TaxTMI 
TaxTMI 
Changes in excise, customs and service tax through Finance Bill, 2005
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.... 2.1 Enabling power has been taken to levy an additional duty of customs not exceeding 4% on all items imported into India. For this purpose, section 3 of the Customs Tariff Act, 1975, has been substituted. This additional duty is being put in place to counterbalance various internal taxes like Sales Tax and VAT leviable on goods on their sale or purchase in India. To begin with, this additional duty will be charged only on imports of ITA (Information Technology Agreement) bound items and on specified inputs/raw materials, for manufacture of electronics/information technology items, which are exempted from customs duty. This duty will not be charged on information technology software. This additional duty will not be included in the assessable value for levy of education cess on imported goods. Manufacturers will be able to take credit of this additional duty for payment of excise duty on their finished products. 3. Peak rate of Duty 3.1 Peak rate of customs duty on non-agricultural goods has been reduced from 20% to 15% with a few exceptions. As regards textiles, only the ad valorem component has been reduced to 15%, the specific component, wherever applicable, remaining unc....
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....ude petroleum and petroleum products has been reduced as follows: (a) Crude petroleum from 10% to 5%; (b) Kerosene for public distribution system from 5% to Nil; (c) LPG for domestic use from 5% to Nil; (d) Motor Spirit (Petrol) from 15% to 10%; (e) High Speed Diesel oil from 15% to 10%; and (f) Other petroleum products from 20% to 10%. 10.2 Additional duty of customs on motor spirit and high speed diesel oil has been increased from Re.1.50 per litre to Rs. 2 per litre. 11. Chemicals and Petrochemicals: 11.1 Customs duty has been reduced from 15% to 10% on Polymers of Ethylene, Polypropylene and Propylene copolymers, Polymers and copolymers of Styrene and Polymers of Vinyl Chloride; 11.2 Customs duty has been reduced on Ethylene, Propylene, Butylene, Butadiene, Benzene, Toluene, O-Xylene, Styrene, Ethylbenzene, Ethylene Dichloride, Vinyl Chloride Monomer and Acrylonitrile, from 10% to 5%. 11.3 Customs duty on other organic chemicals falling under headings 2901 to 2904, has been reduced to 10%. 11.4 Customs duty on Ethyl Vinyl Acetate has been reduced from 20% to 10%. 11.5 Customs duty on molasses has been reduced from 15% to 10%. 11.6 Custo....
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....ucts (Clause 85 of the Finance Bill, 2005). The surcharge will be levied at prescribed specific rates on cigarettes, and at specified ad valorem rates on other tobacco products. Units in North Eastern Region will also attract this surcharge. This surcharge will not apply to biris and cigarettes made of tobacco substitutes. 17. Imposition and Increase in Duty 17.1 Excise duty of 8% with CENVAT credit has been imposed on mosiac tiles. 17.2 Excise duty on molasses has been increased from Rs. 500 per metric tonne to Rs. 1000 per metric tonne. 17.3 Excise duty on cement clinkers has been increased from Rs. 250 per metric tonne to Rs. 350 per metric tonne. 17.4 Excise duty has been raised on iron and steel and on ships for breaking up, from 12% to 16%. 17.5 Excise duty of 16% has been imposed on road tractors (of engine capacity exceeding 1800 cc) for semi trailers. 18. Branded articles of jewellery 18.1 A duty of 2% is being imposed on branded articles of jewellery of heading 7113 of the Central Excise Tariff. The duty will be leviable only if the brand name or the trade name is indelibly affixed or embossed on the article of jewellery itself. The process of such....
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....ng which he would be debarred from the scheme, and the credit and interest would be recovered in the manner , as existed prior to this amendment. (iii) The interest payable would be @ 13% for the period between each date of utilization of wrongly availed credit and 10th September 2004. It has been deemed that the wrongly availed credit has been utilized first before utilizing the credit of AED (GSI) paid after 1st April 2000. (iv) The Central Excise Officer would determine the total credit with interest, and inform the assessee, in writing, the EMI with bifurcation of amounts of credit and the interest, by 15th June 2005. For example, for assessee 'A', (a) if the total credit availed of AED (GSI) availed prior to 01.04.2000 =Rs. 10 crores; and (b) if the interest calculated as per above method is =Rs. 1.2 crores. Then the total dues would be Rs. 10 crores + Rs. 1.2 crores= Rs. 11.2 crores and the EMI would be Rs. 11.2/36= Rs. 31.11 lakhs (Rs.27.77 lakhs credit +Rs.3.34 lakhs interest) (v) The payment of monthly instalments would commence from the month following the month of the determination. The date of payment would be the same as the due date for payi....
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....meaning assigned to it in clause (ff) of Section 2 of the Khadi and Village Industries Act, 1956. 21.2 Amendment to Notification No.88/88-CE is proposed so as to provide that this definition of 'rural area' will also be applicable from 21st Feburary, 2000 to 28th February, 2003. This has been done by replacing clause (a) of the Explanation during the period 21.2.2000 to 28.2.2003. Show cause notices, if any, issued in this context will have to be decided in the light of the above amendments. 22. Relief Measures: 22.1 Excise duty of Re. 1 per kg. on refined edible oils and Rs. 1.25 per Kg. on vanaspati, bakery shortening and inter-esterfied, re-esterified, elaidnised fats, has been exempted. 22.2 Tea and tea waste have been exempted from additional duty of excise of Re. 1 per kg. 22.3 Excise duty has been reduced from 24% to 16% on air conditioners. 22.4 Excise duty has been reduced from 24% to 16% on tyres, tubes and flaps. 22.5 Excise duty has been reduced from 16% to 12% (with Cenvat credit) on matches made by mechanized and semi-mechanized sectors. 22.6 Excise duty on imitation jewellery has been reduced from 16% to 8%. 22.7 Excise duty has been reduce....
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....ced from 35% to 30%, consequent to reduction in excise duty from 24% to 16%. 28. Central Excise Tariff (Amendment) Act, 2005 As you would be aware, the Central Excise Tariff (Amendment) Act, 2005 has been brought into effect from 28th February, 2005. The new 8 digit tariff replaces the earlier 6 digit tariff. To ensure that the existing rates by notification are continued, and are not denied merely on the ground of change in chapter, heading, sub heading, 3 notifications No. 5/2005-CE (NT), 6/2005-CE(NT) and 7/2005-CE(NT) all dated 24th February, 2005 effective from 28.2.2005 have been issued in this regard. Another notification No.3/2005-CE dated 24.2.2005 was also issued effective from 28.2.2005 to continue the existing rates for specified goods, for which the exemptions were built in the tariff but not in the amended tariff schedule. 29. Amendments in Customs and Central Excise Act and Rules: 1) Rule 57CC, Rule 57AD of the Central Excise Rules and Rule 6 of the CENVAT Credit Rules are being amended retrospectively to provide a mechanism for recovery of amount due from a manufacturer when he is required to pay an amount of 8% or 10%, on his exempted clearances because....
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....er the Central Excise Act, 1944 is being amended so as to align the entries with the new Excise Schedule introduced by the Central Excise Tariff (Amendment) Act, 2005. 11) The Seventh Schedule under the Finance Act, 2001 is being amended so as to align the entries with the new Excise Schedule introduced by the Central Excise Tariff (Amendment) Act, 2005. 12) Sections 28E and 28H of the Customs Act, 1962 are being amended so as to provide that advance ruling may also be sought in respect of determination of Rules of Origin of goods and matters relating thereto. It is also proposed to allow an existing Joint Venture in India to avail the benefit of Advance Ruling. The Central Government is also being empowered to notify any class or category of persons as eligible for availing of the benefit of Advance Ruling. 13) Section 28F of the Customs Act, 1962, is being amended so as to rename "Authority for Advance Ruling" as "Authority for Advance Ruling (Customs, Central Excise and Service Tax)". 14) Section 127MA of the Customs Act, 1962 is being amended so as to make a provision for sending back a case by the Settlement Commission to the Tribunal in the event of non-cooperatio....
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....ith common areas and other appurtenances. These services will be leviable to service tax only from the date to be notified after the enactment of the Finance Bill, 2005. (c) Scope of certain existing services is being extended as follows: (1) Commercial or industrial construction service to: (i) include renovation of such building or civil structure. (ii) include post construction completion and finishing services for such building or civil structure. (iii) include construction, repair, alteration, renovation or restoration of pipeline or conduits. (2) Erection, commissioning or installation services to include specified installation services. (3) Maintenance or repair services to include: (i) maintenance or management of immovable properties. (ii) maintenance or repair including reconditioning or restoration undertaken as part of any contract or agreement. (4) Broadcasting services to include charges recovered by broadcasting agencies from multisystem operator (MSO) and provision of direct to home (DTH) signals to the customers. (5) Sound recording to include recording of sound on any media and includes post production services such as sound mix....
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....ng to orders passed by officers of Central Excise. 7) Section 84 of Finance Act, 1994 is being amended to enable revision of orders passed by officers subordinate to Commissioner of Central Excise. 8) Sections 85 and 86 of Finance Act, 1994 are being amended to provide filing of appeal against the orders passed by the central excise officers. 9) A new Section 83A is being inserted similar to that of Section 33 of Central Excise Act to provide power of adjudication. 10) Adjudication procedure prescribed under Section 33A of Central Excise Act is adopted for the purpose of service tax matters also. 11) Section 96A of Finance Act, 1994 is being amended to allow any existing joint venture in India to avail the benefit of advance ruling and empowering the Central Government to notify any class or category of persons to avail the benefit of advance ruling. 12) Rule 2 is amended to shift the liability to pay service tax from mutual fund distributor or agent to mutual funds. 13) Rule 4 is amended to facilitate more than one registration by a person having centralized account and billing system. 14) Rule 4A(1) prescribes the requirement of issue of invoice within 14 ....
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....ramanian, Deputy Secretary, TRU (Tel No. 23092236). Copies of the FM's speech, notifications, Finance Bill etc, are forwarded herewith. These will also be available on the department's website soon after the conclusion of FM's speech. With regards, Yours sincerely, (Gautam Ray) To All Chief Commissioners/Director Generals/ Commissioners of Customs, Central Excise and Service Tax Annexure-I PRICE DATA Report for the period Commodity Chapter No. Date Description of Goods Heading/ subheading No. Ex-factory Price(Rs.) Excise Duty Paid Wholesale price inclusive of all taxes (Rs.) Retail Price Remarks 28.2.2005 15.3.2005 31.3.2005 15.4.2005 30.4.2005 Notes: 1. Description should be specific and should....