Government of India, Ministry of Finance, Department of Revenue, Tax Research Unit

Alok Shukla, Joint Secretary (TRU-I), Tel: 23092687, Fax: 23092031, Email: alok.shukla@nic.in

D.O.F.No.334/5/2015-TRU New Delhi, the 30th April, 2015.

Dear Principal Chief Commissioner / Chief Commissioner / Director General,

While replying to the discussions on the Finance Bill, 2015 in Lok Sabha today, Finance Minister has announced certain further changes in Central Excise and Customs duty rates. Notifications No.23 to No.27/2015-Central Excise and notifications No. 28 to No.30/2015- Customs, all dated 30th April, 2015 have been issued to give effect to these announcements. Notifications No.12 and No.13/2015-Central Excise (N.T.), dated 30th April, 2015 has also been issued in this regard. As regards Service Tax, notification No.12/2015-Service Tax, dated 30.04.2015 has been issued.

2. The changes introduced through these notifications are summarised below. In addition, a clarification regarding applicability of customs duty exemption notifications has also been provided. Unless otherwise stated, all changes in rates of duty take effect from the midnight of 29th April / 30th April, 2015.

CUSTOMS:

1)      Basic Customs Duty on raw and refined / white sugar has been increased from 25% to 40%. S.Nos.76, 77 and 78 of notification No. 12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refer.

2)      Basic Customs Duty on Colemanite and other Boron ores has been reduced from 2.5% to Nil. S.No.1 13 of notification No. 12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refers. S.No.1 13A has been omitted since ulexite ore, being a boron ore, will be eligible for Nil duty under S.No.1 13.

3)      Basic Customs Duty on natural rubber (NR) has been increased from 20% or Rs. 30 per kg., whichever is lower, to 25% or Rs. 30 per kg., whichever is lower. S.No.252 of notification No. 12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refers.

4)      Basic Customs Duty on raw silk (not thrown) has been reduced from 15% to 10%. S.No.276 of notification No. 12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refers.

5)      All Digital Still Image Video Cameras (DSC) falling under tariff item 8525 80 20 irrespective of their specification [including the restriction with reference to video recording time] and their parts are being exempted from Basic Customs Duty. S.No.428A and 429 of notification No. 12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refer.

6)      Export duty on iron ore fines (below 58% Fe content) [falling under tariff lines 2601 11 41 and 2601 11 42] has been reduced from 30% to 10%. There is no change in the export duty rate on iron ore other than iron ore fines (below 58% Fe content). Notification No.27/2011-Customs, dated 01.03.2011 as amended by notification No.30/2015- Customs, dated 30.04.2015 [new S.No.20A refers].

7) Exemption from additional duty of customs levied under section 3 of the Customs Tariff Act (both CVD and SAD) in respect of certain entries of notification No.39/96-Customs, dated 23.07.1996 are being withdrawn. Exemption from Basic Customs Duty in respect of these entries, however, would continue. Paragraph 2 of the notification No.39/96- Customs, dated 23.07.1996 as amended by notification No.29/2015-Customs dated 30.04.2015 refers. Further, exemption from Basic Customs Duty, CVD and SAD in respect of direct imports by the Government of India and the State Governments would continue. Notification No.39/96-Customs, dated 23.07.1996 as amended by notification No.29/2015-Customs dated 30.04.2015 [amended S. Nos.9 and 10] refer. These changes, however, will be effective from 01.06.2015.

EXCISE:

1) The speed range for ‘jarda scented tobacco’has been divided into two ranges (as in case of chewing tobacco),

a.         first upto 300 pouches per minute; and

b.         second from 301 onwards,

and the deemed capacity and duty payable have been notified accordingly. Notification No.11/2010-Central Excise (N.T.), dated 27.02.2010 [The Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010] as amended by notification No.13/2015-Central Excise (N.T.), dated 30.04.2015 [for deemed capacity of production] and notification No.16/2010-Central Excise, dated the 27.02.2010 as amended by notification No.25/2015-Central Excise, dated the 30.04.2015 [for duty payable per machine per month] refer.

2) Excise duty exemption on finishing agents, dye carriers to accelerate the dyeing or fixing of dye-stuffs, printing paste and other products and preparations of any kind used in the same factory for the manufacture of textiles and textile articles has been withdrawn. S.No.133 of notification No.12/2012-Central Excise, dated 17.03.2012 as omitted by notification No. 24/2015-Central Excise, dated 30.04.2015 refers.

3) The concessional excise duty (and hence, CVD) of 6% on Hard disk, CD ROM drive, DVD drive or writer, Combo drive, flash memory, microprocessors has been restricted only to actual users for manufacture of computer (PCs/desktops) falling under heading 8471. S.No.255 of notification No.12/2012-Central Excise, dated 17.03.2012 as amended bynotification No. 24/2015-Central Excise, dated 30.04.2015 refers.

4)      Excise duty exemption presently available to Ordnance Factories is being withdrawn. S.No.1 and 6 of notification No.62/95-CE dated 16.03.1995 as omitted by notification No.23/2015-Central Excise, dated 30.04.2015 refers. Further, excise duty exemption presently available to Defence PSUs is being withdrawn. S.No.2 and 16 of notification No.63/95-CE dated 16.03.1995 as omitted by notification No.23/2015-Central Excise, dated 30.04.2015 refers. These changes, however, will be effective from 01.06.2015.

5)      An Explanation has been inserted in notifications No.14/2015-Central Excise and 15/2015-Central Excise, both dated 01.03.2015 to provide that exemption from Education Cess and Secondary & Higher Education Cess contained therein will also apply to DTA clearances of excisable goods from 100% EOU. Notification No.14/2015-Central Excise, dated 01.03.2015 as amended by notification No.26/2015-Central Excise, dated 30.04.2015; and notification No.15/2015-Central Excise, dated 01.03.2015 as amended by notification No.27/2015-Central Excise, dated 30.04.2015 refers.

The CENVAT Credit Rules, 2004 (CCR, 2004):

1) Rule 3(7)(b) of the CCR, 2004 has been amended so as to allow utilisation of credit of Education Cess and Secondary & Higher Education Cess for payment of basic excise duty in the following situations:

a.         Education Cess and Secondary & Higher Education Cess on inputs or capital goods received in the factory of manufacture of final product on or after the 1st day of March, 2015;

b.         Balance 50% Education Cess and Secondary & Higher Education Cess on capital goods received in the factory of manufacture of final product in the financial year 2014-15; and

c. Education Cess and Secondary & Higher Education Cess on input services received by the manufacturer of final product on or after the 1st day of March, 2015.

Notification No.12/2015-Central Excise (N.T.), dated 30.04.2015 refers.

CLARIFICATION: The issue as to whether an importer can simultaneously avail the exemption benefits under two notifications, one for Basic Customs Duty and the other for CVD was examined in the Ministry in the matter of import of coal from Indonesia and vide Circular No.41/2013-Customs dated 21.10.2013 it was clarified that an importer while availing of BCD exemption on steam coal under notification No.46/2011-Customs, dated 01.06.2011 can simultaneously avail of concessional CVD at 2% under S.No.123 of Notification No. 12/2012-Customs, dated 17.03.2012. Drawing the same analogy, in the case of muriate of potash and urea for use in the manufacture of other fertilizers, it was clarified to the Central Excise zone of Visakhapatnam and Bhubaneswar that importers can simultaneously avail benefit of S.No. 198 or 203 of Notification No. 12/2012-Customs, dated 17.03.2012 for concessional rate of BCD and  S.No.127 of notification No.12/2012-Central Excise for CVD exemption. Representations have been received regarding divergence in assessment practice in respect of such imports. It is, therefore, clarified that importers can avail of the benefit of Notification No. 12/2012-Customs, dated 17.03.2012 for the purposes of BCD [i.e. S.No.197 to 203 as amended by notification No.46/2012-Customs, dated 17.08.2012] and simultaneously avail benefit of S.No.127 of Notification No. 12/2012-Customs, dated 17.03.2012 for the purposes of CVD where such imports are for use in the manufacture of other fertilizers.

SERVICE TAX:

1)        Service tax on services of Life Insurance business provided under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) have been exempted.

2)        Service tax on services of Life Insurance business provided under Pradhan Mantri Jan Dhan Yojana (PMJDY) have been exempted.

3)        Service tax on services of General Insurance business provided under Pradhan Mantri Suraksha Bima Yojana (PMSBY) have been exempted.

4)        Service tax on services by way of collection of contribution under Atal Pension Yojana (APY) have been exempted.

[Notification No.25/2012-Service Tax, dated 20.06.2012 as amended by notification No.12/2015-Service Tax, dated 30.04.2015 [item (p) of entry.26 and items (e) and (f) of entries 26A and 26B refer.]

With warm regards,

Yours sincerely,

(Alok Shukla) Joint Secretary (TRU-I)

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0 responses to “Budget 2015- Changes in Service Tax, Excise & Custom Duty as passed in Lok Sabha”

  1. Yasmen says:

    Sir,
    Kindly provide the Year Wise from FY 2006 rate of Basic Excise Duty (Not item wise) i.e 12.5% 12.36% 10.3% and the effective date of Same. it is very thankfull if you provide the ref of notification.

  2. R.V.R.Rao says:

    Why there should be so many doubts for the tax payer while understanding the budjet changes?

  3. KV Raghavan says:

    Request to send all changes in the service tax/customs/excise/VAT to my above mail id.

  4. subhash kumar says:

    sir,
    as per new provision in budget 2015 all the cash transaction above one lac will have to produce PAN card.I want to know whether cash transaction in course of sale purchase of daily use of commodities will also come under the purview of new provision.

  5. Krishnan says:

    As per General Budget 2015-2016, Service Tax changed from 12.36% to 14%.
    Kindly inform, whether the said changes has enacted / passed in Lok Sabha.
    If passed, Cureent Rate whether 14% or 16% (+ 2 some cess include or not)
    If new rate 14% (or) 16% applicable? which date from start? kindly inform.

    best regards : T. Krishnan/ 07.05.2015

  6. manu says:

    Dear sir, 4.5.2015
    I Request to send current rate of Excise, customs and service tax for the AY 2015-16 Applicable, please send a detailed mail to may above mentioned ID..

    Thanks & Regards
    Manu

  7. SRIDHAR RAJU says:

    Dear Sir,

    1).What will be the fate of balance of Cess lying unutilized in Cenvat credit account of the manufacturer as on February 28, 2015?

    2). What will be the treatment of balance 50% of the Cenvat credit of Cess when Capital goods were received before 2014-15 and balance 50% is not taken yet?

    Please clarify

    Rgrds,
    Sridhar Raju

  8. SRIDHAR RAJU says:

    Dear Sir,

    can we continue to carry forward the unutilized cenvat credit balance of CESS as it is perpetual and it never lapses!!! may we still utilize the same in the following situations:

    1. For removal of inputs ‘as such’ upon payment/reversal of cenvat credit availed earlier on such inputs.
    2. For payment of CESS on service tax in case any output service is provided by the manufacturer.
    3. For payment of CESS on arrears of duty demanded for any reason.
    Pls.clarify.

  9. SRIDHAR RAJU says:

    No clarity about utilisation of balance of education cess and S.H.cess lying on 28.02.15 w.r.t input & input service. – pls. give me the detailed clarification

  10. Manoj Agarwal says:

    The Finance Bill, 2015 has been passed by the Lok Sabha on 30-04-2015. But the same is yet to be approved by the Upper House and thereafter it need to be assented by THE PRESIDENT to become ACT. After enactment, the Central Government shall issue a notification for the implementation of revised rate of service tax from 12.36% to 14%. Till then, continue to charge earlier rate of 12.36%.

    Regarding Utilization of CESS, kindly read my article at taxguru for clarifications:
    https://taxguru.in/excise-duty/utilization-cess-payment-excise-duty-industry-fooled.html

  11. Vishal Saurav Gupta says:

    Dear Kamal,

    Still the rate is same 12.36%. Rate will be change after the date of notification only.

  12. Girish says:

    No clarity about utilisation of balance of education cess and S.H.cess lying on 28.02.15 w.r.t input & input service.

  13. sushil kumar bansal says:

    whether any changes in service tax in purchase of flats from builder in new service tax

    passed in lok sabha on 30th, april 2015

  14. Ashesh says:

    I required maximum information regarding Accounting for Financial Year 2015-2016, including Service Tax, Custom Duty, Excise & all Accounts.

    Request to send me each & every by mail on above email id.

  15. KAMAL DIXIT says:

    SIR,
    I want to know about service tax rates to be charge/ pay in Month April 2015 and after April 15.

    Regards,
    Kamal Dixit

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