Check the changes in the Excise Duty as per the Union Budget 2016. Know all amendments made on Central Excise Duty. Refer the latest changes in Central Excise for the Financial year 2016.
Central Excise Amendments – 2016
Changes in Central Excise law and rates of duty have been proposed through the Finance Bill, 2016. In order prescribe effective rates of duty to carry out, changes in the Rules made under the Central Excise Acts, the following notifications are being issued.
|Tariff||No.5/2016-Central Excise to No.18/2016-Central Excise.||01.03.2016|
|Non-Tariff||No.5/2016-Central Excise (N.T.) to No.21/2016-Central Excise (N.T).||01.03.2016|
Unless otherwise stated, all changes in rates of duty take w.e.f. Midnight of 29th February 2016. A declaration has been made under the Provisional Collection of Taxes Act, 1931 of the Finance Bill, 2016 so that changes proposed therein take w.e.f the midnight of 29th Feb 2016. The remaining judicial changes would come into effect only upon the enactment of the Finance Bill, 2016.
Must Read: Central Excise Duty in India
Key Changes in Central Excise as per Union Budget 2016
Let’s have a look at the key changes made in the Central Excise as per the Union Budget 2016-17.
Excise Duty levied on Certain goods
- Exemption on articles of Jewellery [except silver jewelry, other than studded with diamonds or other precious stones like ruby, emerald, and sapphire] withdrawn with a higher threshold exemption upto Rs. 6,00,00,000/- (Rs. 6 crores) in a financial year subject to the eligibility limit of Rs. 12 crores in the preceding fiscal year, along with simplified compliance procedure, from Nil to 1% (without Input Tax Credit [“ITC”] or 12.5% (ITC). Thus, a jewelry manufacturer will be eligible for exemption from Excise duty on first clearances upto Rs. 6 Crore during a financial year, if his aggregate domestic approvals during the preceding fiscal year were less than Rs. 12 crore.
- Branded readymade garments and made up articles of textiles of the retail sale price of Rs. 1000/- or more changed from Nil (without ITC) or 6%/ 12.5% to 2% (without ITC) or 12.5%.
Increase in Excise Duty rate on certain goods
- Excise Duty on various tobacco products grew by 10% to 15% other than beedi raised, to prevent consumption of tobacco and tobacco products.
- Domestically manufactured charger or adapter, battery and wired headsets/speakers for supply to mobile phone manufacturers as original equipment manufacturer, increased from Nil to 2% [without Input Tax Credit] or 12.5% [with ITC].
- Routers, Broadband Modems, Set-top boxes (for access to internet, and for TV), digital video recorder (DVR)/network video recorder (NVR), CCTV camera/IP camera, lithium-ion battery [other than those for mobile handsets] from 12.5% to 4% [without ITC] or 12.5% [with ITC].
Decrease in Excise Duty rate on certain goods
- Exemption from levy of Excise duty provided to improved chulhas (including smokeless chulhas) capable of burning wood, agro waste, cow dung, briquettes, and coal has been withdrawn.
- Electric motor, sleeve, shafts, impeller, chamber, washer required for the manufacture of centrifugal pump reduced from 12.5% – 6% where more than 50% of such pumps are used in agriculture.
- Refrigerated containers reduced from 12.5% – 6%.
- Micronutrients [covered under S. No. 1(f) of Schedule 1 Part (A) of the Fertilizer Control Order, 1985 & manufactured by the manufacturers which are registered under the Fertilizer Control Order, 1985] reduced from 12.5% – 6%.
- A physical mixture of fertilizers, made out of chemical fertilizers on which duty of Excise has been paid, by Co-operative Societies, holding the certificate of manufacture for a combination of fertilizers under the Fertilizer Control Order, 1985, exempted from 1% (without Input Tax Credit) or 6% to Nil.
- Excise on Solar lamp exempt from 12.5% – 0%.
Inputs, parts and components, subparts for the manufacture of charger/adapter, battery and wired headsets/speakers of a mobile phone, subject to actual user condition, from 12.5%/ Nil to Nil.
- Parts & components, subparts for the manufacture of Routers, Broadband Modems, Set-top boxes, digital video recorder (DVR)/network video recorder (NVR), CCTV camera/IP camera, lithium-ion battery [other than those for mobile handsets] from 12.5% to Nil.
- Specified Notifications relating to area based exemptions has been amended to deny the said exemption to the particular specified Industrial Units.
Relief measures under the Central Excise Duty
- Excise exemption, presently available to Concrete Mix manufactured at the site for use in construction work at such site extended to Ready Mix Concrete made at the site of construction for use in construction work.
- Mutual exclusiveness of levy of Excise Duty & Service Tax on information technology software [in respect of Software recorded on media “NOT FOR RETAIL SALE”] has been ensured by exempting from Excise duty only that portion of the transaction value on which Service Tax is paid, with effect from 01.03.2016.
- Exemption from levy of Excise duty has been extended to the power generation projects based on municipal and urban waste without subject to any conditions specified for initial setting up of a project for the generation of power or generation of compressed biogas using non-conventional materials.
Amendment in the Central Excise Act, 1944
- [Section 5A] of the Central Excise Act, 1944 has been amended to omit the requirement of publishing and offering for sale any notification issued, by the Directorate of Publicity and Public Relations of CBEC.
- Section 11A of the Excise Act has been amended to increase the period of limitation from one year to two years in cases not involving fraud, suppression of facts, willful misstatement, etc.
- Section 37B of the Excise Act has been amended 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.
- The Third Schedule has been amended to.
- Make some editorial changes, consequent to 2017 Harmonized System of Nomenclature.
- Include therein.
- All goods are falling under heading 3401 and 3402.
- Aluminium foils of a thickness not exceeding 0.2 mm.
- Wrist wearable devices (commonly known as “smart watches”).
- Accessories of the motor vehicle.
However, the amendment at b) will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.
Amendment in the Central Excise Rules, 2002
- In the case of finalization of provisional assessment, the interest will be chargeable from the original date of payment of duty.
- Diminish the number of returns to be filed by a Central Excise Assessee above a certain threshold from 27 to 13, that is, one annual and 12 monthly returns. Monthly returns are already being e-filed. The CBEC will provide for e-filing of annual return also. This annual return will have to be filed by Service Tax Assessees also, above a certain threshold, taking a total no. of returns to three in a year for them.
- Extended the facility for revision of performance, hitherto obtainable to a Service Tax Assessees only, to the manufacturers also.
- If in cases where invoices are digitally signed, the manual attestation of the copy of an invoice, meant for the transporter, is done away with.
- Procedures have been prescribed for obtaining Centralized Excise Registration regarding Rule 9 of the Central Excise Rules, 2002 for the specified manufacturers of articles of jewelry.
- Exemption from the procedures of physical verification of premises for providing registration has been granted to the specified manufacturers of articles of jewelry.
- The Notification No. 9/2012-Central Excise (N.T.) dated 17.03.2012, fixing the tariff value on articles of jewelry (other than silver jewelry) has been rescinded.
- Instructions are being furnished to Chief Commissioners of Central Excise to file an application to Courts to withdraw prosecution in cases involving the duty of less than Rs. 5,00,000 /-and pending for more than fifteen years.
- The existing Central Excise Rules, 2001 are substituted with the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable and Other Goods) Rules, 2016, to simplify the rules, including allowing duty exemptions to importer/manufacturer based on self-declaration instead of obtaining permissions from the Central Excise Authorities.