TaxTMI 
TaxTMI 
Union Budget 2025:- Proposes substantial amendments to the Customs Act, Central Excise Act, and CGST Act, including revisions to customs duties, exemptions, and GST provisions
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....ate Tariff Export Duty No.3/2025-Customs 1st February, 2025 Customs Duty No.4/2025-Customs to No.13/2025- Customs 1st February, 2025 Central Excise No.1/2025-Central Excise 1st February, 2025 Non-Tariff Customs No.7/2025 -Customs (NT) 1st February, 2025 A declaration has been made under the Provisional Collection of Taxes Act, 2023 in respect of Clause 98 (a) of the Finance Bill, 2025 and accordingly, changes proposed therein takes effect from the midnight of 1st February / 2nd February, 2025. The other changes proposed in the Bill would come into effect on the enactment of the Bill or from 1stMay, 2025 or the date specified in the Finance Bill. 2. Important changes in respect of Customs and Central Excise duty rates and legislative changes are briefly summarised in the five Annexures appended to this letter: 1) Annexure I: Chapter wise changes relating to customs tariff rates and HSN changes; 2) Annexure II: Legislative changes in Customs Act, 1962, Customs Tariff Act, 1975, Central Excise Act 1944; Central Excise duty and Service Tax Exemption 3) Annexure III: Review of customs conditional exemptions/conce....
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....) classified under tariff item 0304 99 00 for use in manufacture of surimi analogue products for export [S. No 3AC of Notification No. 50/2017-Customs dated 30th June, 2017 as amended by Notification No.5/2025 Customs, dated 1st February, 2025 refers]. Chapters 4 to 9: No change Chapter 10: 1) W.e.f 1.5.2025, a Supplementary Note is being inserted for the purposes of tariff items 1006 30 11 and 1006 30 91. 2) W.e.f 1.5.2025, in heading 1006, for sub-heading 1006 30, tariff items 1006 30 10 to 1006 30 90 and the entries relating thereto are being substituted [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. Chapters 11 to 14: No change Chapter 15: 1) The tariff rate is being reduced from 30% to 20% on glycerol falling under tariff item 1520 00 00. This will be effective from 1st May, 2025 [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, no change is being made to the existing effective rates under S. Nos 81 and 81A of Notification No. 50/2017-Customs dated 30th June, 2017. Chapters 16 to 19: No change Chapter 20: 1) W.e.f. 1.5.2025, tariff items 2008 19 20 to 2008 19 90 and their entries are b....
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....nder tariff item 2711 12 00 and Liquefied Butane classified under tariff item 2711 13 00. However, no change is being made to the existing effective rates. 3) The tariff rate is being reduced from 15% to 5%, on LPG (for non-automotive purpose) classified under tariff item 2711 19 10, LPG (for automotive purpose) classified under tariff item 2711 19 20 and other liquified petroleum gas classified under tariff item 2711 19 90. This change will be effective from 1st May,2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, no change is being made to the existing effective rates. Chapter 28: 1) The tariff rate is being reduced from 20% to 7.5% on Phosphoric Acid classified under tariff item 2809 20 10. This change will be effective from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, no change is being made to the existing effective rate. 2) The tariff rate is being reduced from 27.5% to 7.5% on Boric acid classified under tariff item 2810 00 20. This change will be effective from 1st May, 2025 [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, no change is b....
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.... 35 to 37: No change Chapter 38: 1) The tariff rate is being reduced from 30% to 10% on tariff sub heading 3822 90 covering Pharmaceutical Reference standard, Certified/ other reference materials. This change will come into effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, no change is being made to existing effective rates. 2) The tariff rate is being reduced from 30% to 20% on Sorbitol classified under sub heading 3824 60. This change will come into effect from 1st May, 2025 [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025 these goods will attract 20% BCD +10% SWS. [S. No.5 of Notification No.4/2025 Customs, dated 1st February, 2025 refers]. 3) The tariff rate is being reduced from 17.5% to 7.5% on Other - Prepared Binders, chemical products and preparations of chemical or allied industries classified under tariff item 3824 99 00. This change will come into effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, these goods will continue to attract 7.5% BCD [S. No.6 of Notification No. 4/2025....
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.... / 2nd February, 2025. [Clause 98 (a) of Finance Bill read with Second Schedule refers.] Chapters 61-63: No change Chapter 64: 1) The tariff rate is being reduced from 35% to 20% on footwears classified under headings 6401, 6402, 6403, 6404 and 6405. These changes will come into effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025 these goods will attract 20% BCD and 18.5% AIDC + Nil SWS [S. No.8 of Notification No. 4/2025 Customs, dated 1st February, 2025 and S. No.14A of Notification No. 6/2025-Customs dated 1st February, 2025 and S.No. I(ii) of Notification No. 7/2025-Customs, dated 1st February, 2025 refers]. Chapters 65-67: No change Chapter 68: 1) The tariff rate is being reduced from 40% to 20% on worked monumental or building stone classified under heading 6802 except tariff item 6802 99 00. This change will come into effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025 marble slabs falling under tariff items 6802 10 00, 6802 21 10, 6802 21 20, 6802 21 90, 6802 91 00 and 6802 92 00 will attra....
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....r waste & scrap classified under tariff items 7404 00 12, 7404 00 19 and 7404 00 22. This change will come into effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025, these goods will attract Nil BCD [S.No.12 of Notification No. 4 /2025-Customs dated 1st February, 2025 refers] Chapters 75 to 77: No change Chapter 78: 1) The tariff rate is being reduced from 5% to Nil on Lead waste and scrap classified under heading 7802. W.e.f 2nd February, 2025, these goods will attract Nil BCD [S. No. 381A of Notification No. 50/2017-Customs dated 30th June, 2017 as amended by Notification No.5/2025 Customs, dated 1st February, 2025 refers]. Chapter 79: 1) The tariff rate is being reduced from 5% to Nil on Zinc waste and scrap classified under heading 7902. W.e.f 2nd February, 2025, these goods will attract Nil BCD.[S. No.381B of Notification No. 50/2017-Customs dated 30th June, 2017 as amended by Notification No.5/2025- Customs, dated 1st February, 2025 refers]. Chapter 80: 1) The tariff rate is being reduced from 5% to Nil on unwrought Tin classified under heading 8001 to tariffise the existing....
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....3 30 00 (ix) Tungsten, waste & scrap classified under tariff item 8101 97 00 (x) Zirconium, waste & scrap classified under tariff items 8109 31 00, 8109 39 00 These changes will come into effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025, these goods will attract Nil BCD [S.Nos 14 to 23 of Notification No. 4/2025-Customs dated 1st February, 2025 refers] 3) BCD is being reduced from 5% to Nil on Cobalt Powder classified under tariff item 8105 20 30 S.No. 390B of Notification No.50/2107 -Customs dated 30th June, 2017 as amended by Notification No. 5/2025-Customs dated 1st February,2025. 4) W.e.f 1st May, 2025, the description of the heading in heading 8112 is being amended. Chapters 82 to 83: No change Chapter 84: 1) The following capital goods in Table A below are being added in the existing list of capital goods exempted from BCD for manufacture of Lithium Ion Battery of mobile phones. [S. No. 69 of Notification No. 25/2002-Customs dated 1st March, 2002 as amended by Notification No.11/2025-Customs, dated 1st February, 2025 refers.] Table A S.No. Name of....
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....l Formation - Cell capacity and SOC 90303900/ 85439090 7. Nail Pulling Machine 84798999 24. Cell Formation - DCIR 90303900 8. Injection hole cleaning machine 84798999 25. Cell Formation - Cell Tray plastic 39231090 9. Cell Baking & Cooling Machine 84198990 26. Cell Formation - Cell Tray Metallic 76169910 10. Jelly Roll Pairing Machine 84798999 27. Cell Formation- Formation Machine 73044190 11. Mylar Wrapping Machine 84224000 28. Cell Formation - Other Trays 39239000/ 73269019 12. Cell Sorting Line 84798999/ 84799090 29. Film wrapping and final inspection 90318000/ 90221990 13. Laser Pin Welding 84682010 30. Tap to top cap welding 84682010 14. Laser Notching & Winding 84798999 31. Fibre temperature Detection System 73089000 15. Ultrasonic welding 85158090 32. Water sprinkler system 84248999 16. Load in Can 84798999 33. Rack 73089000 17. Top cover laser welding 85158090 34. Tape Coding 84798999 35. Wire filling and welding machine 84798999 Chapt....
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....ed from 40% to 20% on solar module and other semiconductor devices and photo voltaic cells classified under tariff items 8541 43 00 and 8541 49 00. This change will come into effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025 these goods will attract 20% BCD and 20% AIDC + Nil SWS [S. No. 24 of Notification No. 4/2025 -Customs dated 1st February, 2025 and S. Nos. 16AB and 16AC of Notification No. 6/2025-Customs, dated 1st February, 2025 and S.No. III (8B) of Notification No. 7/2025 -Customs dated 1st February, 2025 refers]. 7) BCD is being reduced from 2.5% to Nil on inputs/parts or sub parts for manufacture of PCBA, Camera Module, connector, wired headset, microphone and receiver, USB cable, Finger print reader/scanner of cellular mobile phone [S. No. 6A, 6B, 6C and 7 of Notification No. 57/2017 -Customs dated 30th June 2017 as amended by Notification No.10/2025 -Customs dated 1st February 2025 refers] 8) The tariff rate is being reduced from 25% to 20% on Solar cells classified under tariff item 8541 42 00. This change will come into effect from 1st May, 2025. [Clause 98(b) of the Finance....
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....ms, dated 1st February, 2025 and S. No. VIII of Notification No. 7/2025 -Customs dated 1st February, 2025 refers]. However, there is no change in existing effective rates on others. 3) The tariff rate is being reduced from 100% to 70% on motor cycles classified under heading 8711. This change will come into effect from 1st May, 2025. [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025, used motor cycles will attract 70% BCD + 40% AIDC + Nil SWS [S. No. 28 of Notification No. 4/2025 -Customs dated 1st February, 2025, S.No. 16AH of Notification No.6/2025-Customs, dated 1st February, 2025 and S.No. III (8C) of Notification No. 7/2025 -Customs dated 1st February, 2025 refers]. The effective rates on motor cycles is being restructured and reduced by substituting S.No 531 of Notification No. 50/2017-Customs dated 30th June, 2017 as under: S.No Description BCD Rate From To 1. (i) Engine capacity not exceeding 1600 CC (CBU) (ii) Semi-knocked down (SKD) (iii) Completely knocked down (CKD) 50% 25% 15% 40% 20% 10% 2. (i) Engine capacity 1600 CC & above (CBU) (ii) Se....
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....ified under heading 9405. These changes will come into effect from 1st May 2025 [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025, these goods will attract 20% BCD + 5% AIDC SWS is being exempted. [S. No. 32 of Notification No.4/2025 -Customs dated 1st February, 2025, S. No. 16D of Notification No. 6/2025-Customs, dated 1st February, 2025 and S.No. I (iv) of Notification No. 7/2025-Customs dated 1st February, 2025 refers]. Chapter 95: 1) The tariff rate is being reduced from 70% to 20% on parts of electronic toys classified under tariff item 9503 00 91. This change will come into effect from 1st May 2025 [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers]. However, w.e.f 2nd February, 2025 these goods will attract,- (i) 20% BCD + 7.5% AIDC + Nil SWS if used for manufacture of electronic toys. (ii) 20% BCD +20% AIDC + Nil SWS if not used for manufacture of electronic toys. [S. No. 33 of Notification No. 4/2025-Customs dated 1st February, 2025, S. Nos 16E and 16F of Notification No. 6/2025-Customs, dated 1st February, 2025 and S.No. I (iv) of Notification No. 7/2025-Customs....
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.... the Customs Act, 1962 a) A new sub-section (1B) is being inserted in Section 18 of the Customs Act, 1962 to provide definite time limit of two years for finalisation of provisional assessment. It also provides that this time period may be extended by the Commissioner of Customs for a further period of one year if the sufficient cause is shown. Further, it also provides that, for the pending cases, the time-limit shall be reckoned from the date of assent of the Finance Bill. b) A new sub-section (1C) is being inserted to provide for certain grounds on which the time-limit of two years for finalizing provisional assessment shall remain suspended. 2) Insertion of new Section 18A of the Customs Act, 1962 A new Section 18A is being inserted after Section 18 of the Customs Act, 1962 for voluntary revision of entry post clearance so as the importers and exporters may revise any entry that is made in relation to the goods within a prescribed time and according to certain conditions as may be prescribed. It also provides for treating such entry as self- assessment and allow payment of duty or treat the revised entry as a refund claim under Section 27. It also provid....
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....) is being inserted in Section 127H to provide that the powers and functions of Settlement Commission shall be exercised or performed by the Interim Board. II. Amendments to the First Schedule to Customs Tariff Act, 1975 S. No. Amendment Clause of the Finance Bill, 2025 Amendments not affecting rates of duty [98(b) read with Third Schedule] The First Schedule to the Customs Tariff Act, 1975 is being amended with effect from 01.05.2025 to, - a) create new tariff items based on process (parboiled, others) and on variety (rice recognised by Geographical Indication Registry, basmati, others) under sub-heading 1006 30 b) create new tariff items under 'Makhana' products (popped, flour and powder, others) and consequent re-numbering of existing entries under chapter 2008 19 c) create new tariff items to separately identify waste oils containing different levels of concentration of levels of polychlorinated biphenyls (PCBs), polychlorinated terphenyls (PCTs) or polybrominated biphenyls (PBBS) under sub-heading 2710 91 d) create new tariff items for identification of certain du....
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....rd from the stage at which such pending application stood immediately before its constitution. 3) A proviso to sub-section (1) of Section 32 is being inserted to provide that CCESC shall cease to operate on or after 1st April, 2025. 4) Sections 32A, 32B, 32C and 32D are being amended by inserting a proviso in all these sections to provide that the provisions of these sections shall not apply on or after 1st April, 2025. 5) A proviso to sub-section (5) of Section 32E is being inserted to provide that no new application shall be made under this section on or after 1st April, 2025. 6) Section 32F is being amended to substitute the expression "Settlement Commission" with "Interim Board" so that the specified procedure on receipt of the application under section 32E shall apply to the Interim Boards. Additionally, a new sub-section is being introduced to allow the Interim Board, within three months of its constitution, to extend the time limit for disposing of pending applications by up to twelve months from its constitution, with reasons to be recorded in writing. 7) Sections 32G, 32-I, 32J, 32K, 32L, 32M, 32-0 and 32P are being amended to p....
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....industrial chemicals S. No. 104B 31.3.2027 10 Fish meal for use in manufacture of aquatic feed S. No. 104C 31.3.2027 11 Goods for the manufacture of telecommunication grade optical fibres or optical fibre cables S. No. 168, S. No. 341, S. No. 341A 31.3.2027 12 Textile machinery (with addition of two new machinery) S. No. 460 S. No. 460A S. No. 460B S. No. 460C S. No. 460D 31.3.2027 13 Parts and components for use in manufacturing of textile machineries S. No. 460E 31.3.2027 14 Goods for use in the manufacture of open cell of LCD and LED TV panel S. No. 515B 31.3.2027 15 Seeds for use in manufacturing of rough Lab- Grown Diamonds [IGCR condition is being removed] S. No. 345B 31.3.2026 16 Parts of wind operated electricity generators, for the manufacture or the maintenance of wind operated electricity generators [The entry has been modified] S. No. 405 31.3.2026 17 Permanent magnets for manufacture of PM synchronous generators above 500KW for use in wind operated electricity generators S. No. 406 31.3.2026 18 Heat Coil for use in the manufacture of Elect....
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....ter-state supplies on which tax has to be paid on reverse charge basis, by inserting reference to sub-section (3) and sub- section (4) of Section 5 of Integrated Goods and Services Tax Act. This amendment will be effective from 1st April, 2025. (ii) Clause (69) (c) is being amended to insert an Explanation to provide for definitions of the terms 'Local Fund' and 'Municipal Fund' used in the definition of "local authority" under the said clause so as to clarify the scope of the said terms. (iii) A new clause (112A) is being inserted to provide definition of Unique Identification Marking for implementation of Track and Trace Mechanism 2. Amendments in Section 12 and 13 of the CGST Act, 2017 Sub-section (4) of Section 12 and sub-section (4) of Section 13 relating to time of supply in respect of Vouchers is being omitted. 3. Amendments in Section 17 of the CGST Act, 2017 Clause (d) of sub-section (5) is being amended to substitute the words "plant or machinery" with the words "plant and machinery" with effect from 1st July, 2017. 4. Amendments in Section 20 of the CGST Act, 2017 Section 20(1) and Section 20(2) are being amended to exp....