TaxTMI 
TaxTMI 
Changes in excise and customs through Finance Bill, 2008 and Notifications
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.... in rates of duty (except for items brought into the SSI exemption) take effect from the midnight of 29^th February/ 1^st of March, 2008. The legislative changes, except those declared under the Provisional Collection of Taxes Act, 1931would come into effect only upon the enactment of the Finance Bill. I. CENTRAL EXCISE 2. General CENVAT Rate: (Notification No. 2/2008-CE) 2.1 The general rate of excise duty (CENVAT) has been reduced from 16% to 14%. This reduction applies to all goods that hitherto attracted this general rate of 16%. In some cases, a deeper reduction has been made, the details of which are indicated in the subsequent paragraphs. These changes have been carried out by notification. The other ad valorem rates of 24%, 12% and 8% have been retained. 2.2 Since the reduction in the general rate has been carried out by notification, the possibility of the same product/ item being covered by more than one notification cannot be ruled out. In such a situation, the rate beneficial to the assessee would have to be extended if he fulfils the attendant conditions of the exemption. 3. Drugs and Pharmaceuticals: 3.1 Excise ....
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....arbats', a concessional rate of duty of 8% has been provided. 5.3 On specified packaging material used mainly for packaging of processed foods, the rate of duty has been reduced from 16% to 8%. These items are: Open Top Sanitary (OTS) cans, aseptic packaging paper and aseptic bags. 5.4 There is already a full exemption for specified equipment for the installation of a cold storage, cold room or refrigerated vehicle, for the preservation, storage and transportation of agricultural produce on end-use basis. Another item has been added to this list. 6. Information Technology & Communication sector 6.1 Packaged software hitherto attracted excise duty of 8%. This has been enhanced to 12%. There is no change in the excise duty on other software. Excise duty has been fully exempted on Wireless data modem cards. Consequently, CVD shall also be exempted on imported cards. However, 4% additional duty of customs will be applicable. 6.2 Specified convergence products viz. MP3/ MP4/ MPEG4 player having video and audio reception facility have been provided a concessional excise duty of 8%. 7. Paper and Paper products 7.1 Excise duty on writing paper, ....
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....the Provisional Collection of Taxes Act, 1931. A report regarding the price and revenue impact of these changes may kindly be sent in the proforma at Annexure VI. 11. Petroleum 11.1 The duty rates on MS/HSD intended for sale without a brand name have been converted from 'ad valorem + specific rate' to pure 'specific rate' as under: S. No. Description From To 1. Motor Spirit 6% + Rs.13 per litre Rs.14.35 per litre 2. HSD 6% + Rs.3.25 per litre Rs. 4. 60 per litre 11.2 The duty rates on branded fuels would continue to attract the present ad valorem cum specific rates i.e. as under: a) Motor Spirit : 6% + Rs.13 per litre b) HSD : 6% + Rs. 3.25 per litre 12. NCCD: (Clause 117 of the Finance Bill, 2008) 12.1 National Calamity Contingent duty (NCCD) at the rate of 1% has been imposed on mobile phones. The CENVAT Credit Rules have been amended to provide that input or capital goods credit of other duties of excise cannot be utilized for the payment of this NCCD. 12.2 NCCD of 1% hitherto leviable on Polyester filament yarn has been withdrawn. Suitable bill entries have been incorporated in the Finance Bill to delete t....
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.... so as to provide exemption to printers and monitors capable of connecting to a computer or network. 15.5 Some editorial changes have been carried out in the First Schedule to the Central Excise Tariff Act through a notification issued under section 5 (1) of the said Act. The details are as under: (i) Section 2(f) (iii) of Central Excise Act contains definition of "deemed manufacture". Similarly, the Notes in some of the chapters of the Tariff also define certain processes as amounting to "manufacture". In respect of the processes of labeling and relabelling and packing/repacking, the definitions in the chapter notes are not aligned with the definition contained in Section 2(f) (iii). The chapter notes have been amended suitably. (ii) The First Schedule of the Central Excise Tariff Act has been amended so as to align entries related to parts and accessories of printers falling under heading 8443 of the Excise Tariff with the corresponding entries in the Schedule to the Customs Tariff. 15.6 Sl. No. 7 of Notification No. 64/95-CE dated 16.3.1995 provides exemption to goods meant for use in the launch vehicle project or a satellite project of ISRO.&nb....
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....w materials for manufacture of sports goods for exports. The exemption would be available only upto 3% of FOB value of exports made by the importer in the preceding year and would be subject to certification by the Sports Goods Export Promotion Council. 20. Dairy/Poultry: 20.1 Basic customs duty has been reduced from 7.5% to Nil on bactofuges and from 30% to 20% on feed additives/pre-mixes. 21. IT/Electronic industry: 21.1 A concessional duty of 5% (basic) is already available to certain electronic products such as MP3 and MPEG4 players. This concession has now been extended to "convergence products" i.e. MP3/ MP4 and MPEG player having audio and video reception facility. 21.2 Similarly, full exemption from basic customs duty is available to a large number of raw materials/ inputs for manufacture of specified electronic/ IT products to provide a level playing field to the domestic manufacturers of such products. This concession is now being extended to more raw materials and inputs. 21.3 Set-top boxes are fully exempt from basic customs duty. Specified parts for the manufacture of set-top boxes are also exempt from customs duty, on....
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....s normal duty at the time of import and claims drawback at the time of re-export. In the other case, he pays a concessional rate of duty at the time of import. However, the admissible period of retention of equipment and the extent of exemption under these schemes have been at variance. The two provisions have now been aligned in the following manner: (i) The period for re-export of leased equipment and machinery, imported for temporary use in contracts under notification no. 27/2002-Customs dated 1.3.2002 has been increased from 12 months to 18 months. Simultaneously, the period of retention prescribed under notification no.19/65-Customs dated 6.2.1965 has been reduced (for all goods covered by S.No.1 of the notification) from 36 months to 18 months. (ii) The slab rates of duty under both the provisions have now been prescribed on a quarterly basis. Earlier, the rates under notification no.27/2002 were prescribed on half-yearly basis. (iii) The rates have also been aligned with the rates of drawback admissible under section 74(2) of the Customs Act, 1962, depending on the period of retention of the goods in India. No drawback will be admissible when goods for ....
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....s. As such, recovery of amounts collected in this manner is possible only from persons who are liable to pay duty. Sub-section (1A) has now been inserted to enable the Central Government to recover such amounts from any person. Besides, it has also been provided that any person who recovers an amount representing it as duty of excise on excisable goods, which are wholly exempt or chargeable to Nil rate of duty, would also be required to deposit it with the Central Government. Consequential amendments have been carried out in section 11 DD to enable recovery of interest on such amounts if they are not deposited in time. The analogous provision contained in section 28 B of the Customs Act has also been amended in the same manner. e) Orders passed in appeal by Commissioner (Appeals) are currently examined by a Committee consisting of two Commissioners of Central Excise under section 35B of the Central Excise Act, 1944. This provision does not cover a situation where there is a difference of opinion between the two Commissioners about the filing of appeal against the appellate order. It is now being provided that the Committee would refer such cases to the jurisdic....
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....f the rules, and from two hundred rupees to fifty thousand rupees for contravention of regulations. 31. Amendment in Rules: a) Rule 18 of the Central Excise (No.2) Rules, 2001 is being amended to allow with retrospective effect, rebate of duty paid on excisable goods cleared from the factory for exports. b) Rule 12 of the Central Excise Rules, 1944 is being amended to allow with retrospective effect, rebate of duty paid on excisable goods cleared from the factory for exports. c) Rule 18 of the Central Excise Rules, 2002 is being amended to allow with retrospective effect, rebate of duty paid on excisable goods cleared from the factory for exports. d) The CENVAT Credit Rules, 2004 are being amended to bring in the following significant changes: (i) Rule 3 [except sub-rule (4)] is being amended to allow removal of capital goods outside the premises of the provider of the output service without any time restriction, if the same is for providing output service. This change shall come into effect from 1^st April, 2008. (ii) Sub-rule (4) of Rule 3 is being amended to provide that in case of Natio....
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....ture Statement 32.1 The revenue foregone or Tax Expenditure Statement, published as part of the Receipts Budget, contains information that is critical both for formulating tax policy as well as for administration of tax laws by the field formations. The insight it provides into the pattern of tax expenditure can be a useful input for designing appropriate policy interventions and for tightening administrative control where needed. It is crucial, therefore, that the statement is based on clean, reliable and comprehensive data. Although the data coverage in customs has been fairly satisfactory and stable, on the excise side both completeness and accuracy are still an issue. May I request you to kindly ensure that data from Excise returns is captured in a timely and accurate manner and on a regular basis by the Commissionerates so that the figures of tax expenditure may be computed with greater precision. 33. General 33.1 You may kindly study the budgetary changes carefully and indicate your views, comments and suggestions on their implementation. It is necessary to ensure that the implementation of the proposed changes is smooth and causes no inconvenience to....
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.... feedback. These have been valuable in giving a final shape to our proposals. With regards, Yours sincerely, (Vivek Johri) To All Chief Commissioners/Directors Generals/ Commissioners of Customs, Central Excise and Service Tax Annexure -I (Refer para 3.2) Data on clearances (excluding exports) and duty paid on drugs. (A) Name of the Commissionerate: (1) Name of the manufacturer : S. No Name of the Product Unit of packing For the Month of February, 2008 For the Month of March, 2008 MRP of unit packing (in Rs.) Rs. in crore MRP of unit packing (in Rs.) Rs. in crore Total assessable value of clearance during the month PLA Cenvat Total assessable value of clearance during the month PLA Cenvat 1 2 3 &nb....
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....th variants separately (for instance, information would be needed separately for Maruti 800 Standard and Maruti 800 Deluxe). Annexure-III (Refer Para 8.3.2) 1. Name of the units under their jurisdiction manufacturing any or all of the following products: (i) pan masala containing tobacco falling under CETH 2403 99 90 (ii) Pan masala without tobacco falling under CETH 2106 90 20 (a) Containing not more than 15% betel content, falling under S.No.29B of 3/2006-Central Excise as amended vide 3/2008-CE (b) Containing more than 15% betel content pan masala 2. Duty paid under PLA and CENVAT under all the aforesaid products by these units. Monthly data may be provided in the following format: S. No Name of the Unit Product Value of Clearances (In Rs. Crores) Duty paid (In Rs. Lakhs) Upto the month For the month Upto the month PLA CENVAT PLA CENVAT 1 (i) (ii) &nbs....