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Customs duty definitions clarified under Finance Bill, setting scope and an enactment date effectiveness for amendments.
Amendments in the Finance (No. 2) Bill, 2019 clarify that Basic Customs Duty means the customs duty under the Customs Act, 1962; Export duty means the customs duty on goods in the Second Schedule to the Customs Tariff Act, 1975; and Road and Infrastructure Cess means the additional duty under section 111 of the Finance Act, 2018. Amendments become effective on enactment unless otherwise specified, and clause numbers are shown in square brackets.
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Verification of identity through biometric identifiers enables customs to verify individuals and suspend benefits for non-compliance.
Amendments broaden customs powers: departure manifests may be furnished to notified persons; a new verification chapter permits identity checks through Aadhaar or alternatives with regulatory exemption and penalties for non-compliance; authorised screening and body scans may be reported to a magistrate. Arrest powers extend beyond territorial waters, specified offences are made cognizable or non-bailable, and custody rules for seized goods are clarified. Officers may provisionally attach bank accounts with limited extension and adjudicatory release. New penalties address fraudulent procurement or use of instruments and increase monetary caps; the Board may make related regulations.
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Anti circumvention measures for countervailing duty introduced, and appeals on safeguard determinations moved to appellate tribunal.
An amendment inserts an anti circumvention provision into the Customs Tariff Act to prevent evasion of countervailing duty, and another amendment channels appeals against determinations or reviews about increased import volume for imposition of safeguard duty to the Customs Excise and Service Tax Appellate Tribunal.
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Customs duty revisions: targeted increases and reclassification to align tariff lines, affecting specific goods and book treatment.
The Finance (No. 2) Bill, 2019 revises Basic Customs Duty rates for specified tariff headings across construction materials, precious metals, automobile parts and electronics effective 06.07.2019 by virtue of a provisional collection declaration, and inserts Chapter Note 7 to exclude printed books for personal use from heading 9804 so they attract applicable merit rates. Clause 87(b) directs creation of specific tariff lines and rectification of classification errors to align the First Schedule with HSN, effective on a date to be notified in the Official Gazette.
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Basic customs duty changes reorganise import tariff reliefs and increases across strategic manufacturing and project imports.
Proposals revise basic customs duty rates and clarify notifications across sectors, granting nil-rating or reduced duties for specified defence, medical device, nuclear project and electronics capital goods imports, while increasing duties on various agricultural, petrochemical, plastic, metal, paper, flooring and automobile imports; they also permit duty on depreciated transaction value for disposal of petroleum-operation imports, expand duty-free inputs for sports-goods exports, and clarify duty treatment for non-pellet prawn and shrimp feeds.
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Export duty reductions proposed under Finance Bill lower tariffs on tanned leather and hides, skins and leathers.
The Finance (No.2) Bill, 2019 proposes removal of export duty on EI tanned leather and a reduction of export duty on hides, skins and leathers, tanned and untanned, effecting tariff-rate adjustments for the leather sector under customs regulation.
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Road and Infrastructure Cess increase on petrol and diesel takes effect, raising scheduled additional customs duty per litre.
Amendment to the Sixth Schedule to the Finance Act, 2018 increases the scheduled rate of Road and Infrastructure Cess as an additional duty of customs on motor spirit (petrol) and high speed diesel; the Finance (No. 2) Bill, 2019 prescribes the new per litre scheduled rate and the amendment is to take effect from 06.07.2019 with immediate provisional operation under the Provisional Collection of Taxes Act, 1931.
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Road and Infrastructure Cess increase on petrol and diesel raises additional customs duty incidence and alters fuel taxation.
The Finance (No. 2) Bill, 2019 increases the Road and Infrastructure Cess levied as an additional duty of customs on motor spirit (petrol) and high speed diesel, thereby raising the per litre cess rate applied to these fuels and altering the customs duty component in fuel taxation.
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Retrospective amendments correct customs classifications and extend exemptions for temporary vehicle imports and antidumping measures.
The Finance (No. 2) Bill, 2019 proposes retrospective amendments to insert correct customs tariff headings for stearic acid and to correct antidumping classifications and exclusions for polyester yarn and polypropylene, and to give retrospective effect to an exemption of IGST and compensation cess on temporary vehicle imports under the carnet regime, thereby altering duty, IGST/cess and antidumping chargeability for specified past periods.
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Customs tariff amendments extend concessional feed treatment and explicitly exempt specified semiconductor machines and audio components from BCD.
The amendments confirm that prawn feed and shrimp larvae feed in any form attract a concessional rate of 5%, while fish feed qualifies only in pellet form; propose inclusion of HS 8486 to exempt semiconductor manufacture machines from basic customs duty; add headphones, earphones and combined microphone/speaker sets to tariff subheading 8518 30 00 consistent with ITA commitments; and amend notification No. 57/2017-Customs to explicitly exclude microphones, receivers, speakers, connectors and SIM sockets from a concession entry.
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Excise duty definitions clarified: amendments specify basic excise duty, road and infrastructure cess, and special additional excise duty.
Amendments define three core excise components-Basic Excise Duty as set out in the Fourth Schedule, Road and Infrastructure Cess as the additional excise introduced by the Finance Act 2018, and Special Additional Excise Duty as the levy created by the Finance Act 2002-and provide that changes effected by the Finance (No. 2) Bill, 2019 take effect on enactment unless otherwise specified.
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Basic excise duty on petroleum crude raised, imposing a nominal per tonne duty and enabling provisional collection under tax law.
The Finance (No.2) Bill, 2019 amends the Fourth Schedule to the Central Excise Act, 1944 to impose a nominal per tonne basic excise duty on petroleum crude, changing the rate from nil and providing that the revised duty operates immediately under a declaration made under the Provisional Collection of Taxes Act, 1931.
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Excise duty changes impose specified rates on a range of tobacco products and alter duty treatment for crude petroleum.
Proposals set out notification based excise duty rates for multiple tobacco tariff lines-imposing per unit and percentage levies on specified categories of cigarettes, biris, smoking mixtures, chewing tobacco, snuff, tobacco extracts and other manufactured tobacco or substitutes-replacing prior nil treatment. They also remove a nominal per tonne excise charge on crude petroleum produced under production sharing contracts and certain exploration blocks, with each tariff line assigned a precise levy form to be applied by notification.
News Bills
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Special additional excise duty increase on petrol and diesel imposes higher fuel taxes immediately under provisional collection.
Amendment raises the scheduled rates of Special Additional Excise Duty on petrol and diesel by modifying the Eighth Schedule to the Finance Act, 2002 via the Finance (No. 2) Bill, 2019; the change is to take effect immediately under a provisional collection declaration, with the operative rates to be prescribed by subsequent notification.
News Bills
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Road and Infrastructure cess increase on petrol and diesel takes effect immediately under Provisional Collection of Taxes framework.
The Finance (No. 2) Bill, 2019 amends the Sixth Schedule to the Finance Act, 2018 to increase the Road and Infrastructure cess as an additional excise duty on motor spirit (petrol) and high speed diesel from Rs. 8 per litre to Rs. 10 per litre, with the amendment declared effective from 6 July 2019 under a provisional collection declaration and to be implemented by notification.
News Bills
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Excise duty increases on petrol and diesel under Finance Bill raise effective tax rates for fuel levies.
The Finance (No.2) Bill, 2019 increases the effective rates of Special Additional Excise Duty and Road and Infrastructure Cess on motor spirit (petrol) and high speed diesel by substituting the prior per litre rates with higher per litre rates for each levy, with the cess expressly levied as an additional duty of excise.
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Service tax retrospective exemptions expanded to specified state licence fees, select IIM programmes, and upfront lease consideration.
The Finance (No. 2) Bill, 2019 proposes retrospective Service Tax exemptions: (i) State Government consideration for grant of liquor licences for 1 April 2016-30 June 2017; (ii) specified Indian Institutes of Management educational programmes (excluding Executive Development Programmes) for 1 July 2003-31 March 2016; and (iii) upfront amounts paid for long term (thirty years or more) leases of development plots by State industrial/majority government entities for 1 October 2013-30 June 2017.
News Bills
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Dispute resolution amnesty scheme introduced to settle legacy central excise and service tax cases under the Finance Bill.
The Finance (No.2) Bill, 2019 introduces a Sabka Vishwas Legacy Dispute Resolution Scheme, a dispute resolution cum amnesty mechanism to resolve and settle legacy Central Excise and Service Tax cases through provisions in clauses 119-134 of the Bill, establishing a time bound framework for admission and settlement of eligible legacy disputes.
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GST amendment effective dates clarified: central amendments effective on enactment while finance-bill changes await notification.
Amendments carried out through the Finance (No.2) Bill, 2019 take effect on the date of its enactment unless otherwise specified; amendments carried out in the Finance Bill, 2019 will come into effect from the date when they are notified, concurrently with corresponding amendments to the Acts passed earlier by the States and Union territories with legislature.
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National Appellate Authority for Advance Ruling clarifies binding advance rulings, procedural powers and remedies under amended CGST framework.
The amendments create a National Appellate Authority for Advance Ruling with defined composition, powers to regulate procedure and exercise civil court powers, time bound disposal and limited rectification capacity; its advance rulings are binding on distinct applicants and registered persons with the same permanent account identifier and void if obtained by fraud. They also introduce an alternative composition scheme for service/mixed suppliers with specified turnover limits, clarify treatment of interest/discount for turnover computations, raise the exclusive goods exemption threshold, mandate Aadhaar authentication for specified taxpayers, require specified electronic payment options, permit electronic cash ledger head transfers and authorize Commissioner extensions for certain filings, while calibrating interest charging and refund disbursement, and enhancing anti profiteering penalty authority.

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Review of Customs duty Exemptions - Review of conditional exemption rates of BCD

24 July, 2024

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Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

(i) The BCD exemption for the goods covered under following serial numbers of the notification are being extended upto 31st March, 2026 unless specified otherwise.

S. No.

S N of 50/17-Cus

Brief Description

1.

17

Specified Planting materials, namely, oilseeds, seeds of vegetables, tubers, etc.

2.

80A

Algal oil for manufacturing of aquatic feed

3.

90

Lactose for use in manufacture of homeopathic medicines

4.

104

Specified goods used in processing of sea-food

5.

133

Gold ores and concentrates

6.

139

Bunker Fuels namely: (i). IFO 180 CST; (ii). IFO 380 CST; (iii). VLSFO (CTH 27)

7.

150

Naphtha for manufacture of Fertilisers (scope of exemption is being reduced only to Naphtha)

8.

155

Liquefied petroleum gases (LPG) received from unit in SEZ and returned by the DTA unit to the SEZ unit

9.

164

Electrical energy supplied from SEZ unit to DTA

10.

165

Electrical energy supplied from SEZ to DTA

11.

172

Specified goods used in manufacture of silicon wafers or solar wafers, for manufacture of solar cell or module

12.

183

Medical use fission Molybdenum-99 (Mo-99) for use in manufacture of radio pharmaceuticals

13.

184

Pharmaceutical Reference Standard

14.

188

Goods for manufacture of ELISA Kits

15.

191

Maltol for manufacture of deferiprone

16.

204

Anthraquinone or 2-Ethyl Anthraquinone for use in manufacture of Hydrogen peroxide

17.

237

Specified material for manufacture of EVA (Ethylene Vinyl Acetate) sheets or backsheet, which are used in the manufacture of solar photovoltaic cells or modules (Scope of materials which can be imported is being increased)

18.

253

Specified Goods for manufacture of Brushless Direct Current (BLDC) motors

19.

257

Tags, labels, stickers, belts, buttons, hangers or printed bags, imported by bonafide exporters

20.

257A

Specified goods used in manufacture of handicraft items for export when imported by bonafide exporter

21.

257B

Specified goods used in manufacture of textile or leather garments for export when imported by bonafide exporter

22.

257C

Specified goods used in manufacture of leather or synthetic footwear or other leather products for export when imported by bonafide exporter

23.

258

Security fibre, threads, Paper based Taggant, M-feature for use in manufacture of security paper by Security Paper Mill, Hoshangabad and Bank Note Paper Mill India Pvt Ltd, Mysore.

24.

259

Raw materials for manufacture of security fibre and security thread for supply to Security Paper Mill, Hoshangabad and Bank Note Paper Mill India Pvt. Ltd, Mysore for use in manufacture of security paper

25.

260

Goods for the manufacture of specified orthopedic implants (902110)

26.

261

Raw material for manufacture of Copper-T Contraceptive

(i) Alatheon

(ii) Copper Wire

27.

265

Capacitor grades polypropylene granules for manufacture of Capacitor grade plastic

28.

269

Super absorbent polymer for manufacture of adult diapers and specified goods

29.

271

Polytetrametylene ether glycol, (PT MEG) for use in manufacture of spandex yarn

30.

276

Ethylene- propylene- non-conjugated diene rubber (EPDM) for manufacture of insulated wire and cables

31.

279

New or retreated Pneumatic tyres of rubber for use in servicing, repair of maintenance of aircrafts used for operating scheduled air transport service or scheduled air cargo service etc

32.

280

New or retreated Pneumatic tyres of rubber for use in servicing, repair or maintenance of aircraft imported or procured by Aero Club of India/ for flying training purpose/ operating non-scheduled (passenger or charter) services/ AAI for flight calibration purpose

33.

290

Wood pulp for manufacture of newsprint, paper or paperboard

34.

292

Goods imported for manufacture of paper, paper boards, newsprint

35.

293A

Newsprint and uncoated paper imported for printing of newsprint

36.

296A

Lightweight coated paper imported by actual users for printing of magazines

37.

326

Hydrophilic /Hydrophobic Non- Woven, imported for use in the manufacture of Adult Diapers

38.

329

Pile fabrics for the manufacture of toys

39.

333

Moulds, tools and dies, for the manufacture of parts of electronic components or electronic equipment

40.

334

(i) Graphite Felt or Graphite pack for growing silicon ingots (ii) Thin Steel wire used in wire saw for slicing of silicon wafers

41.

345A

Simply Sawn Diamonds

42.

364A

Spent catalyst or ash containing precious metals

43.

368

Ferrous Scrap

44.

374

Magnesium Oxide (MgO) coated cold rolled steel coils for use in manufacture of cold rolled grain oriented (CRGO) steel

45.

375

Specified items for manufacture of cold rolled grain-oriented steel (CRGO) steel

46.

378

Metal parts for manufacture of electrical insulators falling under heading 8546

47.

379

Pipes and tubes for use in manufacture of boilers

48.

380

Forged steel rings for manufacture of special bearings for use in wind operated electricity generators

49.

381

Flat copper wire for use in the manufacture of photo voltaic ribbon for manufacture of solar photovoltaic cell or modules

50.

392

Dies for drawing metal, where imported after repairs from abroad

51.

403

Parts and raw materials for offshore oil exploration

52.

404

Specified items including capital goods and raw materials for off shore oil exploration

53.

415

Parts for manufacture of catalytic convertors

54.

415A

Platinum or Palladium for manufacture of Noble Metal Compounds & Noble Metal Solutions

55.

416

Ceria zirconia compounds for use in the manufacture of washcoat for catalytic converters

56.

417

Cerium compounds for use in the manufacture of washcoat for catalytic converters

57.

418

Zeolite for use in the manufacture of washcoat for catalytic converters

58.

422

Machinery, electrical equipment for use in semiconductor wafer and LCD

59.

423

Machinery, electrical equipment for use in marking and packaging of semiconductor chips

60.

426

Specified goods for the manufacture of semiconductor devices, memory card, IC, solar cell

61.

435

Capital goods for printing industry

62.

442

Bushings made of Platinum and Rhodium alloy when imported in exchange of worn out or damaged bushings exported out of India

63.

446

Parts and components for manufacture of tunnel boring machines

64.

451

Evacuated tubes with three layers of solar selective coating for use in manufacture of solar water heater

65.

462

Ball screws for use in the manufacture of CNC Lathes

66.

463

Linear Motion Guides for use in the manufacture of CNC Lathes

67.

464

CNC Systems for use in the manufacture of CNC Lathes

68.

464A

Goods for manufacture of plastic processing machineries

69.

467

Parts and components of cash dispenser or automatic bank note dispenser

70.

468

Parts for manufacture of Micro ATM, Fingerprint reader/scanner, Iris scanner, Miniaturised POS (Scope of exemption is being limited to import of raw materials only)

71.

471

All parts for use in the manufacture of LED lights

72.

472

All inputs for use in the manufacture of LED driver or MCPCB for LED lights

73.

476

Television equipment, cameras etc for taking films, imported by a foreign film unit or television team

74.

477

Filming equipment of foreign origin if imported into India after having been exported therefrom.

75.

480

Goods imported for being tested in specified test centers

76.

489B

Goods for manufacturing of Microphones

77.

504

Parts and Components of Digital Still Image Video Cameras

78.

509

Parts, components and accessories for manufacture of Digital Video Recorder

79.

510

 Parts, components and accessories for use in manufacture of reception apparatus for television

80.

511

Parts, components and accessories for manufacture of CCTV Camera

81.

512

Specified Parts, components and for use in manufacture of Lithium-ion battery and battery pack

82.

512A

Inputs, parts or sub-parts for use in the manufacturing of Printed Circuit Board Assembly

83.

515A

Open Cell for manufacture of TV Panel

84.

516

The following goods for use in the manufacture of Liquid Crystal Display (LCD) /LED TV Panel

85.

517

Magnetrons for manufacture of domestic microwave ovens

86.

519

Raw materials or parts for use in manufacture of e-Readers

87.

523A

Parts, sub-parts, inputs or raw material for use in manufacture of Lithium-ion cells

88.

527

Lithium-ion cell use in manufacture of battery or battery pack

89.

527A

Lithium-Ion Cell for use in manufacture of battery or battery pack of cellular mobile

90.

527B

Lithium-Ion Cell manufacture of battery or battery pack of EV

91.

534

Parts of gliders or simulators of aircrafts (excluding rubber tyres and tubes of gliders)

92.

535

Raw materials for manufacture of aircraft and parts of aircraft

93.

535A

Parts of aircraft for manufacture of aircraft or for manufacture of parts of aircraft by PSU under Min of Defence

94.

536

Parts, testing equipment, tools and tool-kits for maintenance, repair, and overhauling of aircraft, components or parts of aircrafts

95.

537

All goods of Heading 8802 (except 88026000-spacecraft)

96.

538

Components or parts, including engines, of aircraft of heading 8802

97.

539

(a) Satellites and payloads; (b) Ground equipment brought for testing of (a)

98.

539A

Scientific and technical instruments etc for launch vehicles and satellites

99.

540

Specified goods imported by scheduled air transporter

100.

542

Specified goods imported by Aero Club, Flying Training Institutes

101.

543

Specified goods imported by non-scheduled air transporter

102.

544

Parts (other than rubber tubes), of aircraft of heading 8802

103.

546

Parts (other than rubber tubes), of aircraft of heading 8802

104.

548

Barges or pontoons imported along with ships

105.

551

Cruise ships, Excursion ships

106.

553

Fishing vessels, Tugs and Pusher crafts, light vessels excluding vessels and floating structure imported for break up

107.

555

Vessels like warships, lifeboats excluding vessels and floating structure imported for break up

108.

567

Stainless steel tube and wire, for manufacture of Coronary stents /artificial valve

109.

569

Parts required for manufacture of Ostomy products

110.

570

Medical and surgical instruments, apparatus and appliances including spare parts and accessories thereof

111.

575

Specified Hospital Equipment for use in specified hospitals

112.

578A

Raw materials, for the manufacture of Cochlear Implants

113.

580

X-Ray Baggage Inspection Systems and parts thereof

114.

581

Portable X-ray machine / system

115.

583

Parts and cases of braille watches, for the manufacture of Braille watches

116.

591

Parts of electronic toys

117.

593

Parts of video games for the manufacture of video games

Note: Description of entries is indicative. Notification may be referred to for complete description.

(ii) The BCD exemption for the goods covered under following serial numbers of the notification no 50/2017-Customs is being extended upto 31st March 2029.

S. No.

S. No. of 50/2017Cus

Brief Description

1.

212A

Medicines/drugs/vaccines supplied free by United  Nations International Children's Emergency Fund (UNICEF), Red Cross etc

2.

213

Drugs and materials

3.

428

Specified goods imported by accredited press cameraman

4.

429

Specified goods, imported by accredited journalist

5.

549

Capital goods, raw materials and spares for repairs of ocean-going vessels

6.

550

Spare parts and consumables for repairs of ocean going vessels registered in India.

7.

577

Lifesaving medical equipment for personal use

8.

607

Life Saving drugs like Keytruda etc

9.

607A

Lifesaving drugs/medicines for personal use

10.

611

Archaeological artefacts for exhibition in a museum

11.

612

Specified raw material for sports goods

Note: Description of entries is indicative. Notification may be referred to for complete description.


Full Text:

Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

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Acts Income Tax