISCELLANEOUS

    1) Optional excise duty of 2% (without CENVAT)/6% (with CENVAT) on writing and printing paper for printing of educational textbooks is being withdrawn and instead a uniform excise duty of 6% with CENVAT is being levied.

    2) Intermediate goods manufactured and consumed captively for further manufacture of matches is being fully exempted.

    3) The scope of the Excise Duty exemption to “all goods supplied against International Competitive Bidding” is being clarified to the effect that the said exemption is also available to sub-contractors for manufacture and supply of goods to the main contractor (who has won the bid for the project through ICB) for execution of the said project.

    4) Full exemption from Excise duty is being provided on plastic materials reprocessed out of the scrap or waste and cleared into the DTA by an EOU.

    5) Education cess and secondary & higher education cess (customs component) is being exempted on goods cleared by an EOU into the DTA.

    6) A clarification is being issued that the exemption from education cess and secondary & higher education cess under notifications No.28/2010-CE and No.29/2010-CE, both dated 22.06.2010 is applicable only in respect of the clean energy cess leviable on coal and not in respect of excise duty leviable on coal.

    7) It is being clarified that all goods falling under headings 8601 to 8606 (except 8604) attract 6% excise duty with CENVAT benefit.

MISCELLANEOUS

    1) The Seventh Schedule to the Finance Act, 2001 dealing with National Calamity Contingent Duty is being amended to omit the tariff item 2402 20 60 as a consequential change to amendment in the First Schedule to the Central Excise Tariff Act.

    This change will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.

[Clause 107]

    2) The Seventh Schedule to the Finance Act, 2005 dealing with Additional Excise Duty is being amended so as to:

     (a) impose an additional duty of excise at the rate of 5% ad valorem on aerated waters containing added sugar.

    (b) omit the tariff item 2402 20 60 as a consequential change to amendment in the First Schedule to the Central Excise Tariff Act.

    These changes will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.

[Clause 110]

    3) The Tenth Schedule to the Finance Act, 2010 dealing with Clean Energy Cess is being amended so as to expand the scope of purposes of levy of the said cess to include clean environment initiatives and funding research in the area of clean environment.

[Clause 111]