CT : First Schedule to the Customs Tariff Act, 1975 (51 of 1975)
AD : Additional duty of customs
The proposals include the following:-
A. GENERAL
The First Schedule to the Customs Tariff Act, 1975 is being
amended vide relevant clause of the Bill to give effect to the tariff
changes relating to the Customs Duties.
Major Proposals involving changes in rates of duty, whether by
amendment of tariff rates or by notifications.
1. Reduction in customs duty on edible oils (other than coconut oil, RBD
palm oil, RBD palm kernel oil and palm stearin) from 30% to 20%.
2. Peak rate reduction in customs duty on:
(a) specified dairy produce and edible products from 40% to 30%;
(b) mate and spices to 30%;
(c) animal and vegetable fats and oils and prepared edible fats
from 50% to 40%;
(d) cocoa and cocoa preparations from 50% to 40%;
(e) non -metallic mineral products, other than DBM, from 50% to 40%.
3. Reduction in customs duty on:
(a) dates falling under sub-heading No. 0804.10 of CT from 40% to
30%;
(b) specified fresh fruits falling under sub-heading No. 0810.90
of CT from 50% to 10%;
(c) pectic substances falling under sub-heading No. 1302.20 of CT
from 50% to 20%;
(d) soya bean oil falling under heading No. 15.07 of CT from 35%
to 30%;
(e) olive oil from 45% to 30%;
(f) rape, mustard and colza oils from 35% to 30%;
(g) lactose and lactose syrup from 25% to 20%;
(h) preparation for infant use put up for retail sale, falling under
sub-heading No.1901.10 of CT, from 15% to 10%;
(i) compound alcoholic preparations used in the manufacture of
beverages from 200% to 195%;
(j) specified minerals from 30% to 25%;
(k) natural borates and concentrates thereof from 50% to 25%.
4. Increase in customs duty on :
(a) products of milling industry such as wheat flour, cereal flour
and wheat gluten from 10% to 30%;
(b) beer made from malt, grape must and fermented beverages from 145%
to 150%.
5. I Prescribing uniform customs duty of 10% on ethyl alcohol and
other spirits, denatured of any strength.
II Prescribing uniform customs duty of 150% on all wines not
containing more than 42% of proof-spirit in place of
specific-cum ad valorem or ad valorem rates of duty.
6. Reduction in customs duty on:
(a) petroleum crude from 35% to 25%;
(b) non-coking coal from 35% to 20%;
(c) coke from 25% to 20%;
(d) bitumen from 30% to 10%.
7. Exemption from AD on bitumen falling under sub-heading No., 2714.90
for manufacture of fertiliser and generation of power.
8. Full exemption from customs duty (Basic + AD) on bitumen for
manufacture of fertilizer.
9. Peak rate reduction in customs duty on:
(a) inorganic chemicals of Chapter 28 of CT from 50% to 40%;
(b) organic chemicals of Chapter 29 of CT from 50% to 40%.
10. Reduction in customs duty on:
(a) caustic soda and soda ash from 40% to 30%;
(b) iodine from 25% to 10%;
(c) heavy water and specified radio active materials from 15%
to 10%;
(d) zirconium oxide and yttrium oxide (used in manufacture of
synthetic stones) from 20% to 10%;
(e) cyclohexane,toluene,cumene and acrylonitrile from 20% to 10%;
(f) MEG, DMT and PTA from 35% to 25%;
(g) caprolactum from 45% to 30%;
(h) acetic acid, adipic acid and its salts,tartaric acid and
camphor sulphonic acid from 40% to 25%;
(i) hydantoin and its derivatives from 50% to 25%;
(j) phenol and its salts and vinyl pyridine monomer from 40%
to 30%;
(k) specified amino acids from 15% to 10%.
11. Reduction in peak rate of customs duty on pharmaceutical products
from 50% to 40%.
12. Reduction in customs duty on:
(a) specified drugs falling under Chapter 30 of CT from
50%/25% to 20% ;
(b) specified bulk drugs falling under Chapter 29 of CT from
50%/25% to 20% ;
(c) codeine phosphate and narcotine from 25% to 20% ;
(d) specified veterinary drugs and other products from 15%
to 10%.
13. Full exemption from customs duty on all chemicals used for
manufacture of contraceptive, centchroman.
14. Peak rate reduction in customs duty on:
(a) fertilisers ( other than exempted) from 50% to 40%;
(b) dyes, colours and paints except heading No.32.01 of CT
from 50% to 40%;
(c) chemicals of Chapters 32, 35 and 36 from 50% to 40%;
(d) glues and enzymes from 50% to 40%;
(e) explosives and pyrotechnic products from 50% to 40%;
(f) photographic goods from 50% to 30%;
(g) miscellaneous chemical products from 50% to 40%.
15. Reduction in customs duty on goods falling under heading
No.32.01 of CT from 20% to 10%.
16. Full exemption from customs duty on potassium nitrate for use as
fertilizer.
17. Reduction in customs duty on:
(a) wattle, quebracho and chestnut extracts from 20% to 10%;
(b) oleoresins extracts from 25% to 20%;
(c) photographic paper, paperboard etc. falling under heading
No.37.03 of CT from 50% to 30%;
(d) linear alkyl benzene from 40% to 30%;
(e) dipping oil and paclobutrazol from 15% to 10%;
(f) graphic art films, photopolymer relief image, offset
printing plates ( pre-sensitised), cinematographic films
(B/W), sound films, colour positive and jumbo rolls of
colour roll films from 40% to 30%.
18. Prescribing a uniform customs duty of 30% on:
(a) goods falling under heading Nos. 37.01, 37.02, 37.04 and
37.05 of CT except instant print film;
(b) reaction initiators, reaction accelerators and catalytic
preparations falling under heading No. 38.15 of CT.
19. I Prescribing a uniform customs duty of 30% on plastic
polymers and waste/ scrap falling under heading Nos. 39.01
to 39.15 of CT.
II Reduction in customs duty on plastic semi-manufactures
and articles falling under heading Nos. 39.16 to 39.26 of
CT from 50% to 40%.
III Reduction in customs duty on all goods of heading Nos.
68.06 and 69.02 like ceramic fibre blocks and refractories
etc. of CT from 50% /35% to 30%.
20. I Reduction in customs duty on :
(a) natural rubber from 25% to 20%;
(b) retreaded aircraft tyres from 50% to 30%;
(c) leather from 50% to 20%;
(d) fuel wood,wood chips, wood charcoal, wood in the rough
from 50% / 15% to 10%;
(e) specified sawn/chipped wood from 35% to 30%;
(f) other wood and wood products falling under heading Nos.
44.04 to 44.21 of CT from 50% to 30%;
(g) cork and cork products from 40% to 30%;
(h) pulps (other than rayon grade) from 10% to 5%;
(i) rayon grade pulp from 25% to 5%;
(j) waste paper from 40% / 10% to 5%;
(k) journals and printed music from 25% to nil;
(l) blank cheque forms from 25%/20% to 10%;
(m) miscellaneous printed products from 25% to 20%.
21. Reduction in customs duty on :
(a) polyester filament yarn from 45% to 30%;
(b) nylon filament yarn from 45% to 30%;
(c) viscose filament yarn, cuprammonium filament yarn and
acetate filament yarn from 40% to 30%;
(d) other man-made filament yarn from 45% to 30%;
(e) synthetic and artificial staple fibres and tow from
45% to 30%;
(f) woollen and synthetic rags including wool waste from
35% to 30%;
(g) vegetable textile fibres including flax fibres and tow
from 40% to 30%.
22. Reduction in customs duty on :
(a) HR coils from 30% to 25%;
(b) TMBP coils for manufacture of tin plates from 30% to 25%;
(c) ferro-alloys (other than of nickel and molybdenum) from
30% to 25%;
(d) HR stainless steel coils from 30% to 25%;
(e) CR stainless steel coils from 40% to 30%;
(f) stainless steel slabs/billets from 40% to 20%;
(g) other iron & steel and articles thereof from 40% to 30%.
23. I Reduction in customs duty on non-ferrous metals as under:-
Metal From To
Unwrought zinc 35% 30%
Unwrought copper 35% 30%
Unwrought lead 35% 30%
Wrought zinc 40% 30%
Wrought copper 40% 30%
Wrought lead 40% 30%
Wrought tin 40% 30%
Wrought nickel 30% 20%
Wrought aluminium 25% 20%
II Prescribing a uniform customs duty of 30% on other base
metals such as tungsten, magnesium, molybdenum etc.
24. Reduction in customs duty for electronic industry on :
From To
(a) specified raw materials 15% 10%
(b) specified components 25% 20%
(c) populated printed circuit
boards (PCBs) of electronic 35% 30%
goods
(d) colour television picture tubes 40% 30%
(e) floppy diskette 25% 10%
(f) glass parts of colour picture 30% 25%
tube
25. Reduction in customs duty on specified capital goods imported for
manufacture of electronic integrated circuits and micro assemblies from 15%
to 10% and to extend this concession to the manufacture of semi-conductor
devices etc.
26. Reduction in customs duty on :
From To
(a) computers and computer peripherals 40% 20%
(b) hard disk drive, floopy disk drive and 40%/35%/25% 20%
other storage units
(c) computer printers capable of being 50% 20%
used with automatic type writers, word
processors and other office machines
27. Reduction in customs duty on following items for non-conventional
energy sectors :
(a) polycrystalline silicon or ingots and undiffused silicon
wafers from 15% to 10%;
(b) solar cells/modules and photovoltaic systems from 35% to 30%.
28. Reduction in customs duty on:
(a) telecom equipment from 50% to 40%;
(b) cellular/pager/trunking handsets from 50% to 30%;
(c) parts and sub-assemblies of (a) and (b) above falling
within Chapter 85 of CT from 35% to 30% ;
(d) optical fibre for manufacture of telecom cables from 35%
to 30%;
(e) specified raw materials of optical fibres/telecom cables
and fibre reinforced plastic rods from 15% to 10%.
29. Reduction in customs duty on:
(a) musical instruments and their parts and accessories from
50% to 30%;
(b) toys, games, sports requisites and their parts and
accessories from 50% to 30%.
30. Reduction in customs duty from 25% + Rs.120/kg on :
(a) bearings of more than 50mm bore diameter to 25%;
(b) bearings of 50mm bore diameter and below to 10% + Rs.
150 per Kg;
(c) parts of bearings to 25%.
31. Reduction in customs duty on:
(a) specified textile machines from 25% to 10%;
(b) electrical signalling, safety or traffic control equipment
from 50% to 25%.
32. I Reduction in customs duty on specified dental ,
ophthalmic and specified medical equipment and their
parts/spare parts from 15% to 10%.
II Reduction in customs duty on :
(a) other medical equipment falling under heading
Nos. 90.18 to 90.21 and sub-heading Nos. 9022.12
to 9022.14 and 9022.21 of CT from 40% to 30%;
(b) parts/spare parts required for other medical
equipment from 15% to 10%.
33. Full exemption from customs duty (Basic + AD) on specified items,
if imported for the use of Police forces of the States/UTs or the CRPF for
bomb detection/disposal purposes.
34. Exemption on specified goods imported for use in R & D project
funded partially by any Department of Central Government and undertaken by
a company in their in-house R & D unit, registered with Department of
Scientific & Industrial Research.
35. Exemption from Basic + AD on goods gifted free of cost under a
bilateral agreement between a foreign Government and the Government of
India.
36. I Reduction in customs duty on baggage from 80% to 60%.
II Exemption from AD on TVs when imported under baggage.
III Removing the restriction on maximum duty -free limit of
Rs. 3000 for import of VCR/VCP as baggage.
37. I Project Import benefit ( Basic 20% + AD 10%) to captive
power plants of 5 MW or above.
II Project import benefit of (Basic 20% + AD 10%) to power
transmission projects of 66 KV and above.
III Reduction in customs duty to 10% on raw material/
components for manufacture and supply of machinery and
equipment to power generation plants, other than captive
power plants.
IV Extension of concessional rate of basic customs duty of
20%+Nil AD to iron & steel products for modernisation and
renovation of power generation plants, other than captive
power plants.
38. Levying a surcharge as special duty of customs on imported goods
at the rate of 2% of the value of goods for the period ending 31st March
1999, with the exception of goods which are exempt from the whole of
customs duty leviable thereon or chargeable to nil rate of duty and gold
and silver, imported as passenger baggage.
BED : Basic Excise duty MODVAT : Modified Value Added Tax AED : Additional excise duty in lieu of sales tax PMT : Per Metric Tonne AT&T : Additional duty on textiles and textile articles CET : Schedule to the Central Excise Tariff Act, 1985(5 of 1986) PSM : Per Square Metre Unless otherwise indicated, the excise duty refer to basic excise duty. The proposals include the following:A. GENERAL
The schedule to the Central Excise Tariff Act, 1985 is being amended vide relevant clauses of the Finance Bill to give effect to the Tariff changes relating to the Union Excise Duties. B. Major Proposals involving changes in rates of duty, whether by amendment of tariff rates or by notifications. 1. Full exemption from excise duty on: (a) vanaspati and margarine; (b) animal fats and oils ; (c) asbestos fibre ; (d) tapioca products ; (e) ores of Chapter 26 of CET . 2. Reduction in excise duty on instant coffee from 30% to 25%. 3. Reduction in excise duty on pan masala from 50% to 40%. 4. Increase in excise duty on malt from Nil to 10%. 5. Revision in specific rates of excise duty on cigarettes falling under heading No.24.03 of CET as indicated below:- Rs. per thousand cigarettes Present Proposed Non filter Cigarettes (BED+AED) BED AED (BED+AED) (a) not exceeding 60 mm in length 60 51 24 75 (b) exceeding 60 mm but not exceeding 300 214 101 315 70 mm Filter Cigarettes (c) not exceeding 70 mm in length 400 292 138 430 (d) exceeding 70 mm but not exceeding 750 544 256 800 75 mm (e) exceeding 75 mm but not exceeding 1000 728 342 1070 85 mm 6. Increase in excise duty from 10% to 15% on petroleum products, other than kerosene and petroleum gases. 7. Prescribing 5% duty on: (a) furnace oil for use other than as feed stock in the manufacture of fertilizer or for use within a heavy water plant; (b) residues of petroleum oil for use as non-feed stock in the manufacture of fertilizer. 8. Reduction in excise duty on: (a) tooth paste from 20% to 10%; (b) detergents from 30% to 25%. 9. Exemption from excise duty on all chemicals used for manufacture of contraceptive, centchroman. 10. Rate rationalisation by : (a) prescribing a uniform rate of 15% on all drugs except those used in the National Health Programme and certain specified drugs; (b) prescribing a uniform rate of 15% on photographic or cinematographic goods of Chapter 37 of CET. 11. Rationalising the existing excise duty rates of 5%/10%/15% to a single rate of 10% on paper and paperboard manufactured using 50% or more of unconventional raw materials. 12. Exemption from excise duty on: (a) writing and printing paper used by State Text Book Publication Corporations/Boards or NCERT for printing educational text books; (b) natural gums similar to natural rubber; (c) resin bonded bamboo corrugated roofing sheets. 13. Reduction in excise duty on : (a) specified animal drawn vehicle tyres, off the road tyres, aero tyres and aero tubes from 35% to 30%; (b) cartons, boxes, bags, cases and similar containers from 20% to 10%. 14. Prescribing a uniform BED of 10% on: (a) processed fabrics of Chapters 52,54 and 55 of CET except (i)100% cotton fabrics of value upto Rs.25 PSM which would attract BED of 5% and (ii) fabrics which are exempted from AED(ST); (b) processed and unprocessed fabrics falling under heading Nos.58.01,58.02 and 58.06 of CET excepting (i) 100% cotton fabrics of value upto Rs.25 PSM, which would attract BED of 5% (ii) narrow fabrics containing elastomeric yarn or rubber thread which continues at 15% (iii) unprocessed narrow woven fabrics of cotton or man-made fibres (other than fabrics of pile, terry towelling, chenille and fabrics containing elastomeric yarn or rubber thread) which continue to be exempted and (iv) fabrics processed without the aid of power or steam which continue to be exempted; (c) processed and unprocessed fabrics of Chapter 60 of CET excepting (i) cotton fabrics which continue to be fully exempted (ii) narrow fabrics containing elastomeric yarn or rubber thread which continue at 15% and (iii) fabrics processed without the aid of power or steam which continue to be exempted. 15. Extension of MODVAT scheme to the fabrics mentioned at Sl.No.14 wherein the credit of duty paid on yarn would be available on a notional basis and the credit of duty paid on other inputs alongwith capital goods would be available on the basis of duty paying document. 16. Reduction in BED on polyester filament yarn from 50% to 40%. 17. Increase in BED on artificial filament yarn including viscose filament yarn from 15% to 20%. 18. Rationalising the existing AED rates of 5%/10%/20% to a single rate of 10% on processed fabrics of cotton or man-made fibres and falling within Chapters 52,54,55,58 and 60 of CET except 100% cotton fabrics of value upto Rs.25 PSM which continue to attract AED of 5%. 19. Full exemption from AT & T to all fabrics mentioned at Sl. No.14 above and all goods falling under heading No.58.04 of CET. 20. Extension of benefit of concessional BED under general SSI scheme to unprocessed fabrics of cotton or man-made fibres falling within heading Nos. 58.01,58.02, 60.01 and 60.02. 21. Modification of the exemption scheme to fabrics of Chapters 51,52,54 and 55 of CET subjected to minor processes so as to restrict the exemption only if the processor does not have the facility (including plant and equipment) for carrying out bleaching, dyeing or printing with the aid of power or steam. 22. Restricting the full exemption from BED to only such woollen yarns in plain (straight) reel hank where the counts of such yarns do not exceed 10. 23. Prescribing BED of 10% on carded wool. 24. Prescribing BED of 5% on woollen shoddy yarn falling under heading No.51.06 of CET. 25. Rationalisation of duty structure on laces of cotton and man-made fibres, whether or not processed, with BED at 10% and AED at 5%. 26. Exemption on twisting of duty paid polyproplene filament yarn from excise duty. 27. Rationalisation of duty structure of coated fabrics falling under heading No.59.01of CET by prescribing a uniform BED at 10% and AED at 5%, irrespective of its composition. 28. Rationalising the scope of concessional rate of 5% only to ramie yarn (containing 85% or more by weight of ramie fibre) falling under sub heading No.5308.14 of CET. 29. Reduction in excise duty on: (a) specified glassware produced by semi-automatic process from 20% to 10%; (b) glassware used for table, kitchen, office, indoor decoration and similar purposes from 15% to 10%; (c) all goods falling under heading No. 68.04 of CET, such as articles of asbestos cement from 25% to 20%; (d) ceramic articles (other than glazed tiles) from 20% to 15%. 30. Raising the exemption limit for footwear from Rs.50 per pair to Rs.75 per pair. 31. Rationalisation of excise duty on iron and articles of iron to 15%, at par with steel. 32. Extension of SSI exemption benefit to all goods of Chapter 74 of CET. 33. I Rationalisation of excise duty on air-conditioners and air-conditioning machines at a uniform level of 40%. II Rationalisation of excise duty on parts and accessories of refrigerating and air-conditioning appliances and machines (including compressors and parts thereof) at a uniform level of 40% . 34. Rationalisation of excise duty on motor vehicles falling under heading Nos. 87.02 and 87.03 of CET as under: Heading/Sub-heading No Description Rate 87.02 Motor vehicles principally designed for the transport of more than 6 persons, excluding the driver 8702.10 Motor vehicles principally designed for the transport 20% of more than 6 persons but not more than 12 persons, excluding the driver. 8702.90 Others 15% 87.03 Motor cars and other motor vehicles 40% principally designed for the transport of not more than 6 persons ( excluding the driver) including racing cars. 35. Extension of SSI exemption to copper powder, potassium chlorate and cigarette lighters. 36. Full exemption from excise duty on goods manufactured based on an indigenously developed knowhow and patented in any country of European Union or United States of America or Japan for a period of three years from the date of commercial production. 37. Exemption on excisable goods arising at the intermediate stage and captively consumed in the manufacture of specified exempted goods. Estimated net revenue effectEstimated net revenue effect
(a) Union Excise Duties Net gain in revenue due to increase in excise duties in one full year is estimated to be Rs.1100 crore. (Rs. in lakh) CENTRE STATE TOTAL Basic Excise Duty 54285 49115 103400 Additional Excise Duty in lieu of sales tax 145 6455 6600 Net gain for one full year 54430 55570 110000 Net gain in the remaining part of the 37578 38366 75944 current financial year (b) Customs The loss in revenue on account of reduction in customs duties is estimated to be Rs.900 crore in one full year and Rs.650 crore in the remaining part of the current financial year, excluding the revenue gain on account of special duty of customs (Rs.1600 crore for the remaining part of the current financial year).SERVICE TAX
Imposing service tax at the rate of 5% each on:
(a) advertising services; (b) courier services; (c) radio paging services. The estimated revenue from these three services is likely to be Rs. 150 crore in a year and Rs.70 crore for remaining part of the current financial year. These service taxes will be applicable with effect from the date to be notified in the official gazette. Procedural changes in Union Excise and CustomsProcedural changes in Union Excise and Customs
A. Introduction of a system of selective audit and doing away with the existing procedure of assessment w.e.f 1.10.96 - a major step towards modernising the excise procedure. B. Provision of mandatory penalty on deliberate evasion of excise duties or misuse of Modvat credit. The penalty shall be equal to the amount of excise duty short- levied, short-paid, amount of refund erroneously paid or amount of Modvat credit misused. Similar provision on the customs side also. C. Permission to file advance bill of entry within 30 days of the expected arrival of goods. D. Central Excise Officers to monitor the end-use based exemptions from customs duty. E. Raise the power of single member bench of CEGAT from Rs.1 lakh to Rs.10 lakhs.F. Amendments in the Modvat Scheme.
1. Modification in the scheme of modvatable invoices issued by dealers .Modvatable invoices to be permitted only upto second stage wholesale dealers. 2. In respect of capital goods, components and instruments, the chapters, headings or sub-headings will be listed out and it will be provided that any product falling within them shall be admissible for Modvat Credit. 3. Providing for mandatory penalty and penal interest for misuse of Modvat credit scheme. 4. In the case of a manufacturer manufacturing both fully exempted and dutiable goods, the reversal of Modvat credit in respect of fully exempted goods shall be at the rate of 20% of the value of goods. 5. Suitable provisions in the Modvat scheme for capital goods so as to allow credit on the strength of original invoice in case the duplicate is lost, subject to suitable safe guards.
