BUDGETARY CHANGES IN CENTRAL EXCISE TARIFF

[Mr. M. GOVINDARAJAN]

INTRODUCTION:

In every budget it is used to increase the rate of excise duty or reduce the rate of excise duty or give exemption to some goods from excise duty or add some goods for the levy of excise duty. The present budget is also not an exemption to this. The Hon'ble Finance Minister in his budget speech he indicated that symptoms of economic recovery are widespread and clear cut not. The three fiscal stimulus packages that the Government introduced in quick succession have helped the process of recovery significantly. The improvement in our economic performance encourages a course of fiscal correction even as the global situation warrants caution.

Non Petroleum Products:

The Minister, in view of the above circumstances, proposed to partially roll back the rate reduction in central excise duties. At the same time he enhanced the standard rate on all non petroleum products from 8 per cent to 10 per cent ad valorem. Consequent to enhancement of the standard rate of duty the specific rates of duty on cement and cement clinker is also being revised upwards as follows:

Mini Cement Plant:

Cleared in packaged form:                                          (i) of retail sale price not exceeding Rs.190 per 50 kg bag or of per ton equivalent retail sale price not exceeding Rs.3800/-	Rs.185 per ton from Rs.145 per ton
ii) of retail sale price exceeding Rs.190 per 50 kg bag or of per ton equivalent retail sale price exceeding Rs.3800/-	Rs. 315 per ton from Rs.250 per ton
Cleared other than in packaged form	Rs.215 per ton from Rs.170 per ton

Other than mini cement plant:

Cleared in packaged form:                                          (i) of retail sale price not exceeding Rs.190 per 50 kg bag or of per ton equivalent retail sale price not exceeding Rs.3800/-	Rs.290 per ton from Rs.230 per ton
ii) of retail sale price exceeding Rs.190 per 50 kg bag or of per ton equivalent retail sale price exceeding Rs.3800/-	10% of retail sale price from 8%
Cleared other than in packaged form	10% or Rs.290 per tone which              is higher from 8% or Rs.230 per ton whichever is higher.
Cement Clinker	Rs.375/- per ton from Rs.300 per ton.

Petroleum Products:

In the wake of spiraling petroleum prices, the Government provided full exemption from basic customs duty to crude petroleum. In view of the pressing need to move to a fiscal consolidation path, the Finance Minister proposed to enhance the central excise duty on petrol and diesel by Re. 1 per litre each.  The revised rates of duty on these items are as under:

Description	Without Brand Name	With Brand Name
Motor Spirit	*Rs.14.35 per litre	Rs.15.50 per litre
HSD	**Rs.4.60 per litre	Rs.5.75 per litre

*includes Rs.2 additional excise duty and Rs.6 special additional excise duty;

**includes Rs.2 additional excise duty

Automobile:

Ad-valorem component of excise duty on large cars, multi utility vehicles and sports utility vehicles etc., and chassis thereof is being increased from 20% to 22%.

Tobacco Products:

The Finance Minister made some structural changes in the excise duty on cigarettes, cigars and cigarillos coupled with some increase in rates.   It was also proposed to enhance excise duty on all non smoking tobacco such as scented tobacco, snuff, chewing tobacco etc., In addition it was proposed to introduce a compounded levy scheme for chewing tobacco and branded unmanufactured tobacco based on the capacity of pouch packing machines.

The revised tariff for the tobacco products are as follows:

Non filter Cigarettes length in mm:

* Not exceeding 60 mm - Rs.669 (from Rs.819) - Basic Excise duty(BED) - 509; Addl. Excise duty (AED)- Rs.70/-; Natural calamity contingent duty (NCCD) Rs.90/-;

* Exceeding 60 mm but not exceeding 70 mm - Rs.1473/- (from Rs.1323) - BED -Rs.1218/-; AED Rs.110/-; NCCD - Rs.145;

Filter Cigarettes length in mm:

* Not exceeding 60 mm - Ra.669 (from Rs.819/-) BED - 509; AED - 70; NCCD - Rs.90;

* Exceeding 60 mm but not exceeding 70 mm - Rs.969/- (from Rs.810) BED - Rs.809; AED - Rs.70/-; NCCD - Rs.90/-;

* Exceeding 70 mm but not exceeding 75 mm - Rs.1473 (fromRs.1323/-) BED - 1218; HC - Rs.110/-; NCCD - Rs.145/-;

* Exceeding 75 mm but not exceeding 85 - Rs.1959 (from Rs.1759/-) BED - Rs.1624/-; AED - Rs.145/-; NCCD - Rs.190/-;

* Others - Rs.2363 (From Rs.2163) - BED - Rs. 1948; HC - Rs.180/-; NCCD - Rs.235/-;

*Cigarettes of tobacco substitutes - Rs.1408/- (from Rs.1208) - BED -Rs.1258/-; NCCD - Rs.150/-

Others:

* Cigars, cheroots and cigarillos of tobacco - the existing rates are replaced with a composite rate of 10% or Rs.1227/- per thousand, whichever is higher (BED) and 1.6% or Rs.246/- per thousand whichever is higher (AED);

* Cigars, cheroots and cigarillos of tobacco substituted - BED - 10% or Rs.1473 per thousand whichever is higher;

* Branded manufactured tobacco and tobacco refuse - BED is increased from 42% to 50%;

* Branded 'hookah' or 'gudaku' tobacco - BED increased from 8% to 10%;

* Chewing tobacco, preparations containing chewing tobacco, jarda scented tobacco, snuff and its preparations, tobacco extracts and essences etc - increase from 50% to 60%;

* Branded homogenized or reconstituted tobacco - BED increased from 50% to 60%;

* Other smoking tobacco (branded) - BED is increased from 34% to 40%;

* Unbranded other smoking tobacc0 - BED is increased from 8% to 10%;

* Smoking mixtures of pipes and cigarettes - BED is increased from 300% to 360%;

* Cut tobacco - BED is increased from Rs.50 per Kg. to Rs.60 per Kg.;

Precious metals:

* Refined serially numbered gold bars made from the ore/concentrate stage - excise duty - Rs.280/- per 10 grams instead of 8% ad valorem;

* DTA clearances of plain gold and silver jeweler manufactured by 100%EOU - increased rate - present rate - Rs.750/- per 10 grams for gold jewellery and Rs.1500 per Kg. for silver jewellery.

Exemptions:

* To specified equipment for preservation, storage and processing of agriculture and related sectors;

* Full exemption to trailers and semi-trailers used in agriculture;

* Articles of bedding wholly made of quilted textile materials;

* Toy balloons made of nature rubber;

* Betel nut product known as 'supari';

* Dementholised oil, Deterpenated Mentha oil, Spearmint/Mentha Piperita oils and all intermediates and by products of menthol;

* Few more specified inputs required for the manufacture of rotor blades for wind energy generators;

Reduction:

* LED lights - reduction of duty from 8% to 4%;

* Replaceble kits for household type water filters other than those based on RO technology to 4%;

* Corrugated boxes and cartons - from 8% to 4%;

* Latex rubber thread - from 8% to 4%;

* Goods covered under the Medicinal and Toilet Preparations Act - from 16% to 10%;

Concessional duty:

* 'Soleckshaw' replacing manually operated rickshaws running on batteries which are charged by solar power - concession duty - 4%; This concession will be available up to 31.3.2013.

Withdrawal of exemptions/concessions:

* Full exemption give to mosquito nets impregnated with insecticides, AV gas, microprocessor for computers (other than mother board), floppy disk drive, hard disk drive, flash drive, CD/DVD and Combo Drive means for external use - excise duty - 4%;

* Full exemption given to baby & clinical diapers and sanitary napkins - excise duty - 10%;

* Concessional rate given to open tin sanitary cans - excise duty - 10%;

* Concessional rate given to goggles except those used for correcting vision - excise duty - 10%.

Rationalization:

It is common for levying excise duty at different rates for different parts of a product.   In this budget instead of levying different rates uniform rate is fixed for the following:

* All starches - unified at 4% of duty;

* Umbrella - unified at 4% of duty for all parts;

* All ceramic tiles regardless of the fuel used for firing the kiln - unified rate at 10%;

* Rough ophthalmic blanks - two different rates of excise duty NIL and 4%; now redundant entry 4% is omitted.