3.1 The standard rate of Central Excise duty for non-POL products has been maintained at 10%. The merit rate of excise duty (CENVAT) for non-petroleum goods has been increased from 4% to 5%. The increased rate would apply to all such goods that hitherto attracted the rate of 4%.


3.2 The rate structure applicable to Portland cement falling under heading no.252329 has been revised. Cement manufactured by units other than mini-cement plants and cleared in a packaged form was chargeable to Central Excise duty either at specific rates or ad valorem rates depending on the retail sale price per 50 kg bag. The ad valorem rate was applicable to the retail sale price. Although the price slabs are being retained, the rates of duty are being converted to mixed rates i.e. ad valorem + specific rates along with some reduction. For the purpose of the ad valorem component, the value would no longer be the retail sale price but the transaction value determined under section 4 of the Central Excise Act, 1944. Similarly, rates of duty applicable to cement manufactured by mini-cement plants have been revised from specific rates to either ad valorem or ad valorem+ specific rates with some reduction. The rate of duty on bulk cement (i.e. other than packaged form), whether manufactured in a mini-cement plant or not, is being unified at 10% ad valorem. The details of these changes are as under:

S.No. Description of goods Earlier rate Revised rate
1 Packaged cement manufactured in a mini-cement plant –
(i) Of retail sale price not exceeding Rs.190 per 50 kg bag or of per tonne RSP not exceeding Rs.3800 Rs.185 PMT 10% ad valorem
(ii) Of retail sale price not exceeding Rs.190 per 50 kg bag or of per tonne RSP not exceeding Rs.3800 Rs.315 PMT 10% ad valorem + Rs.30 PMT
2 Packaged cement manufactured in a plant other than a mini-cement plant –
(i) Of retail sale price not exceeding Rs.190 per 50 kg bag or of per tonne RSP not exceeding Rs.3800 Rs.290 PMT 10% ad valorem + Rs.80 PMT
(ii) Of retail sale price not exceeding Rs.190 per 50 kg bag or of per tonne RSP not exceeding Rs.3800 10% of retail saleprice 10% ad valorem +Rs.160 PMT

3.3 Excise duty on cement clinker has been revised from Rs.375 per metric tonne to “10%+ Rs.200 per metric tonne”.

Ready-made garments and made-up articles:

3.4 Excise duty at the rate of 10% shall now apply to ready-made garments and made-up articles of textiles falling under Chapters 61, 62 and 63 (heading nos.63.01 to 63.08) of the Central Excise Tariff except those falling under heading nos.63.09 and 63.10 when they bear or are sold under a brand name. Hitherto, ready-made garments and made-up articles were exempt from Central Excise duty on the condition that no credit of duty on inputs is taken by the manufacturer in terms of notification no.30/2004-CE dated 9th July, 2004. If credit were taken, the applicable rate was 4% for goods of cotton, not containing any other textile material and 10% for others under notification no.29/2004-CE also dated 9th July, 2004. These notifications are being amended so that they apply only to those goods of Chapters 61, 62 and 63 not bearing a brand name or not sold under a brand name. For such goods, therefore, the optional duty regime would continue. In the case of ready-made garments and made-up articles bearing a brand name or sold under a brand name, no such option would be available and a duty of 10% would be payable regardless of the composition of the item/article.

3.5 Note 12 of Chapter 61 and Note 11 of Chapter 62 already prescribe that certain processes such as affixing a brand name on a product, labeling or re-labeling of containers etc. shall be processes amounting to manufacture. A similar note (Note 5) is being added to Chapter 63. As for the valuation of these goods, tariff value has already been fixed at the rate of 60% of the retail sale price in terms of notification No.20/2001-CE (NT) dated 30th April, 2004. This provision is being extended to goods of Chapter 63 as well. It may be noted that SSI exemption is being extended to the goods attracting this levy. This is being implemented through a suitable amendment in item (xxvi) of the Annexure to notification No. 8/2003-CE dated 1.3.2003. Although this should take care of small manufacturers, it may be made abundantly clear to the field formations that the levy does not apply to retail tailoring establishments that stitch garments in a customized manner to the size and style specifications of individual customers, whether out of fabric purchased by the customer from the same establishment or fabric supplied by the customer.

3.6 It is the practice in the garment and made up industry for brand owners to have goods manufactured from several job-workers. The brand owners may or may not, themselves, possess any manufacturing facility. Central Excise Rules are being amended to incorporate sub-rule (1A) in rule 4 to prescribe that in such a situation the liability to pay duty and comply with Central Excise procedure shall be on the person on whose behalf the goods are manufactured by job-workers. For this purpose, he would be required to register his private store-room or warehouse in which inputs are received for distribution to job-workers and finished goods are received from the job-workers. He would also be required to comply with all the other provisions of Central Excise law. The job-worker is exempt from payment of duty if the merchant manufacturer pays the duty. Alternatively, the merchant manufacturer may authorize the job- worker to obtain registration and comply with all formalities of Central Excise including payment of duty. Cenvat Credit Rules, 2004 are being amended to enable merchant manufacturers to avail of credit of duty paid on inputs, input services and capital goods.


3.7 Motor vehicles of headings 87.02 and 87.03 which are registered for use solely as ambulance after clearance are eligible to a concessional rate of 10% by way of a refund mechanism (S.No.34 (i) of notification no.6/2006-CE). For factory-built ambulances i.e. vehicles duly fitted with all fitments, furniture and accessories necessary for an ambulance, this concessional rate of 10% is being prescribed without any condition so that it may be claimed at the time of their clearance from the factory.

3.8 A similar refund-based concession was hitherto available to motor vehicles of heading 87.03 with a capacity of 7 persons including the driver which are registered for use solely as taxis after clearance(S.No.34 (ii) of notification no.6/2006-CE). Two changes are being carried out in this exemption: (i) the condition regarding capacity of the vehicle is being modified so that the concession is available to vehicles with capacity upto 13 persons including the driver; (ii) instead of a concessional rate of 10% ad valorem, the manufacturer of such vehicles would be entitled to a concessional rate equivalent to 80% of the excise duty paid on such vehicle at the time of clearance. Thus, if a vehicle attracts a normal duty of 10%, the manufacturer would be entitled to a refund of the amount representing 2% i.e. one-fifth of the total duty if the vehicle is subsequently registered as a taxi.

3.9 Concessional duty of 10% is being prescribed for hydrogen vehicles based on fuel cell technology. Similarly, a concessional rate of Central Excise duty of 5% has been extended to specified parts of hybrid vehicles and plug-in kits (and their parts) for conversion of normal fuel vehicles into hybrid vehicles.

Precious metals

3.10 Excise duty on serially numbered gold bars, other than tola bars, when manufactured from the ore/ concentrate stage is being reduced from Rs.280 per 10 grams to Rs.200 per 10 grams. This concessional rate is also being extended when such bars are manufactured starting from the stage of “gold dore bars”. Gold and silver arise in the course of manufacture of unwrought copper from copper ore or concentrate through the smelting process. The rates of excise duty on such gold and silver are also being rationalized at Rs.300 per 10 grams and Rs.1500 per kg respectively.

Goods for Mega-Power Projects:

3.11 Full exemption from Central Excise duty is available to goods supplied to ultra-mega power projects subject to the fulfillment of certain conditions – one of them being that the goods should be eligible for exemption from customs duties. Trade had represented that difficulties were being experienced in availing of the benefit of this exemption owing to this condition. The description of goods in the relevant entry in notification no.6/2006-CE has been amended to align it with the description under heading no.98.01 (project imports) and the condition regarding eligibility for customs exemption has been deleted. In addition, the exemption has been extended to power cables used within the generation facility of such a project. It has also been clarified by an explanation that the ash disposal system including ash dyke, coal transportation systems and water intake are integral parts of such a project.

3.12 Full exemption from Central Excise duty has also been extended to specified goods supplied to expansion projects of existing mega power projects, subject to certain conditions.

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September 2021