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Changes in Custom Duty in Indian Budget 2015-16

Date 02-March-2015
Subject Changes in Custom Duty in Indian Budget 2015-16

CUSTOMS

Chapter 1 to 24: No change

Chapter 25:

1) Basic Customs Duty on ulexite ore is being reduced from 2.5% to Nil. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015- Customs, dated 1st March, 2015 [new S.No.113A] refers.

Chapter 26:

1) Export duty on ilmenite, upgraded (beneficiated ilmenite including ilmenite ground) is being reduced from 5% to 2.5%. S.No.24D of notification No.27/2011-Customs, dated 1st March,2011 as amended by notification No.8/2015-Customs, dated 1st March, 2015 refers.

Chapter 27:

1) The tariff rate of Basic Customs Duty on Bituminous coal [2701 12 00] is being reduced from 55% to 10%. A suitable amendment has been proposed in the Customs Tariff Act,1975. Clause 89 of the Finance Bill, 2015 refers. However, the effective rate of Basic Customs Duty on Bituminous coal continues to be 2.5%.

2) Basic Customs Duty on metallurgical coke [2704 00] is being increased from 2.5% to 5%.S.No.125 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015 Customs, dated 1st March, 2015 refers.

3) Special Additional Duty (SAD) on Naphtha [2710] for use in manufacture of excisable goods is being reduced from 4% to 2%. Notification No.21/2012-Customs, dated 17th March, 2012 as amended by notification No.11/2015-Customs, dated the 1st March, 2015 [new S.No.45A]refers.

4) Basic Customs Duty on liquefied butanes [2711 13 00] is being reduced from 5% to 2.5%.Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated the 1st March, 2015 [new S.No.142C] refers.

5) Scheduled rate of Additional Duty of Customs levied on imported Motor Spirit [Petrol] and High Speed Diesel Oil [commonly known as Road Cess] is being increased from Rs.2 per litre to Rs.8 per litre. A suitable amendment has been proposed in the Second Schedule to the Finance (No.2) Act, 1998 and Second Schedule to the Finance Act, 1999. Clause 163 and 164 of the Finance Bill, 2015 refer. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, these changes will come into force with immediate effect. However, the effective rate of Additional Duty of Customs levied on imported Motor Spirit [Petrol] and High Speed Diesel Oil [commonly known as Road Cess] is being increased from Rs.2 per litre to Rs.6 per litre. Notification No.6/2015-Customs and notification No.7/2015-Customs both dated the 1st March, 2015 refer.

Chapter 28:

1) Basic Customs duty on sulphuric acid [2807 00 10] for the manufacture of fertilizers is being reduced from 7.5% to 5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated the 1st March, 2015 [new S.No.157A] refers.

Chapter 29 and 30:

1) Basic Customs duty on isoprene [2901 24 00] is being reduced from 5% to 2.5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated the 1st March, 2015 [S.No.173D] refers.

2) Basic Customs duty on styrene [2902 50 00], ethylene dichloride (EDC) [2903 15 00] and Vinyl Chloride Monomer (VCM) [2903 21 00] is being reduced from 2.5% to 2%. S.Nos.175, 177 and 178 Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated the 1st March, 2015 refers.

3) Special Additional Duty (SAD) on styrene [2902 50 00], ethylene dichloride (EDC) [2903 15 00] and Vinyl Chloride Monomer (VCM) [2903 21 00] for use in manufacture of excisable goods is being reduced from 4% to 2%. Notification No.21/2012-Customs, dated 17th March,2012 as amended by notification No.11/2015-Customs, dated the 1 st March, 2015 [new S.Nos.45B, 45C and 45D] refers.

4) Basic Customs duty on anthraquinone [2914 61 00] is being reduced from 7.5% to 2.5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated the 1st March, 2015 [new S.Nos.181A] refers.

5) Basic Customs duty on butyl acrylate [2916 12 10] is being reduced from 7.5% to 5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated the 1st March, 2015 [new S.No.181B] refers.

Chapter 31 to 71: No change

Chapters 72 &73:

1) Tariff rate of Basic Customs Duty on iron and steel (Chapter 72) and articles of iron or steel (Chapter 73) is being increased from 10% to 15%. Clause 89 of the Finance Bill 2015 refers. However the existing effective rate of BCD on these goods are being retained. S.Nos.329A and 334A of notification No.12/2012-Customs, dated 17th March, 2012 as inserted by notification No.10/2015-Customs, dated 1st March, 2015 refer. Further, it is clarified that the existing concessional rates of Basic Customs Duty in respect of goods falling under Chapters 72 & 73 under S.Nos. 330, 331, 332, 333 & 334 and other similar entries of notification No.12/2012-Customs dated 17th March, 2012 will continue.

Chapter 74 & 76:

1) Special Additional Duty of Customs (SAD) on melting scrap of iron or steel, stainless steel scrap for the purpose of melting, copper scrap, brass scrap and aluminium scrap is being reduced from 4% to 2%. Notification No.21/2012-Customs, dated 17th March, 2012 as amended by notification No.11/2015-Customs, dated the 1st March 2015 [new S. Nos. 78A, 79A and 79B] refers.

Chapter 75, 77 to 80: No change.

Chapter 81:

1) Basic Customs duty on antimony metal [8110 10 00] and antimony waste and scrap [8110 2000] is being reduced from 5% to 2.5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated the 1st March, 2015 [new S.No.344A] refers.

Chapter 82, 83: No change.

Chapter 84:

1) Basic Customs Duty on C- Block Compressor [8414 90 11], Crank Shaft [8414 90 11] and Over Load Protector (OLP) & Positive thermal co-efficient [8536 20 90] for use in the manufacture of Refrigerator compressors is being reduced from 7.5% to 5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015- Customs, dated the 1st March 2015 [new S. Nos. 399A and 399B] refers.

2) Basic Customs Duty on specified components [8537 10 00] of CNC Lathe machines and Machining Centres, namely Ball screws [8483 40 00], Linear Motion Guides [8466 93 90] and CNC Systems is being reduced from 7.5% to 2.5%, subject to actual user condition. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated the 1st March 2015 [new S. Nos. 406B, 406C and 406D] refers.

3) Basic Customs Duty on ceria zirconia compounds [ 2825 60 20], cerium compounds [2846 10 90] and zeolite [3824 90 90] is being reduced from 7.5% to 5% for use in manufacture of washcoat, which is used in catalytic converters, subject to actual user condition. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015- Customs, dated the 1 st March 2015 [new S. Nos. 371A, 371B and 371C] refers.

4) Parts and components of cash dispenser and automatic bank note dispensers [heading 8473 40] are exempt from Basic Customs Duty. However, since the classification of parts was not mentioned in the relevant notification, there were doubts about the scope of the exemption for parts of cash dispenser and automatic bank note dispensers. As the ‘parts and components of cash dispensers and automatic bank note dispensers’ were specifically included in the description of goods even though their classification was not, it is clarified that the benefit of exemption from Basic Customs Duty was available to parts and components of cash dispenser and automatic bank note dispensers, in accordance with CBEC circular 9/96- Customs dated 13.2.96 [F.No.528/4/96-Customs (TU)]. Prospectively, the S. No. 408 of the Notification No. 12/2012- Customs dated 17-3-2012 is being amended to include the classification [8473 40] of parts and components of cash dispensers and automatic bank note dispensers. S. No. 408 of Notification No. 12/2012-Cus, as amended vide notification No.10/2015-Customs dated 1 st March, 2015 refers.

5) Basic Custom Duty is being exempted on evacuated tubes with three layers of solar selective coating for use in the manufacture of solar water heater and system, subject to actual user condition. Notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No.10/2015-Customs, dated 1st March, 2015 [new S.No.399C] refers.

6) Basic Custom Duty and CVD are being exempted on parts, components and accessories for use in the manufacture of tablet computer. Also, Basic Custom Duty and CVD are being exempted on sub-parts for use in manufacture of parts, components and accessories of tablet computers. Both BCD and CVD being exempt, vide S. No. 1 of notification No 21/2012- Customs, dated 17-3-2012, the SAD on these goods will also be exempt. These exemptions are subject to actual user condition. Notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No.10/2015-Customs, dated 1st March, 2015 [new S.No.407A] refers.

Chapter 85

1) Basic Custom Duty is being exempted on High Density Polyethylene (HDPE) for manufacture of telecommunication grade optical fibres or optical fibre cables. Item-11 of List-5 of notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No.10/2015-Customs, dated 1 st March, 2015 refers.

2) Basic Custom Duty is being reduced from 10% to 7.5% on Water Blocking Tape, Ethylene– propylene–non-conjugated diene rubber (EPDM) and Mica glass tape for use in the manufacture of insulated wires and cables (except sub-heading 8544 11), subject to actual user condition. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated 1st March, 2015 [new S.Nos.247A-247C] refers.

3) Basic Custom Duty is being reduced from 10% to 7.5% on metal parts for use in manufacture of electrical insulators, subject to actual user condition. Notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No.10/2015-Customs, dated 1st March, 2015 [new S.No.334B] refers.

4) Concessional Basic Custom Duty of 5% is being extended to AEC (Active Energy Controller) for manufacture of Renewable Power System (RPS) inverters, subject to certification by Ministry of New and Renewable Energy [MNRE]. Notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No.10/2015-Customs, dated 1 st March, 2015 [new S.No.424A and Condition No. 46] refers.

5) Basic Custom Duty is being reduced from 10% to Nil on Digital Still Image Video Cameras capable of recording video with minimum resolution of 800x600 pixels, at minimum 23 frames per second, for at least 30 minutes in a single sequence, using the maximum storage (including the expanded) capacity. Notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No.10/2015-Customs, dated 1st March, 2015 [new S.No.428A] refers. Basic Custom Duty is also being also reduced from 5% to Nil on parts and components for use in the manufacture of such Digital Cameras. S.No.429 of notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No. 10/2015- Customs, dated 1st March, 2015 refers.

6) Basic Custom Duty is being reduced on Organic LED (OLED) TV panels from 10% to Nil. S.No.432 of notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No.10/2015-Customs, dated 1st March, 2015 refers.

7) Basic Custom Duty is being exempted on Black Light Unit Module also for manufacture of LCD/LED TV panels, subject to actual user condition. S.No.432B of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015- Customs, dated 1st March, 2015 refers.

8) Basic Custom Duty is being reduced from 5% to Nil on magnetron (upto 1 KW) used for the manufacture of domestic microwave oven. S. No. 433 of notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No.10/2015-Customs, dated 1st March, 2015 refers.

9) Special Additional Duty (SAD) is being exempted on all goods [except populated PCBs] for use in the manufacture of ITA bound goods covered by Notification Nos. 25/1998-Customs dated 2nd June, 1998, 24/2005-Customs dated 1st March, 2005, 25/2005-Customs dated 1st March, 2005, subject to actual user condition. Notification No.21/2012-Customs, dated 17th March, 2012 as amended vide notification No.11/2015-Customs, dated 1st March, 2015 [new S.No. 14D] refers.

10) Special Additional Duty (SAD) is being exempted on all inputs for use in the manufacture of LED driver and MCPCB for LED lights and Fixtures & LED Lamps, subject to actual user condition. Notification No.21/2012-Customs, dated 17th March, 2012 as amended vide notification No.11/2015-Customs, dated 1st March, 2015 [new S.No.14F] refers.

Chapter 86: No change.

Chapter 87

1) Tariff rate of BCD on import of vehicles falling under headings 8702 or 8704 (commercial vehicles) is being increased from 10% to 40%. Clause 89 of the Finance Bill 2015 refers. By virtue of the Provisional Collection of Taxes Act, 1931, this increase will come into force with immediate effect. An effective BCD rate of 10% is being prescribed on vehicles falling under headings 8702 or 8704 (commercial vehicles) when imported in a Completely Knocked Down (CKD) kit. All such vehicles when imported in any other form will attract BCD of 20%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No.10/2015-Customs dated 1 st March, 2015 [new S. No 436A] refers. However, electrically operated vehicles including in CKD condition, for transport of persons falling under heading 8702 would continue to attract 10% BCD. Notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No.10/2015-Customs dated 1 st March,2015 [new S. No. 436B] refers.

2) The validity period of exemption granted to specified goods for use in the manufacture of hybrid and electrically operated vehicles is being extended by one more year up to 31st March, 2016. Clauses (g) and (h) of proviso to notification No. 12/2012-Customs, as amended by notification No. 10/2015-Customs, dated the 1st March 2015 refers.

Chapter 88, 89: No change.

Chapter 90:

1) CVD is being exempted on specified raw materials for use in the manufacture of pacemakers,subject to actual user condition. Notification No. 12/2012-Customs, dated 17th March, 2012 as amended vide notification No.10/2015- Customs, dated 1st March, 2015 [new S. No.488A] refers. Further, these good are also being exempted from SAD subject to actual user condition. Notification No. 21/2012-Customs, dated 17th March, 2012 as amended vide notification No.11/2015- Customs, dated 1 st March, 2015 [new S. No. 14E] refers.

2) Basic Customs Duty on specified inputs for use in the manufacture of flexible medical video endoscope is being reduced from 5% to 2.5%. Notification No. 12/2012-Customs, dated 17th March, 2012 as amended vide notification No.10/2015- Customs, dated 1st March, 2015 [newS. No. 474A] refers.

3) Basic Customs Duty and CVD is being fully exempted on artificial hearts (left ventricular assist device). S.No.480 of notification No. 12/2012-Customs, dated 17th March, 2012 as amended vide notification No.10/2015- Customs, dated 1st March, 2015 refers.

Chapter 91 to 98: No change.

Miscellaneous:

1) Notification No.12/2012-Customs [S.No.148(C)] fully exempts Basic Customs Duty and CVD leviable on life saving drugs and medicines imported by an individual for personal use subject to the Condition No.10, which stipulates that importer produces a certificate (in prescribed form) issued by the Director General or Deputy Director General or Assistant Director General, Health Services, New Delhi, Director of Health Services of the State Government or the District Medical Officer/Civil Surgeon of the district, in each individual case, that the goods are life saving drugs or medicines. The prescribed Form is being amended so as to provide that such certificate shall be valid for a period of one year in case of patients who have to import such drugs and medicines on a regular basis. Condition No.10 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.10/2015-Customs, dated the 1st March, 2015 refers.

2) S. No. 507 of Notification No. 12/2012-Customs dated 17-3-2012 prescribes Nil BCD and NIL CVD for goods imported for setting up a Mega Power Project specified in List No. 32A of the said Notification. In case of imports for a project for which the certificate regarding Mega Power Project status is provisional, the exemption is, inter alia, subject to condition that importer furnishes a bank guarantee or fixed deposit receipt for a term of 36 months or more. This condition is being amended to prescribe furnishing of bank guarantee or fixed deposit receipt for a period of 66 months. This condition is also applicable to imports under S. No. 508 of Notification No. 12/2012-Customs, dated 17-3-2012. Condition No.93 of notification No 12/2012-Customs, dated 17th March 2012, as amended by notification No 10/2015-Customs, dated the 1st March 2015 refers.

3) CVD and SAD exemption on specified goods imported for use by Security Printing and Minting Corporation of India Limited (SPMCIL) are being withdrawn. S.No.394 of notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No.10/2015-Customs dated 1st March, 2015 and S.No.83 of notification No.21/2012-Customs, dated 17th March, 2012 as deleted by notification No. 11/2015-Customs, dated the 1st March, 2015 refers.

4) Notifications No.13/2012-Customs and No.14/2012-Customs both dated 17th March, 2012 exempt Education Cess and Secondary & Higher Education Cess leviable as CVD on imported goods. Since Education Cess and Secondary & Higher Education Cess leviable on excisable goods are being exempted in general, there will be no corresponding levy as CVD on imported goods. Hence, these notifications are being rescinded. In this regard, notification No.9/2015-Customs dated 1st March, 2015 refers.

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