Customs Circular No: D.O.F.No.334/5/2015-TRU (28-Feb-15) Union Budget 2015 - Changes in Central Excise and Customs
Dear Chief Commissioner / Principal Commissioner,
The Finance Minister has introduced the Finance Bill, 2015 in Lok Sabha today, i.e., 28th February, 2015. Changes in Customs and Central Excise law and rates of duty have been proposed through the Finance Bill, 2015 (clauses 80 to 89, 163, 164 for Customs and clauses 90 to 104, 163, 164, 184 and 188 for Central Excise). In order to prescribe effective rates of duty and to carry out changes in the Rules made under the respective Acts, the following notifications are being issued:
| CUSTOMS | Notification Nos. | Date |
| Tariff | No.6/2015-Customs to No.11/2015-Customs 1st March, 2015 | |
| Non-Tariff | No.27/2015-Customs (NT) | 1st March, 2015 |
| CENTRAL EXCISE | ||
| Tariff | No.5/2015-CE to No.17/2015-CE | 1st March, 2015 |
| Non-Tariff | No.3/2015-CE (NT) to No.11/2015-CE (NT) | 1st March, 2015 |
| CLEAN ENERGY CESS | ||
| No.1/2015-Clean Energy Cess | 1st March, 2015 | |
| M&TP ACT | ||
| No.1/2015-M&TP | 1st March, 2015 |
Unless otherwise stated, all changes in rates of duty take effect from the midnight of 28th February / 1st March, 2015. A declaration has been made under the Provisional Collection of Taxes Act, 1931 in respect of clauses 89, 90, 103, 104, 163, 164 and 188 of the Finance Bill, 2015 so that changes proposed therein take effect from the midnight of 28th February / 1st March, 2015. The remaining legislative changes would come into effect only upon the enactment of the Finance Bill, 2015. Retrospective amendment in the notification issued under the Central Excise Act shall have the force of law only upon the enactment of the Finance Bill, 2015 but with effect from the date indicated in the relevant clause or Schedule. These dates may be carefully noted.
2. Important changes in respect of Customs and Central Excise duty and legislative changes are contained in the four Annexes appended to this letter:
(i) Annex I contains Chapter wise changes relating to Customs;
(ii) Annex II contains Chapter wise changes relating to Central Excise:
Education Cess and Secondary & Higher Education Cess leviable on all excisable goods are being fully exempted. Simultaneously, the standard ad valorem rate of duty of excise (i.e. CENVAT) is being increased from 12% to 12.5%. Details of the consequential changes are enlisted in the aforesaid Annex.
Also, maximum speed of packing machine for packages of notified goods of various retail sale prices is being specified as a factor relevant to production for determining excise duty payable under the Compounded Levy Scheme presently applicable to pan masala, gutkha and chewing tobacco. The deemed production and duty payable per machine per month are accordingly being notified in respect of these goods with reference to the speed range in which the maximum speed of a packing machine for packages of various retail sale prices falls. Consequential amendments are being carried in the Pan Masala Packing machines (Capacity Determination and Collection of Duty) Rules, 2008 and Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 to enable the AC / DC, as the case may be, to re-determine the annual capacity of production for the period 1st March, 2015 onwards within 3 working days of the coming into force of the Packing machines (Capacity Determination and Collection of Duty) Amendment Rules, 2015 and Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Amendment Rules, 2015. Details of changes in this regard enlisted in the aforesaid Annex may be studied carefully.
(iii)Annex III contains the clarifications being issued on certain matters.
(iv) Annex IV provides a bird''s eye view of legislative changes proposed in the Finance Bill, 2015.
2.1 The Annexes provide a summary of the changes made and should not be used in any quasi-judicial or judicial proceedings, where only the relevant legal texts need to be referred to.
2.2 I would also like to bring to your notice that it is quite likely that a commodity may be covered under more than one notification attracting different rates of duties. In such cases, as per various judicial pronouncements on the subject, the benefit of lower rate of duty cannot be denied to the assessee provided he fulfils the conditions prescribed, if any, for such lower rate.
3. In order to achieve a sharper focus, I have alluded only to the key highlights of the budgetary changes in this communication. The details are contained in the Finance Bill and notifications which alone have legal force. My team and I have made every possible effort to avoid the occurrence of errors or mistakes in the Budget documents. However, given the scale of changes, inadvertent errors cannot be ruled out. I shall be grateful if the provisions of the Finance Bill and notifications are studied carefully and feedback on issues that may need clarification is provided urgently.
4. It may kindly be ensured that the changes are implemented in a smooth manner without causing any inconvenience to the taxpayers and other stakeholders. 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 or to the notice of Sh. Amitabh Kumar, OSD (TRU) (Tel No.011-23092236); Sh. G.G. Pai, Director (TRU) (Tel No. 011-23092753), e-mail: giridhar.pai@nic.in or Sh. Malay Samir, Budget Officer (TRU) (Tel No. 011-23094819), e-mail: malay.samir@nic.in. We can also be reached at budget-cbec@nic.in.
5. Copies of Finance Bill, 2015, Finance Minister''s Budget Speech, Explanatory Memorandum to the Bill, relevant notifications can be downloaded directly from www.indiabudget.nic.in as well as www.cbec.gov.in.
6. To conclude, my team and I would like to express my gratitude to you for the valuable suggestions, feedback and support and would look forward to your comments/ suggestions.
With warm regards, Yours sincerely,
Alok Shukla
Joint Secretary (TRU-I)
To,
All Principal Chief Commissioners / Principal Directors General
All Chief Commissioners / Directors General
All Principal Commissioners,
All Commissioners
Director DPPR/ Logistics/Legal Affairs/ Data Management.
ANNEX I
CUSTOMS
Chapter 1 to 24: No change
Chapter 25:
1) Basic Customs Duty on ulexite ore is being reduced from 2.5% to Nil. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated 1st March, 2015 [new S.No.113A] refers.
Chapter 26:
1) Export duty on ilmenite, upgraded (beneficiated ilmenite including ilmenite ground) is being reduced from 5% to 2.5%. S.No.24D of notification No.27/2011-Customs, dated 1st March, 2011 as amended by notification No.8/2015-Customs, dated 1st March, 2015 refers.
Chapter 27:
1) The tariff rate of Basic Customs Duty on Bituminous coal [2701 12 00] is being reduced from 55% to 10%. A suitable amendment has been proposed in the Customs Tariff Act, 1975. Clause 89 of the Finance Bill, 2015 refers. However, the effective rate of Basic Customs Duty on Bituminous coal continues to be 2.5%.
2) Basic Customs Duty on metallurgical coke [2704 00] is being increased from 2.5% to 5%. S.No.125 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated 1st March, 2015 refers.
3) Special Additional Duty (SAD) on Naphtha [2710] for use in manufacture of excisable goods is being reduced from 4% to 2%. Notification No.21/2012-Customs, dated 17th March, 2012 as amended by notification No.11/2015-Customs, dated the 1st March, 2015 [new S.No.45A] refers.
4) Basic Customs Duty on liquefied butanes [2711 13 00] is being reduced from 5% to 2.5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated the 1st March, 2015 [new S.No.142C] refers.
5) Scheduled rate of Additional Duty of Customs levied on imported Motor Spirit [Petrol] and High Speed Diesel Oil [commonly known as Road Cess] is being increased from ₹ 2 per litre to ₹ 8 per litre. A suitable amendment has been proposed in the Second Schedule to the Finance (No.2) Act, 1998 and Second Schedule to the Finance Act, 1999. Clause 163 and 164 of the Finance Bill, 2015 refer. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, these changes will come into force with immediate effect. However, the effective rate of Additional Duty of Customs levied on imported Motor Spirit [Petrol] and High Speed Diesel Oil [commonly known as Road Cess] is being increased from ₹ 2 per litre to ₹ 6 per litre. Notification No.6/2015-Customs and notification No.7/2015-Customs both dated the 1st March, 2015 refer.
Chapter 28:
1) Basic Customs duty on sulphuric acid [2807 00 10] for the manufacture of fertilizers is being reduced from 7.5% to 5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated the 1st March, 2015 [new S.No.157A] refers.
Chapter 29 and 30:
1) Basic Customs duty on isoprene [2901 24 00] is being reduced from 5% to 2.5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated the 1st March, 2015 [S.No.173D] refers.
2) Basic Customs duty on styrene [2902 50 00], ethylene dichloride (EDC) [2903 15 00] and Vinyl Chloride Monomer (VCM) [2903 21 00] is being reduced from 2.5% to 2%. S.Nos.175, 177 and 178 Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated the 1st March, 2015 refers.
3) Special Additional Duty (SAD) on styrene [2902 50 00], ethylene dichloride (EDC) [2903 15 00] and Vinyl Chloride Monomer (VCM) [2903 21 00] for use in manufacture of excisable goods is being reduced from 4% to 2%. Notification...
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