Budget 2024 brings several amendments to indirect taxes under GST and Customs laws. Key changes in Customs Act, 1962 include updates to proof of origin requirements, empowering the government to specify restricted manufacturing operations in warehouses, and replacing “Certificate of Origin” with “Proof of Origin” for certain trade agreements. Amendments also include the elimination of Section 6 in the Customs Tariff Act, 1975 due to the closure of the Tariff Commission, and revisions to tariff rates and classifications. GST laws see adjustments such as removing Extra Neutral Alcohol from central tax, easing input tax credit time limits, and reducing pre-deposit amounts for appeals. New provisions include waivers for interest or penalties under certain conditions, extending transitional credit for input services, and clarifying the treatment of insurance sector activities. Additionally, new rules are introduced for the time of supply and blocking input tax credit, aiming to streamline trade facilitation and reduce disputes. These changes will take effect from various dates, as specified in the amendments.
Annexure to Part B
Amendments relating to Indirect Taxes
| A. LEGISLATIVE CHANGES IN CUSTOMS LAWS | ||
| A.1 Amendments in the Customs Act, 1962 | Existing Provisions | Amendments in Budget 2024 |
| Chapter VAA – Administration of Rules of Origin under Trade Agreement- Section 28DA. Procedure regarding claim of preferential rate of duty. –
(i) Section 28 DA is being amended to enable the acceptance of different types of proof of origin provided in trade agreements in order to align the said section with new trade agreements which provide for self-certification. |
Thus, effectively , the benefits of tariff concession, on which a bona fide importer may have based his business case & commercial economics, can be nullified by administrative actions of Revenue officers , if he has “reason to believe ” that the COO criteria has not been met, or the information furnished by the importer under the Rules, “is not found satisfactory ” ( readers may note, in particular S 28 DA (4) including its proviso, & S 28DA (8) apart from the other sub sections ) | Where ever the words “Certificate of Origin” appeared, it shall be substituted by “Proof of Origin” that are accepted by certain Trade Agreements.
It means if the Trade agreement provides for Self- Certification of Country of Origin, No further adjudication by authorities |
| Chapter IX – Warehousing
A proviso to sub-section (1) of Section 65 is being inserted to empower the Central Government to specify certain manufacturing and other operations in relation to a class of goods that shall not be permitted in a warehouse. |
May be the list of Manufacturing & Other operations that are not permitted shall be notified by the Government Other than those shall be treated as permitted in any WH | The Circulars issued by the CBIC regarding activities that can be carried out in warehouses can, therefore, be summarized as follows:
(a) Only activities like labelling/packing etc., undertaken to fulfil statutory compliance requirements can be undertaken in Public & Private warehouses without obtaining a permission under Section 65 of the Customs Act; (b) Any activities other than the above and other than what is set out in Section 64 of the Customs Act, cannot be undertaken in a Public Warehouse |
| (iii) The expression “a class of importers or exporters” is being substituted with “a class of importers or exporters or any other persons” in Section 143AA of the Customs Act for purposes of facilitating trade. Consequential changes are being carried out in clause (m) of subsection (2) of Section 157 of the Customs Act | Chapter XVII – Miscellaneous Now the relaxation under the circular No . 17/2020-Customs F.No.473/02/2020-LC Dated 03rd April, 2020
Sub.: Measure to facilitate trade during the lockdown period – section 143AA of the Customs Act, 1962 – Reg- in obtaining notarised stamp papers for furnishing bonds required by Customs in certain situations during the assessment and clearance of goods. Shall apply to any other persons also
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Circular No. 17/2020-Customs F. No.473/02/2020-LC Dated 03rd April, 2020
Sub.: Measure to facilitate trade during the lockdown period – section 143AA of the Customs Act, 1962 – reg- in obtaining notarised stamp papers for furnishing bonds required by Customs in certain situations during the assessment and clearance of goods. This relaxation currently applies to the following categories of the importers/exporters: a. Government/Public Sector Undertakings (Central/State/UT Govt. or Administrations and their undertakings) b. Manufacturer/Actual User importer c. Authorised Economic Operators d. Status holder e. All importers availing warehouse facility in terms of section 59 of the Customs Act, 1962 |
| These changes shall come into effect from date of assent to the Finance (No.2) Bill | ||
| A.2 Amendments in the Customs Tariff Act, 1975 | ||
| (i) Section 6 is being omitted on account of winding up of the Tariff Commission. | Tariff Commission is wound up. So no recommendation nd so no protective duty | Section 6. Power of Central Government to levy protective duties in certain cases.
Section 6 of the CTA empowers the Central Government to impose a protective duty upon the recommendation of the Tariff Commission, if the emergency circumstances exist to provide for the protection of the interests of any industry established in India. Further, section 7 deals with the duration of protective duties and power of Central Government to alter them. |
| (ii) The First Schedule to the Customs Tariff Act, 1975 is being amended to,- | Rate changes – Refer to below table | |
| a) Increase the rates on certain tariff items with effect from 24.07.2024. | ||
| b) Create new tariff lines in respect of defence products, technical textiles, sustainable blended aviation fuel, products used in Indian semiconductor machines, e-bicycles, natural menthol, printer cartridge etc. This is to align the tariff lines with WCO classification and better identification of goods. | ||
| These changes shall come into effect from 01.10.2024. | ||
| A.3 Amendment of Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules, 1995 | ||
| The Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules, 1995 have been amended to insert a provision for New Shipper Review. This will be effective from 24.07.2024. | May be under Section 6. Initiation of investigation.(1) Except as provided in sub-rule (4) the designated authority shall initiate an investigation to determine the existence, degree and effect of alleged subsidy only upon receipt of a written application by or on behalf of the domestic industry. | |
| B. LEGISLATIVE CHANGES IN GST LAWS [Save as otherwise provided, these changes will be brought into effect from a date to be notified in coordination with States, as per recommendations of the GST council] | ||
| AMENDMENT FOR TRADE FACILITATION | ||
| B.1 Amendment to keep Extra Neutral Alcohol outside the purview of central tax: | ||
| Section 9 is being amended to take Extra Neutral Alcohol used in manufacture of alcoholic liquor for human consumption out of the purview of central tax. Similar amendments are also proposed in IGST Act and UTGST Act. | * Section 9. Levy and collection.-
(1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption and Extra Neutral Alcohol used in manufacture of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person.
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* Section 9. Levy and collection.-
(1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person. |
| B.2 Amendment to regularize non-levy and short-levy of central tax due to general practice | ||
| Section 11A is being inserted to empower the government to regularize non-levy or short levy of central tax due to any general practice prevalent in trade. Similar power is being proposed in IGST Act, UTGST Act and GST (Compensation to States) Act. | In order to facilitate trade, several amendments have been made to the GST Laws. As part of this, Extra Neutral Alcohol used in manufacture of liquor will be kept out of the purview of the central tax. Similar amendments are also proposed in IGST and UTGST Act. Further, newly added Section 11A will empower the government to regularize non-levy or short levy of central tax due to any general practice prevalent in trade. | |
| B.3 Amendment to relax the time limits to avail input tax credit | ||
| New sub-sections (5) and (6) are being inserted in section 16 of CGST Act to relax the time limit to avail input tax credit as per section 16(4) of the CGST Act with effect from 01.07.2017, as follows: |
1) The time limit to avail input tax credit has been relaxed by inserting two new subsections to Section 16 of CGST. 2) The amended Act will also provide a common time limit for issuance of demand notices and orders. 3) Also, the time limit for tax payers to avail the benefit of reduced penalty, by paying demanded tax along with interest is increased from 30 days to 60 days. |
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| a) In respect of initial years of implementation of GST, i.e., financial years 2017-18, 2018-19, 2019-20 and 2020-21: | ||
| In respect of an invoice or debit note for the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under section 39 Which is filed upto the 30th day of November, 2021 | ||
| b) With respect to cases where returns have been filed after revocation: | ||
| The time limit to avail input tax credit in respect of an invoice or debit note, in cases where returns for the period from the date of cancellation of registration/ effective date of cancellation of registration till the date of revocation of cancellation of the registration, will be extended till the date of filing the said GSTR-3B return, subject to certain conditions, if the said return is filed by the registered person within thirty days of the order of revocation of cancellation of registration. | ||
| B.4 Insertion of new section to provide a common time limit for issuance of demand notices and orders | ||
| Section 74A is being inserted in the CGST Act to provide a common time limit for issuance of demand notices and orders in respect of demands for FY 2024-25 onwards, for cases involving charges of fraud, suppression of facts or wilful misstatement and the cases not involving the charges of fraud, suppression of facts or wilful misstatement etc. Also, the time limit for the taxpayers to avail the benefit of reduced penalty, by paying the tax demanded along with interest, is being increased from 30 days to 60 days. | ||
| B.5 Amendment to reduce the maximum amount of pre-deposit for filing appeals |
In order to further facilitate trade, the maximum amount of pre-deposit for filing appeal with the Appellate Authority is being reduced from Rs.25 crore of central tax to Rs 20 crore of central tax. The amount of pre-deposit for filing appeal with the Appellate Tribunal is being reduced from 20% with a maximum amount of Rs. 50 crore of central tax to 10 % with a maximum of Rs. 20 crore of central tax. Besides, the time limit for filing appeals before the Appellate Tribunal is being modified with effect from 1st August, 2024 to avoid the appeals from getting time barred, on account of Appellate Tribunal not coming into operation. |
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| Sections 107 and 112 of CGST Act are being amended to reduce the maximum amount of pre-deposit for filing appeal with the Appellate Authority from Rs. 25 crore of central tax to Rs. 20 crore of central tax and to reduce the amount of pre-deposit for filing appeal with the Appellate Tribunal from 20% with a maximum amount of Rs. 50 crore of central tax to 10 % with a maximum of Rs. 20 crore of central tax. Besides, the time limit for filing appeals before the Appellate Tribunal is being modified w.e.f. 1st August, 2024 to avoid the appeals from getting time barred, on account of Appellate Tribunal not coming into operation. | ||
| B.6 Amendment to provide conditional waiver of interest or penalty or both relating to demands raised under section 73, for certain tax periods | ||
| Section 128A is being inserted in the CGST Act to provide for a conditional waiver of interest and penalty in respect of demands pertaining to financial years 2017-18, 2018-19 and 2019-20, in cases where demand notices have been issued under section 73 and full tax liability is paid by the taxpayer before a date to be notified. | Recommendations of 53rd GST Council Meeting GST Council recommends waiving interest and penalties for demand notices issued under Section 73 of the CGST Act (i.e. the cases not involving fraud, suppression or wilful misstatement, etc.) for the fiscal years 2017-18, 2018-19 and 2019-20, if the full tax demanded is paid upto 31.03.2025. | |
| B.7 Amendment to enable availment of the transitional credit of eligible CENVAT credit by Input Services Distributor in respect of invoices received prior to the appointed date | ||
| Section 140(7) of CGST Act is being amended with effect from 01.07.2017, to enable availment of transitional credit in respect of input services received by an Input Services Distributor prior to the appointed day, where invoices were also received prior to the appointed day. | GST Council recommends the time limit to avail input tax credit w.r.t. any invoice or debit note under Section 16(4) of CGST Act, through any GSTR 3B return filed upto 30.11.2021 for FY 2017-18, 2018-19, 2019-20 and 2020-21, may be deemed to be 30.11.2021 | |
| B.8 Amendment to empower Government to notify Appellate Tribunal to handle anti-profiteering cases and to provide for a sunset clause for accepting anti-profiteering cases | ||
| Section 171 of CGST Act is being amended to enable the Government to notify the GST Appellate Tribunal to handle anti-profiteering cases and to empower the Government to notify a date after which the Authority for anti-profiteering shall not accept applications for examination. | To ease the interest burden of the taxpayers, GST Council recommends to not levy interest u/s 50 of CGST Act in case of delayed filing of return, on the amount which is available in Electronic Cash Ledger (ECL) on the due date of filing of the said return GST Council recommends sunset clause from April 1st, 2025 for receipt of any new application for Anti-profiteering | |
| B.9 Amendment to clarify various activities in insurance sector as neither a supply of goods nor a supply of services | ||
| Paragraphs 8 and 9 are being inserted in Schedule III of CGST Act to provide that the activity of apportionment of co-insurance premiums by the lead insurer to the co-insurers in the co-insurance agreement and the services by insurers to reinsurers in respect of ceding/re-insurance commission will, subject to certain conditions, be treated neither as a supply of goods nor as a supply of services. | SCHEDULE III [See section 7] ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES
New Paragraph to cover the activity of apportionment of co-insurance premiums by the lead insurer to the co-insurers in the co-insurance agreement and the services by insurers to reinsurers in respect of ceding/re-insurance commission will, subject to certain conditions, to be treated neither as a supply of goods nor as a supply of services |
Currently the paragraph 8 states:
8. (a) Supply of warehoused goods to any person before clearance for home consumption; (b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.] Explanation [1] .—For the purposes of paragraph 2, the term “court” includes District Court, High Court and Supreme Court. [Explanation 2.––For the purposes of paragraph 8, the expression ―warehoused goods‖ shall have the same meaning as assigned to it in the Customs Act, 1962.] |
| OTHER LAW AMENDMENTS IN CGST ACT | ||
| B10. Amendment to clarify time of supply of services in reverse charge supplies. Amendment is proposed in Section 13 of CGST Act to provide for time of supply of services where the invoice is required to be issued by the recipient of services in cases of reverse charge supplies. | Clarification on following issues to provide clarity to trade and tax officers and to reduce litigation:
i. Clarification on time of supply on Annuity Payments under HAM Projects. ii. Clarification regarding time of supply in respect of allotment of Spectrum to Telecom companies in cases where payment of licence fee and Spectrum usage charges is to be made in instalments. Clarification regarding applicability of provisions of Section 16 (4) of CGST Act, 2017, in respect of invoices issued by the recipient under Reverse Charge Mechanism (RCM): The Council recommended to clarify that in cases of supplies received from unregistered suppliers, where tax has to be paid by the recipient under reverse charge mechanism (RCM) and invoice is to be issued by the recipient only, the relevant financial year for calculation of time limit for availment of input tax credit under the provisions of section 16(4) of CGST Act is the financial year in which the invoice has been issued by the recipient. |
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| B11. Amendment to restrict blockage of input tax credit for tax paid under section 74 to demands upto Financial Year 2023-24 | ||
| Clause (i) of Section 17 of CGST Act is being amended to restrict blockage of input tax credit for tax paid under Section 74 for demands pertaining up to FY 2023-24. | We need to wait for the post Budget document to check if the restriction is introduced through a Proviso or Explanation or whether it will be done through an amendment under Rule 86A | Rule 86A of CGST Rules, 2017 empowers the Commissioner or its authorized officers to disallow debit of electronic credit ledger and block the credit based on a reasonable belief that credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible. It is clear that there must be “reasons to believe” that credit of input tax available in the electronic credit ledger is either ineligible or has been fraudulently availed by the registered person before disallowing the debit of amount from the electronic credit ledger of the said registered person.
Section 17 (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub- section (1) of section 18, input tax credit shall not be available in respect of the following, namely:— (aa) vessels and aircraft except when they are used–– (i) for making the following taxable supplies, namely:— |
| B12. Amendment to provide for conditions and restrictions for revocation of cancellation of registration | ||
| Section 30 of the CGST Act is being amended to enable the government to prescribe conditions and restrictions for revocation of cancellation of registration. | Relaxation in condition of section 16(4) of the CGST Act: with respect to cases where returns have been filed after revocation:
The GST Council recommended retrospective amendment in Section 16(4) of CGST Act, to be made effective from July 1st, 2017, to conditionally relax the provisions of section 16(4) of CGST Act in cases where returns for the period from the date of cancellation of registration/ effective date of cancellation of registration till the date of revocation of cancellation of the registration, are filed by the registered person within thirty days of the order of revocation. |
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| B13. Amendment to prescribe the time period for issuance of invoice by recipient in Reverse Charge Mechanism supplies | ||
| Clause (f) of section 31 of CGST Act is being amended to provide for an enabling provision to prescribe the time period within which the invoice has to be issued by the recipient under reverse charge mechanism and to clarify that a person registered solely for purpose of deducting TDS under section 51 of CGST Act shall be treated as a person not registered for the purpose of clause (f) of section 31(3) of the said Act. | Clarification regarding applicability of provisions of Section 16 (4) of CGST Act, 2017, in respect of invoices issued by the recipient under Reverse Charge Mechanism (RCM):
The Council recommended to clarify that in cases of supplies received from unregistered suppliers, where tax has to be paid by the recipient under reverse charge mechanism (RCM) and invoice is to be issued by the recipient only, the relevant financial year for calculation of time limit for availment of input tax credit under the provisions of section 16(4) of CGST Act is the financial year in which the invoice has been issued by the recipient. |
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| B14. Amendment to make filing of monthly returns by TDS deductor mandatory. | ||
| Section 39 is being amended to mandate filing of returns by TDS deductor for every month, even if no deductions are made during the said month, and also to provide for an enabling clause for prescribing the time limit for filing such returns. | The Council recommended that return in FORM GSTR-7, to be filed by the registered persons who are required to deduct tax at source under section 51 of CGST Act, is to be filed every month irrespective of whether any tax has been deducted during the said month or not. It has also been recommended that no late fee may be payable for delayed filing of Nil FORM GSTR-7 return. Further, it has been recommended that invoice-wise details may be required to be furnished in the said FORM GSTR-7 return. | |
| B15. Amendment to prohibit refund in zero rated supply of goods where such goods are subjected to export duty. | ||
| Section 54 of CGST Act and section 16 of IGST Act are being amended to prohibit refund of unutilized input tax credit or integrated tax on zero-rated supply of goods, which are subjected to export duty. | Amendment in Section 16 of IGST Act and section 54 of CGST Act to curtail refund of IGST in cases where export duty is payable:
The Council recommended amendments in section 16 of IGST Act and section 54 of CGST Act to provide that the refund in respect of goods, which are subjected to export duty, is restricted, irrespective of whether the said goods are exported without payment of taxes or with payment of taxes, and such restrictions should also be applicable, if such goods are supplied to a SEZ developer or a SEZ unit for authorized operations. |
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| B16. Amendment for allowing appearance by authorised representative on behalf of a summoned person | ||
| Sub-section 1A is being inserted in section 70 of the CGST Act to enable appearance by an authorized representative on behalf of a summoned person. | Already Section 116 provides for appearance by Authorized Representative. Then where is the need for this insertion of Sub-section (1A) in Section 70 is not understood:
116. Appearance by authorised representative. (1) Any person who is entitled or required to appear before an officer appointed under this Act, or the Appellate Authority or the Appellate Tribunal in connection with any proceedings under this Act, may, otherwise than when required under this Act to appear personally for examination on oath or affirmation, subject to the other provisions of this section, appear by an authorised representative. |
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| B17. Amendment to empower the government to notify cases which shall be heard only by the principal Bench of GST Appellate Tribunal | ||
| Section 109 of CGST Act is being amended to empower the government to specify cases to be heard only by the Principal Bench of the Appellate Tribunal. | The Council recommended amendment in section 171 and section 109 of CGST Act, 2017 to provide a sunset clause for anti-profiteering under GST and to provide for handling of anti-profiteering cases by Principal bench of GST Appellate Tribunal (GSTAT). Council has also recommended the sun-set date of 01.04.2025 for receipt of any new application regarding anti-profiteering. | |
| B18. Amendment to restrict applicability of penal provisions under Section 122(1B) to Electronic Commerce Operators who deduct TCS | ||
| Section 122(1B) of CGST Act is being amended w.e.f. 01.10.2023 to restrict the applicability of penal provisions under this section to only those Electronic Commerce Operators who are required to collect tax at source under section 52. | Reduction in rate of TCS to be collected by the ECOs for supplies being made through them: Electronic Commerce Operators (ECOs) are required to collect Tax Collected at Source (TCS) on net taxable supplies under Section 52(1) of the CGST Act. The GST Council has recommended to reduce the TCS rate from present 1% (0.5% CGST + 0.5% SGST/ UTGST, or 1% IGST) to 0.5 % (0.25% CGST + 0.25% SGST/UTGST, or 0.5% IGST), to ease the financial burden on the suppliers making supplies through such ECOs. | |
| B19. Consequential amendments due to insertion of new section 74A in the CGST Act | ||
| Sections 73 and 74 of CGST Act are being amended to limit the applicability of these sections to demands up to FY 2023-24, since from FY 2024-25 onwards demands are to be ascertained as per provisions of newly inserted section 74A. Also, Section 75 of CGST Act is being amended to allow for redetermination of penalties if the charges of fraud, suppression, or wilful misstatement are not established. Further, references to section 74A or the concerned sub-sections of section 74A are being inserted in section 10, section 21, section 35, section 49, section 50, section 51, section 62, section 63, section 64, section 65, section 66, section 104 and section 127. | Amendments in Section 73 and Section 74 of CGST Act, 2017 and insertion of a new Section 74A in CGST Act, to provide for common time limit for issuance of demand notices and orders irrespective of whether case involves fraud, suppression, willful misstatement etc., or not: Presently, there is a different time limit for issuing demand notices and demand orders, in cases where charges of fraud, suppression, willful misstatement etc., are not involved, and in cases where those charges are involved. In order to simplify the implementation of those provisions, the GST Council recommended to provide for a common time limit for issuance of demand notices and orders in respect of demands for FY 2024-25 onwards, in cases involving charges of fraud or willful misstatement and not involving the charges of fraud or willful misstatement etc. Also, the time limit for the taxpayers to avail the benefit of reduced penalty, by paying the tax demanded along with interest, has been recommended to be increased from 30 days to 60 days. | |
| C. OTHER PROVISIONS IN THE FINANCE (No. 2) BILL | ||
| C.1 Amendment of Customs duty notification dated 10.5.2023 | ||
| Notification No. 37/2023- Customs dated 10.5.23 is being validated for the period from 1st April, 2023 up to and inclusive of 10th May, 2023 to provide exemption from basic customs duty and AIDC on imports of crude soya bean oil and crude sunflower seed oil subject to availability of unutilized quota in TRQ authorization for FY 2022-23 allotted by DGFT and Bill of lading issued on or before 31st March, 2023. The changes will come into effect from date of assent to the Finance (No.2) Bill 2024 | This notification shall come into force on the 11thday of May, 2023, and nothing contained in this notification shall apply after the 30th of June, 2023
Then where is the question of validation on or before 31 March 2023? |
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| C.2 Amendment of Central excise duty notification dated 17.3.2012 | This has been extended to 156 months | |
| Notification No 12/2012-Central Excise dated 17.3.2012 is being amended to extend the time period for submission of the final Mega Power Project certificate from 120 months to 156 months. The changes will come into effect from date of assent to the Finance (No.2) Bill 2024 | ||
| C.3 Exemption from Clean Environment Cess | Applicable Rate and Exemption:-
1.10 Initially the Rate of Clean Energy (New environment) cess was fixed @ Rs.100/ per tonne. However, vide exemption Notification No.3/2010-CEC, dated 22.06.10, the effective rate was notified as Rs.50/-per tonne. 1.11 Vide Finance Act, 2015, the Rate of Clean Energy Cess in the Tenth Schedule of Finance Act, 2010 was enhanced to Rs.300/- per tonne. However, the effective rate was notified as Rs. 200/- per tonne vide notification No.1/2015-CEC, dated 1.3.2015. 1.12 In the Finance Bill, 2016, the rate of Clean Energy Cess in the Tenth Schedule has been further enhanced to Rs.400/- per tonne. As this clause of the Finance Bill, 2016 has been declared under Section 3 of the Provisional Collection of Taxes Act, 1932, the enhanced rate has come into force w.e.f. 1.3.2016. To enable collection of Clean Energy Cess at such revised rate, the exemption notification No.1/2015 Clean Energy Cess, dated 1.3.2015 has been rescinded (vide Notification No.1/2016 –Clean Energy Cess, dated 1.3.2016). 1.13 The Government has issued two exemption notifications providing relief from payment of Clean Energy Cess in certain cases. The details of such exemption notifications issued are as under: – (a) full exemption to all goods falling under heading No.2701, 2702, 2703, other than raw coal, raw lignite and raw peat from clean energy cess provided that applicable clean energy cess has been paid at the stage of raw coal, raw lignite or raw peat from which the said goods are produced or manufactured (Ref: notification No.4/2010-Clean Energy Cess, dated 22.6.2010). (b) exemption to all goods specified in Tenth Schedule of the Finance Act, 2010, which are produced or extracted, as per traditional and customary rights enjoyed by local tribal in the State of Meghalaya and State of Nagaland without any licence or lease required under any Law for the time being in force. (Ref: notification No.5/2010-Clean Energy Cess, dated 22.06.2010 as amended vide notification No.2/2016-Clean Energy Cess, dated 1.3.2016). (c) Now the 3rd exemption through Budget 2024 |
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| The Clean Environment Cess, levied and collected as a duty of excise, is being exempted on excisable goods lying in stock as on 30th June, 2017, subject to payment of appropriate GST Compensation Cess on supply of such goods on or after 1st July, 2017.The changes will come into effect from date of assent to the Finance (No.2) Bill 2024 | ||
| C.4 Exemption GST Compensation Cess, 2017 | (a) GST Council recommends exemption from Compensation Cess leviable on the imports in SEZ by SEZ Unit/developer for authorised operations from 1st July, 2017
(b) To exempt Compensation Cess on the imports in SEZ by SEZ Unit/developers for authorised operations w.e.f. 01.07.2017. (c) To exempt Compensation cess on supply of aerated beverages and energy drinks to authorised customers by Unit Run Canteens under Ministry of Defence. |
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| Based on the recommendation of the GST Council in its 53rd meeting, GST Compensation Cess is being exempted with effect from 1st July, 2017 on imports in SEZ by SEZ units or developers for authorized operations. The changes will come into effect from date of assent to the Finance (No.2) Bill 2024 | ||
| D. CUSTOMS DUTY RATE CHANGES | ||
| D.1. Reduction in customs duty to reduce input costs, deepen value addition, promote export competitiveness, correct inverted duty structure, boost domestic manufacturing etc [with effect from 24.07.2024] | ||
Source:
- FM’s speech on Budget 2024 – Pages 40-53
- Recommendations of 53rd GST Council Meeting https://pib.gov.in/PressReleasePage.aspx?PRID=2027982
- https://nacin.gov.in/resources/file/e-books/18.%20Clean%20Environment%20(Energy)%20Cess-upto%20March-2022.pdf
| Sl. No | Commodity | From % | To (per cent) | ||
| I. | Agricultural Products | ||||
| 1 | Sheanuts | 30 | 15 | ||
| II. | Aquafarming & Marine exports | ||||
| 1 | Prawn and Shrimps feed | 15 | 5 | ||
| 2 | Fish feed | 15 | 5 | ||
| 3 | Following inputs for manufacture of Prawn and Shrimps feed or fish feed: | 30/15/5 | Nil | ||
| (i) Mineral &vitamin pre mixes | |||||
| (ii) Krill Meal | |||||
| (iii) Fish lipid oil | |||||
| (iv) Crude fish oil | |||||
| (v) Algal prime (flour) | |||||
| (vi) Algal oil | |||||
| 4 | Artemia | 5 | Nil | ||
| 5 | Artemia cysts | 5 | Nil | ||
| 6 | SPF Polychaete worms | 30 | 5 | ||
| 7 | Live SPF Vannamei shrimp | 10 | 5 | ||
| (Litopenaeus vannamei) broodstock & | |||||
| Live Black tiger shrimp (Penaeus monodon) broodstock | |||||
| 8 | Insect Meal for use in R&D for aquatic feed manufacturing | 15 | 5 | ||
| 9 | Single Cell Protein from Natural Gas for use in R&D for aquatic feed manufacturing | 15 | 5 | ||
| 10 | Pre-dust breaded powder for use in processing of sea-food | 30 | Nil | ||
| III. | Critical Minerals | ||||
| 1 | Antimony, Beryllium, Bismuth, Cobalt, | 10/7.5/5/2.5 | Nil | ||
| Copper, Gallium, Germanium, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, Potash, REE, Rhenium, Strontium, Tantalum, Tellurium, Tin, Tungsten, | |||||
| Vanadium, Zirconium, Selenium , Cadmium, Silicon other than Quartz & Silicon Dioxide. | |||||
| 2 | Graphite | 7.5/5 | 2.5 | ||
| 3 | (i) Silicon Quartz | 7.5/5 | 2.5 | ||
| (ii) Silicon Dioxide | |||||
| IV. | Cancer Drugs | ||||
| 1 | (i) Trastuzumab Deruxtecan | 10 | Nil | ||
| (ii) Osimertinib | |||||
| (iii) Durvalumab | |||||
| V. | Precious Metals | ||||
| 1 | Gold bar | 15 | 6 | ||
| 2 | Gold dore | 14.35 | 5.35 | ||
| 3 | Silver bar | 15 | 6 | ||
| 4 | Silver dore | 14.35 | 5.35 | ||
| 5 | Platinum, Palladium, Osmium, | 15.4 | 6.4 | ||
| Ruthenium, Iridium | |||||
| 6 | Coins of precious metals | 15 | 6 | ||
| 7 | Gold/Silver findings | 15 | 6 | ||
| 8 | Platinum and Palladium used in the manufacture of noble metal solutions, noble metal compounds and catalytic convertors | 7.5 | 5 | ||
| 9 | Bushings made of platinum and rhodium alloy when imported in exchange of worn out or damaged bushings exported out of India | 7.5 | 5 | ||
| VI. | Textile and Leather Sector | ||||
| 1 | MDI for manufacture of spandex yarn | 7.5 | 5 | ||
| 2 | Wet white, Crust and finished leather for manufacture of textile or leather garments, leather /synthetic footwear or other leather products, for export | 10 | Nil | ||
| 3 | Certain additional accessories and | As applicable | Nil | ||
| embellishments for manufacture of textile or leather garments, leather/synthetic footwear or other leather products, for export | |||||
| 4 | Real Down Filling material from duck or goose for use in manufacture of textile or leather garments for export | 30 | 10 | ||
| VII. | Steel Sector | ||||
| 1 | Ferro-Nickel | 2.5 | Nil | ||
| 2 | Ferrous Scrap | Nil (till | Nil (till | ||
| 30.09.2024) | 31.03.2026) | ||||
| 3 | Certain specified raw materials for manufacture of CRGO steel | Nil (till | Nil (till | ||
| 30.09.2024) | 31.03.2026) | ||||
| VIII. | Copper Sector | ||||
| 1 | Blister Copper | 5 | Nil | ||
| IX. | Capital Goods | ||||
| 1 | Certain additional goods for use in petroleum exploration operations | As applicable | Nil | ||
| 2 | Certain additional capital goods for use in manufacture of solar cells and modules | 7.5 | Nil | ||
| X. | Shipping Sector | ||||
| 1 | Components and consumables for manufacture of vessels | As applicable | Nil | ||
| 2 | Technical documentation and spare parts for construction of warships | As applicable | Nil | ||
| XI. | IT and Electronics | ||||
| 1 | Cellular Mobile Phone | 20 | 15 | ||
| 2 | Charger/Adapter of cellular mobile phone | 20 | 15 | ||
| 3 | Printed Circuit Board Assembly (PCBA) of cellular mobile phone | 20 | 15 | ||
| 4 | Specified goods for use in | 5/7.5 | Nil | ||
| manufacture of connectors | |||||
| 5 | Oxygen Free Copper for use in | 5 | Nil | ||
| manufacture of Resistors | |||||
| XII. | Medical Equipment | ||||
| 1 | All types of polyethylene for use in manufacture of orthopedic implants | As applicable | Nil | ||
| 2 | Special grade stainless steel, Titanium alloys, Cobalt-chrome alloys, and all types of polyethylene for use in manufacture of other artificial parts of the body | As applicable | Nil | ||
| 3 | X-ray tubes and Flat panel detectors (including scintillators) for use in manufacture of medical, surgical, dental or veterinary X-ray machines | 15 | 5 | 7.5 | 10 |
| Till 31/03/25 | Till 31/03/26 | From 01/04/2026 | |||
| D.2. Increase in Customs duty [with effect from 24.07.2024] | |||||
| I. | Plastics and Chemicals | ||||
| 1 | Ammonium Nitrate | 7.5 | 10 | ||
| 2 | PVC Flex Films/Flex Banners | 10 | 25 | ||
| II | Chemicals | ||||
| 1 | Laboratory Chemicals under heading | 10 | 150 | ||
| 9802 | |||||
| III. | Renewable Sector | ||||
| 1 | Solar Glass for manufacture of solar cells or modules | Nil | 10 | ||
| (w.e.f | |||||
| 1.10.24) | |||||
| 2 | Tinned Copper Interconnect for | Nil | 5 | ||
| manufacture of solar cells or modules | (w.e.f | ||||
| 1.10.24) | |||||
| IV. | Miscellaneous Items | ||||
| 1 | PCBA of specified telecom equipment | 10 | 15 | ||
| 1 | Garden Umbrella (tariff item 6601 10 | 20 | 20 or ₹60 per piece | ||
| 00) | whichever is higher | ||||
| D.3. Increase in tariff rate with no change in effective duty rate [With effect from 01.10.2024] | |||||
| 1 | Other roasted nuts and seeds, | 30 | 150 | ||
| including areca nuts | |||||
| 2 | Other nuts, otherwise prepared or preserved , including areca nuts | 30 | 150 | ||
| E.1. Increase in duration for re-import of goods exported out of India | |||||
| The time-period of duty free re-import of goods (other than those under export promotion schemes) exported out under warranty from India has been increased from 3 years to 5 years, further extendable by 2 years. | |||||
| D.4. Rationalization of Export duty on Raw hides, skins and leather [with effect from 24.07.2024] | |||||
| S. | Commodity | Rate of duties | |||
| No. | From | To (per cent) | |||
| (per cent) | |||||
| 1 | Raw Hides & skins, all sorts (other than buffalo) | 40 | 40 | ||
| 2 | Raw Hides & skins of buffalo | 30 | 30 | ||
| 3 | Raw fur and skins including lamb fur skin | 60/10 | 40 | ||
| 4 | Wet Blue Chrome Leather | 40 | 20 | ||
| 5 | Crust Leather | 40 | 20 | ||
| 6 | Tanned fur skin | 60 | 20 | ||
| 7 | E.I. Tanned Leather | Nil | Nil | ||
| 8 | Finished leather (as defined by DGFT) | Nil | Nil | ||
| E. Trade Facilitation Measures | |||||
| E.2. Increase in duration for export of articles of foreign origin imported into India for repairs | |||||
| Currently, articles of foreign origin can be imported into India for repairs subject to their re-exportation within six months extendable upto 1 year. The duration for export in the case of aircraft and vessels imported for maintenance, repair and overhauling has been increased from 6 months to 1 year, further extendable by 1 year. | |||||
| F. OTHERS | |||||
| There are few other changes of minor nature. For details of the budget proposals, the Explanatory Memorandum and other relevant budget documents may be referred to. | |||||
Conclusion: The Budget 2024 amendments to the Customs and GST laws introduce crucial changes that affect various aspects of trade and taxation. Businesses must adapt to these new provisions, particularly those related to tariff rates, warehousing activities, and GST compliance. By understanding these amendments, companies can ensure better compliance, avoid penalties, and leverage new opportunities for trade facilitation.
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