Budget 2015-16 Reply to Lok
Sabha by FM Jaitley –
Changes in Customs, Excise and Service Tax Announced
[D.O.F.No.
334/5/2015-TRU dated 30 April 2015]
While replying to the discussions on the Finance Bill,
2015 in Lok Sabha today,
Finance Minister has announced certain further changes in Central Excise and
Customs duty rates. Notifications No.23 to No.27/2015-Central Excise and
notifications No.28 to No.30/2015-Customs, all dated 30th April, 2015 have been
issued to give effect to these announcements. Notifications No.12 and
No.13/2015-Central Excise (N.T.), dated 30th April, 2015 has also been issued
in this regard. As regards Service Tax, notification No.12/2015-Service Tax,
dated 30.04.2015 has been issued.
2. The changes
introduced through these notifications are summarised below. In addition, a
clarification regarding applicability of customs duty exemption notifications
has also been provided. Unless otherwise stated, all changes in rates of duty
take effect from the midnight of 29th April / 30th April, 2015.
CUSTOMS:
1) Basic Customs
Duty on raw and refined / white sugar has been increased from 25% to 40%.
S.Nos.76, 77 and 78 of notification No.12/2012-Customs, dated 17.03.2012 as
amended by notification No.28/2015-Customs, dated 30.04.2015 refer.
2) Basic Customs
Duty on Colemanite and other Boron ores has been
reduced from 2.5% to Nil. S.No.113 of notification No.12/2012-Customs, dated
17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refers.
S.No.113A has been omitted since ulexite ore, being a
boron ore, will be eligible for Nil duty under
S.No.113.
3) Basic Customs
Duty on natural rubber (NR) has been increased from 20% or Rs.
30 per kg., whichever is lower, to 25% or Rs. 30 per
kg., whichever is lower. S.No.252 of notification No.12/2012-Customs, dated
17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015
refers.
4) Basic Customs
Duty on raw silk (not thrown) has been reduced from 15% to 10%. S.No.276 of
notification No.12/2012-Customs, dated 17.03.2012 as amended by notification
No.28/2015-Customs, dated 30.04.2015 refers.
5) All Digital
Still Image Video Cameras (DSC) falling under tariff item 8525 80 20
irrespective of their specification [including the restriction with reference
to video recording time] and their parts are being exempted from Basic Customs
Duty. S.No.428A and 429 of notification No.12/2012-Customs, dated 17.03.2012 as
amended by notification No.28/2015-Customs, dated 30.04.2015 refer.
6) Export duty
on iron ore fines (below 58% Fe content) [falling under tariff lines 2601 11 41
and 2601 11 42] has been reduced from 30% to 10%. There is no change in the
export duty rate on iron ore other than iron ore fines (below 58% Fe content).
Notification No.27/2011-Customs, dated 01.03.2011 as amended by notification
No.30/2015-Customs, dated 30.04.2015 [new S.No.20A refers].
7) Exemption
from additional duty of customs levied under section 3 of the Customs Tariff
Act (both CVD and SAD) in respect of certain entries of notification
No.39/96-Customs, dated 23.07.1996 are being withdrawn. Exemption from Basic
Customs Duty in respect of these entries, however, would continue. Paragraph 2
of the notification No.39/96-Customs, dated 23.07.1996 as amended by
notification No.29/2015-Customs dated 30.04.2015 refers. Further, exemption
from Basic Customs Duty, CVD and SAD in respect of direct imports by the
Government of India and the State Governments would continue. Notification
No.39/96-Customs, dated 23.07.1996 as amended by notification
No.29/2015-Customs dated 30.04.2015 [amended S. Nos.9 and 10] refer. These
changes, however, will be effective from 01.06.2015.
EXCISE:
1) The speed
range for ‘jarda scented tobacco’ has been divided
into two ranges (as in case of chewing tobacco),
a. first upto 300 pouches per minute;
and
b. second from 301 onwards,
and
the deemed capacity and duty payable have been notified accordingly.
Notification No.11/2010-Central Excise (N.T.), dated 27.02.2010 [The Chewing
Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and
Collection of Duty) Rules, 2010] as amended by notification No.13/2015-Central
Excise (N.T.), dated 30.04.2015 [for deemed capacity of production] and
notification No.16/2010-Central Excise, dated the 27.02.2010 as amended by
notification No.25/2015-Central Excise, dated the 30.04.2015 [for duty payable
per machine per month] refer.
2) Excise duty
exemption on finishing agents, dye carriers to accelerate the dyeing or fixing
of dye-stuffs, printing paste and other products and preparations of any kind
used in the same factory for the manufacture of textiles and textile articles
has been withdrawn. S.No.133 of notification No.12/2012-Central Excise, dated
17.03.2012 as omitted by notification No.24/2015-Central Excise, dated
30.04.2015 refers.
3) The
concessional excise duty (and hence, CVD) of 6% on Hard disk, CD ROM drive, DVD
drive or writer, Combo drive, flash memory, microprocessors has been restricted
only to actual users for manufacture of computer (PCs/desktops) falling under
heading 8471. S.No.255/2012-Central Excise, dated 17.03.2012 as amended by
notification No.24/2015-Central Excise, dated 30.04.2015 refers.
4) Excise duty
exemption presently available to Ordnance Factories is being withdrawn. S.No.1
and 6 of notification No.62/95-CE dated 16.03.1995 as omitted by notification
No.23/2015-Central Excise, dated 30.04.2015 refers. Further, excise duty
exemption presently available to Defence PSUs is being withdrawn. S.No.2 and 16
of notification No.63/95-CE dated 16.03.1995 as omitted by notification
No.23/2015-Central Excise, dated 30.04.2015 refers. These changes, however,
will be effective from 01.06.2015.
5) An
Explanation has been inserted in notifications No.14/2015-Central Excise and
15/2015-Central Excise, both dated 01.03.2015 to provide that exemption from
Education Cess and Secondary & Higher Education Cess contained therein will
also apply to DTA clearances of excisable goods from 100% EOU. Notification No.14/2015-Central
Excise, dated 01.03.2015 as amended by notification No.26/2015-Central Excise,
dated 30.04.2015; and notification No.15/2015-Central Excise, dated 01.03.2015
as amended by notification No.27/2015-Central Excise, dated 30.04.2015 refers.
The CENVAT Credit Rules, 2004 (CCR, 2004):
1) Rule 3(7)(b)
of the CCR, 2004 has been amended so as to allow utilisation of credit of
Education Cess and Secondary & Higher Education Cess for payment of basic
excise duty in the following situations:
a. Education Cess
and Secondary & Higher Education Cess on inputs or capital goods received
in the factory of manufacture of final product on or after the 1st day of
March, 2015;
b. Balance 50%
Education Cess and Secondary & Higher Education Cess on capital goods received
in the factory of manufacture of final product in the financial year
2014-15; and
c. Education
Cess and Secondary & Higher Education Cess on input services received by
the manufacturer of final product on or after the 1st day of March, 2015.
Notification No.12/2015-Central Excise (N.T.), dated
30.04.2015 refers.
CLARIFICATION: The issue as to whether
an importer can simultaneously avail the exemption benefits under two
notifications, one for Basic Customs Duty and the other for CVD was examined in
the Ministry in the matter of import of coal from Indonesia and vide Circular
No.41/2013-Customs dated 21.10.2013 it was clarified that an importer while
availing of BCD exemption on steam coal under notification No.46/2011-Customs,
dated 01.06.2011 can simultaneously avail of concessional CVD at 2% under
S.No.123 of notification No.12/2012-Customs, dated 17.03.2012. Drawing the same
analogy, in the case of muriate of potash and urea
for use in the manufacture of other fertilizers, it was clarified to the
Central Excise zone of Visakhapatnam and Bhubaneswar that importers can
simultaneously avail benefit of S.No.198 or 203 of notification
No.12/2012-Customs, dated 17.03.2012 for concessional rate of BCD and S.No.127
of notification No.12/2012-Central Excise for CVD exemption. Representations
have been received regarding divergence in assessment practice in respect of
such imports. It is, therefore, clarified that importers can avail of the
benefit of notification No.12/2012-Customs, dated 17.03.2012 for the purposes
of BCD [i.e. S.No.197 to 203 as amended by notification No.46/2012-Customs,
dated 17.08.2012] and simultaneously avail benefit of S.No.127 of notification
No.12/2012-Central Excise, dated 17.03.2012 for the purposes of CVD where such
imports are for use in the manufacture of other fertilizers.
SERVICE TAX:
1) Service tax
on services of Life Insurance business provided under Pradhan
Mantri Jeevan Jyoti Bima Yojana
(PMJJBY) have been exempted.
2) Service tax
on services of Life Insurance business provided under Pradhan
Mantri Jan Dhan Yojana (PMJDY) have been exempted.
3) Service tax
on services of General Insurance business provided under Pradhan
Mantri Suraksha Bima Yojana (PMSBY) have been exempted.
4) Service tax
on services by way of collection of contribution under Atal
Pension Yojana (APY) have
been exempted.
[Notification No.25/2012-Service Tax, dated 20.06.2012
as amended by notification No.12/2015-Service Tax, dated 30.04.2015 [item (p)
of entry.26 and items (e) and (f) of entries 26A and 26B refer.]