- - EXCISE - FINANCE BILL, 2016

EXCISE

Note:  “Basic Excise Duty” means the excise duty set forth in the First Schedule to the Central Excise Tariff Act, 1985.

AMENDMENTS IN THE CENTRAL EXCISE ACT, 1944:

S. No.	Amendment	Clause of the Finance Bill, 2016
1.	Section 5A 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.	[139]
2.	Section 11A is being amended so as to increase the period of limitation from one year to two years in 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: All goods falling under heading 3401 and 3402; Aluminium foils of a thickness not exceeding 0.2 mm; Wrist wearable devices (commonly known as ‘smart watches’); and Accessories of motor vehicle and certain other specified goods. Changes at (b) above will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.	[142(ii)] [142(i)]

 

AMENDMENTS IN THE FIRST SCHEDULE TO THE CENTRAL EXCISE TARIFF ACT, 1985

S. No.	Amendment	Clause of the Finance Bill, 2016
	Amendments not affecting rates of duty
1.	Editorial changes in 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 description Warp pile fabrics ‘epingle’ uncut velvet] and 5801 37 19 [with description Warp pile fabrics ‘epingle’ uncut other]; 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.	[143(i)]

 

		From	To
	Amendments involving change in the rate of duty
	Aerated Beverages
1	Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured	18%	21%
	Tobacco and Tobacco Products
2	Cigar and cheroots	12.5% or ₹ 3375 per thousand, whichever is higher	12.5% or ₹ 3755 per thousand, whichever is higher
3	Cigarillos	12.5% or ₹ 3375 per thousand, whichever is higher	12.5% or ₹ 3755 per thousand, whichever is higher
4	Cigarettes of tobacco substitutes	Rs.3375 per thousand	Rs.3755 per thousand
5	Cigarillos of tobacco substitutes	12.5% or Rs.3375 per thousand, whichever is higher	12.5% or Rs.3755 per thousand, whichever is higher
6	Others of tobacco substitutes	12.5% or Rs.3375 per thousand, whichever is higher	12.5% or Rs.3755 per thousand, whichever is higher
7	Gutkha, chewing tobacco (including filter khaini) and jarda scented tobacco	70%	81%
8	Unmanufactured tobacco	55%	64%
9	Paper rolled biris [whether handmade or machine made] and other biris [other than handmade biris] However, the effective rate of basic excise duty of ₹ 21 per thousand shall remain unchanged.	Rs.30 per thousand	Rs.80 per thousand

The amendments involving increase in 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:

				From	To
		Food processing
1		Refrigerated containers		12.5%	6%
		Fertilizers
2		Micronutrients 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%
3		Physical mixture of fertilizers manufactured by Co-operative Societies, holding certificate of manufacture for mixture of fertilizers under the Fertiliser Control Order 1985, made out 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
4		To increase Tariff Value of readymade garments and made up articles of textiles		30% of retail sale price	60% of retail sale price
5		Branded readymade garments and made up articles of textiles of retail sale price of ₹ 1000 or more		Nil [without CENVAT credit] or 6%/12.5% [with CENVAT credit]	2%  [without CENVAT credit] or 12.5% [with CENVAT credit]
6		PSF / 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
7		Rubber sheets & resin rubber sheets for soles and heels		12.5%	6%
8		Increase the abatement from retail sale price (RSP) for the purposes of excise duty assessment for all categories of footwear		25%	30%
		Metals
9		To 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]
		Precious metals & Jewellery
10		Refined gold bars manufactured from gold dore bar, silver dore bar, 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%
11		Refined 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%
12		Articles 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 ₹ 6 crore in a year and eligibility limit of ₹ 12 crore, along with simplified compliance procedure.		Nil	1%  [without CENVAT credit] or 12.5% [with CENVAT credit]
		Renewable Energy
13		Unsaturated 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 blades and intermediates, parts and sub parts of rotor blades for wind operated electricity generators		Nil	6%
14		Carbon pultrusion used for manufacture of rotor blades and intermediates, parts and sub-parts of rotor blades for wind operated electricity generators		12.5%	6%
15		Solar lamp		12.5%	Nil
16		To prescribe “valid agreement between importer / producer of power with urban local body 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
17		Aviation Turbine Fuel [ATF] other than for supply to Scheduled Commuter Airlines (SCA) from the Regional Connectivity Scheme airports		8%	14%
		Maintenance, repair and overhaul [MRO] of aircrafts
18		Tools 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
19		To simplify the procedure for availment of exemption from excise duty on parts, testing equipment, tools and tool-kits for maintenance, repair and overhaul of aircraft based on records		-	-
20		To remove the restriction of one year for utilization of duty free parts for maintenance, repair and overhaul of aircraft		-	-
			Electronics & IT hardware
	21		Charger / adapter, battery and wired headsets / speakers for supply to mobile phone manufacturers as original equipment manufacturer	Nil	2% [without CENVAT credit] or 12.5% [with CENVAT credit]
	22		Inputs, parts and components, subparts for manufacture of charger / adapter, battery and wired headsets / speakers of mobile phone, subject to actual user condition.	12.5% / Nil	Nil
	23		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]	12.5%	4% [without CENVAT credit] or 12.5% [with CENVAT credit]
	24		Parts 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]	12.5%	Nil
			Machinery
	25		Electric motor, shafts, sleeve, chamber, impeller, washer required for the manufacture of centrifugal pump	12.5%	6%
			Automobiles
	26		Specified parts of Electric Vehicles and Hybrid Vehicles	6% Upto 31.03.2016	6% Without time limit
	27		Engine for xEV (hybrid electric vehicle)	12.5%	6%
			Miscellaneous
	28		Excise duty on sacks and bags of all plastics is being rationalized at 15%.	12.5%/15%	15%
	29		Unconditionally exempt improved cook stoves including smokeless chulhas for burning wood, agrowaste, cowdung, briquettes, and coal	Nil	Nil
	30		Disposable sterilized dialyzer and micro barrier of artificial kidney	12.5%	Nil
	31		Ready 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
	32		Parts 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%
	33		Remnant 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
	34		Clean Energy Cess / Clean Environment Cess on 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
	35		To extend Retail Sale Price [RSP] based assessment of excise duty 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 vehicle and certain other specified goods [with abatement rate of 30%].