Budget 2015 : Changes in Central Excise

 

1. CHANGES IN EXCISE DUTY STRUCTURE

(i) Wafers for use in the manufacture of integrated circuit (IC) modules for smart cards from 12% to 6%;

(ii) Inputs for use in the manufacture of LED drivers and MCPCB for LED lights, fixtures and LED lamps from 12% to 6%;

(iii) Mobiles handsets, including cellular phones from 1% without CENVAT Credit or 6% with CENVAT Credit to 1% without CENVAT Credit or 12.5% with CENVAT Credit. NCCD of 1% on mobile handsets including cellular phones remains unchanged;

(iv) Tablet computers from 12% to 2% without CENVAT Credit or 12.5% with CENVAT Credit;

(v) Specified raw materials [battery, titanium, palladium wire, eutectic wire, silicone resins and rubbers, solder paste, reed switch, diodes, transistors, capacitors, controllers, coils (steel), tubing (silicone)] for use in the manufacture of pacemakers to Nil;

(vi) Pig iron SG grade and Ferro-silicon-magnesium for use in the manufacture of cast components of wind operated electricity generators to Nil, subject to certification by MNRE;

(vii) Solar water heater and system from 12% to Nil without CENVAT Credit or 12.5% with CENVAT Credit;

(viii) Round copper wire and tin alloys for use in the manufacture of Solar PV ribbon for manufacture of solar PV cells to Nil subject to certification by Department of Electronics and Information Technology (DEITY).

2. CHANGES IN RATES OF DUTY

(i) Education Cess and Secondary and Higher Education Cess leviable on excisable goods are being subsumed in Basic Excise duty. Consequently, Education Cess and Secondary and Higher Education Cess leviable on excisable goods are being fully exempted;

(ii) The standard ad valorem rate of Basic Excise Duty is being increased from 12% to 12.5% and specific rates of Basic Excise Duty on petrol, diesel, cement, cigarettes and other tobacco products (other than biris) are being suitably changed. However, the total incidence of various duties of excise on petrol and diesel remains unchanged;

(iii) Other Basic Excise duty rates (ad valorem as well as specific) with a few exceptions are not being changed. Customs Education Cesses will continue to be levied on imported goods.

3. CHANGES IN VALUATION OF GOODS

(i) All goods falling under Chapter sub-heading 2101 20, including iced tea has been notified under Section 4A of the Central Excise Act, 1944 for the purpose of assessment of Central Excise Duty with reference to the Retail Sale Price with an abatement of 30%. Such goods are also being included in the Third Schedule to the Excise Act;

(ii) Goods, such as lemonade and other beverages, have also been notified under Section 4A of the Excise Act for the purpose of assessment of Central Excise duty with reference to the Retail Sale Price with an abatement of 35%. Such goods are also being included in the Third Schedule to the Excise Act.

 

4.  BROADENING OF TAX BASE

(i) Excise Duty of 2% without CENVAT Credit or 6% with CENVAT Credit has been levied on condensed milk put up in unit containers. It has also been notified under Section 4A of the Excise Act for the purpose of valuation with reference to the Retail Sale Price with an abatement of 30%;

(ii) Excise Duty of 2% without CENVAT Credit or 6% with CENVAT Credit has been levied on peanut butter.

5. RELIEF

Full exemption from Excise Duty is being extended to captively consumed intermediate compound coming into existence during the manufacture of Agarbattis.

6. MISCELLANEOUS

(i) Excise Duty on leather footwear (footwear with uppers made of leather of heading 4107 or 4112 to 4114) of Retail Sale Price of more than Rs. 1000 per pair from 12% to 6%;

(ii) Excise Duty levied on the value of duty paid on rails for manufacture of railway or tramway track construction material is being exempted retrospectively for the period from March 17, 2012 to February 2, 2014, if no CENVAT Credit of duty paid on such rails is availed;

(iii) Excise Duty on cigarettes has been increased by 25% for cigarettes of length not exceeding 65 mm and by 15% for cigarettes of other lengths. Similar increases are proposed on cigars, cheroots and cigarillos;

(iv) Maximum speed of packing machine is being specified as a factor relevant to production for determining Excise Duty payable under the Compounded Levy Scheme presently applicable to pan masala, gutkha and chewing tobacco. Accordingly, deemed production and duty payable per machine per month has been notified with reference to the speed range in which the maximum speed of a packing machine falls;

(v) The entry waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured in the Seventh Schedule to the Finance Act, 2005 related to levy of Additional Duty of Excise @ 5% is being omitted. Till the enactment of the Finance Bill, 2015, the said additional Duty of Excise of 5% leviable on such goods is being exempted. Simultaneously, the Basic Excise Duty on these goods has been increased from 12% to 18%;

(vi)Excise duty on chassis for ambulances has been reduced from 24% to 12.5%;

(vii) Excise duty structure for mobiles handsets including cellular phones is being changed from 1% without Cenvat credit or 6% with Cenvat credit to 1% without CENVAT Credit or 12.5% with CENVAT Credit;

(viii) Excise duty structure of 2% without CENVAT Credit or 12.5% with Cenvat credit is being prescribed for tablet computers.

Be the first to comment

Leave a Reply