Highlight of the changes proposed in Central Excise in the Budget 2010-11
1. The excise duty of all goods which attracted 8% Central Excise duty previously will now be taxed at 10%.
2. The rates of duty on cement manufactured by units other than Mini Cement Plant in packaged form and bulk form have also been revised upwards. Corresponding changes have been made to increase the rates of duty applicable to cement manufactured by mini-cement plants too.
3. Excise duty on cement clinker has been increased from Rs.300 per metric tonne to Rs.375 per metric tonne.
4. Central Excise duty on Large cars, Multi Utility Vehicles and Sports Utility Vehicles etc. and chassis thereof has been increased from 20% to 22%. The specific component of duty on such vehicles remains unchanged.
5. The rates of excise duty on Motor Spirit (petrol) and HSD (diesel) have been increased by Re.1 per litre. The increase is applicable to both branded and unbranded products. The rates of duty on other petroleum products remain unchanged.
6. The rates of basic excise duty have been raised on all forms of tobacco and tobacco products (e.g. branded unmanufactured tobacco and tobacco refuse, branded hookah or gudaku tobacco, chewing tobacco, preparations containing chewing tobacco, jarda scented tobacco, snuff and its preparations, tobacco extracts and essences etc ; smoking tobacco, cut tobacco, smoking mixtures etc.), On some of these item notified under section 4A which are assessed to duty on Retail Sales Price (RSP) the rates of abatement are also revised. The rates of duty on bidis has not been touched.
7. The existing slab of filter cigarettes of length not exceeding 70 mm has been broken up into two slabs, filter cigarettes of length not exceeding 60 mm and filter cigarettes of length exceeding 60 mm but not exceeding 70 mm and the basic excise duty (BED) on all cigarettes, other than cigarettes of length not exceeding 60 mm (both filter and non-filter), has been increased. In respect of cigars, cheroots and cigarillos of tobacco, the revised rates of Basic Excise duty basis is 10% of the value or Rs.1227 per thousand, whichever is higher Additional Excise duty 1s 1.6% of the value or Rs.246 per thousand, whichever is higher. Similarly cigars, cheroots and cigarillos manufactured from tobacco substitutes will attract Basic Excise Duty of 10% of value or Rs.1473 per 1000, whichever is higher.
8. Compounded levy under section 3A of the Central Excise Act introduced on chewing tobacco and branded unmanufactured tobacco packed in pouches with the aid of packing machines. The scheme is similar to the one already in operation for Guthka and pan masala with the difference that the facility of input credit of the duty paid on bulk packs of chewing tobacco shall be available to the manufacturer of packaged products subject to the levy. This scheme will come into effect on 08.03.2010. 9. Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Rules, 2008 have also been amended to effect certain technical changes. A manufacturer is now allowed to remove goods, other than notified goods, from his factory during the period of abatement specified in rule 10 and the notified goods already produced before the commencement of said period can also be removed within the first two days of the abatement period.
10. A Clean Energy Cess is imposed on coal, lignite and peat produced in India. This cess would be levied and collected as a duty of excise from coal mines. This cess would apply to imported coal as CVD.
11. Exemptions from payment of Central Excise duty withdrawn in respect of Musquito nets impregnated with insecticide, Microprocessor for computers (other than motherboard), Floppy disk drive, Hard disk drive, flaash drive. CD/DVD and Combo Drive meant for external use and Baby & clinical diapers and sanitary napkins.
12. In respect of open to sanitary (OTS) cans and Goggles other than for correcting vision the Central Excise duty has been revised from 4% to 10%.
13. Full exemption has been provided from Central Excise duty in respect of a. Betel nut product known as “Supari” b. Dementholised oil, Deterpenated Mentha oil, Spearmint/ Mentha Piperita oils and all intermediates and by-products of Menthol c. Toy balloons made of natural rubber d. Articles of bedding wholly made of quilted textile materials 1
4. Excise duty exemption on specified plantation machinery is being reintroduced upto 31.3.2011.
15. Goods supplied to mega power projects from which power supply has been tied up through tariff-based competitive bidding, or awarded through tariff-based competitive bidding. Cenvat Credit Rules is also being amended so as to allow Cenvat credit of duty paid on inputs used in the manufacture of such exempted supplies.
16. Few more specified raw materials for the manufacture of rotor blades for wind operated electricity generators are also exempted from Central Excise duty.
17. Central Excise duty exemption is extended to Self-loading/self-unloading trailers & semi trailers for agricultural purposes (tariff item 8716 20 00)
18. Full exemption from excise duty presently available to 20 specified equipments for preservation, storage or transport of agricultural produce has been extended to apiary, horticultural, dairy, poultry, aquatic & marine produce and meat as well as processing thereof.
19. Full exemption from excise duty is being provided to security inks manufactured by Bank Note Press Dewas and supplied to Bank Note Press Dewas, Currency Note Press, India Security Printing Press, Nasik, Security Printing Press, Hyderabad etc.
20. Full exemption is also being provided to Circulation Coins, blanks etc and scrap generated in the manufacture of blanks by India Government Mints at Mumbai, Kolkata, Hyderabad and Noida.
21. Concessional duty of 4% has been prescribed in the following cases: LED lights/lighting fixtures Replaceable kits for all household type water filters (except those operating on RO technology) Corrugated boxes/ cartons manufactured by stand- alone manufacturers, subject to conditions Latex rubber thread
22. A uniform concessional rate of duty of 4% is being prescribed for parts, namely batteries including battery chargers, electric motors and AC or DC motor controllers required for manufacture of all categories of electrical vehicles including cars, two wheelers and three wheelers (like „Soleckshaw‟) subject to actual user condition. This concession will be available till 31.03.2013. Such vehicles will also be charged to excise duty @ 4%.
23. Refined serially numbered gold bars made from the ore/concentrate stage will now attract excise duty of Rs.280 per 10 grams (instead of 10% ad valorem) with Cenvat credit facility on inputs and capital goods.
24. The relaxation from brand name restriction under the general SSI exemption scheme has been extended to plastic bottles and plastic containers used as packing material.
25. Excise duty on DTA clearances of plain gold and silver jewellery manufactured by a 100% EOU is being increased from Rs.500 per 10 gram to Rs.750 per 10 gram for gold jewellery; and Rs.1000 per kg to Rs.1500 per kg. for silver jewellery.
26. The rates of excise duty are being equalized/ unified in respect of maize starch, tapioca starch and potato starch at 4%, umbrellas, umbrella parts and umbrella cloth panels at 4% and ceramic tiles manufactured in kilns fired by not using electricity, and other ceramic tiles at 10%, with Cenvat credit.
27. In respect of Small Scale sector full Cenvat credit on capital goods in one instalment in the year of receipt of such capital goods in the factory and payment of duty on quarterly rather than monthly basis. These amendments come into effect on the 1st of April, 2010. The important point about these relaxations is that they are available to any assessee who is eligible to claim SSI exemption regardless of whether he actually claims it or opts to pay duty. An eligible unit has been defined as one whose aggregate value of clearances did not exceed Rs. 4 crore in the preceding financial year. Moreover, the benefit is available to a unit that is eligible for the entire financial year even if it crosses the limit of Rs. 4 crore (aggregate value of clearances) during the year.
28. The date of filing of quarterly returns by SSI units is being aligned with the date for non-SSI units so that all returns are required to be filed by the 10th of the month following the said quarter.
29. Some of the other procedural simplification measures that are contained in the budget proposals are Pre-authentication of invoices has been dispensed with, benefit of allowing Cenvat credit to be reversed on proportionate basis (when common inputs are used for the manufacture of dutiable and exempt products) is being extended retrospectively for pending cases.
30. Accelerated depreciation of the credit amount has been allowed for reversing credit taken on computers and computer peripherals when they are cleared after use in the factory.
31. Movement of moulds, dies, jigs and fixtures by the main manufacturer to vendors (other than job-workers) without loss of Cenvat credit has been facilitated by suitably amending the Cenvat Credit Rules. 31. In cases of voluntary payment of duty under section 11A (2B) of the Central Excise Act, it is being clarified that no penalty shall be imposed.
32. Settlement of cases through the Settlement Commission has been liberalized by removing restrictions on the nature of cases that may be settled and the number of times the Commission may be approached by an assessee.
33. Among the important legislative provisions is the amendment of section 37 of the Central Excise Act, 1944 to enable the Central Government to make rules providing for deterrent action through the withdrawal of certain facilities to deal with evasion.
34. In the First Schedule to the Central Excise Tariff Act, amendments have been made to (i)Carry out editorial changes in sub- heading no.2712 20 through the deletion of the entry covering chlorinated paraffin wax and insertion of new entries for paraffin wax. (ii) Prescribe that certain processes in respect of goods falling under chapters 68 and 76 as amounting to manufacture. These would come into effect immediately as the relevant provisions have been declared under the PCT Act
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