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Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021. - Customs - D.O. F. No. 334/02/2020-TRU

Extract

..... e Bill, 2021 so that changes proposed therein take effect from the midnight of 1st February/2nd February, 2021. The remaining legislative changes would come into effect only upon the enactment of the Finance Bill, 2021. 3. Important changes in respect of Customs and Central Excise duty (including cesses) are contained in the Annexure to this letter as detailed below. (i) Customs duty rate changes: The change in the rates of duty, SWS, tariff rates, omission of certain exemption and amendments in certain exemptions, conditions to exemptions are at Annexure A. (ii) Central Excise Changes: The changes in Central Excise Act and duty rates are at Annexure B. (iii) Agriculture Infrastructure and development Cess (AIDC): This new cess is being imposed on imports of certain items at specified rate. Simultaneously, basic customs duty is being reduced on the items being brought under new cess. This new cess is also being imposed as additional duty of excise on petrol and diesel. At the same time, Basis Excise Duty and Special Additional Duty of Excise are being reduced. The details are at Annexure C. (iv) Legislative changes in the Customs Act, Customs Tariff Act and Rules made thereunder: ( .....

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Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021. - Customs

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..... feedback is provided urgently, including the issues that may need clarification. 5 It is requested that all possible efforts may be made to guide the taxpayers by holding interactive sessions/seminars for their benefit. In case of any doubt or difficulty, I would request you to kindly bring it to my notice immediately at js-tru01@ gov.in or to the notice of Shri Gaurav Singh, Deputy Secretary (TRU) (Tel: 011-23092753, email: gaurav.singh80nic.in), Sh. J. S. Kandhari, Deputy Secretary (TRU) (Tel: 011-23095526, email: js.kandhari@nic.in) or Sh. Abhishek Verma, Budget Officer (TRU) (Tel: 011- 23095547, email: abhishek.v85@nic.in. We can also be reached at budget-cbec@nic.in. 6. Copies of Finance Bill, 2021, Finance Minister’s Budget Speech, Explanatory Memorandum to the Bill and relevant notifications can be downloaded directly from www.indiabudget.gov.in as well as www.cbic.gov.in. 7. To conclude, my team and I would like to express our gratitude to you for the valuable suggestions, feedback and support and would look forward to your comments/suggestions. With warm regards, Yours sincerely, (G. D. Lohani) Joint Secretary (TRU-I) Enclosed as above To, All Principal Chief Commiss .....

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Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021. - Customs

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..... S. Nos. 57, 61, 70 of notification No. 50/2017-Customs are being amended. AIDC is being imposed on Crude Soya-bean Oil, falling under tariff heading 1507 10 00, Crude Palm Oil, falling under tariff heading 1511 10 00 and Crude Sunflower Seed Oil, falling under tariff heading 1512 11 10. Simultaneously, BCD on these items has been reduced. For the revised rates, refer to the Table in Annexure-C. [S. No. 7 of notification No. 02/2021-Customs dated 1st February, 2021 refers] Chapter 16-21: No Change Chapter 22 (1) New S. Nos. 104A of notification No. 50/2017-Customs is being created. AIDC is being imposed on alcoholic beverages and spirits, falling under tariff headings 2204, 2205, 2206 and 2208. Simultaneously, BCD on these items has been reduced. For the revised rates, refer to the Table in Annexure-C. [S. No. 8 of notification No. 02/2021-Customs dated 1st February, 2021 refers] (2) S. No. 107 of notification No. 50/2017-Customs is being omitted. Consequently, with omission of this end use exemption, all Denatured ethyl alcohol (ethanol) falling under tariff item 2207 20 00 will now attract 5% BCD. [S. No. 9 of notification No. 2/2021-Customs dated 1st February, 2021 refers] Chapte .....

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Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021. - Customs

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..... ction of Taxes Act, 1931, this increase will come into force with immediate effect. Chapter 29 (1) S. No. 202 and 203 of notification No. 50/2017-Customs are being omitted. Consequently, Bis-phenol A and Epichlorohydrin will now attract 7.5% BCD vide S. No. 185 of the said notification. [S. No. 17 of notification No. 2/2021-Customs dated 1st February, 2021 refers] (2) S. No. 209 of notification No. 50/2017-Customs is being omitted. Consequently, with omission of the end use exemption, all Diphenylmethane 4,4-diisocyanate (MDI) will now attract 7.5% BCD vide S. No. 185 of the said notification. [S. No. 17 of notification No. 2/2021- Customs dated 1st February, 2021 refers] (3) BCD on Caprolactam is being reduced from 7.5% to 5% by amending the entry at S. No. 210 of notification No. 50/2017-Customs. [S. No. 18 of notification No. 2/2021-Customs dated 1st February, 2021 refers] Chapter 30: No change Chapter 31 (1) AIDC is being imposed on fertilizers namely Urea, Ammonium Nitrate, Muriate of Potash and Diammonium Phosphate falling under tariff items 3102 10 00, 3102 30 00, Chapter 31 and 3105 30 00 respectively. Simultaneously, BCD on these items have been reduced. For the revised ra .....

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Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021. - Customs

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..... No. 2/2021-Customs, dated 1st February, 2021 refers] Chapter 41 (1) S. No. 285 of notification No. 50/2017-Customs is being omitted. Consequently, with omission of the said exemption, ‘wet blue chrome tanned leather, crust leather, finished leather of all kinds, including splits and sides of the aforesaid’ falling under Chapter 41 will now attract 10% BCD. [S. No. 30 of notification No. 2/2021-Customs, dated 1st February, 2021 refers] Chapter 42-47: No change Chapter 48 (1) Entry at S. No. 293A and S. No. 293B of notification No. 50/2017-Customs are being merged. These entries provide concessional rate to Newsprint and other uncoated paper. The merged entry is for providing clarity to the scope of this exemption that exemption is available to newsprint and other uncoated paper conforming to the specifications of newsprint (other than its surface roughness). Consequently S. No. 293 B has been omitted. [S. No. 32 & 33 of notification No. 2/2021-Customs, dated 1st February, 2021 refers] Chapter 49: No change Chapter 50 (1) BCD on Raw Silk (not thrown) falling under CTH 5002 is being increased from 10% to 15%. This change is being given effect to by omitting S. No. 305 .....

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Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021. - Customs

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..... 1 (1) Tariff rate on all goods falling under tariff item 7104 90 90 (cut and polished synthetic stones) is being increased from 10% to 15%. [Clause 95 (i) of the Finance Bill, 2021 refers]. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, this increase will come into force with immediate effect]. (2) S. No. 349 of notification No. 50/2017-Customs is being amended to exclude cut and polished synthetic stones from the said entry. Consequently, cut and polished synthetic stones falling under tariff item 7104 90 90 will now attract 15% BCD. [S. Nos. 43 of notification No. 2/2021-Customs dated 1st February, 2021 refers]. (3) S. No. 362 of notification No. 50/2017-Customs is being omitted to increase BCD rate on cut and polished cubic zirconia from 7.5% to 15%, at par with other cut and polished synthetic stones. [S. Nos. 49 of notification No. 2/2021-Customs dated 1st February, 2021 refers]. (4) On Silver, including Silver Dore falling under tariff heading 7106 and Gold, including Gold Dore falling under tariff heading 7108, AIDC is being imposed. Simultaneously, BCD on these goods have been reduced. For the revised rates, refer to the Table in Annexure C. [ .....

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Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021. - Customs

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..... (ADD) dated 18.10.2018 Straight length Bars and Rod of alloy Steel China PR, 2 38/2019-Cus (ADD) dated 25.09.2019 High Speed Steel of Non Cobalt Grade China PR, Brazil, Germany, 3 16/2020 - Cus (ADD) dated 23.06.2020 Flat rolled prdcts of steel, (Al or Zinc coated) China PR, Vietnam, and Korea RP, 4 1/2017-Cus (CVD) dated 07.09.2017 Hot rolled and cold rolled stainless steel flat products China PR [Notification Nos. 05/2021-Customs (ADD), 06/2021-Customs (ADD), 07/2021-Customs (ADD), and 02/2021- Customs (CVD), all dated 1st February, 2021 refers] (3) Provisional countervailing duty imposed vide notification No. 02/2020-Cus(CVD) dated 09.10.2020 on Flat rolled products of stainless steel originating in or exported from Indonesia, is being revoked. [Notification No. 01/2021-Customs (CVD), dated 1st February, 2021 refers] (4) In Sunset Review, anti-dumping duty on Cold-Rolled Flat Products of Stainless Steel of width 600mm to 1250mm and above 1250mm of non-bonafide usage originating in or exported from People’s Republic of China, Republic of Korea, European Union, South Africa, Taiwan, Thailand and United States of America is being discontinued upon expiry of the antidumping d .....

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Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021. - Customs

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..... y, goods falling under sub-headings 8501 10 to 8501 53 will attract the effective BCD rate of 10%. (2) Basic customs duty on Solar Inverters (sub-heading 8504 40) is being raised to 20%. For this purpose, S. No. 13 of the notification No. 57/2017-Customs is being amended. Simultaneously, notification No. 1/2011-Customs, dated 6th January, 2011 is being rescinded. [S. No. (ix) of the notification No. 03/2021-Customs dated 1st February, 2021 and, notification No. 07/2021-Customs, dated 1st February, 2021 refer]. (3) Notification No. 1/2011-Customs, dated 6th January, 2011 is being rescinded. Consequently, all items of machinery, including prime movers, instruments, apparatus and appliances, control gear and transmission equipment and auxiliary equipment (including those required for testing and quality control) and components, required for the initial setting up of a solar power generation project or facility will attract applicable BCD. [Notification No. 07/2021-Customs, dated 1st February, 2021 refers]. (4) BCD on parts of all goods under tariff item 8512 90 00 (parts of electrical lighting or signaling equipment, windscreen wipers, defrosters and demisters, of a kind used for moto .....

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Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021. - Customs

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..... uch as wired headset, USB Cable, microphone and receiver, etc Nil 2.5% 1.4.2021 [S. Nos. (i), (ii), (iii) and (iv) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (10) S. No. 6A of the notification No. 57/2017-Customs is being amended to exclude “Metal Shield” from the scope of the said entry. Consequently, Metal Shield will now attract BCD as applicable. [S. No. (i) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (11) S. No. 6B of the notification No. 57/2017-Customs is being amended to exclude “Camera Lens” from the scope of the said entry. Consequently, Camera Lens will now attract BCD as applicable. [S. No. (ii) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (12) S. No. 7 of the notification No. 57/2017-Customs is being amended to exclude following goods from the scope of the entry, namely: - “(iv). Battery cover, (v) Front Cover, (vi) Front Cover (with Zinc Casting), (vii). Middle cover, (ix) Side Key, (xii) Screw, (xiii) Microphone rubber case, (xiv) Sensor rubber case/sealing gasket including sealing gaskets/cases from rubbers like SBR, EPDM, CR, CS, Silicon and all o .....

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..... ed from Nil to 2.5% with effect from 1.4.2021. [S. No. 80 of the notification No. 02/2021-Customs dated 1st February, 2021 and S. No. (v) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (18) BCD on inputs, parts or sub-parts for use in manufacture of PCBA of Lithium-ion battery and battery pack, is being increased from Nil to 2.5% with effect from 1.4.2021. [S. No. 81 of the notification No. 02 /2021-Customs dated 1st February, 2021 and S. No. (vi) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (19) BCD rate on Lithium-ion battery and battery pack, Lithium-ion cell, PCBA of Li-ion battery and parts thereof, is prescribed through various entries of notification No. 57/2017- Customs and notification No. 50/2017-Customs. All such entries are being consolidated in notification No. 50/2017-Customs, dated the 30th June, 2017 for ease of reference. [S. Nos. 84 and 85 of the notification No. 02 /2021-Customs dated 1st February, 2021 and S. No. (xi) of the notification No. 03/2021-Customs dated 1st February, 2021 refers]. (20) S. No. 8 of the notification No. 57/2017-Customs, dated the 30th June, 2017, is being amended to:- (i) omit Base .....

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Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021. - Customs

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..... ices imported by international/diplomatic organization. [notification No. 06/2021, dated 1st February, 2021 refers]. (2) Tariff rate on all goods falling under tariff item 9031 80 00 (other measuring or checking instruments, appliances and machines) is being increased from 10% to 15% [Clause 95 (i) of the Finance Bill, 2021 refers]. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, this increase will come into force from 02.02.2021. However, the effective BCD on all goods under tariff item 9031 80 00, is being retained at 7.5% [S. No. 90 of notification No. 2/2021 - Customs dated 1st February, 2021 refers]. Consequently, goods falling under tariff item 9031 80 00 will attract the effective BCD rate of 7.5%. Chapter 91 (1) BCD on Instrument panel clocks and clocks of a similar type for vehicles, aircraft, spacecraft or vessels falling under tariff item 9104 00 00 is being increased from 10% to 15% by increasing the tariff rate [Clause 95 (i) of the Finance Bill, 2021 refers. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, this increase will come into force from 02.02.2021. Chapter 92-93: No Change Chapter 94 (1) S. No. 587 of .....

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..... r been merged with other exemption notifications or rescinded as these have outlived their utility. The list of notifications that are being rescinded are as follows: S. No. Notification No. Notification Subject 1. 34/2017-Customs dated 30th June, 2017 Exemption to tags, labels and printed bags imported for fixing on articles for export or for the packaging of such articles. 2. 75/2017-Customs dated 13th September, 2017 Exemption for goods imported for organizing FIFA Under-17 World Cup, 2017. (6) At present, there are certain end-use based exemptions in notification No. 50/2017- Customs which are presently being administered without the need to follow the procedure set out under the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 (IGCR Rules, 2017). To provide uniformity of enforcement of end-use provisions, the condition of IGCR Rules is being provided for the entries listed below in the manner as specified in the column (3) of the Table below: - S.No. S. No. of Notfn Description (1) (2) (3) 1. 237 (a) Existing condition 22 for the entry is being amended so as to remove the requirement of furnishing an undertaking to Deputy Commissioner/Assistant Commissioner o .....

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Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021. - Customs

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..... mport. (b) IGCR Rules, 2017 is also being prescribed in addition with the condition 60 as amended. (c) In addition, Deputy Commissioner of Customs or Assistant Commissioner of Customs having jurisdiction under IGCR Rules, 2017, is also being empowered to issue the end use certificate for the past period after due verification as per the rules. 10. 431 (a) Existing condition 61 for the entry is being amended to remove the requirement of furnishing the end use certificate regarding use of imported goods to the Deputy Commissioner/Assistant Commissioner of Customs at the Port of import. (b) IGCR Rules, 2017 is also being prescribed in addition with the condition 61 as amended. (c) In addition, Deputy Commissioner of Customs or Assistant Commissioner of Customs having jurisdiction under IGCR Rules, 2017, is also being empowered to issue the end use certificate for the past period after due verification as per the rules. 11. 534 IGCR Rules, 2017 is being prescribed in addition with the Condition 74 for the entry. 12. 559 The Explanation in the said entry is being amended to replace the Assistant/Deputy Commissioner of either Central GST or State GST, as the case may be with Deputy Commi .....

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Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021. - Customs

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..... being provided to new category of blended fuels namely, 15% Methanol blended Petrol (M-15 fuel) and 20% ethanol blended Petrol (E-20 fuel), provided appropriate excise duty on Petrol and appropriate GST on ethanol/methanol and cosolvents has been paid. [notification Nos. 04/2021-Central Excise, 05/2021-Centrral Excise and 06/2021-Central Excise, all dated 1st February, 2021 refer] (2) Exemption from Agriculture Infrastructure and Development Cess (AIDC) is being provided to blended fuels namely 5% ethanol blended petrol, 10% ethanol blended petrol, 20% bio-diesel blended High speed diesel, and new category of blended fuels namely, 15% Methanol blended Petrol (M-15 fuel) and 20% ethanol blended Petrol (E-20 fuel). [notification Nos. 03/2021-Central Excise, dated 1st February, 2021 refers] (3) The Exemptions available to blended fuels, 5% ethanol blended petrol, 10% ethanol blended petrol, 20% bio-diesel blended High speed diesel from Basic Excise Duty, Special Additional Excise Duty and Road and Infrastructure Cess is being amended to include the reference to the AIDC in the definition of appropriate duty of excise on petrol/diesel being blended. [notification Nos. 02/2021-Central .....

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Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021. - Customs

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..... . 7108 Gold Dore 6.9% 2.5% * All goods originating in or exported from the United States of America. (2) For the purpose of calculating the AIDC, the import value of such goods shall be calculated in the same manner as the value of goods is calculated under the provisions of section 14 of the Customs Act, 1962. (3) Social Welfare Surcharge (SWS) would be levied on AIDC. However, exemption from SWS on AIDC has been given to gold and silver. (4) Further, goods imported under customs duty exemptions available under FTA and EOU as well as under advance authorization schemes are being exempted from AIDC. II. Excise: An agriculture Infrastructure and Development Cess (AIDC) of ₹ 2.5 per litre has been imposed on petrol and ₹ 4 per litre on diesel as an additional duty of excise [Clause 116 of the Finance Bill, 2021 refers]. Accordingly, Basic Excise Duty and the Special Additional Excise Duty have been calibrated so that there would be no additional burden on the consumer. The table below summarizes the change in various duties applicable to Petrol and Diesel: Commodity Duty rates applicable with effect from 02.02.2021 (Rs. per litre) BED SAED RIC AIDC Total Petrol (unbranded .....

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..... any person has obtained any invoice by fraud, collusion, willful misstatement or suppression of facts to utilize Input Tax Credit on the basis of such invoice for discharging any duty or tax on goods that are entered for exportation under claim of refund of any duty or tax. (g) Explanation to section 139 of Customs Act is being amended so as to include inventories, photographs and lists certified by the Commissioner (Appeals) under the new sub-section (1D) to the documents within the meaning of that section to give evidentiary value to such documents. (h) Section 149 is being amended so as to- i. introduce a second proviso which would allow amendments to be done through the customs automated system on the basis of risk evaluation through appropriate selection criteria. ii. introduce a third proviso so that certain amendments, as may be specified by the Board, may be done by the importer or exporter on the common portal. (i) Section 153 is being amended so as to insert a new clause ‘(ca)’ under sub section (1) thereof so as to enable service of order, summons, notice, etc. by making it available on the common portal. (j) Chapter XVII is being amended so as to insert a n .....

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Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2021. - Customs

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..... on of safeguard measure, including tariff-rate quota in the Safeguard Duty (name changed to Safeguard Measures) Rules. ANNEXURE E Amendments in CGST, IGST and UTGST Acts, 2017: Amendments carried out in the Finance Bill, 2021 will come into effect from the date when the same will be notified, as far as possible, concurrently with the corresponding amendments to the similar Acts passed by the States and Union territories with Legislature. I. AMENDMENTS IN THE CGST ACT, 2017: a. A new clause (aa) in sub-section (1) of Section 7 of the CGST Act is being inserted, retrospectively with effect from the 1st July, 2017, so as to ensure levy of tax on activities or transactions involving supply of goods or services by any person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. b. A new clause (aa) to sub-section (2) of the section 16 of the CGST Act is being inserted to provide that input tax credit on invoice or debit note may be availed only when the details of such invoice or debit note have been furnished by the supplier in the statement of outward supplies and such details have been communicated to the .....

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