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41
CUSTOMS
Note:(a)“Basic Customs Duty” means the customs duty levied under the Customs Act,1962.
(b)“CVD” means the Additional Duty of Customs levied under sub-section (1) ofsection 3 of the Customs Tariff
Act, 1975.
(c)“SAD” means the Special Additional Duty of Customs levied under sub-section (5) of section 3 of the
Customs Tariff Act, 1975.
(d)“Export duty” means duty of Customs leviable on goods specified in the Second Schedule to the Customs
Tariff Act, 1975.
(e)Clause nos. in square brackets [ ] indicate the relevant clause of the Finance Bill, 2016.
Amendments carried out through the Finance Bill, 2016 come into effect on the date of its enactment unless otherwise
specified.
AMENDMENTS IN THE CUSTOMS ACT, 1962:
S.
No.
AmendmentClause of the Finance
Bill, 2016
1.Subsection (43) of Section 2 is being amended so as to add a new class of warehouses
for enabling storage of specific goods under physical control of thedepartment, as
control over the other types of warehouses would be only record based.
[113]
2.Subsection (45) of Section 2 which defines “warehousing station” is being omitted.[113]
3.Chapter heading of Chapter III is being amended to omit the word “warehousing
station”.[114]
4.Section 9 is being omitted.[115]
5.Section 25 is being amended so as to omit the requirement of publishing and offering
for sale any notification issued, by the Directorate of Publicity and Public Relations of
CBEC.
[116]
6.Sections 28, 47, 51 and 156 are being amended so as to:
a)increase the period of limitation from one year to twoyearsin cases not
involving fraud, suppression of facts, willful mis-statement, etc.
b)provide for deferred payment of customs duties for importers and exporters to
certain class of importers and exporters.
[117], [118], [119], [135]
7.Section 53 is being amended so as to enable the Board to frame regulations for
allowing transit of certain goods and conveyance without payment of duty.[120]
8.Sections 57 and 58 are being substituted to provide for licensing by the Principal
Commissioner or Commissioner, in place of Deputy/Assistant Commissioner, subject to
such conditions asmay be prescribed.
[121], [122]
9.New section 58A is being inserted to provide for a new class of warehouses which
require continued physical control and will be licensed for storing goods, as may be
specified.
[122]
10.New section 58B is being inserted so as to regulate the process of cancellation of
licences which is a necessary concomitant of licencing.[122]
11.The existing section 59 governing warehousing bonds submitted by importers availing
duty deferred warehousingis being substituted so as to fix the bond amount at thrice
the duty involved and to furnish security as prescribed.
[123]
42
12.The existing section 60 is being substituted to define the date of removal of goods from
a customs station and deposit thereof ina warehouse.[124]
13.The existing section 61 is being substituted to extend the period of warehousing to all
goods used by Export Oriented Undertakings, Units under Electronic Hardware
Technology Parks, Software Technology Parks, Ship Building Yards and other units
manufacturing under bond; empower Principal Commissioners and Commissioners to
extend the warehousing period upto one year at a time.
[125]
14.Section 62 relating to physical control over warehoused goods is being omitted since
the conditions for licensing different categories of warehouses and exercising control
over the same are being provided under sections 57, 58 and 58A.
[126]
15.Section 63 relating to payment of rent and warehouse charges is being omitted in view
of the privatization of services, and free market determination of rates, including those
by facilities in the public sector.
[126]
16.The existing section 64 relating to owner’s rights to deal with warehoused goods is
being substituted so as to rationalize the facilities and rights extended under the
section.
[127]
17.Section 65 is being amended to delete the payment of fees to Customs for supervision
of manufacturing facilities under Bond; and empower Principal Commissioner or
Commissioner of Customs to licence such facilities.
[128]
18.Section 68 is being amended to omit rent and other charges on account of omission of
section 63.[129]
19.Section 69 is being amended to omit rent and other charges on account of omission of
section 63.[130]
20.Section 71 is being amended so as to substitute the word“exportation” with the word
“export” to align with definition contained in sub section (18) of section 2.[131]
21.Section 72 is being amended to delete clause (c) regarding improper removal of
samples[132]
22.Section 73 is being amended to provide for cancellation bond in case of transfer of
ownership of the goods, and is thus aligned with sub-section (5) of section 59.[133]
23.New section 73A is being inserted so as to provide for custody of warehoused goods
and responsibilities including the liabilities of warehouse keepers.[134]
AMENDMENT IN THE CUSTOMS TARIFF ACT, 1975
S.
No.
AmendmentClause of the Finance
Bill, 2016
1.To omit Section 8C [Power of Central Government to impose transitional product
specific safeguard duty on imports from People’s Republic of China][137]
AMENDMENT IN THE FIRST SCHEDULE TO THE CUSTOMS TARIFF ACT, 1975
S.
No.
AmendmentClause of the Finance
Bill, 2016
Amendments not affecting rates of duty
1.Editorial changes inthe Harmonized System of Nomenclature (HSN) in certain chapters
are being incorporated in the First Schedules, to be effective from 01.01.2017.[138(ii)]
43
2.To:
1)Amend supplementary notes (e) and (f) Chapter 27 so as to change the
reference:
a)fromIS:1460:2000 to IS:1460:2005 for high speed diesel (HSD) and
b)from IS:1460 to IS: 15770:2008 for light diesel oil (LDO);
2)Substitute Tariff line 5801 39 10 with description “Warp pile fabrics, uncut” in
place of tariff line 5801 37 11 [with description Warppile fabrics ‘epingle’ uncut
velvet] and 5801 37 19 [with description Warp pile fabrics ‘epingle’ uncut
other];
3)Prescribe separate tariff lines for laboratory created or laboratory grown or
manmade or cultured or synthetic diamonds;
4)Delete Tariff line 852550 50, relating to Wireless microphone.
[138 (i)]
Amendments affecting rates of duty
FromTo
Articles of rubber
3Natural latex rubber made balloons falling under specified headings10%20%
Metals
4Primary aluminium5%7.5%
5Zincalloys5%7.5%
Jewellery
6Imitation jewellery10%15%
Renewable Energy
7Industrial solar water heater7.5%10%
Capital goods and parts thereof
8Increase the tariff rate of BCD for 211 specified tariff lines in Chapters 84, 85 and 907.5%10%
a)The effective rates for 96 specified tariff lines will increase7.5%10%
b)The effective rate for 115 tariff lines will be maintained7.5%7.5%
The amendments involvingincreasein the duty rates will come into effect immediately owing to a declaration under the
Provisional Collection of Taxes Act, 1931.
OTHER PROPOSALS INVOLVING CHANGES IN BCD, CVD, SAD AND EXPORT DUTY RATES
S.No.BCD/CVD/SAD/Export Duty
FromTo
Exportduty
Ores and concentrates
1Iron ore fines with Fe content below 58%10%Nil
2Iron ore lumps with Fe content below 58%30%Nil
3Chromium ores and concentrates, all sorts30%Nil
44
S.No.BCD/CVD/SAD/Export Duty
FromTo
4Bauxite (natural), not calcined or calcined20%15%
BasicCustoms Duty
Food Processing
1Cashew nuts in shellNil5%
2Cold chain including pre-cooling unit, packhouses, sorting and grading lines and
ripening chambers
10%5%
3Refrigerated containers10%5%
Mineral fuels and Mineral oils
4Coal; briquettes, ovoids and similar solid fuels manufactured from coal2.5% / 10%2.5%
5Lignite, whether or not agglomerated, excluding jet10%2.5%
6Peat (including peat litter), whether or not agglomerated10%2.5%
7Coke and semi-coke of coal, oflignite or of peat, whether or not agglomerated;
retort carbon
5% / 10%5%
8Coal gas, water gas, producer gas and similar gases, other than petroleum gases
and other gaseous hydrocarbons
10%5%
9Tar distilled from coal, from lignite or from peat and other mineral tars, whether or
not dehydrated or partially distilled, including reconstituted tars
10%5%
10Oils and other products of the distillation of high temperature coal tar similar
products in which the weight of the aromatic constituents exceeds that of the
non-aromatic constituents
2.5%/ 5%/
10%
2.5%
11Pitch and pitch coke, obtained from coal taror from other mineral tars5% / 10%5%
Petroleum exploration and production
12Goods required for exploration & production of hydrocarbon activities undertaken
under Petroleum Exploration Licenses (PEL) or Mining Leases (ML) issued or
renewed before 1stApril 1999
Applicable
BCD and CVD
BCD-Nil
CVD–Nil
Chemicals & Petrochemicals
13All acyclic hydrocarbons and all cyclic hydrocarbons [other than para-xylene
which attracts Nil BCD and styrene which attracts 2% BCD]
5%/ 2.5%2.5%
14Denaturedethyl alcohol (Ethanol) subject to actual user condition5%2.5%
15Orthoxylene for the manufacture of phthalic anhydridesubject to actual user
condition
SAD–4%SAD–2%
16Electrolysers, membranes and their parts required by caustic soda / potashunit
using membrane cell technology
2.5%Nil
Paper, Paperboard and newsprint
17Wood in chips or particles for manufacture of paper, paperboard and news print5%Nil
18Plans, drawings and designsNil10%
Textiles
19Specified fibres and yarns5%2.5%
45
S.No.BCD/CVD/SAD/Export Duty
FromTo
20Specified fabrics [for manufacture of textile garments for export]of valueequivalent
to 1% of FOB value of exports in the preceding financial year subject to the
specified conditions. The entitlement for the month of March 2016 shall be one
twelfthof oneper cent. of the FOB value of exports in the financial year 2014-15.
Applicable
BCD
Nil
Electronics / Hardware
21Polypropylene granules / resins for the manufacture of capacitor grade plastic films7.5%Nil
22E-ReadersNil7.5%
23Parts of E-readersApplicable
BCD
5%
24Magnetron of capacity of 1 KW to 1.5 KW for usein manufacture of domestic
microwave ovens subject to actual user condition.
10%Nil
25Machinery, electrical equipment and instrument and parts thereof(except
populated PCBs)for semiconductor wafer fabrication / LCD fabrication units
Applicable BCD
SAD
Nil BCD
Nil SAD
26Machinery, electrical equipment and instrument and parts thereof(except
populated PCBs)imported for Assembly, Test, Marking and Packaging of
semiconductor chips (ATMP)
Applicable BCD
SAD
Nil BCD
Nil SAD
27Theexemption frombasiccustoms duty,CV duty, SAD on charger / adapter,
battery and wired headsets / speakersfor manufacture of mobile phonebeing
withdrawn
BCD-Nil
CVD-Nil
SAD-Nil
Applicable
BCD
CVD–
12.5%
SAD–4%
28Inputs, parts and components, subparts formanufacture of charger / adapter,
battery and wired headsets / speakers of mobile phones, subject to actual user
condition
Applicable BCD,
CVD SAD
Nil BCD
Nil CVD
Nil SAD
29Parts and components, subparts for manufacture of Routers, broadband Modems,
Set-top boxes for gaining access to internet, set top boxes for TV, digital video
recorder (DVR) / network video recorder (NVR), CCTV camera / IP camera,
lithium ion battery [other than those for mobile handsets]
Applicable BCD,
CVD SAD
Nil BCD
Nil CVD
NilSAD
30Magnetic-Heads (all types), Ceramic / Magnetic cartridges and stylus, Antennas,
EHT cables, Level meters/level indicators/ tuning indicators/ peak level meters/
battery meter/VC meters / Tape counters, Tone arms, Electron guns
Nil BCDApplicable
BCD
31To exclude specified telecommunication equipment [Soft switches and Voice over
Internet Protocol (VoIP) equipment namely VoIP phones, media gateways,
gateway controllers and session border controllers, Optical Transport equipment;
combination ofone / more of Packet Optical Transport Product/Switch
(POTP/POTS), Optical Transport Network(OTN) products, and IP Radios, Carrier
Ethernet Switch, Packet Transport Node (PTN) products, Multiprotocol Label
Switching-Transport Profile (MPLS-TP) products, Multiple Input / Multiple Output
(MIMO) and Long Term Evolution (LTE) Products on which 10% BCD was imposed
in 2014-15 Budget being non-ITA I bound] from the purview of the other exemption.
Nil BCD10%
32Preform of silica for manufacture of telecom grade optical fibre /cablesNil10%
46
S.No.BCD/CVD/SAD/Export Duty
FromTo
33Specified capital goods and inputs for use in manufacture of Micro fuses,
Sub-miniature fuses, Resettable fuses, and Thermal fuses
Applicable
BCD
Nil
34Neodymium Magnet(before Magnetization) and Magnet Resin (Strontium Ferrite
compound/before formed, before magnetization) for manufacture of BLDC
motors, subject to actual user condition
Applicable
BCD
2.5%
35Populated PCBs for manufacture of personal computers (laptop or desktop)Nil SAD4% SAD
36Populated PCBs for manufacture of mobile phone/tablet computerNilSAD2% SAD
Metals, glass and ceramics
37Silica sand5%2.5%
38Brass scrap5%2.5%
39Other aluminium products7.5%10%
Jewellery
40Gold dore bars.8% CVD8.75% CVD
41Silver dore.7% CVD7.75% CVD
Automobiles
42Golf cars10%60%
43Specified parts of electric and hybrid vehiclesBCD-Nil
CVD–6%
Upto
31.03.2016
BCD-Nil
CVD–6%
Without time
limit
44Aluminium Oxide for use in the manufacture of Wash Coat, which is used in the
manufacture of catalytic converters, subject to actual user condition
7.5%5%
45Engine for xEV (hybrid electric vehicle)Applicable BCD
and CVD
NilBCD
6% CVD
Capital Goods
46Specified machinery required for construction of roadsCVD–NilCVD–12.5%
Defence Production
47Direct imports of specified goods by Government of India or State Governments,
with effect from 01.4.2016
BCD Nil
CVD–Nil
SAD–Nil
Applicable
BCD, CVD
and SAD
48Imports of specified goods for defence purposes by contractors of the
Government of India, PSUs or sub-contractors of PSUs, with effect from
01.4.2016
BCD Nil
Applicable
CVD and SAD
Applicable
BCD, CVD
and SAD
Maintenance, repair and overhaul [MRO] of aircrafts
49Tools and tool kits when imported by MROs for maintenance, repair, and
overhauling [MRO] of aircraft subject to a certification by the Directorate General
of Civil Aviation
Applicable BCD,
CVDand SAD
Nil BCD
Nil CVD
Nil SAD
47
S.No.BCD/CVD/SAD/Export Duty
FromTo
50Simplify the procedure for availmentof exemption from customs duties on parts,
testing equipment, tools and tool-kits for maintenance, repair and overhaul of
aircraft based on records and subject to actual user condition
--
51Remove the restriction of one year for utilization of dutyfree parts for
maintenance, repair and overhaul of aircraft
--
52Further relax the existing conditions of stay [upto 60 days], so as to provide for
stay up to 6 months of the foreign aircraft for maintenance, repair or overhauling,
and provide for further extension of such period by DGCAas deemed fit
--
Ship Repair Units
53Capital goods and spare thereof, raw materials, parts, material handling
equipment and consumable for repairs of ocean-going vessels by a ship repair
unit subject to actualuser condition.
Applicable
excise duty
Nil
54Simplify the procedure for availment of exemption from Basic Customs Duty, CVD
and SAD by ship repair units based on records and subject to actual user
condition
--
Miscellaneous
55Braille paper10%Nil
56Disposable sterilized dialyzerand micro barrier of artificial kidneyApplicable
BCD, CVD,
SAD
Nil BCD
Nil CVD
Nil SAD
57Solar tempered glass / solar tempered (anti-reflective coated) glass, subject to
actual user condition
Nil5%
58Medical UseFission Molybdenum-99 imported by Board of Radiation and Isotope
Technology (BRIT) for manufacture of radio pharmaceuticals
7.5%Nil
59Pulp of wood for manufacture of sanitary pads, napkins & tampons5%2.5%
60Super Absorbent Polymer when used for themanufacture of sanitary pads,
napkins & tampons
7.5%5%
61Merge the exemptions from customs duties on specified goods imported for
petroleum exploration under various types of licenses or mining leases, pre-NELP
contracts, NELP contracts, MarginalFields Policy and the Coal Bed Methane
Policy into a single exemption with a unified list of specified goods and conditions
Nil BCD
Nil CVD
Nil SAD
Nil BCD
Nil CVD
Nil SAD
62Specified goods required for exploration & production of hydrocarbon activities
undertaken under Petroleum Exploration Licenses (PEL) or Mining Leases (ML)
issued or renewed before 1stApril 1999
Applicable
BCD, CVD,
SAD
Nil BCD
Nil CVD
Nil SAD
63Prescribe actual user condition for the imports of Phosphoric Acid and Anhydrous
Ammonia atconcessional BCD/CVDfor manufacture of Fertilizers--
64Prescribe actual user condition for imports of LCD/LED/OLED Panels imported at
Nil BCD for manufactureof LCD/LED/OLED TVs--
48
S.No.BCD/CVD/SAD/Export Duty
FromTo
65“Foreign Satellite data” on storage media when imported by National Remote
Sensing Centre (NRSC), Hyderabad
Applicable
BCD, CVD,
SAD
Nil BCD
Nil CVD
Nil SAD
RETROSPECTIVE AMENDMENT
S.
No.
AmendmentClause of the Finance
Bill,2016
1.To amend various notifications pertaining to Advance Licenceand Duty Free
Import Authorization Schemes retrospectively, to correct the reference to “section
8” in such notifications to “section 8B” so as to clearly provide that exemption from
safeguard duty under section 8B of the Customs Tariff Act, 1975 was/is available
under these notifications on imports under Advance Licence and Duty Free Import
Authorization Schemes.
[136]
49
EXCISE
Note:“Basic Excise Duty” means theexcise duty set forth in the First Schedule to the Central Excise Tariff Act, 1985.
AMENDMENTS IN THE CENTRAL EXCISE ACT, 1944:
S.
No.
AmendmentClause of the Finance
Bill, 2016
1.Section 5A is being amendedso as to omit the requirement of publishing and
offering for sale any notification issued, by the Directorate of Publicity and Public
Relations of CBEC.
[139]
2.Section 11A is being amended so as to increase the period of limitation from one
year to twoyearsin cases not involving fraud, suppression of facts, willful
mis-statement, etc.
[140]
3.Section 37B is being amended so as to empower the Board for implementation of
any other provision of the said Act in addition to the power to issue orders,
instructions and directions.
[141]
4.The Third Schedule is being amended so as to:
a)make some editorial changes, consequent to 2017 Harmonized System
of Nomenclature.
b)include therein:
1)All goods falling under heading 3401 and 3402;
2)Aluminiumfoils of a thickness not exceeding 0.2 mm;
3)Wrist wearable devices (commonly known as ‘smart watches’); and
4)Accessories of motor vehicleand certain other specified goods.
Changes at (b) above will come into effect immediately owing to a
declaration underthe Provisional Collection of Taxes Act, 1931.
[142(ii)]
[142(i)]
AMENDMENTS IN THEFIRST SCHEDULE TO THECENTRAL EXCISE TARIFF ACT, 1985
S.
No.
AmendmentClause of the Finance
Bill, 2016
Amendments not affecting rates of duty
1.Editorial changesin the Harmonized System of Nomenclature (HSN) in certain
chapters are being incorporated in the First and Second Schedules, to be
effective from 01.01.2017.
[143 (ii)]
2.To:
a)Amend supplementary notes (e) and (f) Chapter 27 so as to change the
reference:
i.from IS:1460:2000 to IS:1460:2005 for high speed diesel (HSD)
and
ii.from IS:1460 to IS: 15770:2008 for light diesel oil (LDO)
b)Substitute Tariff line 5801 39 10 with description “Warp pile fabrics,
uncut” in place of tariff line 5801 37 11 [with descriptionWarp pile fabrics
‘epingle’ uncut velvet] and 5801 37 19 [with description Warp pile fabrics
‘epingle’ uncut other];
[143(i)]
50
S.
No.
AmendmentClause of the Finance
Bill, 2016
c)Prescribe separate tariff lines for laboratory created or laboratory grown
or manmade or cultured or synthetic diamonds;
d)Delete Tariff line 8525 50 50, relating to Wireless microphone.
FromTo
Amendments involving change in the rate of duty
Aerated Beverages
1Waters,including mineral waters and aerated waters, containing added sugar or
other sweetening matter orflavoured
18%21%
Tobacco and Tobacco Products
2Cigar and cheroots12.5% or
Rs.3375 per
thousand,
whichever
is higher
12.5% or
Rs.3755 per
thousand,
whichever is
higher
3Cigarillos12.5% or
Rs.3375 per
thousand,
whichever
is higher
12.5% or
Rs.3755per
thousand,
whichever is
higher
4Cigarettes of tobacco substitutesRs.3375 per
thousand
Rs.3755 per
thousand
5Cigarillos of tobacco substitutes12.5% or
Rs.3375 per
thousand,
whichever
is higher
12.5% or
Rs.3755 per
thousand,
whichever is
higher
6Others of tobacco substitutes12.5% or
Rs.3375 per
thousand,
whichever
is higher
12.5% or
Rs.3755 per
thousand,
whichever is
higher
7Gutkha, chewing tobacco (including filter khaini) and jarda scented tobacco70%81%
8Unmanufactured tobacco55%64%
9Paper rolled biris [whether handmade or machine made] and other biris [other
than handmade biris]
However, the effective rate of basic excise duty of Rs.21 per thousand shall
remain unchanged.
Rs.30 per
thousand
Rs.80 per
thousand
51
The amendments involvingincreasein the duty rates will come into effect immediately owing to a declaration under the
Provisional Collection of Taxes Act, 1931.
OTHER PROPOSALS INVOLVING CHANGES IN DUTY RATES:
FromTo
Food processing
1Refrigeratedcontainers12.5%6%
Fertilizers
2Micronutrients which are covered under Sr. No. 1(f) of Schedule 1 Part (A) of the
Fertilizer Control Order, 1985 and are manufactured by the manufacturers which
are registered under FCO, 1985
12.5%6%
3Physicalmixture of fertilizers manufactured by Co-operative Societies, holding
certificate of manufacture for mixture of fertilizers under the Fertiliser Control
Order 1985, madeout of chemical fertilizers on which duty of excise has been
paid and no credit of duty paid on such chemical fertilizers has been taken under
rule 3 of the CENVAT Credit Rules, 2004 and which are intended for supply to the
members of such Co-operative Societies
1% [without
CENVAT
credit]
or
6% [with
CENVAT
credit]
Nil
Textiles
4Toincrease Tariff Value of readymade garments and made up articles of textiles30% of
retail sale
price
60% of retail
sale price
5Branded readymade garments and made up articles of textiles of retail sale price
of Rs.1000 or more
Nil [without
CENVAT
credit]
or
6%/12.5%
[with
CENVAT
credit]
2% [without
CENVAT credit]
or
12.5% [with
CENVAT credit]
6PSF / PFY, manufactured from plastic scrap or plastic waste including waste PET
bottles
2% [without
CENVAT
credit]
or
6%
[with
CENVAT
credit]
2% [without
CENVAT credit]
or
12.5% [with
CENVAT credit]
Footwear
7Rubber sheets & resin rubber sheets for soles and heels12.5%6%
8Increase the abatement from retail sale price (RSP) for the purposes of excise
duty assessment for all categories of footwear
25%30%
Metals
9To change excise duty structure on disposable containers made of aluminium
foils.
2% [without
CENVAT
credit]
or
6% [with
CENVAT
credit]
2% [without
CENVAT credit]
or
12.5% [with
CENVAT credit]
52
FromTo
Precious metals &Jewellery
10Refined gold bars manufactured fromgold dore bar, silver dorebar, gold ore or
concentrate, silver ore or concentrate, copper ore or concentrate. Prospectively,
the excise duty exemption under the existing area based exemptions on refined
gold is being withdrawn.
9%9.5%
11Refined silver manufactured from silver ore or concentrate, silver dore bar, or gold
dore bar. Prospectively, the excise duty exemption under the existing area based
exemptions on refined silver is being withdrawn.
8%8.5%
12Articles of Jewellery [excluding silver jewellery, other than studded with diamonds
or other precious stones namely, ruby, emerald and sapphire] with a higher
threshold exemption upto Rs. 6 crore in a year and eligibility limit of Rs.12 crore,
along with simplified compliance procedure.
Nil1% [without
CENVAT credit]
or
12.5% [with
CENVAT credit]
Renewable Energy
13Unsaturated Polyester Resin (polyester based infusion resin and hand layup resin),
Hardeners/Hardener for adhesive resin, Vinyl Easter Adhesive (VEA) and Epoxy
Resin used for manufacture of rotor bladesand intermediates,parts and sub parts
of rotor bladesfor wind operated electricity generators
Nil6%
14Carbon pultrusionused for manufacture of rotor blades and intermediates, parts
and sub-parts of rotor blades for wind operated electricity generators
12.5%6%
15Solar lamp12.5%Nil
16To prescribe “valid agreement between importer / producer of power with urban
localbody for processing of municipal solid waste for not less than ten years from
the date of commissioning of project” as an alternative to the condition of
“production of valid power purchase agreement between the importer/producer of
power and the purchaser, for the sale and purchase of electricity generated using
non-conventional materials” for availing concessional customs/excise duty
benefits in case of power generation project based on municipal and urban waste
--
Civil Aviation
17Aviation TurbineFuel [ATF] other than for supply toScheduledCommuter Airlines
(SCA) from theRegional Connectivity Schemeairports
8%14%
Maintenance, repair and overhaul [MRO] of aircrafts
18Tools and tool kits when procured by MROs for maintenance, repair, and
overhauling [MRO] of aircraft subject to a certification by the Directorate General
of Civil Aviation
Applicable
excise duty
Nil
19To simplify the procedure for availment of exemption from excise duty on parts,
testing equipment, tools and tool-kits formaintenance, repair and overhaul of
aircraft based on records
--
20To remove the restriction of one year for utilization of duty free parts for
maintenance, repair and overhaul of aircraft
--
53
FromTo
Electronics & IT hardware
21Charger / adapter, batteryand wired headsets / speakers for supply to mobile
phone manufacturers as original equipment manufacturer
Nil2% [without
CENVAT credit]
or
12.5% [with
CENVAT credit]
22Inputs, parts and components, subparts for manufacture of charger / adapter,
battery and wired headsets / speakers of mobile phone, subject to actual user
condition.
12.5%/ NilNil
23Routers, broadband Modems, Set-top boxes for gaining access to internet, set top
boxes for TV, digital video recorder (DVR) / network videorecorder (NVR), CCTV
camera / IP camera, lithium ion battery [other than those for mobile handsets]
12.5%4% [without
CENVAT credit]
or
12.5% [with
CENVAT credit]
24Parts and components, subparts for manufacture of Routers, broadband Modems,
Set-topboxes for gaining access to internet, set top boxes for TV, digital video
recorder (DVR) / network video recorder (NVR), CCTV camera / IP camera,
lithium ion battery [other than those for mobile handsets]
12.5%Nil
Machinery
25Electric motor, shafts,sleeve, chamber, impeller, washer required for the
manufacture of centrifugal pump
12.5%6%
Automobiles
26Specified parts of Electric Vehicles and Hybrid Vehicles6%
Upto
31.03.2016
6%
Without time
limit
27Engine for xEV (hybrid electric vehicle)12.5%6%
Miscellaneous
28Excise duty on sacks and bags ofall plasticsis being rationalized at 15%.12.5%/15%15%
29Unconditionally exempt improved cook stoves including smokeless chulhas for
burning wood, agrowaste, cowdung, briquettes, and coal
NilNil
30Disposable sterilizeddialyzerand micro barrier of artificial kidney12.5%Nil
31Ready Mix Concrete manufactured at the site of construction for use in
construction work at such site
2% [without
input tax
credit] /
6% [with
input tax
credit]
Nil
32Parts of railway or tramway locomotives or rolling stock and railway or tramway
track fixtures and fittings, railway safety or traffic control equipment, etc.
12.5%6%
54
FromTo
33Remnant kerosene, presently available for manufacture of Linear alkyl Benzene
[LAB] and heavy alkylate [HA] to N-paraffin.At present,exemption is restricted to
manufacturers of LAB and HA.
14%Nil
34Clean Energy Cess / Clean Environment Cesson coal, lignite or peat produced or
extracted as per traditional and customary rights enjoyed by local tribals without
any license or lease in the State of Nagaland
Rs.200 per
tonne
Nil
35To extend Retail Sale Price [RSP] based assessment of exciseduty to:
a)all goods falling under heading 3401 and 3402 [with abatement rate
of 30%],
b)aluminium foils of a thickness not exceeding 0.2 mm [with
abatement rate of 25%],
c)wrist wearable devices (commonly known as ‘smart watches’) [with
abatement rate of 35%],and
d)accessories of motor vehicleand certain other specified goods[with
abatement rate of 30%].
MISCELLANEOUS
1)The Oil Industry (Development) Act, 1974 is being amended so as to reduce the rate of Oil Industries Development
Cess, on domestically produced crude oil, from Rs. 4500 PMT to 20% ad valorem OIDB Cess. The amendment in the
Act will be effective from the date of assent to the Finance Bill, 2016.
[Clause 222]
2)The Seventh Schedule to the Finance Act, 2005 is being amendedso as to increase the excise duty across all
lengths of non-filter and filter cigarettes as under:
[Clause 231]
CigarettesFrom
Rs. Per
thousand
To
Rs. Per
thousand
Non filter not exceeding 65mm70215
Non-filter exceeding 65mmbut not exceeding 70mm110370
Filter not exceeding 65mm70215
Filter exceeding 65mmbut not exceeding 70mm70260
Filter exceeding 70mmbut not exceeding 75mm110370
Other180560
3)The Clean Energy Cessis being renamed as Clean Environment Cess. Also, the Tenth Schedule to the Finance Act,
2010 dealing with Clean Energy Cess is being amended so as to increase the Scheduled rate of Clean Energy Cess
from Rs.300 per tonne to Rs.400 per tonne. The effective rate of Clean Energy Cess is being increased from Rs.200
per tonne to Rs.400 per tonne
[Clause 232]
55
4)Infrastructure Cessis being levied on motor vehicles, of heading 8703, as under:
b)Petrol/LPG/CNG driven motor vehicles of length not exceeding 4m and engine capacity not exceeding
1200cc–1%
c)Diesel driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1500cc–2.5%
d)Other higher engine capacity motor vehicles and SUVs and bigger sedans–4%.
Three wheeled vehicles,Electrically operated vehicles,Hybrid vehicles, Hydrogen vehicles based on fuel cell
technology, Motor vehicles which after clearance have been registered for use solely as taxi, Cars for physically
handicapped persons and Motor vehicles cleared as ambulances or registered for use solely as ambulance will be
exempt from this Cess.No credit of thisCesswill be available, andcredit of no other duty can be utilized for payment
of this Infrastructure Cess.
[Clause 159]
The changes at 2), 3) and 4) abovewill come into effect immediately owing to a declaration under the Provisional
Collection of Taxes Act, 1931.
RULES AND REGULATIONS UNDER THE CUSTOMS ACT, 1962
1)The existing Baggage Rules, 1998 are being substituted with the Baggage Rules, 2016, so as tosimplify and rationalize
multiple slabs of duty free allowance for various categories of passengers. The new Rules are effective from 01.04.2016.
2)The existing Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules,1996
are being substituted with the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable
Goods) Rules, 2016 with a view to simplify the rules, including allowing duty exemptions to importer/manufacturer
based on self-declaration instead of obtaining permissions from the Central Excise authorities. Need for additional
registration is also being done away with. The new Rules will be effective from 01.04.2016.
3)The Customs Baggage Declaration Regulations, 2013 is being amended soas to prescribe filing of Customs
declaration only for those passengers who carry dutiable or prohibited goods.
AMENDMENTS IN THE CENTRAL EXCISE RULES, 2002 AND THE CENVAT CREDIT RULES, 2004
1)The Central Excise Rules, 2002are being amended so as to:
(a)reducethe number of returns to be filed by a central excise assessee above a certain threshold from 27 to 13, that
is, one annual and 12 monthly returns. Monthly returns are already being e-filed. CBEC will provide for e-filing of
annual return also. This annual return will have to be filed by service tax assessees also, above a certain threshold,
taking total number of returns to three in a year for them,
(b)extend the facility for revision of return, hitherto available to a service tax assessees only, to manufacturers also.
(c)provide that in cases where invoices are digitally signed, the manual attestation of copy of invoice, meant for
transporter, is done away with.
(d)provide that in case of finalization of provisional assessment, the interest will be chargeable from the original date
of payment of duty.
2)The CENVAT Credit Rules, 2004 are being amended, so as to improve credit flow, reduce the compliance burden and
associated litigations, particularly those relating to apportionment of credit between exempted and non-exempted final
products / services. Changes are also being made in the provisions relating to input service distributor, including
extension of this facility to transfer input services credit to outsourced manufacturers, under certain circumstances. The
amendments in these Rules will also enable manufacturers with multiple manufacturing units to maintain a common
warehouse for inputs and distribute inputs with credits to the individual manufacturing units.
3)Instructions are being issued to Chief Commissioners of Central Excise to file application to Courts to withdraw
prosecution in cases involving duty of less than rupees five lakh and pending for more than fifteen years.
4)The existing Central Excise (Removal of Goods at Concessional Rate of Duty forManufacture of Excisable and Other
Goods) Rules, 2001 are being substituted with the Central Excise (Removal of Goods at Concessional Rate of Duty for
Manufacture of Excisable and Other Goods) Rules, 2016, so as to simplify the rules, including allowing duty exemptions
to importer/manufacturer based on self-declaration instead of obtaining permissions from the Central Excise authorities.
56
AMENDMENTS TO OTHER ACTS
S.
No.
AmendmentClause of the Finance
Bill, 2016
1.THE FINANCE ACT, 2001
(i)To amend theSeventh Schedule which provides for levy on NCCD of excise on
specified goods so as to align the tariff lines with the First Schedule to the Central
Excise Tariff Act, 1985.
[228(i)]
(ii)To amend the Seventh Schedule which provides for levy on NCCD ofexcise on
specified goods so as to include 2017 Harmonized System of Nomenclature
(HSN) editorial changes. These changes will be effective from 01.01.2017.
[228 (ii)]
2.THE CENTRAL SALES ACT, 1956
Section 3 of the Central Sales Tax Act, 1956 is beingamended so as to insert an
explanation:
Explanation.-Where the gas sold or purchased and transported through a
common carrier pipeline or any other common transport distribution systems
becomes co-mingled and fungible with other gas in the pipeline or system and
such gas is introduced into the pipeline or system in one State and is taken out
from the pipeline in another State, such sale or purchase of gas shall be deemed
to be a movement of goods from one state to another.
[221]
3.THE CENTRAL ROAD FUNDACT, 2000
Section 10 of the Central Road Fund Act, 2000 is being amended so as to
substitute clause (viii) of sub-section (1) therein to provide a formula for
redistribution of the cess for different purposes
[227]
4.THE PREVENTION OF MONEY LAUNDERING ACT, 2002, THE SMUGGLERS
AND FOREIGN EXCHANGE MANIPULATORS (FORFEITURE OF PROPERTY
ACT, 1976 and NARCOTICS DRUGS ANDPSYCHOTROPIC SUBSTANCES
ACT, 1985
To merge the three Tribunals established under these Acts and to provide that
Appellate Tribunal established under the Smugglers and Foreign Exchange
Manipulators (Forfeiture of Property) Act, 1976 shall be the appellate Tribunal for
hearing the appeals against the orders made under all these three Acts.
[229, 223 & 224]
5.THE FOREIGN EXCHANGE MANAGEMENT ACT, 1999
To insert section 14A in the Foreign Exchange Management Act [FEMA], 1999 to
incorporate provisions contained under the Second Schedule appended to the
Income-tax Act, 1961, so as to empower an officer notbelow the rank of Assistant
Director to recover arrears of penalty under the FEMA 1999 by exercising the
powers conferred under the Income-tax Act, 1961.
[225 & 226]
57
SERVICE TAX
IKrishiKalyan CessExistingProposed
1.An enabling provision is being made to levy Krishi Kalyan Cess on all taxable
services with effect from 1stJune, 2016, to finance and promote initiatives to
improve agriculture.
-0.5%
IIBroadening of Tax baseExistingProposed
1.Exemption on services provided by,-
(i)a senior advocate to an advocate or partnership firm of advocates
providing legal service; and
(ii)a person represented on an arbitral tribunal to an arbitral tribunal,
is being withdrawn with effect from 1stApril, 2016 and Service Tax is being
levied under forward charge.
Nil14%
2.Exemption on construction, erection, commissioning or installation of original
works pertaining to monorail or metro, in respect of contracts entered into on or
after 1stMarch2016, is being withdrawn with effect from 1stMarch, 2016.
Nil5.6%
3.Exemption on the services of transport of passengers, with or without
accompanied belongings, by ropeway, cable car or aerial tramway is being
withdrawn with effect from 1stApril, 2016.
Nil14%
4.The Negative List entry that covers ‘service of transportation of passengers, with
or without accompanied belongings, by a stage carriage’ is being omitted with
effect from 1stJune, 2016.
Service Tax is being levied on transportation ofpassengers by air conditioned
stage carriage with effect from 1stJune, 2016, at the same level of abatement
as applicable to the transportation of passengers by a contract carriage, that is,
60% without credit of inputs, input services and capital goods.
Nil5.6%
IIINew Exemptions
1.Services by way of construction etc. in respect of-
(i)housing projects under Housing For All (HFA) (Urban)
Mission/Pradhan Mantri Awas Yojana (PMAY);
(ii)low cost houses up to a carpet area of 60 square metresin a
housing project under “Affordable housing in Partnership”
component of PMAY,
(iii)low cost houses up to a carpet area of 60 square metres in a
housing project under any housing scheme of the State
Government,
are being exempted from Service Tax with effect from 1stMarch, 2016.
5.6%Nil
2.The service of life insurance business provided by way of annuity under the
National Pension System regulated by Pension Fund Regulatory and
Development Authority (PFRDA)of India is being exempted from Service Tax
with effect from 1stApril, 2016.
3.5%Nil
58
ExistingProposed
3.Services provided by Employees’ Provident Fund Organisation (EPFO) to
employees are being exempted from Service Taxwith effect from 1stApril, 201614%Nil
4.Services provided byInsurance Regulatory and Development Authority (IRDA)
of India are being exempted from Service Tax with effect from 1stApril, 2016.14%Nil
5.The regulatory services provided by Securities and Exchange Board of India
(SEBI) are being exempted fromService Tax with effect from 1stApril, 2016.14%NIL
6.The rate of Service Tax on single premium annuity (insurance) policies is being
reduced from 3.5% to 1.4% of the premium, in cases where the amount
allocated for investment, or savings on behalf of policy holder is not intimated to
the policy holder at thetime of providing of service, with effect from
1stApril, 2016.
3.5%1.4%
7.The services of general insurance business provided under ‘Niramaya’ Health
Insurance scheme launched by National Trust for the Welfare of Persons with
Autism, CerebralPalsy, Mental Retardation and Multiple Disability in
collaboration with private/public insurance companies are being exempted from
Service Tax with effect from 1stApril, 2016.
14%Nil
8.Services provided by National Centre for Cold Chain Developmentunder
Department of Agriculture, Cooperation and Farmer’s Welfare, Government of
India, by way of knowledge dissemination are being exempted from Service Tax
with effect from 1stApril, 2016.
14%Nil
9.Services provided by Biotechnology Industry Research Assistance Council
(BIRAC) approved biotechnology incubators to incubatees are being exempted
from Service Tax with effect from 1stApril, 2016.
14%Nil
10.Services provided by way of skill/vocationaltraining by training partners under
Deen Dayal Upadhyay Grameen Kaushalya Yojana are being exempted from
Service Tax with effect from 1stApril, 2016.
14%NIL
11.Services of assessing bodies empanelled centrally by Directorate General of
Training,Ministry of Skill Development & Entrepreneurship are being exempted
from Service Tax with effect from 1stApril, 2016.
14%NIL
12.The threshold exemption to services provided by a performing artist in folk or
classical art forms of music, dance or theatre is being enhanced from Rs 1 lakh
to Rs 1.5 lakh charged per event with effect from 1stApril, 2016.
14%Nil
IVReliefMeasures
1To provide level playing field to Indian Shipping lines vis-a-vis foreign shipping
lines, it is being proposed to:
a)zero rate the services provided by Indian Shipping lines by way of
transportation of goods by a vessel to outside India witheffect from
1stMarch, 2016, and
b)impose Service Tax on services provided by them by way of
transportation of goods by a vessel from outside India up to the
customs station in India with effect from 1stJune, 2016 so as to
complete the credit chain and enable Indian Shipping Lines to avail
and utilize input tax credits.
No credit
Nil
Inputs, input
services &
capital goods
credit
14%
59
2Notification No. 41/2012-ST, dated the 29th June, 2012 was amended by notification No.1/2016-ST dated 3rd
February, 2016 so as to,inter alia, allow refund of Service Tax on services used beyond the factory or any other
place or premises of production ormanufacture of the said goods for the export of the said goods. This amendment
is being made effective from the date of application of the parent notification (i.e. 1stJuly 2012).
3The benefit of quarterly payment of Service Tax is being extended to‘One Person Company’ (OPC) and HUF with
effect from 1stApril, 2016.
4The facility of payment of Service Tax on receipt basis is being extended to ‘One Person Company’ (OPC) with
effect from 1stApril, 2016.
5Exemptions on services of:
a)construction provided to the Government, a local authority or a
governmental authority, in respect of construction of govt. schools,
hospitals etc.
b)construction of ports, airports,
[which were withdrawn with effect from 01.04.2015], are being restored in
respect ofservices provided under contracts which had been entered into prior
to 01.03.2015 on payment of applicable stamp duty, with retrospective effect
from 01.04.2015.
5.6% of total
amountNil
6Services provided by way of construction, maintenance etc. ofcanal, dam or
other irrigation works provided to bodies set up by Government but not
necessarily by an Act of Parliament or a State Legislature, during the period from
the 1stJuly, 2012 to 29th January, 2014, are being exempted from Service Tax
with consequential refunds, subject to the principle of unjust enrichment.
5.6% of total
amountNil
7Services provided by the Indian Institutes of Management (IIM) by way of 2 year
full time Post Graduate Programmein Management (PGPM) (other than
executive development programme), Integrated Programme in Management and
Fellowship Programme in Management (FPM) are being exempted from Service
Tax with effect from 1stMarch, 2016.
14%NIL
8The services provided bymutual fund agent/distributor to a mutual fund or asset
management company, are being made taxable under forward charge with effect
from 1stApril, 2016, so as to enable the small sub-agents down the distribution
chain to avail small scale exemption havingthreshold turnover of Rs 10 lakh per
year, subject to fulfillment of other conditions prescribed.
14%14%
VInterest Rate
1.Interest rates on delayed payment of duty/tax across all indirect taxes are being
rationalized and made uniform at 15%, except in case of Service Tax collected
but not deposited to the exchequer, in which case the rate of interest will be 24%
from the dateon which the Service Tax payment became due.
In case of assessees, whose value of taxable services in the preceding
year/years covered by the notice is less than Rs. 60 Lakh, the rate of interest on
delayed payment of Service Tax will be 12%.
[The abovechanges will come into effect on the day the Finance Bill receives the
assent of the President.]
Customs 18%
Excise
18%
Service Tax
18%
24%
30%
Customs,
Excise &
Service Tax
15%;
24%
in case of Service
Tax collected but
not deposited to
the exchequer
60
VIRationalization of AbatementsExistingProposed
1Credit of input services is being allowed on transport of passengers by rail at the
existing rate of abatement of 70%.
4.2%
Without
credit
4.2%
With input
service credit
2Credit of input services is being allowed on transport of goods, other than in
containers, by rail at the existing rate of abatement of 70%.
4.2%
Without
credit
4.2%
With input
service credit
3
Credit ofinput services is being allowed on transport of goods in containers by
rail at a reduced abatement rate of 60%.
4.2%
Without
credit
5.6%
With input
service credit
4Credit of input services is being allowed on transport of goods by vessel at the
existing rate of abatement of 70%.
4.2%
Without
credit
4.2%
With input
service credit
5The abatement rate in respect of services by way of construction of residential
complex, building, civil structure, or a part thereof, is being rationalized at 70%
by merging the two existing rates (70% for high end flats and 75% for low end
flats).
3.5%/
4.2%4.2%
6The abatement rate in respect of services by a tour operator in relation to
packaged tour (defined where tour operator provides to the service recipient
transportation, accommodation, food etc) and other than packaged tour is being
rationalized at 70%.
3.5%/
5.6% of
amount
charged
4.2% of amount
charged
7The abatement on shifting of used household goods by a Goods Transport
Agency (GTA) is being rationalized at the rate of 60%, without CENVAT credit on
inputs, input services and capital goods. (Theexisting rate of abatement of 70%
allowed on transport of other goods by GTA continues unchanged).
4.2%5.6%
8The abatement rate on services of a foreman to a chit fund is being rationalised
at the rate of 30%, without CENVAT credit on inputs, input services and capital
goods.
14%9.8%
[The above changes will come into effect from 1stApril, 2016.]
VIIReduce litigation and providing certainty in taxation
1Indirect tax Dispute Resolution Scheme, 2016, wherein a scheme in respect of cases pending before Commissioner
(Appeals), the assessee, after paying the duty, interest and penalty equivalent to 25% of duty, can file a declaration,
is being introduced. In such cases the proceedings against the assessee will be closed and he will also get
immunity from prosecution. However, this scheme will not apply in cases:
a)where prosecution has already been launched
b)involving narcotics & psychotropic substances
c)involvingdetention under COFEPOSA.
2Section 67A is being amended to obtain rule making powers in respect of the Point of Taxation Rules, 2011, so as
to provide that the point in time when service has been provided or agreed to be provided shall be determined by
rules made in this regard.
Point of Taxation Rules, 2011 is being amended accordingly.
61
3Section 93A of theFinance Act,1994 is being amended so as to allow rebate by way of notification as well as rules.
4Explanation 2 in section 65B (44) of the Finance Act, 1994 is being amended so as to clarify that any activity carried
out by a lottery distributor or selling agent in relation to promotion, marketing, organizing, selling of lottery or
facilitating in organizing lottery of any kind, in any other manner, of the State Government as per the provisions of
the Lotteries (Regulation) Act, 1998 (17 of 1998), is leviable to Service Tax.
5Notification No. 27/2012–C.E. (N.T.) dated 18.06.2012 is being amendedwith effect from 1stMarch, 2016 so as to
provide that time limit for filing application for refund of CENVAT Credit under Rule 5 of the CENVAT Credit Rules,
2004, in case of export of services, is 1 year from the date of:
(a)receipt of payment in convertible foreign exchange, where provision of service has been completed prior to
receipt of such payment; or
(b)issue of invoice, where payment, for the service has been received in advance prior to the date of issue of the
invoice.
6Assignment by the Government of the right to use the radio-frequency spectrum
and subsequent transfers thereof is being declared as a service under section
66E of the Finance Act, 1994 so as to make it clear that assignment of right to use
the spectrum is a service leviable to Service Tax and not sale of intangible goods.
14%14%
7A condition mandating inclusion of cost of fuel in the consideration for availing abatement on the services by way of
renting of motor-cab is being prescribed witheffect from 1stApril, 2016.
8Service tax on the services of Information Technology Software on media bearing
RSP is being exempted from Service Tax with effect from 1stMarch, 2016
provided Central Excise duty is paid on RSP in accordance with Section4A of the
Central Excise Act.
NilNil
9Mutual exclusiveness of levy of excise duty and Service Tax on Information
Technology Software in respect of software recorded on media “NOT FOR
RETAIL SALE” is being ensured by exempting from excise duty only that portion
of the transaction value on whichService Tax is paid.
14%14%
VIIIService Tax Rules
1To reduce compliance cost, the number of returns to be filed by a central excise assessee, above a certain
threshold, is being drastically reduced, from 27 to 13, one annual and 12 monthly returns.Monthly returns are
already being e-filed. CBEC will provide for e-filing of annual return also. The annual returnwill also have to be filed
byService Tax assessees, above a certain threshold, taking total number of returns to three in a year for them.This
change shall come into effect from 1stApril, 2016.
IXCENVAT Credit Rules
1The rules are being amended so as to allow banks and other financial institutions to reverse credit in respect of
exempted services on actual basis in addition to theoption of 50% reversal.
2The rules are being amended to improve credit flow, reduce the compliance burden and associated litigation,
particularly those relating to apportionment of credit between exempted and non-exempted final products / services.
Changes are also being made in the provisions relating to input service distributor, including extension of this facility
to transfer input services credit to outsourced manufacturers, under certain circumstances. The amendments in
these rules will also enablemanufacturers with multiple manufacturing units to maintain a common warehouse for
inputs and distribute inputs with credits to the individual manufacturing units.
62
3The rules are being amended to provide for reversal of CENVAT Credit of inputs/input services which have been
commonly used in providing taxable output service and an activity which is not a ‘service’ under the Finance Act,
1994.
4The CENVAT credit rules are being amended so as to allow CENVAT credit of Service Tax paid on amount charged
forassignment by Government or any other person of a natural resource, over such period of time as the period for
which the rights have been assigned.
[The above amendment shall come into effect from 1stApril, 2016.]
XMiscellaneous
Period for issuingdemand notices
1Section 73 of the Finance Act,1994 is being amended so as to increase the limitation period from 18 months to 30
months for short levy/non levy/short payment/non-payment/erroneous refund of Service Tax.
Other changes in the Finance Act, 1994
2The Negative List entry covering ‘educational services by way of (a) pre-school education and education up to
higher and secondary school or equivalent, (b) education as a part of a curriculum for obtaining a qualification
recognized by any lawfor the time being in force and (c) education as a part of an approved vocational education
course [Section 66D (l)] and the definition of ‘approved vocational education course’ [section 65B (11)] are being
omitted. However, the exemption shall continue byway of exemption notification No. 25/2012–ST.
3In the last Budget, the Customs, Central Excise and Service Tax laws were amended to provide for closure of
proceedings where the assessee pays duty/tax due, interest and specified penalty.
Further amendments are being made toService Tax lawso as to provide for closure of proceedings against co-
noticees, once the proceedings against the main noticee have been closed.
4The power to arrest in Service Tax is being restricted only to situations where thetax payer has collected the tax but
not deposited it to the exchequer, and that too above a threshold of Rs 2 crore.
The monetary limit for launching prosecution is being increased from Rs. 1crore to Rs. 2 crore of Service Tax
evasion.
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