TaxTMI 
TaxTMI 
Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021.
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....VD) 1^st February, 2021 2. Unless otherwise stated, all changes in rates of duty take effect from the midnight of 1st February/ 2nd February, 2021. A declaration has been made under the Provisional Collection of Taxes Act, 1931 in respect of clauses 95 (i), 115 and 116 of the Finance Bill, 2021 so that changes proposed therein take effect from the midnight of 1st February/2nd February, 2021. The remaining legislative changes would come into effect only upon the enactment of the Finance Bill, 2021. 3. Important changes in respect of Customs and Central Excise duty (including cesses) are contained in the Annexure to this letter as detailed below. (i) Customs duty rate changes: The change in the rates of duty, SWS, tariff rates, omission of certain exemption and amendments in certain exemptions, conditions to exemptions are at Annexure A. (ii) Central Excise Changes: The changes in Central Excise Act and duty rates are at Annexure B. (iii) Agriculture Infrastructure and development Cess (AIDC): This new cess is being imposed on imports of certain items at specified rate. Simultaneously, basic customs duty is being reduced on the items being brought ....
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....si-judicial or judicial proceedings. The relevant legal texts contained in the Finance Bill and notifications alone have legal force. We have taken every possible care in making the changes error free. However, inadvertent errors cannot be ruled out given the scale of the exercise. I shall be grateful if the provisions of the Finance Bill and notifications are studied carefully and feedback is provided urgently, including the issues that may need clarification. 5 It is requested that all possible efforts may be made to guide the taxpayers by holding interactive sessions/seminars for their benefit. In case of any doubt or difficulty, I would request you to kindly bring it to my notice immediately at js-tru01@ gov.in or to the notice of Shri Gaurav Singh, Deputy Secretary (TRU) (Tel: 011-23092753, email: gaurav.singh80nic.in), Sh. J. S. Kandhari, Deputy Secretary (TRU) (Tel: 011-23095526, email: [email protected]) or Sh. Abhishek Verma, Budget Officer (TRU) (Tel: 011- 23095547, email: [email protected]. We can also be reached at [email protected]. 6. Copies of Finance Bill, 2021, Finance Minister's Budget Speech, Explanatory Memorandum to the Bill and relevant notifications....
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....00. Simultaneously, BCD on this item has been reduced. For the revised rates, refer to the Table in Annexure-C. [S. Nos. 4, 5 of notification No. 02/2021-Customs dated 1st February, 2021 refers] Chapter 9-11: No Change Chapter 12 (1) S. No. 44 of notification No. 50/2017-Customs is redundant. Hence, it is being omitted along with clause (b) of first proviso of the notification [S. No. 6 of notification No. 2/2021- Customs dated 1st February, 2021 refers] Chapter 13-14: No Change Chapter 15 (1) S. Nos. 57, 61, 70 of notification No. 50/2017-Customs are being amended. AIDC is being imposed on Crude Soya-bean Oil, falling under tariff heading 1507 10 00, Crude Palm Oil, falling under tariff heading 1511 10 00 and Crude Sunflower Seed Oil, falling under tariff heading 1512 11 10. Simultaneously, BCD on these items has been reduced. For the revised rates, refer to the Table in Annexure-C. [S. No. 7 of notification No. 02/2021-Customs dated 1st February, 2021 refers] Chapter 16-21: No Change Chapter 22 (1) New S. Nos. 104A of notification No. 50/2017-Customs is being created. AIDC is being imposed on alcoholic beverages and spirits, falling under tariff heading....
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....ms have been reduced. For the revised rates, refer to the Table in Annexure-C. [S. Nos. 13 and 14 of notification No. 02/2021-Customs dated 1st February, 2021 refers] (2) S. No. 147A of notification No. 50/2017-Customs is being amended to decrease BCD on Naphtha from 4% to 2.5%. [S. No. 15 of notification No. 02/2021-Customs dated 1st February, 2021 refers] Chapter 28 (1) BCD on Carbon blacks (Tariff item 2803 00 10) is being increased from 5% to 7.5%, by increasing the tariff rate [Clause 95 (i) of the Finance Bill, 2021 refers]. By virtue of the declaration under Provisional Collection of Taxes Act, 1931, this increase will come into force with immediate effect. Chapter 29 (1) S. No. 202 and 203 of notification No. 50/2017-Customs are being omitted. Consequently, Bis-phenol A and Epichlorohydrin will now attract 7.5% BCD vide S. No. 185 of the said notification. [S. No. 17 of notification No. 2/2021-Customs dated 1st February, 2021 refers] (2) S. No. 209 of notification No. 50/2017-Customs is being omitted. Consequently, with omission of the end use exemption, all Diphenylmethane 4,4-diisocyanate (MDI) will now attract 7.5% BCD vide S. No. 185 of the said notifi....
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.... cover, battery cover etc. The specified parts of mobile under the said tariff item were attracting 15% BCD by tariff. Consequently, with this omission, these goods will now attract 15% BCD. [S. No. (viii) of the notification No. 03/2021- Customs dated 1st February, 2021 refers]. Chapter 40 (1) An explanation is being added to S. No. 284 of notification No. 50/2017-Customs so as to explicitly clarify that the said exemption entry does not include 'toy balloons made of natural rubber latex'. Toy balloons are classified under customs tariff heading 9503 and attract a basic customs duty of 60%. [S. No. 29 of notification No. 2/2021-Customs, dated 1st February, 2021 refers] Chapter 41 (1) S. No. 285 of notification No. 50/2017-Customs is being omitted. Consequently, with omission of the said exemption, 'wet blue chrome tanned leather, crust leather, finished leather of all kinds, including splits and sides of the aforesaid' falling under Chapter 41 will now attract 10% BCD. [S. No. 30 of notification No. 2/2021-Customs, dated 1st February, 2021 refers] Chapter 42-47: No change Chapter 48 (1) Entry at S. No. 293A and S. No. 293B of notification No. 50/2017-Customs a....
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.... 02/2021-Customs, dated 1st February, 2021 refers] Chapter 56-69: No Change Chapter 70 (1) Tariff rate on all goods falling under heading 7007 is being increased from 10% to 15% [Clause 95 (i) of the Finance Bill, 2021 refers]. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, this increase will come into force from 02.02.2021. (2) BCD on all goods under heading 7007, other than those used in motor vehicles, is being retained at 10% [S. No. 42 of notification No. 2/2021-Customs dated 02.02.2021 refers]. Consequently, goods falling under heading 7007 when used for motor vehicles will attract the tariff rate of 15%. Chapter 71 (1) Tariff rate on all goods falling under tariff item 7104 90 90 (cut and polished synthetic stones) is being increased from 10% to 15%. [Clause 95 (i) of the Finance Bill, 2021 refers]. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, this increase will come into force with immediate effect]. (2) S. No. 349 of notification No. 50/2017-Customs is being amended to exclude cut and polished synthetic stones from the said entry. Consequently, cut and polished synthetic stones falling und....
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.... 7208, 7209, 7210, 7211, 7212, 7225 (except 7225 11 00), 7226 (except 7226 11 00) Flat Products of iron or nonalloy steel and alloy steel 7.5% 62 7213, 7214, 7215, 7216, 7217, 7221, 7222, 7223, 7227, 7228 Long Products of iron or nonalloy steel, stainless steel and alloy steel 7.5% 62 7225 Specified inputs for manufacturing CRGO steel mentioned against S. Nos. 374 and 375 of notification No. 50/2017 - Customs dated 30.06.2017 Nil (subject to end use condition and up to 31.03.2023) 59 and 60 (2) The following notifications imposing anti-dumping duty or countervailing duty on certain products of steel are being temporarily revoked for the period 02.02.2021 to 30.09.2021: S. No. Notification No. Product/ Exporting Country 1 54/2018- Cus (ADD) dated 18.10.2018 Straight length Bars and Rod of alloy Steel China PR, 2 38/2019-Cus (ADD) dated 25.09.2019 High Speed Steel of Non Cobalt Grade China PR, Brazil, Germany, 3 16/2020 - Cus (ADD) dated 23.06.2020 Flat rolled prdcts of steel, (Al or Zinc coated) China PR, Vietnam, and Korea RP, 4 1/2017-Cus (CVD) dated 07.09.2017 Hot rolled and cold rolle....
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....8414 30 00 and compressors of Air Conditioners falling under tariff item 8414 80 11, is being increased from 12.5% to 15% by increasing the tariff rate. [Clause 95 (i) of the Finance Bill, 2021 refers]. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, this increase will come into force with immediate effect. Chapter 85 (1) Tariff rate on all goods falling under sub-heading 8501 10 to 8501 53 is being increased from 10% to 15% [Clause 95 (i) of the Finance Bill, 2021 refers]. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, this increase will come into force from 02.02.2021. However, the effective BCD on all goods under these sub-headings (8501 10 to 8501 53), is being retained at 10% [S. No. 77 of notification No. 2/2021 - Customs dated 1st February, 2021 refers]. Consequently, goods falling under sub-headings 8501 10 to 8501 53 will attract the effective BCD rate of 10%. (2) Basic customs duty on Solar Inverters (sub-heading 8504 40) is being raised to 20%. For this purpose, S. No. 13 of the notification No. 57/2017-Customs is being amended. Simultaneously, notification No. 1/2011-Customs, dated 6th January, 2011 i....
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....ion wiring sets and other wiring sets of a kind used in vehicles falling under tariff item 8544 30 00 is being increased from 10% to 15% by increasing the tariff rate on all goods falling under this tariff item [Clause 95 (i) of the Finance Bill, 2021 refers. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, this increase will come into force from 02.02.2021. [S. No. 78 of notification No. 2/2021-Customs, dated 1st February, 2021 also refers]. (9) BCD on inputs, parts, sub-parts and raw materials of following specified parts of cellular mobile phone, is being increased as detailed below: - S. No. of notification No. 57/2017-Customs Description From To Effective date 6A Printed circuit board assembly (PCBA) Nil 2.5% 1.4.2021 6B Camera Module Nil 2.5% 1.4.2021 6C Connectors Nil 2.5% 1.4.2021 7 Items mentioned against the said entry such as wired headset, USB Cable, microphone and receiver, etc Nil 2.5% 1.4.2021 [S. Nos. (i), (ii), (iii) and (iv) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (10) S. No. 6A of the notification No. 57/2017-Customs i....
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.... PCBA and Moulded Plastic of charger or adapter, shall continue to attract 10% BCD vide S. No. 13A of the notification No. 57/2017-Customs, dated 30th June, 2017 as amended vide notification No. 03/2021-Customs, dated 1st February, 2021. (15) S. No. 7B of notification No. 57/2017-Customs, dated 30th June, 2017, is being omitted. Consequently, Moulded Plastics of charger or adapter will now attract 15% BCD. [S. No. (v) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (16) S.No. 7C of notification No. 57/2017-Customs is being omitted. Consequently, inputs or parts of PCBA and Moulded Plastic of charger or adapter of cellular mobile phone will now attract applicable BCD. [S .No. (v) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (17) BCD on inputs or raw materials [other than Lithium-Ion Cell and PCBA] for use in manufacture of Lithium-ion battery and battery pack, is being increased from Nil to 2.5% with effect from 1.4.2021. [S. No. 80 of the notification No. 02/2021-Customs dated 1st February, 2021 and S. No. (v) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (18) BCD on inputs, parts or sub-....
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.... like bobbins, wire etc. for manufacture of transformers, will now attract BCD as applicable. [notification No. 04/2021-Customs dated 1st February, 2021 refers]. Chapter 86: No Change Chapter 87 (1) BCD on specified auto parts (other than Bicycle parts and components) is being increased from 10% to 15% by amending S. No. 532 of notification No. 50/2017 - Customs [ S. No. 86 of notification No. 02/2020 - Customs, dated 1st February, 2021] Chapter 88 (1) BCD on components or parts, including engines, of aircraft of heading 8802 imported for: (a) manufacture of such aircrafts; (b) manufacture of parts of such aircrafts by Public Sector Units under Ministry of Defence, is being reduced to Nil (subject to specified conditions). [S. Nos. 88 of notification No. 02/2021-Customs, dated 1st February, 2021 refers]. Chapter 89: No Change Chapter 90 (1) Notification No. 8/2020-Customs, dated 2nd February, 2020, is being amended to provide Health Cess exemption on medical devices imported by international/diplomatic organization. [notification No. 06/2021, dated 1st February, 2021 refers]. (2) Tariff rate on all goods falling under tariff item 9031....
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....021-Customs dated 01.02.2021 refers] (3) Serial number 4 of notification No. 153/94-Customs dated 13th July, 1994 as amended, extend the said exemption to items 'costumes and props' for film making. (4) S. Nos. 229, 311, 312 and 313 of notification No. 50/2017-Customs are being omitted with effect from 01.04.2021. Consequently, BCD exemption to items falling under aforementioned S. Nos. shall be withdrawn with effect from 1st April, 2021 and they would attract applicable BCD rates. [S. Nos. 22 and 34 of notification No. 02/2021-Customs, dated 1st February, 2021] (5) S. No. 230 of the notification No. 50/2017-Customs is being omitted. Consequently, ink cartridges, ribbon assembly, ribbon gear assembly, ribbon gear carriage, for use in printers for computer, will now attract BCD as applicable. [S. No. 23 of the notification No. 02/2021- Customs dated 1st February, 2021 refers]. (6) Review of Exemption Notifications: Certain miscellaneous exemption notifications have been reviewed and these notifications have either been merged with other exemption notifications or rescinded as these have outlived their utility. The list of notifications that are being rescinded are as fol....
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.... amended), IGCR Rules, 2017 is being prescribed to avail the concession under said entry. 6. 410 IGCR Rules, 2017 is being prescribed in addition with the Condition 52 for the entry. 7. 413 (a) Existing condition 53 for the entry is being amended so as to remove the requirement of furnishing an undertaking to Deputy Commissioner/Assistant Commissioner of Customs as per part (iii) of the said condition. (b) In addition, with the existing condition (as amended), IGCR Rules, 2017 is being prescribed to avail the concession under said entry. 8. 414 (a) Existing condition 54 for the entry is being amended so as to remove the requirement of furnishing an undertaking to Deputy Commissioner/Assistant Commissioner of Customs as per part c.(iii) of the said condition. (b) In addition, with the existing condition (as amended), IGCR Rules, 2017 is being prescribed to avail the concession under said entry. 9. 430 (a) Existing condition 60 for the entry is being amended to remove the requirement of furnishing the end use certificate regarding use of imported goods to the Deputy Commissioner/Assistant Commissioner of Customs at the Port of import. (b) ....
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....n of goods Unit Rate of Duty (1) (2) (3) (4) 2404 11 00 Products intended for inhalation without combustion, containing tobacco or reconstituted tobacco Kg. 81% 2404 19 00 Products intended for inhalation without combustion, Other Kg. 81% (2) The Seventh Schedule of the Finance Act 2001, is being amended with effect from 01.01.2022 to insert the following tariff items. Tariff Item Description of goods Unit Rate of Duty (1) (2) (3) (4) 2404 11 00 Products intended for inhalation without combustion, containing tobacco or reconstituted tobacco Kg. 25% 2404 19 00 Products intended for inhalation without combustion, Other Kg. 25% Chapter 27 (1) Agriculture Infrastructure and Development Cess (AIDC) is being imposed on Petrol and High speed diesel falling under CETH 2710 at the rate of Rs. 2.5 per litre and Rs. 4 per litre respectively. Simultaneously, Basic Excise Duty and Special Additional Excise Duty on Petrol and High speed diesel is being calibrated. The details of these changes are given in Annexure-C. [notification Nos. 01/2021-Central Excise and 02/2021-Centrral Excise, both dated ....
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.... Basic customs duty AIDC 1. 0808 10 00 Apples 15% / 35%* 35% 2. 1511 10 00 Crude Palm Oil 15% 17.5% 3. 1507 10 00 Crude Soya-bean oil 15% 20% 4. 1512 11 10 Crude Sunflower seed oil 15% 20% 5. 0713 10 Peas (Pisum sativum) 10% 40% 6. 0713 20 10 Kabuli Chana 10% 30% 7. 0713 20 20 Bengal Gram (desichana) 10% 50% 8. 0713 20 90 Chick Peas (garbanzos) 10% 50% 9. 0713 40 00 Lentils (Mosur) 10% / 30%* 20% 10. 2204 All goods (Wine) 50% 100% 11. 2205 Vermouth and other wine of fresh grapes, flavoured 50% 100% 12. 2206 Other fermented beverages for example, Cider, Perry, Mead, sake, mixture of fermented beverages or fermented beverages and nonalcoholic beverages 50% 100% 13. 2208 All goods (Brandy, Bourbon whiskey, Scotch etc.) 50% 100% 14. 2701 Various types of coal 1% 1.5% 15. 2702 Lignite, whether or not agglomerated 1% 1.5% 16. 2703 Peat, whether or not agglomerated 1% 1.5% 17. 3102 10 00 Urea Nil 5% 18. 3102 30 00 Ammonium ni....
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....falling immediately two years after the date of such grant or variation. Further, all existing conditional exemptions in force as on the date on which the Finance Bill 2021 receives the assent of the President unless having a prescribed end date, shall come to an end on 31st March, 2023 (if not specifically extended/ rescinded earlier) on review. (b) A new section 28BB is being introduced prescribing a two-year time-limit, further extendable by one year by the Commissioner, for completion of any proceedings under this act which would culminate in issuance of a notice under section 28 of the Customs Act, 1962. (c) Sub section (3) of section 46 is being amended so as to- i. mandate filing of bill of entry before the end of the day preceding the day (including holidays) of arrival of goods. ii. A new proviso is being introduced therein, to enable the Board to notify the time period for presenting bill of entry in certain cases as it may deem fit. (d) Section 110 of the Customs Act is being amended so as to revise the procedure for pretrial disposal of seized gold, in any form as notified. Commissioner (Appeals) having jurisdiction, to certify the correctness....
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....d to create specific tariff lines for certain items. (b) Changes to the first schedule to the Customs Tariff Act are being proposed that are to come into effect from 01.01.2022. This is in accordance with HSN 2022, which proposes 351 amendments to the existing harmonized nomenclature, covering a wide range of goods moving across borders. The amendments are necessary to adapt to the current trade through the recognition of new product streams, the changing nature of commodities being traded, advent of new technologies and addressing the environmental and social issues of global concern- all with a prime focus on the larger goal of ease of doing business and trade facilitation. (c) It is being proposed to make the following amendments in the provision relating to ADD, CVD, Safeguard measures [ sections 8B, 9 and 9A of the Customs Tariff Act and respective Rules] to provide for: i. imposition of duty from the date of initiation of anti-circumvention investigation; ii. anti-absorption provisions to counter situation where, by reduction of export prices or otherwise, the ADD/CVD levied is sought to be absorbed, diluting the intended impact of such ADD/CVD. ....
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....ng a reconciliation statement duly audited by specified professional and to provide for filing of the annual return on self-certification basis. It further provides for the Commissioner to exempt a class of taxpayers from the requirement of filing the annual return. e. Section 50 of the CGST Act is being amended, retrospectively, to substitute the proviso to sub-section (1) so as to charge interest on net cash liability with effect from the 1st July, 2017. f. Section 74 of the CGST Act is being amended so as make seizure and confiscation of goods and conveyances in transit a separate proceeding from recovery of tax. g. An explanation to sub-section (12) of section 75 of the CGST Act is being inserted to clarify that "self-assessed tax" shall include the tax payable in respect of outward supplies, the details of which have been furnished under section 37, but not included in the return furnished under section 39. h. Section 83 of the CGST Act is being amended so as to provide that provisional attachment shall remain valid for the entire period starting from the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV till the expi....