TaxTMI 
TaxTMI 
Central Excise, Customs & Service Tax – Budget proposals for 2002-2003
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....has been abolished on the following items. Now they will be charged to CENVAT only @ 16% (a) Cosmetics and toilet preparations (b) White cement and other cements (c) Travel kits for personal use (d) Yachts and other vessels and floating structures (e) Arms and ammunitions (f) Manufactures of furskin and artificial fur 1.5 With the above changes the rate of 8% is now confined to cotton yarn. The Special Excise Duty of 16% is also confined to a few items, being, Polyester Filament Yarn, Motor Cars, Multi Utility Vehicles, Soft drinks and their concentrates, Tyres for replacement, air-conditioners, pan masala, chewing tobacco and miscellaneous tobacco products. 1.6 An important change relates to textiles. While excise duty on cotton yarn continues at 8%, the exemption applicable to cotton yarn cleared in hank form has been withdrawn w.e.f. 1.3.2002. 1.7 The rate of excise duty on processed fabrics, made-ups and readymade garments has been fixed at 12% which will comprise of 8% CENVAT and 4% AED (in lieu of sales tax) in the case of fabrics. 1.8 Option has been given to manufacturers of grey fabrics, processors of knitte....
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....sed on cigars and cheroots and cigarillos at the rate of 16% adv. and on a number of specified items at the rate of 4%. The rate of 4% applies without the facility of CENVAT credit. Manufacturers wishing to avail of CENVAT credit facility would have to pay excise duty at the rate of 16%. The items on which excise duty at 4% has been imposed now are mentioned in notification No.10/2002-CE dated 1.3.2002. 1.14 The rate of excise duty on petrol has been modified. It is now composed of 32% ad-valorem plus surcharge of Rs. 6 per litre. The government has decided to dismantle the Administrative Price Mechanism. The oil companies which are required to pay excise duty would be calculating the revised assessable value for payment of excise duty. It may kindly be ensured that no hold up in the clearances of motor spirit or other petroleum products are caused. For any clarification on the assessable value the oil company may be consulted to provide details. 1.15 The surcharge of Rs. 5.25 per litre will apply for motor spirit which is doped with ethanol. Notification in this regard would be issued in due course of time. 1.16 Rate of excise duty on HSD has been reduced from 20% to 16%.....
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....p; Artists', students' or signboard painters' colours, modifying tints, amusement colours and the like, in tablets, tubes, jars, bottles, pans or in similar forms or packings (3213.00) 6 Resin cements, caulking compounds and other mastics; painters' fillings, non-refractory surfacing preparations for facades, indoor walls, floors, ceilings or the like (3213.00) 7 Video recording/reproducing apparatus, whether or not incorporating a video tuner (85.21) 8 Switches, relays, fuses, surge suppressors, plugs, sockets, lamp holders, junction boxes, etc. for a voltage not exceeding 1000 V (8536.00) 9 Sanitary wares and fixtures (69.08/73.24/7418.90) 1.23 The field officers may kindly advise the assessees manufacturing these items under their charge suitably and the purport of the new assessment, form....
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....rom Special Additional Duty. 2.9 An important change is with regard to non-edible oils. While the effective rate of basic customs duty will be 30%, the fatty acid criterion has been introduced for the applicability of this rate. Henceforth, the 30% rate will apply only to such oils in which the free fatty acid is 20% or more. The importers may be asked to declare this aspect and necessary action taken to satisfy that the oil contains 20% or more free fatty acid. 2.10 Basic customs duty has been imposed on certain items for the first time. Similarly, SAD has been imposed on other items. The details of these changes are indicated in the notifications and the Explanatory Memorandum. 2.11 An important change is that IATT has been exempted for flights from and to any of the North Eastern States. 2.12 Yet another significant feature on the customs changes is that the limit under the Transfer of Residence concession has been increased from Rs. 1.50 lakhs to Rs. 5 lakhs. The limit under "mini" TR has been increased from Rs. 30,000 to Rs. 75,000. A number of items have also been added which can now be imported at the rate of 30% which is the rate for thes....
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....event management services, (v) rail travel agent, (vi) health clubs and fitness centres, (vii) beauty parlours, (viii) fashion designers services (ix) cable operators; (x) Drycleaning services. 3.2 Corporate bodies that provide taxable service in respect of banking and financial services shall also be liable to pay the Service Tax. 3.3 These changes will come into force from the date that will be notified after the Finance Bill, 2002, is passed. 3.4 In the meanwhile, I request that you and your officers may kindly go through the definitions and other aspects of the new services carefully. Any doubts, comments or observations requiring clarification may kindly be sent to me as early as possible so that they can be taken care of while we issue comprehensive instructions before the new services are brought into force. 3.5 Information regarding the likely number of assessees from trade associations or directories may be gathered and a report on this aspect may kindly be sent to me within one month. 3.6 The definition of broadcasting service has been modified with retrospective effect so as to put the intention clearly....
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....ct one important market. The first report in this regard may be send to me urgently so as to reach latest by the 10th March, 2002. 6. There are some other changes in the Finance Bill or through the notifications. I request that you may kindly write to me urgently on any errors and omissions or any doubts or difficulties requiring clarification. 7. In the Explanatory Memorandum we have asked for special reports in few cases. They may kindly be arranged to be sent on time after careful scrutiny. 8. Before I end, I would like to convey to you and all your officers our gratitude and sincere thanks for the suggestions received in response to our pre-budget request and during the course of the year. We have been immensely benefitted by them. With kind regards, Yours sincerely, To (T. R. Rustagi) All Commissioners of Customs and Central Excise Appendix 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 28-2-2002 &nbs....