TMI BlogCentral Excise, Customs & Service Tax – Budget proposals for 2001-2002X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 HP. 4. A single rate of 16% of SED now applies to only the following items: 1) Cosmetics and toilet preparations 2) Tyres for cars, buses, trucks, etc.(Non-OE use) 3) Multi utility vehicles 4) Air-conditioners 5) Cars 6) Pan masala 7) Chewing tobacco products (miscellaneous category) 8) Aerated waters 9) Soft drink concentrate, if supplied to vending machines 10) White cement and other special cements 11) Yachts, pleasure boats, etc. 12) Arms and ammunition for private use 13) POY/PFY With the rationalized duty structure now, the maximum rate of duty is 32%. 5. A new levy for National Calamity Contingent Duty (NC duty) has been imposed on cigarettes, biris, pan masala and miscellaneous tobacco products. It takes effect from 1.3.2001. In addition, pan masala containing tobacco (commonly known as Gutkha) has now been shifted from Chapter 21 to Chapter 24. With this change, AED at the rate of 18% has also been imposed on such pan masala. Along with the NC duty, the total duty on pan masala containing tobacco is now 60%. Total duty on other pan masala is 55%. 6. Duty on cigarettes has been increased by imposing NC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ou to personally monitor the implementation of this new levy. In case any procedural problems are noticed, you may kindly examine them and make reference to me with your views and suggestions. 13. The scheme of compounded levy in respect of independent textile processors has been withdrawn. With effect from 1.3.2001, independent textile processors will pay excise duty on ad valorem basis. There should be no difficulty in implementing this change, considering the fact that prior to December,1998, independent textile processors were paying excise duty on this basis. 14. Excise duty exemption on 10 items has been withdrawn. They will now be subjected to a duty of 4% but without the benefit of CENVAT credit. However, the manufacturers of these commodities have the option to pay duty at the normal rate of 16% availing of CENVAT benefit. 15. The scheme of SSI exemption is applicable to all the 10 commodities, except watches of MRP upto ₹ 500 per piece. Thus watches will be liable to pay duty w.e.f. 1.3.2001. Manufacturers of other 9 commodities may not come in the effective tax net immediately owing to SSI exemption being applicable. Service Tax 16. The highlight o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side is, therefore, the reference notification for the purpose of the new mode of application of CVD on packaged goods. This system comes into force 1.3.2001 itself. 23. Provision has also been made for notifying a rate of CVD in respect of alcoholic liquors. The notification will be issued in due course. In this context, I would like to request you to contact the State Excise Commissioner and ascertain the current rate of State excise duty on different types of alcoholic liquors, wines, beer, etc. and send the details to me by 15th March, 2001. 24. The World Customs Organisation has approved amendments in the legal text of the HSN. These changes are being incorporated in the First Schedule to the Customs Tariff Act, 1975 , with effect from a date to be notified later. The details of the changes proposed are contained in the Third Schedule to the Finance Bill. Miscellaneous 25. A number of legislative changes have been introduced in the Central Excise Act as also the Customs Act. Interest would now be leviable from the first day of the month succeeding that in which the duty ought to have been paid in all cases, whether involving fraud or not. Another important f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new manuals are to be made available to the public by 1st September, 2001. It is thus imperative for us to undertake a comprehensive review of all the instructions and procedures and weed out the irrelevant and obsolete ones. Besides, the lengthy procedures and instructions are to be reduced to more user-friendly stuff. Needless to say that this is both a challenge and an opportunity for the department. We would be writing separately inviting your views and suggestions in this regard. In the meanwhile, it would be useful if you can hold seminars on this, involving also the officers at the cutting edge. And invite TRU officers, if you please! 31. The Central Excise Rules, 1944 have been in existence for long. It is widely perceived that quite a few of them have lost relevance or utility in the context of the changes that have since taken place in the administration of excise duties. Also, many of the rigidities and technicalities engulfing some of the rules are not compatible with the spirit of tax reforms. Quite a few rules seem to owe their birth to our succumbing to pressure to resolve trivial or peripheral issues. Some others appear to justify their existence to our weakness ..... X X X X Extracts X X X X X X X X Extracts X X X X
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