Finance Bill 2011 – Significant Amendments in Custom Duty and Excise Duty Provisions

Central Excise

Changes in excise duty structure on textile goods

• Branded ready-made garments which are returned to the factory and cleared there from after being re-made, re-conditioned, repacked are exempted from payment of excise duty subject to the following conditions:

─         CENVAT credit on the returned goods is not availed

─         an intimation is submitted to the jurisdictional Central Excise Authority within 48 hours of receipt of the returned goods

─         account of receipt and disposal of such goods provided in monthly return

─         aggregate value of the returned goods does not exceed 10% of the aggregate value of clearances for home consumption in the preceding financial year.

• The assessable value fixed at 45% instead of 60% of Retail Sale Price (RSP)
• Small manufacturers who sell the branded garments to the brand owners to pay duty as per the transaction value and not on the basis of RSP

Changes in the excise duty structure on goods subject to 1% Excise Duty

• Significant items on which abatement of 35% provided

-           Coffee or tea premixes

-           Sauces, ketchup and the like and the preparation therefor

-           Ready to eat packaged food

-           Ink for fountain pen, ball pen and drawing

-           Tooth powder

-           Surgical rubber gloves or medical examination gloves

-           Radio trunking terminals

-           Recorded Audio CD, Video CD and DVD

• Waste, parings and scrap arising in the manufacture of such goods exempted from excise duty
• Assessees manufacturing only such goods shall file quarterly return in the notified form.

Change in Excise duty structure of Mobile handsets including cellular phones

• Mobile handsets including cellular phones subjected to excise duty of 1% ad valorem without any restriction on availment of CENVAT credit and abatement of 35% provided for levy of duty on RSP.
• Waste, parings and scrap arising in the manufacture of such goods exempted from excise duty.

SSI Exemption

• Explanation inserted in the Notification providing SSI exemption to the manufacturers to clarify that packing material includes labels of all kinds. Thus labels meant for use in packing by or on behalf of the person whose brands they bear shall be entitled to SSI exemption.

Custom Duty

• Custom duty concession on Motor Cars and Motor Cycles when imported as a completely knocked (CKD) down kit

Description of goods

Source:-

1.         Notification No.20/2011-Central Excise, Notification No. 21/2011-Central Excise, Notification No.22/2011-Central Excise, Notification No.27/2011-Central Excise, Notification No.28/2011-Central Excise, Notification No. 31/2011- Central Excise, Notification No. 8/2011-Central Excise (N. T), Notification No. 11/2011-Central Excise (N. T), Notification No. 12/2011-Central Excise (N. T) dated March 24, 2011

2.         Notification No. 31/2011-Customs dated March 24, 2011

Related posts:

1. Explanatory notes to Amendments made by Union Budget 2011 in Excise Duty Provisions
2. Proposed amendments to the Finance Bill, 2011 in respect of Direct and Indirect Taxation
3. Budget 2011 -Service Tax, Excise and Custom Duty Proposals-Preliminary Highlights
4. Excise duty notifications dated 27.02.2010 related to Union budget 2010-11 amendments and provisions
5. Finance Bill 2010-2011 passed in Lok Sabha with few amendments