TaxTMI 
TaxTMI 
FINANCE BILL, 2018 PROVISIONS RELATING TO DIRECT TAXES
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....come liable to tax for the assessment year 2018-19. In respect of income of all categories of assessees liable to tax for the assessment year 2018-19, the rates of income-tax have been specified in Part I of the First Schedule to the Bill. These are the same as those laid down in Part III of the First Schedule to the Finance Act, 2017 for the purposes of computation of "advance tax", deduction of tax at source from "Salaries" and charging of tax payable in certain cases. (1) Surcharge on income-tax The amount of income-tax shall be increased by a surcharge for the purposes of the Union,- (a) in the case of every individual or Hindu undivided family or every association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Act,- (i) at the rate of ten per cent. of such tax, where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds fifty lakh rupees but does not exceed one crore rupees, and (ii) at the rate of fifteen per cent. of such tax, where the income or the aggregate of income paid or likely....
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....on income-tax" shall continue to be levied at the rate of two per cent. and one per cent., respectively, on the amount of tax computed, inclusive of surcharge, in all cases. No marginal relief shall be available in respect of such cesses. II. Rates for deduction of income-tax at source during the financial year 2018-19 from certain incomes other than "Salaries". The rates for deduction of income-tax at source during the financial year 2018-19 from certain incomes other than "Salaries" have been specified in Part II of the First Schedule to the Bill. The rates for all the categories of persons will remain the same as those specified in Part II of the First Schedule to the Finance Act, 2017, for the purposes of deduction of income-tax at source during the financial year 2017-18. However, in case of long-term capital gain referred to in section 112A of the Act, tax shall now be deducted at source at the rate of 10 per cent.. (1) Surcharge- The amount of tax so deducted, in the case of a non-resident person (other than a company), shall be increased by a surcharge,- (a) in case of an individual, Hindu undivided family, association of person, body of individual or artific....
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....good during the financial year, assessment of persons who are likely to transfer property to avoid tax, assessment of bodies formed for a short duration, etc. The salient features of the rates specified in the said Part III are indicated in the following paragraphs- A. Individual, Hindu undivided family, association of persons, body of individuals, artificial juridical person. Paragraph A of Part-III of First Schedule to the Bill provides following rates of income-tax:- (i) The rates of income-tax in the case of every individual (other than those mentioned in (ii) and (iii) below) or Hindu undivided family or every association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Act (not being a case to which any other Paragraph of Part III applies) are as under:- Upto Rs. 2,50,000 Nil. Rs. 2,50,001 to Rs. 5,00,000 5 per cent.. Rs. 5,00,001 to Rs. 10,00,000 20 per cent.. Above Rs. 10,00,000 30 per cent.. (ii) In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty year....
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....graph C of Part III of the First Schedule to the Bill. This rate will continue to be the same as that specified for financial year 2017-18. The amount of income-tax shall be increased by a surcharge at the rate of twelve per cent. of such income-tax in case of a firm having a total income exceeding one crore rupees. However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees. D. Local authorities The rate of income-tax in the case of every local authority has been specified in Paragraph D of Part III of the First Schedule to the Bill. This rate will continue to be the same as that specified for the financial year 2017-18. The amount of income-tax shall be increased by a surcharge at the rate of twelve per cent. of such income-tax in case of a local authority having a total income exceeding one crore rupees. However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total ....
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.... such cess. [Clause 2 & First Schedule] B. WIDENING AND DEEPENING OF TAX BASE Entities to apply for Permanent Account Number in certain cases Section 139A inter-alia provides that every person specified therein and who has not been allotted a permanent account number shall apply to the Assessing Officer for allotment of a Permanent Account Number (PAN). In order to use PAN as Unique Entity Number (UEN) for non-individual entities, it is proposed that every person, not being an individual, which enters into a financial transaction of an amount aggregating to two lakh and fifty thousand rupees or more in a financial year shall be required to apply to the Assessing Officer for allotment of PAN. In order to link the financial transactions with the natural persons, it is also proposed that the managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer or any person competent to act on behalf of such entities shall also apply to the Assessing Officer for allotment of PAN. This amendment will take effect from lst April, 2018. [Clause 42] Widening of scope of Accumulated profits for the purpo....
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....ause (22) of section of 2 the Act is taxed in the hands of the recipient at the applicable marginal rate. The taxability of deemed dividend in the hands of recipient has posed serious problem of the collection of the tax liability and has also been the subject matter of extensive litigation. With a view to bringing clarity and certainty in the taxation of deemed dividends, it is proposed to delete the Explanation to Chapter XII-D occurring after section 115Q of the Act so as to bring deemed dividends also under the scope of dividend distribution tax under section 115-O. Further, such deemed dividend is proposed to be taxed at the rate of 30 per cent. (without grossing up) in order to prevent camouflaging dividend in various ways such as loans and advances. This amendment relating to imposition of dividend distribution tax on deemed dividend will apply to transactions referred to in sub-clause (e) of clause (22) of section 2 of the Act undertaken on or after 1st April, 2018. [Clause 38 & 39] New regime for taxation of long-term capital gains on sale of equity shares etc. Under the existing regime, long term capital gains arising from transfer of long term capital asse....
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....capital gains will be computed without giving effect to the first and second provisos to section 48, i.e. inflation indexation in respect of cost of acquisitions and cost of improvement, if any, and the benefit of computation of capital gains in foreign currency in the case of a non-resident, will not be allowed. ii) The cost of acquisitions in respect of the long term capital asset acquired by the assessee before the 1st day of February, 2018 , shall be deemed to be the higher of - a) the actual cost of acquisition of such asset; and b) the lower of - (I) the fair market value of such asset; and (II) the full value of consideration received or accruing as a result of the transfer of the capital asset. (iii) "equity oriented fund" has been defined to mean a fund set up under a scheme of a mutual fund specified under clause (23D) of section 10 and,- a) In a case where the fund invests in the units of another fund which is traded on a recognized stock exchange, (I) A minimum of 90 per cent. of the total proceeds of such funds is invested in the units of such other fund ; and (II) such other fund also invests a minimum of 90 per cent. of it....
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....ax at the rate of ten per cent on income so distributed. For this purpose, equity oriented fund will have the same meaning assigned to it in the new section 112A of the Act. This amendment will take effect from 1st April, 2018. [Clause 40, 41 & 214] Taxation of long-term capital gains in the case of Foreign Institutional Investor The existing provisions of section 115AD of the Act inter alia, provide that where the total income of a Foreign Institutional Investor (FII) includes income by way of long-term capital gains arising from the transfer of certain securities, such capital gains shall be chargeable to tax at the rate of ten per cent. However, long term capital gains arising from transfer of long term capital asset being being equity shares of a company or a unit of equity oriented fund or a unit of business trusts, is exempt from income-tax under clause (38) of section 10 of the Act. Consequent to the proposal for withdrawal of exemption under clause (38) of section 10 of the Act, such long term capital gain will become taxable in the hands of FIIs also. As in the case of domestic investors, the FIIs will also be liable to tax on such long term capital gains on....
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.... of section 9, "business connection" includes business activities carried on by non-resident through dependent agents. The scope of "business connection" under the Act is similar to the provisions relating to Dependent Agent Permanent Establishment (DAPE) in India's Double Taxation Avoidance Agreements (DTAAs). In terms of the DAPE rules in tax treaties, if any person acting on behalf of the non-resident, is habitually authorised to conclude contracts for the non-resident, then such agent would constitute a PE in the source country. However, in many cases, with a view to avoid establishing a permanent establishment (hereafter referred to as 'PE') under Article 5(5) of the DTAA, the person acting on the behalf of the non-resident, negotiates the contract but does not conclude the contract. Further, under paragraph 4 of Article 5 of the DTAAs, a PE is deemed not to exist when a place of business is engaged solely in certain activities such as maintenance of stocks of goods for storage, display, delivery or processing, purchasing of goods or merchandise, collection of information. This exclusion applies only when these activities are preparatory or auxiliary in relation to the....
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....ffective. In view of the above, it is proposed to amend the provision of section 9 of the Act so as to align them with the provisions in the DTAA as modified by MLI so as to make the provisions in the treaty effective. Accordingly, clause (i) of sub-section (1) of section 9 is being proposed to be amended to provide that " business connection" shall also include any business activities carried through a person who, acting on behalf of the non-resident, habitually concludes contracts or habitually plays the principal role leading to conclusion of contracts by the non-resident . It is further proposed that the contracts should be- (i) in the name of the non-resident; or (ii) for the transfer of the ownership of, or for the granting of the right to use, property owned by that non-resident or that thenon-resident has the right to use; or (iii) for the provision of services by that non-resident. This amendment will take effect from 1st April, 2019 and will, accordingly, apply in relation to assessment year 2019-20 and subsequent assessment years. [Clause 4] "Business connection" to include "Significant Economic presence" "The oranges upon ....
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....ECD under its BEPS Action Plan 1 addressed the tax challenges in a digital economy wherein it has discussed several options to tackle the direct tax challenges arising in digital businesses. One such option is a new nexus rule based on "significant economic presence". As per the Action Plan 1 Report, a non-resident enterprise would create a taxable presence in a country if it has a significance economic presence in that country on the basis of factors that have a purposeful and sustained interaction with the economy by the aid of technology and other automated tools. It further recommended that revenue factor may be used in combination with the aforesaid factors to determine 'significance economic presence'. The scope of existing provisions of clause (i) of sub-section (1) of section 9 is restrictive as it essentially provides for physical presence based nexus rule for taxation of business income of the non-resident in India. Explanation 2 to the said section which defines 'business connection' is also narrow in its scope since it limits the taxability of certain activities or transactions of non-resident to those carried out through a dependent agent. Therefore, emergin....
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....existing provisions of clause (ii) of section 28 is restrictive in its scope as far as taxation of compensation is concerned; a large segment of compensation receipts in connection with business and employment is out of the purview of taxation leading to base erosion and revenue loss. Therefore, it is proposed to amend section 28 of the Act to provide that any compensation received or receivable, whether revenue or capital, in connection with the termination or the modification of the terms and conditions of any contract relating to its business shall be taxable as business income. It is further proposed that any compensation received or receivable, whether in the nature of revenue or capital, in connection with the termination or the modification of the terms and conditions of any contract relating to its employment shall be taxable under section 56 of the Act. These amendments will take effect from 1st April, 2019 and will, accordingly, apply in relation to assessment year 2019-20 and subsequent assessment years. [Clause 3, 9 & 21] Presumptive income under section 44AE in case of goods carriage Section 44AE, inter alia provides that, the profits and gains sha....
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....du undivided family, in respect of payments towards annual premium on health insurance policy, or preventive health check-up, of a senior citizen, or medical expenditure in respect of very senior citzen. It is proposed to amend section 80D so as to raise this monetary limit of deduction from Rs. 30,000/- to Rs. 50,000/-. In case of single premium health insurance policies having cover of more than one year, it is proposed that the deduction shall be allowed on proportionate basis for the number of years for which health insurance cover is provided, subject to the specified monetary limit. . These amendments will take effect, from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-20 and subsequent assessment years. [Clause 24] Enhanced deduction to senior citizens for medical treatment of specified diseases Section 80DDB of the Act, inter-alia, provide that a deduction is available to an individual and Hindu undivided family with regard to amount paid for medical treatment of specified diseases in respect of very senior citizen upto Rs. 80,000/- and in case of senior citizens upto Rs. 60,000/- subject to specified conditions. It is p....
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....lements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members, or (iii) the processing of the agricultural produce of its members The benefit shall be available for a period of five years from the financial year 2018-19. This amendment will take effect from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-20 and subsequent assessment years. [Clause 28] Meassures to promote start-ups Section 80-IAC of the Act, inter alia, provides that deduction under this section shall be available to an eligible start-up for three consecutive assessment years out of seven years at the option of the assessee, if- (i) it is incorporated on or after the 1st day of April, 2016 but before the 1st day of April, 2019; (ii) the total turnover of its business does not exceed twenty-five crore rupees in any of the previous years beginning on or after the 1st day of April, 2016 and ending on the 31st day of March, 2021; and (iii) it is engaged in the eligible business which involves innovation, development, deployment or commercialization of newproducts, processes or ....
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....nt. Consequential amendment in section 115JF is also proposed to be made. This amendment will take effect, from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-20 and subsequent assessment years. [Clause 17, 36 & 37] Incentive for employment generation At present, under section 80-JJAA of the Act, a deduction of 30% is allowed in addition to normal deduction of 100% in respect of emoluments paid to eligible new employees who have been employed for a minimum period of 240 days during the year. However, the minimum period of employment is relaxed to 150 days in the case of apparel industry. In order to encourage creation of new employment, it is proposed to extend this relaxation to footwear and leather industry. Further, it is also proposed to rationalize this deduction of 30% by allowing the benefit for a new employee who is employed for less than the minimum period during the first year but continues to remain employed for the minimum period in subsequent year. This amendment will take effect, from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-20 and subsequent assessment years. [Cl....
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....unt of sale of leftover stock of crude oil after the expiry of the agreement or arrangement shall be exempt subject to such conditions as may be notified by the Central Government. The benefit of exemption is presently not available on sale out of the leftover stock of crude in case of termination of the said agreement or the arrangement. Given the strategic nature of the project benefitting India to augment its strategic petroleum reserves, it is proposed to amend clause (48B) of section 10 to provide that the benefit of tax exemption in respect of income from left over stock will be available even if the agreement or the arrangement is terminated in accordance with the terms mentioned therein. This amendment will take effect from 1st of April, 2019 and will, accordingly, apply in relation to assessment year 2019-20 and subsequent years. [Clause 5] Royalty and FTS payment by NTRO to a non-resident to be tax-exempt Section 195 requires a person to deduct tax at the time of payment or credit to a non-resident. Given the business exigencies of the National Technical Research Organisation (NTRO), it is proposed to amend section 10 so as to provide that the income ....
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....ospectively from 1st April, 2001 and will, accordingly, apply in relation to the assessment year 2001-02 and subsequent assessment years. [Clause 35] Benefit of carry forward and set off of losses Section 79 of Act provides that carry forward and set off of losses in a closely held company shall be allowed only if there is a continuity in the beneficial owner of the shares carrying not less than 51 percent. of the voting power, on the last day of the year or years in which the loss was incurred. In general, the case of a company seeking insolvency resolution under Insolvency and Bankruptcy Code, 2016, involves change in the beneficial owners of shares beyond the permissible limit under section 79. This acts as a hurdle for restructuring and rehabilitation of such companies. In order to address this problem, it is proposed to relax the rigors of section 79 in case of such companies, whose resolution plan has been approved under the Insolvency and Bankruptcy Code, 2016, after affording a reasonable opportunity of being heard to the jurisdictional Principal Commissioner or Commissioner. This amendment will take effect from 1st April, 2018 and will, accordingly, apply....
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....ion of "taxable commodities transaction" to mean a transaction of sale of commodity derivatives in respect of commodities, other than agricultural commodities, traded in recognised association. In order to align the definition of "taxable commodities transaction" with instruments allowed for transaction in commodity derivatives, it is proposed to amend the clause (7) of section 116 so as to include "options in commodity futures" in the definition of "taxable commodities transactions". The existing section 117 of the Finance Act, 2013 provides the rate at which a commodities transaction tax in respect of every commodities transaction, being sale of commodity derivative shall be chargeable and such tax shall be payable by the seller. In order to propose rates for option on commodity derivative, it is proposed to amend the provisions of section 117 so as to prescribe the rate at which sale of an option on commodity derivative shall be chargeable and such tax shall be payable by the seller. It is further proposed to amend the provisions of section 117 so as to prescribe the rate at which sale of an option on commodity derivative, where option is exercised, shall be chargeab....
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....initiate penalty. However, the said authorities shall require approval of the superior officers of the rank of Joint Director or Additional Director for imposition of penalty. Accordingly, it is proposed to amend the said sub-section so as to provide that the Joint Director shall also be vested with the power to approve an order imposing a penalty. It is also proposed to amend clause (b) of the said sub-section so as to include reference to the Assistant Director and Deputy Director therein. Section 55 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 provides for institution of proceedings for an offence under that Act. Sub-section (1) of the said section provides that a person shall not be proceeded against for an offence under section 49 to section 53 except with the sanction of the Principal Commissioner or Commissioner or the Commissioner (Appeals). Sub-section (2) of the said section provides that the Principal Chief Commissioner or the Chief Commissioner may issue such instructions, or directions, to the tax authorities referred to in sub-section (1), as he may think fit for the institution of proceedings. It is propose....
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.... (ii) constituent entity resident in India, having a non-resident parent, shall also furnish CbCR in case its parent entity outside India has no obligation to file the report of the nature referred to in sub-section (2) in the latter's country or territory; (iii) the time allowed for furnishing the CbCR, in the case of constituent entity resident in India, having a non-resident parent,shall be twelve months from the end of reporting accounting year; (iv) the due date for furnishing of CbCR by the the ARE of an international group, the parent entity of which is outside India,with the tax authority of the country or territory of which it is resident, will be the due date specified by that country or territory; (v) Agreement would mean an agreement referred to in sub-section (1) of section 90 or sub-section (1) of section 90A, and also an agreement for exchange of the report referred to in sub-section (2) and sub-section (4) as may be notified by the Central Government; (vi) "reporting accounting year" has been defined to mean the accounting year in respect of which the financial andoperational results are required to be reflected in the repor....
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....he Act provide that no deduction would be admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE, unless the return of income by the assessee is furnished on or before the due date specified under sub-section (1) of section 139 of the Act. This burden is not cast upon assesses claiming deductions under several other similar provisions. In view of the above, it is proposed to extend the scope of section 80AC to provide that the benefit of deduction under the entire class of deductions under the heading "C.-Deductions in respect of certain incomes" in Chapter VIA shall not be allowed unless the return of income is filed by the due date. This amendment will take effect, from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-19 and subsequent assessment years. [Clause 23] Rationalization of section 43CA, section 50C and section 56. At present, while taxing income from capital gains (section 50C), business profits (section 43CA) and other sources (section 56) arising out of transactions in immovable property, the sale consideration or stamp duty value, whichever is higher is a....
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....elation to the assessment year 2019-20 and subsequent assessment years. [Clause 3, 9 & 18] Tax neutral transfers Section 47 provides for certain tax neutral transfers. Section 56 also excludes income arising out of certain tax neutral transfers from its ambit. However, the transfers referred to in clause (iv) and clause (v) of section 47 have not been excluded from the scope of section 56. In order to further facilitate the transaction of money or property between a wholly owned subsidiary company and its holding company, it is proposed to amend the section 56 so as to exclude such transfer from its scope. This amendment will take effect, from 1st April, 2018 and shall accordingly, apply in relation to the transaction made on or after 1st April, 2018. [Clause 21] Rationalization of the provisions of section 54EC Section 54EC of the Act provides that capital gain, arising from the transfer of a long-term capital asset, invested in the long-term specified asset at any time within a period of six months after the date of such transfer, shall not be charged to tax subject to certain conditions specified in the said section. The section also provides that "lon....
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....d will, accordingly, apply in relation to the assessment year 2017-2018 and subsequent years. [Clause 34] Amendments in relation to notified Income Computation and Disclosure Standards. At present, section 145 of the Act empowers the Central government to notify Income Computation and Disclosure Standards (ICDS). In pursuance the central government has notified ten such standards effective from 1st April 2017 relating to Assessment year 2017-18. These are applicable to all assesses (other than an individual or a Hindu undivided family who are not subject to tax audit under section 44AB of the said Act) for the purposes of computation of income chargeable to income-tax under the head "Profits and gains of business or profession" or "Income from other sources". In order to bring certainty in the wake of recent judicial pronouncements on the issue of applicability of ICDS, it is proposed to - (i) amend section 36 of the Act to provide that marked to market loss or other expected loss as computed in the mannerprovided in income computation and disclosure standards notified under sub-section (2) of section 145, shall be allowed deduction. (ii) amend 40A of ....
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....ompensation or on enhanced compensation, shall be deemed to be the income of the year in which it is received. (b) the claim for escalation of price in a contract or export incentives shall be deemed to be the income of the previous year in which reasonable certainty of its realisation is achieved. (c) income referred to in sub-clause (xviii) of clause (24) of section 2 shall be deemed to be the income of the previous year in which it is received, if not charged to income tax for any earlier previous year. Recent judicial pronouncements have raised doubts on the legitimacy of the notified ICDS. However, a large number of taxpayers have already complied with the provisions of ICDS for computing income for assessment year 2017-18. In order to regularise the compliance with the notified ICDS by a large number taxpayers so as to prevent any further inconvenience to them, it is proposed to bring the amendments retrospectively with effect from 1st April, 2017 i,e the date on which the ICDS was made effective and will, accordingly, apply in relation to assessment year 2017-18 and subsequent assessment years [Clause 10, 11, 13, 15 & 45] Tax deduction at source on....
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.... Act provides that if a person who is required to furnish the statement of financial transaction or reportable account under sub-section (1) of section 285BA, fails to furnish such statement within the prescribed time, he shall be liable to pay penalty of one hundred rupees for every day of default. The proviso to the said section further provides that in case such person fails to furnish the statement of financial transaction or reportable account within the period specified in the notice issued under sub-section (5) of section 285BA, he shall be liable to pay penalty of five hundred rupees for every day of default. In order to ensure compliance of the reporting obligations under section 285BA, it is proposed to amend the section 271FA so as to increase the penalty leviable from one hundred rupees to five hundred rupees and from five hundred rupees to one thousand rupees, for each day of continuing default. These amendments will take effect from 1st April, 2018. [Clause 51] Amendments to the structure of Authority for Advance Rulings Section 245-O provides for the constitution of an Authority for Advance Rulings, and constitution of its benches, for giving advanc....
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....018 1. Reference to import manifest and export manifest, wherever they occur in the Customs Act, to include Arrival Manifest and Departure Manifest respectively. [54] 2. Section 1 is being amended so as to expand the scope of the Customs Act to any offence or contravention committed thereunder outside India by any person. [55] 3. Section 2 is being amended so as to: (a) substitute the definition of assessment in sub-section (2); (b) to extend the limit of 'Indian Customs Waters' into the sea from the existing 'Contiguous zone of India' to the 'Exclusive Economic Zone (EEZ)' of India in sub-section (28); (c) provide that 'notification' would mean a 'notification published in the Official Gazette' and the word 'notify' would be construed accordingly (new sub-section 30AA refers). [56] 4. Section 11 is being amended so as to- (a) insert sub-section (3) providing that prohibition or restriction or obligation relating to import or export of any goods or class of goods or clearance thereof provided in any other law for the time being in force, or any rule or regulation made or any order or notification thereu....
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.... cases not involving collusion, willful mis-statement, suppression before issue of demand notice. The manner of pre-notice consultation shall be provided in the regulations; (b) insert a new sub-section (7A) to provide for issuance of supplementary show cause notice in circumstances and in such manner as may be prescribed through regulations within the existing time period; (c) amend the existing sub-section (9) to: a. provide a definite time frame of six months and one year for adjudication of demand notices depending upon whether charges of collusion, willful misstatement, suppression have been invoked. These time periods shall be extendable by the officer senior to adjudicating authority for a further period of six months and one year respectively. b. provide that if the demand notice is not adjudicated even within the extended period, it would be deemed as if no demand had been issued. (d) insert a new sub-section (9A) to provide certain grounds on account of which the time limit of six months or one year shall remain suspended and that the proper officer shall inform the person concerned the reasons for non-determination of duty or interest under sub-section (8)....
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....stitute the word "Authority" with the words "Appellate Authority" and to provide that on appointment of Customs Authority for Advance Rulings, the applications and proceedings pending before the erstwhile Authority shall stand transferred to Customs Authority for Advance Rulings. [64] 13. Section 28H is being amended so as to, - (a) amend clause (d) of sub-section (2) to include the word "tax" in addition to "duty" mentioned therein; (b) insert clause (f) in sub-section (2) to enable Central Government to notify any other matter on which advance ruling can be sought by an applicant; (c) insert sub-section (5) to provide that an applicant may be represented by a duly authorized person who is a resident in India; (d) add an explanation stating that the definition of resident shall be same as provided in clause (42) of section 2 of Income Tax Act, 1961. [65] 14. Sub-section (6) of section 28-I is being amended to reduce the time from six months to three months within which the authority shall pronounce its advance ruling. [66] 15. Section 28K is being amended so as to, - (a) omit the expression 'after....
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....n to existing system of clearance by the proper officer. [73] 22. Section 46 is being amended so as to: (a) amend sub-section (1) to insert a reference to Customs Automated System and the manner of presentation of bill of entry; (b) amend the proviso to sub-section (1) to insert a reference to Customs Automated System; and (c) clarify the time limit for the prior presentation of bill of entry, by substituting the words, 'within thirty days of' with the words, 'at any time not exceeding thirty days prior to' in first proviso to sub-section (3); (d) provide for such other documents, as may be prescribed in addition to invoice, by necessary insertion to that effect in sub-section (4); (e) insert a new sub-section (4A) so as to provide for observance of the accuracy, authenticity, validity of the declarations made by the importer under this section and compliance to the prohibitions or restrictions under this act or any other law for the time being in force. [74] 23. Section 47 is being amended so as to have a provision for clearance of goods by Customs Automated System in addition to existing clearance by the proper officer. [75] 24. Secti....
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....ing amended so as to include reference to goods imported or exported by courier through the authorized courier. The extant provisions in the section relate to goods imported or exported by post only. [86] 35. Section 84 is being amended so as to include a reference to goods imported or exported by courier and to empower the Board to make regulations in this regard. The extant provisions in the section relate to goods imported or exported by post only. [87] 36. A new Chapter XIIA and section 99A thereunder, is being inserted relating to Audit. The manner of conducting audit shall be provided in regulations. [88] 37. A new section 109A relating to 'Controlled Delivery' is being inserted, which seeks to authorize the proper officer or any other officer authorized by him to undertake Controlled Delivery of any consignment of goods to any destination in India or a foreign country. The section also provides, through an explanation, definition of controlled delivery. It also seeks to provide that controlled delivery shall be applicable on such consignment of goods and in such manner as may be prescribed in the regulations. [89] 38. Section 110 of ....
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....l justice; or ii. where no order or decision has been passed after re-assessment under section 17; or iii. where an order of refund under section 27 has been issued crediting the amount to the Fund without recording any finding on the evidence produced by the applicant.; [94] 43. A new section 143AA is being inserted to empower the Board to prescribe through regulations trade facilitation measures or separate procedure or documentation for a class of importers or exporters or for categories of goods or on the basis of the modes of transport of goods for: (a) maintenance of transparency in import and export documentation and procedure; or (b) expeditious clearance or release of goods entered for import or export; or (c) reduction in the transaction cost of clearance of importing or exporting goods; or maintenance of balance between customs control and facilitation of legitimate trade.; [95] 44. A new section 151B on reciprocal arrangement for exchange of information is being inserted so as to: (a) authorize the Central Government to enter into an agreement or any other arrangement with the Government of any country or with such c....
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....oastal goods; (b) time and manner of finalization of provisional assessment; (c) manner of conducting pre-notice consultation; (d) circumstances under which, and the manner of issuing supplementary notice; (e) form and manner in which an application for advance ruling or appeal shall be made, and the procedure for the authority, under Chapter VB; (f) manner of clearance or removal of imported or export goods; (g) documents to be furnished in relation to imported goods; (h) conditions, restrictions and the manner for deposits in electronic cash ledgers, the utilization and refund therefrom and the manner of maintaining such ledger; (i) manner of conducting audit; (j) goods for controlled delivery and the manner thereof; (k) measures and the simplified or different procedures or documentation for a class of importers or exporters or categories of goods or on the basis of the modes of transport of goods. [98] II. AMENDMENTS IN THE CUSTOMS TARIFF ACT, 1975 S.No. Amendment Clause of the Finance Bill, 2018 1. Section 3 is being amended so as to: (a) amend sub-section (7) to include reference to sub-section (8A); (b) insert a new su....
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.... Electronics / Hardware 12 8517 12 Cellular mobile phones 15% 20% 13 90 90, 99 99, 3926 90 91, 3926 90 99, 4016 99 90, 7318 15 00, 7326 90 99, 8504, 8506, 8507, 8517 70 90, 8518, 8538 90 00, 8544 19, 8544 42, 8544 49 Specified parts and accessories including lithium ion battery of cellular mobile phones 7.5%/10% 15% 14 8517 62 90 Smart watches / wearable devices 10% 20% 15 8529 10 99 8529 90 90 LCD/LED/OLED panels and other parts of LCD/LED/OLED TVs 7.5%/10% 15% Furniture 16 9401 Seats and parts of seats [other than aircraft seats and their parts] 10% 20% 17 9403 Other furniture and parts 10% 20% 18 9404 Mattresses supports; articles of bedding and similar furnishing 10% 20% 19 9405 Lamps and lighting fitting, illuminated signs, illuminated name plates and the like [except solar lanterns or solar lamps] 10% 20% Watches and Clocks 20 9101, 9102 Wrist watches, pocket watches and other watches, including stop watches 10% ....
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....mendment not affecting rates of duty [Clause 101(b) of the Finance Bill, 2018] 1 Bifurcate the tariff item 0713 31 00 to create separate tariff items each for Moong Dal and Urad Dal. 2 Omit tariff item 0904 22 12 and entries relating thereto and create new tariff item 1209 91 70, in relation to chilly seed of genus capsicum. 3 Amend the tariff item 2917 39 20 to specify the isomers it covers. *Will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. IV. AMENDMENT IN THE SECOND SCHEDULE TO THE CUSTOMS TARIFF ACT, 1975 S.No. Amendment A Amendments not affecting rates of Export duty Rate of Duty From To 1. To insert a new Note to specify Nil rate of duty in respect of all other goods which are not covered under column (2) of the Schedule. [Clause 102 (a) of the Finance Bill, 2018] -- -- 2 Electrodes of a kind used for furnaces [Clause 102 (b) of the Finance Bill, 2018]* [Introduction of 20% Tariff ....
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....d, half-cut or broken; non-industrial diamonds including lab-grown diamonds (other than rough diamonds), including cut and polished diamonds 2.5% 5% Medical Devices 16 Any Chapter Raw materials, parts or accessories for the manufacture of Cochlear Implants 2.5% Nil Rationalization in Customs duty rates Edible oils of vegetable origin 17 1508, 1509, 1510,1512, 1513, 1515 Crude edible vegetable oils like Ground nut oil, Olive oil, Cotton seed oil, Safflower seed oil, Saffola oil, Coconut oil, Palm Kernel/Babassu oil, Linseed oil, Maize corn oil, Castor oil, Sesame oil, other fixed vegetable fats and oils. 12.5% 30% 18 1508, 1509, 1510,1512, 1513, 1515, 1516 20, 1517 10 21, 90 10, 00 11, 1518 00 21, 1518 00 31 Refined edible vegetable oils, like Ground nut oil, Olive oil, Cotton seed oil, Safflower seed oil, Saffola oil, Coconut oil, Palm Kernel/Babassu oil, Linseed oil, Maize corn oil, Castor oil, Sesame oil, other fixed vegetable fats and oils, edible margarine of vegetable origin, Sal fat; specif....
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....nd high speed diesel oil -- Nil 3 2710 Abolition of Additional Duty of Customs [Road Cess] on imported motor spirit commonly known as petrol and high speed diesel oil [Clause 106 of Finance Bill, 2018] Rs. 6 per litre Nil 4 Additional duty of customs under sections 3(1) of the Customs Tariff Act, 1975 in lieu of basic excise duty 2710 (i) Motor spirit commonly known as petrol Rs. 6.48 per litre Rs. 4.48 per litre 2710 (ii) High speed diesel oil Rs. 8.33 per litre Rs. 6.33 per litre EXCISE Note: "Basic Excise Duty" means the excise duty set forth in the Fourth Schedule to the Central Excise Act, 1944. I. PROPOSALS INVOLVING CHANGE IN EXCISE DUTY RATES: Commodity Rate of Duty From To I Motor spirit commonly known as petrol and high speed diesel oil 1. Levy of Road and Infrastruc....
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....d ending with the 30th June, 2017. [104] 3. Consideration paid to the Government in the form of Government's share of profit petroleum in respect of services provided or agreed to be provided by the Government by way of grant of license or lease to explore or mine petroleum crude or natural gas or both, is proposed to be exempted from service tax for the period commencing from 1st April, 2016 and ending with the 30th June, 2017. [105] IV. MISCELLANEOUS S.No. Amendment Clause of the Finance Bill, 2018 A. Amendment in notification No. 50/2017-Customs 1. Notification No. 65/2017-Customs dated 8th July 2017 amending notification No. 50/2017Customs dated 30th June 2017 is proposed to be given retrospective effect so as to exempt integrated tax leviable under section 3(7) of the Customs Tariff Act, 1975 on aircrafts, aircraft engines and other aircraft parts imported under cross-border lease during the period from the 1st July, 2017 to the 7th July, 2017 subject to the payment of Integrated tax leviable under section 5(1) of the IGST Act, 2017 on the said supply. [99] B. Renaming of Central Board of Excise and Customs ....