Sub:
Budget proposals for
2000-2001 vide Finance Bill - 2000 introduced in the Lok Sabha on 29-02-2000 -
Customs broad features - reg.
The Finance Bill, 2000 introduced in the Lok Sabha on 29-02-2000 proposed
interalia a number of changes including those in the duties leviable on imported
goods, by amendment through the Bill or by issue of suitable notifications. A
number of changes in the Central Excise duties leviable on the indigenously
manufactured goods have also been effected as a part of Budget proposals. The
Budget Bulletin, 2000, Customs and Central Excise, New Delhi incorporating the
requisite extracts of Finance Bill 2000 and the memorandum explaining the
provision of the said Bill as also the relevant Customs and Central Excise
notifications may be referred to for precise implications of the aforesaid
changes. The printed Bulletin will be available for sale with the Publication
Department of Custom House from 1st March, 2000 onwards. The broad features of
the changes in respect of Customs duties and additional duties of Customs are
indicated below for the benefit of the trade and public.
CHANGES
WILL COME INTO FORCE ON 01-03-2000
The changes relating to the Tariff effected by Finance Bill, 2000 and
Notifications (unless otherwise indicated in the Bill or the Notifications )
come into force from the midnight of 29-02-2000 / 01-03-2000
MAJOR
CHANGES EFFECTED IN THE BUDGET
CUSTOMS
The
highlights of the changes in Customs duties are :
(a)
Peak rate of basic Customs duty reduced from 40% to 35%
(b) Surcharge continued at 10%. This will also apply to new peak rate of 35%
(c) SAD extended to import by traders also with immediate effect. Petroleum
products are exempted from SAD. The other existing exemptions have been
continued.
(d) The Basic duty on kerosene for parallel marketing raised from 30% to 35%
(e) Basic duty on crude reduced from 20% to 15% and on products (other than
kerosene) reduced from 30% to 25%
(f) Ad-velorem or specific duty on "whichever is higher basis" has
been fixed for a number of textile fabrics and garments.
(g) a number of items are allowed to be imported from Sri Lanka at concessional
rate.
EXCISE
RATE STRUCTURE
The three rates of basic excise duty, namely, 8%, 16% & 24% have been
converged to a single rate of 16%. This rate has been given the name of Central
Value Added tax (CENVAT). On a few items there will be Special Excise Duty (SED).
Rates of Special Excise Duties applicable now are 8%, 16% and 24%. The Tariff
rate of duty for all the items that are now at 8% shall be 16%. This will also
be the effective rate of duty on these items with a few exceptions. The
exceptions are indicated below.
The
following items have been exempted from Excise Duty
-
Medicinal grade oxygen
- Medicinal grade hydrogen peroxide
- Anesthetics
- Potassium iodate
- Medical and surgical gloves
- Cutlery and knives
- Household Glassware, including produced by Mouth blown
process
- Electric Bulbs MRP upto Rs.20/-
- Clocks and watches of MRP upto Rs.500/- per piece
- Tooth Powder
- Sanitary towels, baby napkins etc.
- Soap for distribution through PDS
- Roasted Chicory
- Specified cold chain equipment
The
following items have been exempted from 50% of the duty leviable thereon:
-
Kerosene
- Woolen yarn
- Cotton yarn including sewing thread
- Flax and Ramie yarn
- Viscose filament yarn for handloom sector
- Carded or combed wool
- Laundry soap
There
is no change in the rate of Excise Duty on the items that are now at 16%
The items that are currently charged to the Basic duty of 24% shall continue to
bear the same as total duty, but comprising 16% CENVAT and 8% SED. In this
category also, there are a few exceptions.
Plastic materials (PVC, LDP etc.); Films, Sheets of Plastic and Plastic
articles; thread rubber, cellular rubber, beltings, other articles of rubber;
paper/board coated with plastic; nylon filament yarn; sacks and bags made of
synthetic textile materials; transmissions and conveyor belts/belting of textile
materials; cars for physically handicapped persons and ambulances for Indian Red
Cross Society; Sterile contact lens solution will be charged to 16% duty
with no SED. The other items like white cements, Glazed tiles, Taxis, scooters
and Motor Cycles etc. will continue to bear a total incidence of 24%, composed
of 16% CENVAT plus 8% SED.
Items that are now been charged to 24% Basic Duty plus 6% SED will now be
charged to 16% CENVAT plus 16% SED. There are a few exceptions. The following
will be charged to duty at 16% without SED : Bus, Truck and Car tyres for
Original Equipment supplies, Parts of Air-Conditioners and Refrigerators,
Shikakai Powder not mixed with any other ingredients.
Excise duty on Petrol at present is 24% basic plus 8% SED. It will now be
composed of 16% CENVAT plus 16% SED.
There is no change in respect of Commodities that are now charged to a total
duty of 40%. The rate for these commodities will be 16% CENVAT plus 24% SED.
However, there will be no SED on soft drink concentrate supplied for manufacture
of aerated soft drinks under Chapter X procedure.
Excise
Duty on Cigarettes
The Excise Duty on Cigarettes have been increased by 5% for all categories.
MODVAT
Scheme
With the introduction of CENVAT Scheme, the MODVAT Credit Scheme shall now be
called CENVAT Credit Scheme.
Interest on default under various sections / rules has now been fixed at 24%.
This comes into force with immediate effect.
sd/-
( A. K. RAHA)
Commissioner of Customs (Port)
Custom House, Calcutta
