Detailed analysis of changes in rates of Central Excise & Custom – Union Budget 2019

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In Union Budget 2019-20, the Finance Minister has introduced the Finance (No.2) Bill, 2019 in Lok Sabha on July 05, 2019. The following are the gist of the notifications which makes amendment in Customs and Central Excise, with effect from July 06, 2019 unless otherwise stated. To prescribe effective rate of duty following notifications are being issued:

  Notifications Nos. Date
CUSTOMS No. 18/2019 – Customs to No. 27/2019 – Customs 6th July, 2019
CENTRAL EXCISE No. 2/2019 – CE to No. 6/2019 – CE 6th July, 2019

 

Unless otherwise stated, all changes in rate of duty take effect from the midnight of 5th July/6th July, 2019. A declaration has been made under the Provisional Collection of Taxes Act, 1931 in respect of clauses 87(a), 90, 185 and 201 of the Finance (No. 2) Bill, 2019 so that changes proposed therein takes effect from the midnight of 5th July/6th July, 2019. The remaining legislative changes would come into effect only upon the enactment of the Finance (No. 2) Bill, 2019.

Customs: Amendment in First Schedule to the Customs Tariff Act, 1975
S. No. Notification No. Description
1.* 18/2019-Customs dated July 06, 2019

Seeks to increase the effective rate of Road and Infrastructure Cess, as additional duty of customs, on

· Motor spirit commonly known as petrol falling under chapter heading 2710 from Rs 8 Per Litre to Rs. 9 Per Litre.

· High speed diesel oil falling under Chapter heading 2710 from Rs 8 Per Litre to Rs. 9 Per Litre.

*Note: Similar increase in the effective rate of Road and Infrastructure Cess as additional duty of excise on Petrol and Diesel vide Notification No. 04/2019 -Central Excise dated July 06, 2019
2. 19/2019-Customs dated

July 06, 2019

 

Seeks to exempt specified defense equipment and their parts from whole of Basic Customs Duty subject to certain conditions for a period of 5 years i.e. till July 01, 2024. The conditions are as follows: –

· An officer not below the rank of Joint Secretary to the Government of India in the Ministry of Defence shall certify,

a. The quantity, description and technical specifications of the imported goods;

b. The said imported goods are intended for the purpose of and use by the defence forces only and recommends the grant of exemption to the imported goods.

· the importer shall, at the time of import, furnish the said certificate to the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be.

3. 20/2019-Customs dated July 06, 2019 Seeks to further amend notification No. 52/2017- Customs dated June 30, 2017 so as to increase the effective rate of Basic Customs Duty on Petroleum Crude falling under sub heading 2709 00 00 to Rs. 1 Per tonne.
4. 21/2019-Customs dated July 06, 2019

Seeks to further amend notification No 25/1998-Customs dated June 02, 1998 to update the classification of certain goods in the notification.  Following are some of the goods:

· Parts of chemical vapour deposition apparatus for semi-conductor production.

· Machines for working any material by removal of material, by laser etc.

· Spraying appliances for etching, stripping or cleaning semiconductor wafers.

5. 22/2019-Customs dated July 06, 2019

Seeks to further amend notification No 25/2002- Customs dated March 01, 2002 to exempt specified capital goods used for manufacture of specified electronic items. Some of the changes are as follows:

· Capital goods which are exempt, and used for manufacturing of following electronic items falling under heading 82, 84, 85 or 90, namely

a. Populated PCBA.

b. Camera module of cellular mobile phones.

c. Charger/Adapter of cellular mobile phone.

d. Lithium Ion Cell.

e. Display Module.

f.  Set Top Box.

g. Compact Camera Module, etc

6. 23/2019-Customs dated July 06, 2019 Seeks to further amend notification No 25/2005- Customs dated March 01, 2005 to explicitly provide exemption from Basic Customs Duty on the specified parts of line telephone handset falling under tariff heading 8518 30 00.
7. 24/2019-Customs dated July 06, 2019

Seeks to further amend notification No 57/2017- Customs dated June 30, 2017 to explicitly exclude the specified electronic items from scope of entry at S. No. 6A of the notification and to provide the effective rates on other goods. The following are some of the specified electronic items that are excluded from entry at S. No. 6A of the notification are as hereunder: –

a. Connectors;

b. Microphones;

c. Receivers;

d. Speaker;

e. SIM socket

8. 25/2019-Customs dated July 06 2019

Seeks to further amend notification No 50/2017-Customs dated June 30, 2017 so as to prescribe effective rate of Basic Customs Duty (BCD). Following are some of items which shall be inserted:

· E-drive assembly

· On board charger

· E compressor

· Charging Gun

· Pine wood

· Foam/EVA form

9. 26/2019-Customs dated July 06, 2019 Seeks to further amend notification No 14/2006- Customs dated March 01, 2006 in order to change the classification of other dyed fabrics of nylon from “5407 42 00” to “5407 42”
10. 27/2019-Customs dated July 06, 2019 Seeks to further amend notification No 27/2011- Customs dated March 01, 2011 to reduce the export duty on EI tanned leather falling under chapter heading 41 from 15% to “Nil” and Hides, skins and leathers, tanned and untanned, all sorts falling under chapter heading 41 from 60% to “40%”

 

 

Note: Readers are requested to read relevant notification for complete details.

 

 

Central Excise: Amendments in the Fourth Schedule To The Central Excise Act, 1944
1. 02/2019-Central Excise dated July 06, 2019 Seeks to further amend notification No. 11/2017-Central Excise dated June 30, 2017 so as to omit Sl. No. 1 and entries relating thereto with respect to chapter 24.
2. 03/2019- Central Excise dated July 06, 2019

Seeks to increase the Basic Excise Duty on specified goods in Chapter 24 under section 5A of the Central Excise Act 1944. The following are some of the specified goods: –

· Other than filter cigarettes, of length not exceeding 65 millimeters from Nil to Rs 5 per thousand.

· Other than filter cigarettes, of length exceeding 65 millimeters but not exceeding 70 millimeters from Nil to Rs 5 per thousand.

· Other (Cigarettes containing tobacco) from Nil to Rs 10 per thousand.

· Cigarettes of tobacco substitutes from Nil to Rs 5 per thousand.

· Hookah or Gudaku tobacco from Nil to 0.5%. etc..

3. 04/2019- Central Excise dated July 06, 2019 Seeks to increase the effective rate of Road and Infrastructure Cess as additional duty of excise on Petrol and Diesel.
4. 05/2019- Central Excise

dated July 06, 2019

Seeks to increase the effective rate of Special Additional Excise Duty on:

· Motor spirit commonly known as petrol falling Under chapter heading 2710 to Rs. 8 Per Litre.

· High speed diesel oil falling Under Chapter heading 2710 to Rs. 2 Per Litre.

5. 06/2019- Central Excise dated July 06, 2019 Seeks to exempt crude petroleum oil produced in specified oil fields under production sharing contracts or in the exploration blocks offered under the New Exploration Licensing Policy (NELP) through international competitive bidding.

Note: Readers are requested to read relevant notification for complete details.