Discussion on Budget Updates Central Excise Act CA G
Praveenkumar [email protected] Date: 18 th March 2015 by
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2 Measures to curb black money Job Creation through revival of
growth and investment and promotion of domestic manufacturing and
Make in India Reduction in Customs Duty on Inputs Minimum
Government and Maximum Governance Subsuming Cess, Registration,
Digital signature, TL for Cenvat availment, Relaxation in penal
provisions Improving quality of life and public health through
Swachh Bharat Initiatives Clean energy cess on coal, lignite
Standalone proposals to maximise benefits to the economy Budget
promises www.sbsandco.com
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3 Central Excise Tariff changes Central Excise Non-Tariff
changes Central Excise Rules, 2002 Cenvat Credit Rules, 2004 GST
Way forward Coverage www.sbsandco.com
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Central Excise Tariff Clause 104 Amendments made to Duty rate
for Chewing Tobacco & Pan masala made vide Notification
05&06/2015 Section 3A [levy based on capacity of production]
Condensed Milk Put in unit containers brought to levy as below
Tariff: 0402 91 10 or 0402 99 20 4 Notification ReferenceDuty
RateCondition 07/20152%No Cenvat benefit 08/20156%With Cenvat
facility 03/2015(N.T)30% Abatement MRP based assessment
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Central Excise Tariff Clause 104 (Cont..) Notification 12/2015
Enhancement of Ad valorem Duty from 12% to 12.5% for all the goods
occurring in Notification12/2012 to be read with Fifth Schedule of
Finance Bill Exemption to Excisable goods consumed within the
factory of production [10/96CE] extended to Agarbatti-3307 41 00
added vide Notification13/2015 Education cess & SHE cess
exempted on all goods falling within First Schedule to the Central
Excise Tariff Act, 1985 vide Notification No.14 & 15 of 2015
What about Cess unutilised..? 5 www.sbsandco.com
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6 Goods manufactured in an EOU/EHTP duty rate revised from 12%
to 12.5% for Sl. Nos. 5A, 6, 7A [chapter 52,54,55,60] referred in
23/2003CE. Provisional collection of Taxes Act, 1931: Clauses 89,
90, 103, 104, 163, 164 and 188 of the Finance Bill, 2015 Central
Excise Tariff Clause 104 (Cont..) www.sbsandco.com
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7 Chapter 21: All goods falling under Chapter sub-heading 2101
20, including iced tea notified under S.4A of Central Excise Act
with an abatement of 30%. Chapter 22: Excise duty on waters,
including mineral waters and aerated waters, containing added sugar
or other sweetening matter or flavoured falling under 2202 10 is
increased from 12% to 18%. Chapter 39: Tariff rate of excise duty
on all goods falling under tariff item 3923 21 00 and Chapter
sub-heading 3923 29 [other plastics] is being increased from 12% to
18% Central Excise NON Tariff www.sbsandco.com
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8 Chapter 64 Basic Excise Duty on leather footwear of Retail
Sale Price exceeding Rs.1000 per pair falling under Central Excise
Tariff heading 6403 and 6405 is being reduced from 12% to 6%.
Further Abatement in this regard reduced from 35% to 25% Chapter 74
Full exemption from excise duty is being extended to round copper
wire and tine alloys for use in the manufacture of PV ribbon
(tinned copper interconnect) for manufacture of solar PV cells and
modules, subject to certification by Department of Electronics and
Information Technology (DeitY) Central Excise NON Tariff (Cont..)
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9 Chapter 84: Excise duty exemption is being withdrawn on solar
water heater and system. Further, optional excise duty of Nil
without CENVAT credit / 12.5% with CENVAT credit is being extended
to solar water heater and system. Excise duty of 2% without CENVAT
credit / 12.5% with CENVAT credit is being provided to tablet
computer. Further, excise duty is being exempted on parts,
components and accessories for use in manufacture of tablet
computer. Excise duty is also being exempted on sub-parts for use
in manufacture of parts, components and accessories of tablet
computers [Sl. No.254A&B] Central Excise NON Tariff (Cont..)
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10 Chapter 85: Excise duty on mobile handsets including
cellular phone is being changed from 1% without CENVAT credit or 6%
with CENVAT credit to 1% without CENVAT credit or 12.5% with CENVAT
credit. Excise duty is being reduced from 12% to 6% on wafers for
use in the manufacture of IC modules for smart cards, subject to
actual user condition. Excise duty is being reduced from 12% to 6%
on all inputs for use in manufacture of LED driver and MCPCB for
LED lights and Fixtures & LED Lamps. RSP based assessment is
being prescribed expressly for LED lights or fixtures including LED
lamps with an abatement of 35%. Central Excise NON Tariff (Cont..)
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11 Chapter 87: Excise duty on chassis for ambulance is being
reduced from 24% to 12.5%, subject to actual user condition. The
validity period of concessional excise duty of 6% granted to
specified goods used in the manufacture of electrically operated
vehicles and hybrid vehicles is being extended by one more year up
to 31st March, 2016. Chapter 90 Excise duty is being exempted on
specified raw materials for use in manufacture of pacemakers,
subject to actual user condition. Central Excise NON Tariff
(Cont..) www.sbsandco.com
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12 Section 3A(3) empowers the Central Government to charge
excise duty on the basis of capacity of production in respect of
notified goods, is being amended so as to insert an Explanation to
provide that factor relevant to production includes factors
relevant to production. Section 11A Recovery of Duties not levied
or not paid or short levied: Subsections 5,6,7 have been omitted
which dealt with category of cases where fraud, collusion, willful
mis-statement, etc. is involved but the transaction is recorded in
the specified record New sub section inserted as below: Provisions
of section 11A shall not apply to cases where the non-payment or
short payment of duty is reflected in the periodic returns filed
and that in such cases recovery of duty shall be made in such
manner as may be prescribed in the rules Amendments to Central
Excise Act www.sbsandco.com
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13 Section 11AC Penalty for Short-levy or Non-levy of duty
Amendments to Central Excise Act (Cont..) ScenarioPenalty Penal
provisions in cases where there is no fraud or collusion or
intention to evade Duty: Normal situations prevailing10% of the
Duty determined or Rs.5,000 which ever is higher Duty along with
interest has been admitted & remitted either before issuance of
SCN or within 30 days of issuance of SCN No Penalty. Duty along
with interest remitted within 30days of communication of Order
Penalty shall be 25% of the Duty determined Cases where Fraud or
Collusion or Intention to evade duty exists: Normal situations
prevailing100% of the Duty determined If the transactions exists in
the Books of Accounts penalty shall be reduced to 50%
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14 ScenarioPenalty If the Duty along with Interest paid within
30days of communication of SCN Penalty payable shall be 15% of the
Duty determined & payable within 30days of serving the SCN. If
the same is paid within 30days of communication of SCN proceedings
shall be deemed to be concluded If the Duty along with Interest
paid within 30days of communication of Order Penalty payable shall
be 25% of the Duty determined, provided the same is paid within
30days of communication Order Proceedings in case of pending SCN:
Cases involving fraud, collusion, willful mis-statement etc.,
Payment of Duty and Interest along with a penalty of 15% of the
duty amount determined within 30 days of the Finance Bill, 2015
receiving the assent of the President Cases not involving fraud,
collusion, willful mis-statement etc., Payment of Duty and Interest
within 30 days of the Finance Bill, 2015 receiving the assent of
the President Amendments to Central Excise Act (Cont..)
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15 Direct dispatch of goods to registered dealers/ registered
importers customers without first bringing them to the dealers /
importers registered premises - Rule 11 of CER and Rule 4 of CCR
refers [effective 01.03.2015]. Direct dispatch of inputs and
capital goods to job worker without first bringing them to the
manufacturers /output service providers premises subject to the
conditions specified therein [effective 01.03.2015]. Rule 18
explanation amended as below: Explanation. For the purposes of this
rule, export, with its grammatical variations and cognate
expressions, means taking goods out of India to a place outside
India and includes shipment of goods as provision or stores for use
on board a ship proceeding to a foreign port or supplied to a
foreign going aircraft Changes in Central Excise Rules, 2002
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16 Issuance of digitally signed invoices and preservation of
records in electronic form by a manufacturer - Provided that where
the duplicate copy of the invoice meant for transporter is
digitally signed, a hard copy of the duplicate copy of the invoice
meant for transporter and self attested by the manufacturer shall
be used for transport of goods. Registration process [effective
from 01.03.2015] in Central excise is being simplified to ensure
that registration is granted within two working days of the receipt
of a duly completed application form. Verification of documents and
premises, as the case may be, shall be carried out after the grant
of the registration. Deregistration [effective from 01.03.2015]
where there are no pending recovery from Assessee application made
online shall be approved within 30days Changes in Central Excise
Rules, 2002 (Cont..) www.sbsandco.com
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17 Cancellation of Registration [effective from 01.03.2015] DC
/AC empowered to cancel the registration; Grounds for cancellation
premise not found or non-existent or assessee doesnt respond for
rectification of error noticed or factory closed and no dues
noticed. Changes in Central Excise Rules, 2002 (Cont..)
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18 Time limit for Cenvat revised as below [effective from
01.03.2015] : Inputs ONE Year Capital Goods TWO Years Rule 4(5)(a)
movement of goods from one Job-worker premise to another made
permissible Rule 5 Refund of Cenvat Credit (1A) "export goods"
means any goods which are to be taken out of India to a place
outside India Rule 6 Obligation of a Manufacture or Provider of
Output Service - Exempted goods include Non-Excisable goods Change
in Cenvat Credit Rules, 2004 www.sbsandco.com
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19 Seamless Credits; Maintenance of Books of Accounts
electronically; Refund applications to be made online including
documentation; Status of pending disputes at various stages and
authority concerned to deal with Form C/I/H, Ineligible Cenvat
credits, Valuation issues; Preparedness of Trade & Industry
towards the Documentation, support of accounting records and tax
planning structure. Way forward for GST www.sbsandco.com
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20 When a bird is alive.. It Eats Ants.. When the bird is
dead.. Ants eat the Bird.! Time & Circumstances can change at
any time. You may be powerful today.., but remember time is more
powerful than you..! One tree makes a million match sticks.. Only
one match stick needed to burn a million trees..! Be a Good human
and leave your finer foot prints! Before we part
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