TaxTMI 
TaxTMI 
Changes in excise, customs and service tax through Finance Bill, 2004
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....aggregate duties of customs, excise and service tax has been imposed. While the cess will apply in respect of customs and excise duties with effect from 9.7.2004, in respect of service tax, it will come into effect only on enactment of the Finance Bill. 2.2 In respect of excise, the cess will be 2% of the aggregate duties of excise leviable on the goods. The following illustration explains how the cess should be calculated. An item attracts excise duty of 16%. With education cess, the total incidence of excise duty will be 16.32%. The Cess of 0.32% will be available as credit, but only for payment of education cess leviable on final products as provided for in the CENVAT Credit Rules. 2.3 In the case of customs, the cess will be 2% of the aggregate duty of customs (but excluding safeguard duty under section 8B and 8C, countervailing duty under section 9 and Anti Dumping Duty under section 9 A of the Customs Tariff Act). Items attracting customs duty at bound rates, for example, under the IT Agreement or the Indo-US/Indo-EU Textile Agreement have been exempted from the cess. The following illustration explains how the cess should be calculated ....
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....7.2 Concessional rate of 5% customs duty + Nil CVD, presently available to specified plantation machinery has been extended to additional machinery items namely, coffee packaging machine, coffee bagging machine, rotary shifter, lateral cyclon winnower and dividing bypass. CVD has now been exempted by way of excise duty exemption. These exemptions would be available upto 30.4.2005. 3.8 Health 3.8.1 Rehabilitation aids such as talking books, talking calculators, talking thermometers, braille writers, braille computer terminals have been exempted from customs duty. CVD has been exempted by way of excise duty exemption. 3.8.2 Phonographs and cassette players for playing the talking books, magnetic tapes and cassettes for production of talking books, electronic reading machines, television enlargers and optical aids have been fully exempted from customs duty and CVD, if imported by an institution for the blind and deaf. 3.8.3 The conditions prescribed for availing the import duty exemption on tangible appliances for blind, hearing aids etc. when imported by an institution for the blind and deaf that the goods should have either been gifted or purchased out of donations....
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.... excise duties are: 4.1 Excise duty has been raised on iron and steel of chapter 72 from 8% to 12%. 4.2 Excise duty of 8% with CENVAT credit has been imposed on contact lenses and playing cards. 4.3 Excise duty on following items has been increased from 8% to 16%, namely, cakes and pastries, plastic insulated ware, vacuum flasks, scented supari, pre-fabricated buildings, Laboratory glassware, Clocks and watches of retail sale price not exceeding Rs. 500 per piece (SSI exemption has been extended), monochrome televisions receivers, populated printed circuit boards for monochrome television receivers, imitation jewellery and candles. 4.4 Excise duty on matches made in semi mechanized and mechanized sectors, has been changed from 8% without Cenvat credit, to 16% with credit. 4.5 Excise duty of 16% has been imposed on specified parts of pre-fabricated buildings such as blocks, slabs, concrete beams and stairs and parts of clocks and watches of retail sale price not exceeding Rs. 500 per piece. 4.6 Relief Measures: 4.6.1 The retail sale price (RSP) limit for excise duty exemption on footwear has been raised from Rs. 125 to Rs. 250 per pair. The exe....
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....p; For those opting to pay duty, and thereby avail of duty credit, the applicable rates of duty for all other goods of chapter 50 to 63 will be: (a) 4% for pure cotton textiles including yarn, fabrics, garments, made ups and articles (b) 8% for other textiles including yarn, fabrics, garments, made ups and articles 4.8.4 It may be noted that no intimation or permission is needed by any unit either for availing of the exemption or for payment of duty at the above rates. The optional route is open for all sectors i.e. handloom, power looms, independent processors, stand alone units as well as composite mills. 4.8.5 All textiles and textiles articles falling under chapter 50 to 63 have been fully exempted from duties under Additional Excise Duty (Goods of Special Importance) Act and Additional Excise Duty (Textiles and textiles Articles) Act, wherever applicable. 4.8.6 Manufacture of polyester filament yarn on job work basis has been excluded from the purview of notification No. 214/86-CE. 4.8.7 Rule 1....
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....nvat Excise Rules, 2002 with retrospective effect from 1.4.2003, so as to provide that AED (GSI) paid on inputs on or after 1.4.2000 alone would be eligible for utilization towards payment of Cenvat duty. This amendment would come into effect on enactment of the Finance Bill. Effect of this amendment is that the credit of AED(GSI) against BED will be applicable only if the AED(GSI) was paid on or after 1.4.2000, the date from which separate accounting for AED (GSI) was dispensed with. If any credit has been taken on inputs on which duty has been paid prior to this date, the same would be liable to be recovered. On the other hand, if any assessee has not taken credit, he would be entitled to do so if the AED (GSI) was paid on or after 1.4.2000. For details, relevant clause of the Finance Bill may be referred to. The Circular No.700/16/2003-CX dated 6.3.2003 is consequently withdrawn. 5.2 Provisions are being made in central excise and customs laws to allow compounding of offences either before or after initiation of proceedings by the Chief Commissioner. On compounding, the person would get immunity from pros....
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....out the coverage of the new services, and also suggest as to how best the input tax credit across goods and services may be implemented 6.4 The following changes will come into effect on enactment of Finance (No.2) Bill 2004 : 6.4.1 Rate and input credit: The rate of service tax is being raised from 8% to 10%. The credit of service tax and excise duty is being extended across goods and services 6.4.2 Service tax @ 10% is being imposed on the following services, namely, Business exhibition services, Airport services, Transport of goods by road by a goods transport agency (only applicable to commercial concerns issuing the consignment note), Transport of goods by air, Survey and exploration of minerals, Opinion poll services, Intellectual property services other than copyright, Forward contracts services, Pandal or shamiana services, Outdoor catering, TV or radio programme production, Construction services in respect of commercial or industrial buildings and civil structure and Travel agents (other than air/rail travel agents). 6.4.3 Service tax is being imposed only on the risk cover in life insurance. ....
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.... with. (b) Mandatory penalty for non-registration is being removed. (c) Rule 6 of Service Tax Credit Rules has been amended. If the input service supplier has not paid service tax, the Service Tax credit cannot be recovered from the person availing the credit if he had taken reasonable steps in terms of rule 5. (d) The present rate of interest of 15% per annum on delayed payment of service tax is being replaced by a range, from 10% to 36% per annum. The Central Government will have the power to notify the rate of interest on delayed payment of service tax within this range. (e) Section 67 of the Finance Act, 1994, is amended to provide that where the gross amount charged by a service provider is inclusive of service tax payable, the value of taxable service shall be such amount as with the addition of service tax payable thereon, is equal to the gross amount charged. (f) Sections 71 and 72 of the Finance Act, 1994, relating to verification of assessment and best judgment assessment respectively are being omitted. (g) The provisions of section 73 of the Finance Act, 1994, relating to recovery of service tax short levied or short ....
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....o kindly go through the explanatory notes, notifications and Finance Bill carefully and bring to my notice at the earliest any omission/error that might have crept in. If there is any doubt or difficulty on any point, you are requested to bring it immediately to my notice. You could also contact Shri Gautam Bhattacharya, Director, TRU (Tel No.23092634), Shri Alok Shukla, Director, TRU (Tel No.23092753) or Shri V. Sivasubramanian, 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 PRICE DATA Report for the period Commodity Chapter No Date Description of goods Heading/sub-heading No. Ex-factory Price (Rs.) Excise duty paid Wholesale price inclusive of all taxes (Rs.) Retail price Remarks 8.7.2004 15.7.2004 ....